RCBC Bankard outpaces industry in credit spending

MANILA, Philippines — The credit card arm of Rizal Commercial Banking Corp. (RCBC) posted a 25 percent jump in credit card spending in the first nine months as the economy gradually reopened.

Arniel Vincent Ong, president and chief executive officer of RCBC Bankard, said in a virtual press conference the growth was faster than the 15 percent rise in transaction volumes recorded by the industry for the same period.

“So we’re quite optimistic. A lot of this is really driven by the gradual reopening in the economy, the increasing vaccination rates, and ultimately increasing consumer confidence to once again purchase or to consume,” Ong said.

For this year, Ong said the credit card industry sees a 15 to 20 percent increase in credit card transactions as consumers continue to embrace digitalization through e-commerce.

Card payments are expected to rebound strongly this year from a slump of 7.4 percent in 2020, on the back of improving economic and health conditions.

“So it’s picking up and we probably are looking at better 2022 as a result of that,” Ong said.

He said the industry’s delinquency rate has improved tremendously after peaking in the second quarter of the year and is now close to returning to pre-pandemic levels as banks and issuers extended assistance to borrowers severely affected by the COVID-19 pandemic.

“Delinquency rate generally for the industry has now improved quite significantly, as the industry has worked to help a lot of customers manage their debt, especially at this time,” Ong said.

In the case of RCBC Bankard, it has managed to bring down its delinquency rate to six percent from double-digit levels.

“Asset quality has improved. It has peaked around the first and the second quarter but now it’s in a downward trend. Banks have done a lot of work to help control the portfolio risk and to help a lot of customers who have been having a difficult time,” Ong said.

For RCBC Bankard, Ong said the bank gave borrowers more time to pay their credit card balances and even offered to convert their loans into installments with longer terms and very low interest rates.

Right now, 38.88 million Filipinos are purchasing consumer goods via the internet.

For his part, Mastercard country manager Simon Calasanz said the industry is now seeing a sense of normalcy as credit card transaction levels are already very close to pre-pandemic levels after plunging by 70 percent in the first three months of the pandemic last year.

“So you do see that sense of return to normalcy. At the same time, we also know that travel is not yet up,” Calasanz said.

Instead of cross-border travel, there is a pick up in interstate travel in the Philippines.

“So once cross border travel also opens up, we are going to see that revenge shopping events, travel events, all of which will point to a better economy,” Calasanz said.

RCBC Bankard, leading fashion and lifestyle e-commerce platform Zalora and Mastercard have jointly launched the Zalora credit card packed with fashion and lifestyle benefits and freebies, created with the online shopper in mind.

The credit card is not only the first fashion and lifestyle credit card in the region that rewards customers every time they shop, but also the first-ever sustainable credit card in the Philippines.