Credit card billings in the first quarter climbed 47 percent to P410 billion from P279 billion a year ago, showing that post-lockdown revenge spending among Filipinos continued to fuel the domestic economy, the Credit Card Association of the Philippines said Monday.
CCAP, which is composed 17-member issuers, said the first-quarter growth rate was the highest since the pandemic started in 2020.
CCAP executive director Alex Ilagan said in a statement that as the economy continued to reopen, pent-up demand for consumer goods and services would persist, feeding into the growth of the e-commerce, retail and services, travel and tourism, automotive and housing sectors, among others.
“The credit card industry is indirectly contributing to this economic resurgence,” he said.
Ilagan said a strong and more robust economy would result in more employment, and more people would be qualified for a credit card, sustaining the growth in credit card ownership and usage.
“Credit card delinquency rate will also remain low and may even continue its downtrend in the last two years because cardholders will have the means to pay their bills,” he said.
CCAP’s latest quarterly survey showed a total of 11.8 million credit cards were issued in the Philippines as of end-March 2023. Majority or around 7.5 million Filipinos own only one card.
Household consumption, the main economic driver in the country, grew by 8.3 percent in 2022 compared to 4.2 percent in 2021. Credit card receivables accounted for the lion’s share of consumer loans at 40 percent as of December 2022.
The economy grew by 7.6 percent last year, surpassing the target range of 6.5 percent to 7.5 percent despite the elevated inflation rate. In the first quarter this year, GDP grew by 6.4 percent. Economic managers expect the growth trajectory to be sustained.
Ilagan said that while interest rates and inflation could still rise, CCAP does not see a let up in personal consumption soon.
“If at all, rising inflation may even push more cardholders to use their credit card to cope with the higher prices because a credit card is one way to extend your purchasing power. A credit card is basically a form of installment credit which the Filipino consumer has learned to utilize. As long as cardholders pay on time, it will have no negative impact on either the cardholder or the bank issuer,” Ilagan said.
Ilagan reminded card users that a credit card is not ‘free money’. He said all transactions charged to a credit card will have to be paid.