Latest data from the Credit Card Association of the Philippines (CCAP) show gross billings jumped 47% to P410 billion during the first three months of the year compared with P279 billion in the same period in 2022. The first-quarter 2023 growth rate is also the highest since the pandemic started in 2020.

While interest rates and inflation could still rise, CCAP said it 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 that 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,” said CCAP executive director Alex Ilagan.

As the economy continues to reopen and becomes more robust, pent-up demand for consumer goods and services will 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,” said Mr. Ilagan.

“If the economy remains strong, more people will be employed and will qualify for a credit card, thus 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 added.

Based on CCAP’s quarterly survey of its 17 member issuers, there are now a total of 11.8 million credit cards issued in the Philippines as of end-March. The majority (64%) or around 7.5 million Filipinos own only one card.

Household consumption, the main economic driver in the country, grew by 8.3% in 2022 compared to 4.2% in 2021. Credit card receivables accounted for the lion’s share of consumer loans at 40% as of December 2022.

“While Filipinos’ spending spree keeps the economic engine chugging along, we must bear in mind that a credit card is not ‘free money’. All transactions charged to a credit card will have to be paid so be a responsible card user and don’t use your credit card beyond your capability to repay the amount at a later date,” said Mr. Ilagan.

CCAP has been actively conducting credit awareness programs in various colleges and universities as well as companies since 2017. Those interested in these credit awareness programs may reach out to CCAP at https://www.ccap.net.ph/contact-us/.