In a country where only 5% of the population has a credit card, it’s no surprise that cash is still the top mode of payment. But what might come as a surprise to some is that credit cards are no longer the only popular alternative to cash.
The new alternative? In-store installment financing, which is seeing a fast increase in adoption from Filipino shoppers eager to take advantage of zero-percent interest deals along with fast approvals.
A recent study by consumer finance company Home Credit Philippines revealed the increasing preference for installment financing in the Philippines, becoming the second top choice for payments among respondents when shopping, next only to cash, and slightly ahead of credit cards.
According to the survey conducted in one of the country’s biggest malls, 80% of the total respondents will pay in cash if they had enough budget or resources, while 11% will apply for a financing/installment loan, followed by credit cards (9%).
While the rankings for payment options may have changed, shoppers’ gift buying (and gift receiving) preferences remain the same.
Almost half or 39% of the respondents — including married and single men and women — cited gadgets as their most preferred gifts this Christmas season, followed by appliances, and cash.
On the other hand, 38% prefer to give their loved ones shoes and clothing as presents for the holidays.
For single respondents, there were striking similarities in preferred gifts, with both males and females opting to receive high-tech gadgets as Christmas presents.
On the other hand, the study revealed that 32% of married respondents preferred Christmas gifts that would be more useful in the household. Majority are inclined to receive appliances (32%), followed by gadgets (29%), from their loved ones this Christmas.
With most of the respondents typically buying gifts through full cash payments, more than half of all respondents allocate a budget of almost a fifth of their monthly salary for gifts, with some even allotting almost half of their total monthly income for shopping.
“The preference for gadgets doesn’t come as a surprise, considering the increasing smartphone and Internet penetration in the Philippines. And when it comes to purchases, budget is always a consideration, even more so during the holidays,” said Annica Witschard, Home Credit Philippines CEO.