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Credit card payments up 20%
despite pandemic–Medalla

BSP Governor Felipe M. Medalla
BSP Governor Felipe M. Medalla

DESPITE a challenging environment, the Bangko Sentral ng Pilipinas (BSP) said the country’s credit card payments have increased 20 percent as of July this year.

In a speech at the 42nd Anniversary of the Credit Card Association of the Philippines (CCAP), Central Bank Governor Felipe M. Medalla said the credit card industry has been prudent and managed its portfolio.

Medalla said credit card receivables have started to post double-digit growth in 2022, reaching 20.4 percent year on year in July 2022. He added that non-performing loan ratios declined to 5.7 percent during the period.

“Collaborative efforts provide strong support in carrying out our second pillar of ensuring a resilient and stable financial system. Despite a challenging operating environment, the credit card industry managed to grow its portfolio in a prudent manner,” Medalla said.

In her speech, BSP Deputy Governor Chuchi Fonacier said the credit card industry has also been at the forefront of extending the Central Bank’s temporary relief measures for Filipinos during the pandemic.

Fonacier said as of July 2022, majority of restructured consumer loans were credit card receivables of P6 billion which comprised 56.3 percent of the total during the period.

“Apart from keeping finance charges within the BSP’s ceilings on credit card transactions, the industry led the way in restructuring credit card receivables,” Fonacier said.

“We likewise appreciate the active engagement of CCAP in the BSP’s initiatives, particularly in the regular review of the credit card ceilings. The inputs and feedback of the credit card industry form part of the BSP’s holistic assessment of the appropriateness of the credit card ceilings,” she added.


SIM card law

Medalla also agreed with CCAP’s support for the SIM Registration Act, saying that the new law will help prevent the proliferation of crimes such as bank fraud and tax scams.

The Central Bank Governor commended CCAP for its advocacy to educate and raise awareness to fight credit card fraud through its campaign against “Budol.”

“The rampant activities or process and scammers are compelling reasons for the passage of SIM card registration,” Medalla said.

CCAP Chairman Rolando P. Ebreo, in his welcome remarks on Monday, said the SIM Registration Act is a key step toward removing impediments to digitalization.

Ebreo also said the new law adds a layer of protection for Filipino consumers to prevent them from falling prey to scam messages.

He said these messages contain links and lure recipients into sharing private information, thereby allowing these scammers to victimize them.

“We fully supported the ideals of the SIM Registration Act and that despite its disapproval in December 2021, we have continued to follow through on the interim measures we can implement through the telecommunications companies and through the National Telecommunications Commission,” Ebreo said.

In the past two years since digital payments accelerated in the Covid-19 global pandemic, CCAP has been pushing players in the telecommunications sector, regulators, and lawmakers to adopt stricter measures and enact laws against SIM-related fraudulent activities.

This, after noting a 21-percent increase in fraudulent credit card activities since the start of the pandemic in March 2020 as consumers shifted to various digital payment platforms due to mobility restrictions.

CCAP Executive Director Alex Ilagan said these challenges prompted CCAP to launch its #FightBudolMovement to raise consumer awareness on emerging modus operandi and fighting credit card fraud.

The organization also continues to work with government entities to promote consumer welfare through initiatives that focus on the responsible use of credit cards and consumer protection from smishing attacks and other credit card-related fraud.

CCAP members, along with the BSP, also continue to help alleviate credit card debt by helping debtors pay off their outstanding payments through the Interbank Debt Relief Program.

“As the effects of the pandemic linger, CCAP and its members will continue to work together in offering more liberal debt restructuring/forbearance programs to allow cardholders in financial distress repay their obligations and regain good credit standing,” Mr. Ilagan added.

While the law on SIM registration has finally been enacted, CCAP vowed to “continue to evolve by collaborating with more government agencies to promote consumer rights and protection,” said CCAP President Mags Surtida.

She said CCAP will expand its reach to other payment landscapes and conduct more credit education webinars in schools and companies. “We want to work with card schemes closely to innovate our credit card products to be more tech savvy and to reach a more relevant target market. Exciting times are ahead and there is more meaningful work for us,” Surtida said.

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