Credit card firms post P100B in gross billings

The country’s credit card industry is well and kicking despite the number of unsettling political crisis, the series of kidnappings in Southern Philippines, and the continued weakening of the Philippine currency.

So far, it is responsible for P100 billion in gross card billings per year. Industry estimates that it is growing by an annual average of 20 percent.

Likewise, the industry continues to infuse fresh capital new investment and products to improve services and attract more card users.

According to the Security International Card Corp. (SICC), there are 15 major credit card companies in the country today accounting for gross card billings of over P100 billion annually.

"The industry as a whole is doing well. Despite crisis after crisis in the political environment, the kidnappings and the tumbling Philippine peso in the last year or so the credit card industry has performed quite creditably," said SICC officials. SICC is allied with Security Bank Corp., and it is the exclusive distributors of high-end Diners Club credit cards in the Philippines.

Card distributors claim that nearly 50 percent of the sales in major retail and service establishments in the country are done through credit cards. Likewise, e-commerce transactions via the Internet is undertaken with credit cards.

Industry association, Credit Cards Association of the Philippines (CCAP) said that there are 3.2 million credit cards issued in the Philippines todate. This figure is growing at the rate of almost 20 percent per year in the last five years.

In 1999, credit cards in use reached 2.671 million.

Over 30,000 retail and service establishments nationwide accept credit cards for payment of services or products and the industry forecasts that it will reach more than 50,000 by the year 2005.

CCAP president David G. Sarmiento Jr. had earlier said that a card base of three million in the first nine months of 2000 alone is a milestone.

Sarmiento revealed that card billings reached P77 billion in the whole of 1999. The year before that billings were registered at P79 billion and P71 billion in 1997.

"Credit cards is basically a form of installment credit which the Filipino consumer has learned to utilize. We will still have to go to the groceries, supermarkets and malls. We will still have to pay our utility bills, tuition fees, gasoline bills and upgrade our appliances," the CCAP president said.

The CCAP claims that the credit card industry is indirectly responsible for the development of the retail and service sectors.

"It provides a convenient way for customers to pay for their purchases without the need for bringing a lot of cash. This results to a relatively more frequent and bigger purchases for people who own credit cards," card companies said.

It reportedly employs about 4,000 employees and indirectly contributes to the employment of thousands more through the various related services typically outsourced by most credit card companies like credit investigation, collections, merchant servicing and others.

The industry also invests in technology, manpower development and service infrastructure, which should result in easier access to credit for a wider base of Filipino consumers.

"Credit cards not only provide convenience when shopping, dining or traveling, but it also allows a regular ware earner to use his future income on pressing necessities of today through credit facility. This enables him to stretch his income and maintain his standard of living even during hard times like this. This fact gives us the confidence that credit cards will flourish even during difficult times," SICC officials said.

Meanwhile, SICC said it plans to invest more than P50 million this year for new card operating systems to maintain its competitive stance in the industry. The new system will be pilot-tested by January next year "to enable us to provide more innovative services and compete more effectively in a fast growing credit card market."