Key Takeaways from Ken Research report titled, “Philippines Money Transfer and Bill Payment Market Outlook to 2023”
The improvement in the global economic conditions has been a major growth driver in the OFW remittances during 2017. Depreciation of Philippine Peso was also a factor that raised the amount of OFW remittances
Migration of labor has been an important mode of movement of Filipinos to other countries particularly because of scarcity of jobs with inadequate income in the Philippines and due to the demand, principally in less skilled occupations in overseas nations. From 2010 to 2016, Saudi Arabia, UAE and Singapore were the foremost countries for the deployment of newly hired and re-hired land-based OFWs. Nevertheless, in 2011, there were more OFWs positioned in Singapore than in Hong Kong and Qatar, rendering Singapore the third most important destination of OFWs.
International remittance inflows in Philippines are highly affected by seasonal patterns. For instance, March is the month for graduation in the Philippines and remittances have showcased significant incline in this month over the past five year. Remittances also inclined in the months from May to June as it is the period of opening of schools. Moreover, transfer of finances from OFWs also exhibited a hike amidst the holiday season especially in the month of December as they sent more money back home for Christmas festivities, gifts and other holiday related expenses.
The gains that families in the Philippines draw from remittances principally hinge on where and how they spend the remittances. For instance, Filipino households which obtained remittances from overseas Filipino workers have spent relatively less on consumption of goods such as food and more on investment goods such as housing and education. International remittances have been characteristically utilized for investments in human capital and physical assets, which majorly include health and education. Such investments were observed to be directly responsible for invigorating growth.
In Philippines, remittance has been dominated by companies such as Western Union, Bank of Philippines Island, LBC Express, BDO, Metropolitan Bank. On the other hand, the market is becoming competitive with the introduction of new technologies. New players and startups are offering different forms of money transfer services. With the advent of digital currency and blockchain technology, companies are becoming adaptable for currencies like bitcoin to enable remittance services.
Analysts at Ken Research in their latest publication “Philippines Money Transfer and Bill Payments Market Outlook to 2023 – By Domestic Remittance Banking and Non Banking (Pawnshops, MTO) Channels, International Remittance Flow Corridors and Channel; Bill Payment Segment” believe that promoting latest technologies such as digitization of money transfer, new transaction platforms and increasing deployment of Filipinos in other countries will aid the Philippines International Remittance Market.
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