As per the statistics by a leading Data as well as the Analytics Firm, the GlobalData, the Card Payment Marketplace within the Asia-Pacific territory in Philippines is all touted to progress by 15.4% within this year in 2021, with the positive signs of the gradual recovery of the economy, flexing the lockdown-based boundaries, as well as in nurturing the client spending.
The Senior Payment Cards Analyst at GlobalData, Nikhil Reddy, commented out that; “The Philippines is among the worst affected countries by the COVID-19 pandemic, with the economy falling into recession. The market scenario is now changing with the opening of businesses and vaccine distribution gaining pace. Gradual revival in economic circumstances is projected to power progression in the national card market.”
As per the Philippines Statistics Authority, the national GDP narrowed down by 9.5% in 2020. With the commencement of industries and enabling of lockdown boundaries, the economy is anticipated to revive in 2021 with anticipated GDP growth rate between 6.5%-7.5%.
According to GlobalData’s Payment Cards Analytics, card payments in the Philippines will nurture by 15.4% in 2021 to be valued at PHP2.1 trillion (US$43.4bn). It is anticipated to register a compounded annual growth rate (CAGR) of 12.3% between 2020 and 2024 to grasp PHP2,872.5bn (US$59.8bn) in 2024.
The government has also taken numerous creativities to upsurge card usage in the nation. In September 2020, it approved a regulation covering credit card interest at 2% per month, effective from 3 November 2020, associated to the prevailing average annual rate of 42%. It also plugged the interest on credit card instalment plans at 1% per month.
Debit card governs the overall card holding in the Philippines with 90.6 million debit cards in motion compared to 8.6 million for credit and charge cards. However, credit and charge cards are the favoured payments method accounting for nearly two-thirds of card payments by worth.
This is mainly due to valuing assistances, instalment payment plans, and reward programs accessible on these cards. While credit and charge market were adversely disturbed due to the pandemic, it is anticipated to rebound with the rising in buyer spending.
Amid the COVID-19 pandemic, mandate for contactless payments has flowed significantly, which will provision progress in card transactions. All major banks now offer contactless credit cards.
Mastercard has augmented limit for contactless payment from PHP2000 (US$39.44) to PHP5000 (US$98.60), from 17 July 2020 to urge the contactless payments.
Mr Reddy concludes: “The Filipino card payments market, which witnessed robust growth, has been affected by the economic downturn due to COVID-19 pandemic. However, government initiatives, growing popularity of contactless payment and rise in consumer spending will drive recovery in card payments in 2021.”