Philippine card payments to grow 15.4% in 2021, with 12.3% CAGR through 2024: report

CARD payments in the Philippines are forecast to rebound with 15.4 per cent growth in 2021, after falling 7.4 per cent in 2020, data and analytics firm GlobalData said in a March 29 report.

Between 2020 and 2024, the value of card payments in the Philippines is expected to see a 12.3 per cent compound annual growth rate (CAGR), reaching 2.87 trillion pesos (S$79.81 billion) in 2024, according to GlobalData.

After some years of robust growth, the country's card payments market - which is still in a development phase - was hit by the Covid-19 pandemic, said GlobalData banking and payments analyst Nikhil Reddy.

But as economic conditions recover and vaccine distribution gains pace, the card market will benefit, he added. While the Philippines' gross domestic product growth was -9.5 per cent in 2020, it is expected to recover at 6.5 to 7.5 per cent in 2021.

Also aiding the market are factors such as the entry of digital-only banks such as Tonik, launched in March 2021; favourable government regulations; campaigns by banks and payment companies; and improving financial awareness, said Mr Reddy.

For instance, a recent government regulation has capped credit card interest rates at 2 per cent per month or 24 per cent annually with effect from Nov 3, 2020, compared to the average annual rate of 42 per cent previously.