The ongoing vaccine distribution and re-opening of entities will revive the economy gradually
The Philippines card remittance sector has growth prospects: report. Source: pixabay.com
The estimated 15.4% growth will happen as a result of the improvement of consumer spending, the Philippines economic revival and the easing of coronavirus lockdown restrictions, GlobalData found.
The 15.4% growth is valued at PHP2.1 trillion, which is an equivalent of US$43.4bn. Between 2020 and 2024, a 12.3% annual growth rate (compound) to reach PHP2,872.5bn may be achieved. This is an equivalent of US$59.8bn.
In 2020, the Philippines GDP experienced a 9.5% contraction. In 2021, the economy has a projected growth rate of between 6.5% and 7.5%.
The country holds more debit cards (90.6 million) compared to charge and credit cards (8.6 million). However, most people prefer the use of charge and charge cards due to installment remittance plans, pricing benefits and rewards that come with these cards.
The government is also working to increase the usage of cards in the economy. The interest on credit cards is now capped at 2% per month from November 2020. Card installment interest was also capped at 1% per month.
This new regulation makes the interest on credit cards equal with Malaysia and Thailand, a move that eases the debt burden on credit cardholders and also makes borrowing easier.
The order for contactless remittances has also increased. The surge will support card transaction growth. Consumers can get contactless credit cards from major banks. To increase contactless remittances, Mastercard has raised the payment limits to PHP5000, an equivalent of US$98.60 from 17th July 2020. This moves from the former limit of PHP2000, an equivalent of US$39.44.
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