The Philippines card payments market is expected to grow by 17.2% to reach PHP3.4trn ($61.1bn) in 2024, supported by a constant consumer shift towards non-cash payments, says GlobalData, publishers of EPI.

GlobalData’s Payment Cards Analytics reveals that card payments value in the Philippines reached PHP2.9trn ($52.1bn) in 2023, registering a healthy compound annual growth rate (CAGR) of 10.5% during 2019-23.

Shivani Gupta, Senior Banking and Payments Analyst at GlobalData, commented: “Cash has traditionally been the most popular method of payment among consumers in the Philippines. However, with rising consumer awareness of electronic payments, government’s financial inclusion efforts, availability of low-cost bank accounts, and improvement in payment infrastructure, a rise in card payments could be seen over the last few years.”

Although there has been a rise in electronic payments, 49.6% population are still outside the purview of formal banking and payment system

The government has undertaken several financial inclusion initiatives such as establishment of smaller bank branches called branch-lite units and employment of micro-banking offices and agents to provide access to financial services in underserved areas.

In line with the central bank’s efforts, banks offer basic deposit accounts with simple identification/Know Your Customer requirements, no minimum balance requirements, and no maintenance charges. Such concentrated efforts are expected to contribute to the overall banked and card penetration in the country, thereby providing an opportunity for the card payments growth.

Furthermore, to reduce the prevalence of cash in the payments space, the central bank implemented Digital Payments Transformation Roadmap (2020-2023) to improve financial inclusion and drive digital innovation in the country.

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The goal of the roadmap was to convert 50% of the total volume of retail payments to digital form and increase the financial inclusion by integrating 70% of Filipino adults to formal financial system through payment or transaction accounts. This resulted in significant increase in the proportion of digital transactions in retail payments, surging from 1% in 2013 to 42.1% by 2022, thereby benefiting card payments as well.

Among the card types, credit and charge cards are preferred, which accounted for 58.5% share of the overall card payment value in 2023. Consumers are increasingly using credit cards, primarily to benefit from value-added services such as reward points, instalment payment facilities, and discounts associated with these cards.

Debit cards, which are traditionally preferred for cash withdrawals, are also now increasingly being used for payments as well – especially low-to-medium value transactions. This has been driven by the rising consumer awareness, banks offering contactless debit cards, and the expansion of the country’s POS network.

Gupta concludes: “The Philippines payment card market is anticipated to continue its growth trajectory with rising consumer spending coupled with government push with initiatives like next phase of 2024-2026 Digital Payments Transformation Roadmap. Subsequently, the card payments value is anticipated to grow at a CAGR of 15.1% between 2024 and 2028 to reach PHP6.0trn ($107.0bn) in 2028.”