Growing wealth in PH seen fueling credit card use
THE GROWING wealth of the top sliver of Philippine society is expected to fuel increased credit card use, particularly among premier clients, financial giant Citi said.
In a briefing Tuesday, Citi said the Philippines was outperforming the rest of the world in terms of the growth in the number of high net-worth clients. The number of so-called “wealth builders,” which Citi considers the soon-to-be rich, is also expected to swell in the coming years.
“This segment of the market is worth following and looking at closely,” Citi Philippines consumer banking head Bea Teh-Tan told reporters.
Strong economic growth, driven by domestic consumption, will drive credit card adoption in the Philippines, Tan said.
Citi this week launched its new Citi Prestige cards, which target the bank’s richest Philippine clients.
Tan said about 4.5 percent of Filipinos were considered high-net worth individuals at the end of last year.
These are clients with over P4 million in liquid assets.
Clients with at least P1 million-worth of business with Citi qualify for the new cards, which offer perks such as unlimited lounge access at airports, additional rewards points and even three free rounds of golf.
The bank said the number of high net-worth individuals in the Philippines was expected to grow by 10.3 percent this year, faster than the 6.7-percent expansion projected for the rest of the world.
Tan said improving the rewards that credit cards offer as sweeteners to clients had been vital in staying competitive in the Philippines’ growing credit card sector.
Citi has about one million credit cards in the Philippines today, she said.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed credit card loans rose by a modest 4.14 percent year-on-year to P166.45 billion at the end of June.
This was slower than the 19-percent growth in all types of consumer loans at the end of the first half of 2015.
