MANILA - Filipinos use their credit and debit cards online to pay bills, and shop for clothes and electronics, with ride-sharing services like Uber and Grab helping drive spending in the low end, according to a study by payments company VISA.
Payment of bills and penalties is the top transaction type on mobile and desktop. Electronics ranks second on desktop and third on mobile while fashion is third on desktop and second on mobile, the study showed.
Across both platforms, plane tickets ranked fourth while cosmetics and beauty products ranked fifth, according to the poll of 500 credit and debit card users.
"There's a significant move away from cash as 62 percent of respondents said they feel that there is no need to carry cash," said VISA country manager for the Philippines and Guam Stuart Tomlinson.
A Filipino cardholder spends an average P31,000 monthly using cashless methods. Digital transactions grew 29 percent this year from 2016.
Filipinos do not usually settle their dues in full but delinquencies are "very well-controlled, very well-managed," he said.
Cashless transactions in the Philippines are expected to increase in the coming years as the financial sector taps more banks, retail establishments and services to install technologies that would allow "tap and go" payment schemes.
"With the advent of new transportation models like Grab and Uber, we see more penetration in low-value products," he said.
The Philippines, however, lags Southeast Asia in terms of cashless transactions.
In 2016, 9 percent of personal consumption expenditures were done through credit and debit cards, compared to 50 percent in Singapore and 30 percent in Malaysia and 16 percent in Thailand, the study showed.
The results highlighted the challenges to financial inclusion in the Philippines as well as a slow internet connections.
"When you have a low bank population, you have a low population of electronic payments too," Tomlinson said.
According to the Bangko Sentral's 2016 Financial Inclusion Initiatives report, 63.8 percent of cities and municipalities in the country have banking presence.
"For contactless (payment systems) to take off, it needs to be driven by large, everyday purchases such as from supermarkets, petrol stations," Tomlinson said.