Several factors will contribute to strong growth in card payments in the Philippines, a new report from GlobalData suggests. Gains of 15.4 percent are expected due to the gradual revival of the economy, easing of lockdown restrictions, and improving consumer spending. Those gains will leave the value at $43.4 billion. By 2024 it is expected to reach $59.8 billion based on an expected CAGR of 12.3 percent.
“The Philippines is among the worst affected countries by the COVID-19 pandemic, with the economy falling into recession,” GlobalData senior payments analyst Nikhil Reddy said. “The market scenario is now changing with the opening of businesses and vaccine distribution gaining pace. Gradual revival in economic conditions are expected to drive growth in the country’s card market.”
The country’s GDP shrank by 9.5 percent in 2020 but is slated to grow by as much as 7.5 percent in 2021.
Debit cards reign supreme in the Philippines, with 90.6 million in circulation, more than 10 times the number of credit and charge cards, which sits at 8.6 million. The latter, however, are the preferred payments method, accounting for more than 60 percent of card payments by value due to pricing benefits, installment payment plans, and reward programs.
The federal government has encouraged card use by capping monthly interest rates at two percent and interest on credit card installment plans at one percent per month. Those rates are competitive with Thailand and Malaysia.
“The Filipino card payments market, which witnessed robust growth, has been affected by the economic downturn due to COVID-19 pandemic,” Reddy said. “However, government initiatives, growing popularity of contactless payment and rise in consumer spending will drive recovery in card payments in 2021.”
