The Philippines is the third country in the world that receives remittances next to China and India. According to Ken Research, during the years 2012-2017, the country reached a remarkable growth in terms of international and domestic remittances. It forecasted that from 2018 to 2022, blockchain will help reduce its transaction costs.
One of the biggest drivers of the Philippine economy is the Overseas Filipino Workers (OFWs). The data gathered from the research says that most OFWs are from Cavite, Laguna, Batangas, Rizal, and Quezon region (CALABARZON) and nearby regions of Central Luzon and Manila.
The growth of remittances in the country is attributed to the growing number of OFWs, the increase in the BPO sector, and other related factors. The US is the major country that sends remittances to the country and UAE comes in second. According to the report, OFWs pay the cost of transactions in order to remit money using the following modes: automated teller machines, web-based services, and reloadable cash cards. The remittance costs, however, are now reasonable because of the diversity of remittance networks.
Ken Research projected that from 2018-2022, the Ethereum blockchain will become a primary means to lessen the cost of remittances.
“Ethereum is not a cryptocurrency unlike bitcoin. Its native token ether (ETH) was designed to operate as gas or transaction fee to fuel the network’s decentralized applications.” – Ken Research
In addition to its projections, the research company also foresees the continuous growth of international remittances. This is because of the increased migration of Filipinos to other countries.
According to Mr. Luis Buenaventura of Bloom Solutions in an earlier article on BitPinas, cryptocurrency can reduce remittance cost by up to 50%. The problem it has to face is its lack of awareness. From the January to November 2017 data, OFWs were able to bring home $20 billion worth of remittances and only 2% – 5% of which were sent via cryptocurrency.
More companies are looking into solving remittance costs by using the blockchain. SCI Ventures has Rebit; Betur Inc has Coins.ph; Bloom Solutions and its BloomX; Alipay and its partner, GCash; Singapore’s Investment Evolution Coin; Aniko and its remittance platform; even RCBC tapped the blockchain to serve the OFWs in Japan.