SINGAPORE: COVID 19 was supposed to speed up the transition to digital payments. There was a new era in which physical currency goes the way of dinosaurs, with lockdowns and movement restrictions in early 2020 across Southeast Asia.
Recent data on cash management practices across the region shows that cash seems to be rebounding, at least in some economies. A major regional study of small and medium-sized enterprise SME financial behaviour is conducted by CPA Australia. This annual survey of small business practices around the Asia-Pacific includes a look at the use of cash, and the latest round yielded some arresting results.
The survey asked how many firms still receive 50 per cent or more of their income in cash. It is a simple but effective barometer of currency usage among SMEs.
The Philippines is the highest user of cash, with over 80 per cent of respondents saying that over 2021 of their sales were transacted using cash. Cash usage declined, as was expected due to major COVID-induced lock downs, an increase from 70 per cent in 2020.
Filipinos seem strongly wedded to their pes, and in 2021 their cash usage reverted to an identical level of 80 per cent registered in 2019.
Indonesians have a large reliance on cash, with a marginal increase last year. The share of firms receiving more than half of their payments in cash went from 58 per cent in 2020 to 60 per cent in 2021.
The trend has not been the same in all parts of the region. Malaysia and Singapore reported a decline in cash usage, with less than 40 per cent of small firms in each nation reporting majority cash transactions. The use of cash has declined for several years in these two countries.