Credit card sales seen slowing down

By Ruben Hortelano

03/10/2009

Credit card use was seen yesterday to continue to grow this year albeit at a slower single-digit rate, London-based Hongkong and Shanghai Bank Corp. (HSBC) said.

From stong growth rates of up to 30 percent for some card brands as recently as 2007, credit card growth was seen to average in only single-digit level this year, HSBC Philippines head of personal financial services Ron Logan said.

“We’re not seeing a downturn in credit card spending but its growth will likely be in single digit this year,” Logan said without citing a specific number.

The country’s regular commercial as well as universal banks posted credit card receivables reaching P124.4 billion as at end-September 2008, representing growth of 1.5 percent from three months earlier when this totaled only P122.6 billion.

Logan believes the default rate, at least as far as HSBC cards were concerned, was likely to remain steady this year.

Defaulting credit cardholders averaged 11.7 percent across the industry, based on BSP data.

Logan said healthy overseas remittance flows and other consumption activities are expected to help fuel credit card spending this year.

He said HSBC has around 1.5 million cardholders out of the estimated six million credit card market in the Philippines, which placed their brand at the number two spot.

“Spending through credit cards should still be up this year although not at the 20 or 30 percent growth rates of the past,” Logan said.

The upcoming national elections was also seen to help fuel consumer spending, Logan added.

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