UnaCash, an in-app and in-store financing solutions provider, expects the Philippines’ buy now, pay later (BNPL) market to contribute 6.7 per cent in gross merchandise value (GMV) to the digital economy in 2024.
The forecast comes after UnaCash compared the volume of the Philippines’ BNPL market from 2020 to 2023 to the growth rate of the Philippine digital economy during the same period. It predicts that BNPLs GMV contribution this year will be higher than both 2023 (4.88 per cent) and 2022 (4.19 per cent) values.
Gross merchandise value represents the total sales volume, or the value of goods or services sold over a certain period of time, through a customer-to-customer exchange site.
UnaCash notes that BNPL has become a preferred payment model for both online and offline retailers, enhancing their competitiveness and contributing to the overall digital economic landscape, especially in a country dominated by micro, small, and medium-sized enterprises (MSMEs).
“Our latest findings suggest that the Philippines’ BNPL market is experiencing moderate yet stable progress; affirming its growing role in spurring economic growth,” explained Erwin Ocampo, product head at UnaCash. “We are witnessing a notable shift in consumer behaviour where there is a consistent rise in patronage for this mode of financing.
“Amid economic pressures, we also believe that the increasing adoption of BNPL services is reflective of Filipinos’ view of it as a convenient way of managing their spending habits.”
BNPL can be a ‘powerful tool’
UnaCash also says that BNPL acts as a crucial tool for e-commerce businesses, increasing average order values and propelling the sector’s growth. The growing landscape for e-commerce is significantly intertwined with the growth of BNPL. Spending in the e-commerce segment is projected to increase nine times by 2026 from 2021.
In April, the Bangko Sentral ng Pilipinas revealed that consumer sentiment improved in the first quarter of 2024, with consumers also less hesitant about buying big-ticket items in Q1 2024 and the next 12 months.
Ocampo concluded: “While consumers are still wary of rising commodity prices in 2024 and less optimistic about their finances this year, financing options like BNPL remain great tools for making big-ticket purchases.”
UnaCash explained that it remains committed to providing innovative financial solutions and fostering financial inclusion in the Philippines. It believes that BNPL, when used responsibly, can be a powerful tool for Filipinos to navigate the changes in the digital economy.
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