Tourists ride on a horse-driven carriage in Intramuros, Manila. AFP
MANILA, Philippines—The country’s bid to attract more tourists through the “It’s more fun in the Philippines” slogan has started to bear fruit by perking up foreign onshore spending, global payments firm Visa said.
In a press briefing on Thursday, Visa country manager for the Philippines and Guam Iain Jamieson said this recent surge in inbound spending was complementing the robust growth of business from cardholders in the Philippines, where Visa cards have reached seven million. Of those cards, 4.5 million are debit and prepaid cards and 2.5 million are credit cards. Total payment volume in this market hit around $4 billion in 2011, he said.
Jamieson said the number of Visa cardholders had increased by 17 percent in this market in 2011 alongside a 12 percent rise in payment volume and 16-percent growth in e-commerce transactions. He also noted a 27 percent rise in spending on international transactions as more Philippine residents travel overseas for shopping, sightseeing or business or make online purchases from overseas merchants.
The Visa chief also noted that inbound spending by foreign cardholders have surged by double-digit levels since November last year and has so far been sustained.
“When we look at inbound market, half of amount spent is coming on cards. When we see double-digit growth from inbound customers, then that has positive ramification for the country,” Jamieson said.
He reported that there was a sudden flip to double-digit level growth in inbound spending by foreigners since November of last year hitting 12-13 percent or about double the 6-7 percent growth in 2010.
“The new national tourism campaign has some parts to play in this,” Jamieson said, adding that people now had more reasons to see great places in the Philippines.
The new tourism slogan was unveiled before Christmas last year. “It just rings. It has a nice ring to it,” Jamieson said.
The Visa country chief said he initially thought this spike in foreign spending would tail off by February as westerners come back from their tropical holidays but this hadn’t happened.
As of February, Visa’s top 10 largest foreign spenders are from the following countries: 1.) United States; 2.) Korea; 3) Australia; 4.) United Kingdom; 5.) Japan; 6.) Canada; 7.) Norway; 8.) Singapore; 9.) Sweden; and 10.) Germany.
Based on recent trends, he added that Australians have been increasingly looking at the Philippines, which Jamieson attributed to direct flights from Qantas.
For Visa, he said it’s crucial to look at these trends. “We have beautiful places and destinations to visit and we just want to ensure that we get to the right people in the right countries,” he said. Visa, likewise, has launched a campaign to encourage foreign visitors to get local currency from the automated teller machines using their Visa cards as they hit the ground.
Meanwhile, Jamieson noted that 16 percent of payment volume from Philippine cardholders has been coming from e-commerce, mostly from the booking of airline tickets such as with Cebu Pacific and Philippine Airlines. This ratio has doubled over the last five years.
This year, Visa expects payment volume continuing to grow by mid-teens in percentage while issued cards are seen expanding by over 17 percent.
Average transaction value per usage of Visa cards is currently at around $75 while the amount is even half or less for debit and prepaid cards. Jamieson said the average value would likely further decline as consumers would be more comfortable using cards for the littlest transactions and as people who otherwise can not get credit cards are able to access debit and prepaid cards.