During the COVID-19 pandemic, mobile cross-border payments have increased in popularity among Filipinos.
World Remit Country Director for the Philippines Earl Melivo said they are seeing a rise in both senders and receivers using digital remittance services worldwide, including in the Philippines.
Recipients continue to move away from cash and paper-based transactions favouring digital receiving methods, especially bank account transfers and mobile wallet services.
“It has quickly become a digital affair for many [and a still increasing number of] overseas Filipinos sending money back home – both for those seeking a faster solution to getting money to loved ones, and as a first-time user forced to make the shift because of COVID-19, who have since realized the value of making transactions digitally. Sending money online simply saves them time, giving them more control and transparency over the transaction, and making each transaction much more convenient for both the sender and the receiver,” Melivo said.
Remittances have been digitalizing for years, according to the money transfer processing firm UniTeller, but this trend has sped up further in recent months. Alberto Guerra, CEO of UniTeller, claimed that worldwide mobile money transfers have grown by 65% to US$12.7 billion in the past year.
Remittances are a significant source of income in developing nations, not just for those receiving them but also for entire countries. According to the Asian Development Bank (ADB), Asia received US$315 billion in remittance payments, making it the largest recipient of remittances. India is the most important receiver, having received close to US$80 billion in remittances. The People’s Republic of China (PRC), Pakistan, and the Philippines follow close behind.
ADB further stated that digital services (including mobile money, internet, and bank account credits) are the most effective method to reduce remittance costs, expand access, increase transparency, enhance efficiency, help manage anti-money laundering (AML) and combat the financing of terrorism (CFT) risks.
The Bangko Sentral ng Pilipinas (BSP), the country’s central bank, reported a 2.6% year-on-year growth of remittances last July to US$3.167 billion, while year-to-date expansion stood at 6% to US$19.783 billion, as a result of more economies opening up and recovering from COVID-19.
Nicholas Mapa, ING Bank Manila senior economist, said that last July’s remittances growth is impressive given that it was the highest non-December level recorded, matching volumes usually sent home during the Christmas season. According to Statista, the value of remittance inflows to the Philippines amounted to approximately US$35.17 billion in 2019.