posted November 03, 2015 at 11:25 pm by Julito G. Rada [ manilastandardtoday.com ]
Monday sent home by Filipinos working overseas is expected to reach $36 billion by 2019 from $24 billion in 2014, buoyed by increasing Internet usage and mobile connectivity.
Market research company Ken Research said in a report mobile money and other mobile financial services would play a vital role in the future expansion of the remittance market.
“Increasing Internet penetration and mobile connectivity is improving access to remittance services as digital offerings drive a decline in transaction fees,” the report said.
It said the bills payment market was bolstered dramatically by growth in remittances and higher income of overseas workers.
Remittances fuel private consumption and one of the backbones of economic growth. In the first eight months of 2015, cash remittances reached $16.206 billion, or 4.1 percent higher than $15.572 billion a year ago.
Personal remittances, which include non-cash items, reached $17.933 billion in the first eight months, up 3.9 percent from $17.268 billion a year earlier.
Bangko Sentral earlier said the efforts of banks and non-bank remittance service providers to expand their international and domestic market coverage through their network of remittance business partners worldwide provided support to the steady remittance flows.
Alix Murphy, senior mobile analyst at WorldRemit, said the report of Ken Research reflected the huge role that mobile technology was now playing in remittances to the Philippines.
“Mobile-based remittances can be a game changer: by eliminating the need for cash and paper processes and the high costs associated with them, mobile money will play an increasingly important role in international money transfer,” Murphy said.
It was estimated that the cost of sending remittances through mobile money was 4 percent, lower than the global average of 8 percent to 9 percent.
“Filipinos are among the most digitally connected when it comes to staying in touch with friends and family. Mobile Internet penetration in the Philippines is the third highest in Southeast Asia, behind only Thailand and Malaysia, with mobile Internet adoption reaching 62 percent of total subscribers in 2014,” Murphy said.
He said with just 28 percent of the population having a bank account but over half the population owning a mobile phone, mobile would be the first and only means of accessing financial services for many Filipinos.
“Although mobile money has taken longer to reach same levels of adoption as in other regions such as Africa and Latin America, there are signs that’s now changing. One in 10 Filipinos have received money via a mobile phone, according to the latest national financial inclusion survey,” Murphy said.
He cited available data showing that as of end-2014, there were 26.7 million mobile money accounts, handling around 217 million transactions and P716 billion ($15 billion) during the year.
Bangko Sentral ng Pilipinas also cited the important role of mobile money in its strategy to increase financial inclusion, for which it was cited by the World Bank and other institutions.
Murphy said WorldRemit could be part of this important transformation by serving Filipinos with low-cost instant international money transfers directly from their smartphone to any bank, cash-pick up agency or mobile money account.