Increased use of electronic payments in the country boosted the Philippine economy over the last five years, according to a Visa-commissioned research study by Moody’s Analytics.
The Moody’s Analytics study said the increased use of electronic payments, including credit, debit, and prepaid cards, added $100 million or about P4.6 billion to the Philippine economy from 2011 to 2015.
Increased electronic payment usage also created the equivalent of 3,460 jobs in the Philippines per year on average in the same period, it said.
The study also found out that electronic payments are a key gross domestic product (GDP) driver for many regional economies, although the Philippines still lags behind the trend.
Asian countries experienced an average GDP increase of 0.06 percent resulting from increased card usage in the past five years, compared to the Philippines’ 0.01 percent.
Within Southeast Asia, Thailand (0.19 percent), Vietnam (0.14 percent), and Singapore (0.1 percent) experienced the largest weighted average increase in GDP contribution.
Benefit to govts
Findings from the study were shared the report, “The Impact of Electronic Payments on Economic Growth,” which also indicated that the electronification of payments benefited governments and contributed to a more stable and open business environment.
Additionally electronic payments helped to minimize what is commonly referred to as the gray economy, economic activity that is often cash-based and goes unreported, it said.
As a result, electronic payments provided a higher potential tax revenue base for governments, while also bringing the added benefits of lower cash handling costs, guaranteed payment to merchants and greater financial inclusion for consumers.
“These findings reinforce the many positive benefits that electronic payments bring to local economies not just in the Philippines but all over the world,” Stuart Tomlinson, Visa Country Manager, Philippines and Guam, said.
He said the research also suggests that the right public policies can create an open, competitive payment environment, and contribute to economic growth and job creation.
“While electronic payments’ contribution to the national economy is sizeable, there are untapped opportunities for the nation,” he added.