Low penetration means huge prospects for credit cards

By Jerry Maglunog 

The Philippines has only 7 million credit-card holders, almost a third of whom own cards issued by the Metropolitan Bank and Trust Co. (Metrobank).

A total of 1.5 million more credit cards were issued by Banco de Oro Unibank (BDO) and about 500,000 are from Bankard, the credit-card arm of Rizal Commercial Banking Corp. (RCBC).

Compared with the 105 million population, Filipinos with credit cards make up just around 5 percent of the total population.

Simon Calasanz, former president of the Credit Card Association of the Philippines (CCAP), the regulating agency of the 14 banks that issue such cards, said there are many reasons the Philippines has low credit-card penetration.

Filipino attitude in using credit cards has evolved in the last 15 years, he said.

“People’s attitudes are changing positively toward credit-card use,” he added.

“A decade ago, people would shudder at the thought of using their credit cards for online purchases, and at retail stores, and many would only use their cards for emergencies,” Simon Calasanz, who is also president and chief executive officer of Bankard, said.

Generally, the biggest reason card penetration is very low in the country is the lack of information about the prospective debtor.

Calasanz said there is a need to create a positive credit bureau and a national identification (ID) in order to increase card penetration in the country.

He attributed the sudden shift in attitude while using the credit cards to the innovations set by the banks that issue the cards.

The reward points encouraged many card owners to focus on buying more consumer items such as smart phones and laptops.

“Now, they realize that cards actually add value by giving you rewards points and facilitate payments in an easy and convenient manner,” he added.