[dropcap style=”square”][/dropcap]BANKS have tempered expectations on the remittance business but see growth in business for new products for migrant Filipino workers.
Development Bank of the Philippines (DBP) Vice President George Sy Inocencio, who heads the bank’s Remittance Department, said the remittance business has not managed to maintain the growth trend that it has showed decades ago as competition heated up.
Inocencio said the remittance industry is growing, but the business is hurting. More so, with the robust expansion of pawnshops that are strategically located nationwide.
Data show Cebuana Lhuillier has about 2,200 pickup locations; M. Lhuillier has 1,800 branches; Palawan Pawnshop has 1,000; while LBC Remit has about 1,100.
“The pawnshop business model was disruptive to traditional remittance players. They cater to the unbanked sector. Also, nonbanks enjoy less stringent regulatory environment,” he said at the sidelines of the Philippine International Banking Convention.
The competition between banks and nonbanks is driving down the cost of sending remittance. This, he said, contributed to the declining margins for banks.
However, he said banks continue with the remittance business to maintain their migrant-worker clients.
“Banks should look beyond remittance to address the financial requirements of overseas workers. They are the new middle class. Their sector is too large to ignore,” he told the BusinessMirror.
In DBP, he said, other than opening deposit accounts, it also offers migrant workers time deposits, investment products and business loans.
“We want them to graduate from being migrant workers to investors and entrepreneurs. They have financial requirements, and it’s the role of the banks to provide that service,” he added.
BDO Unibank Senior Vice President Geneva Gloria, head of BDO Remittance Distribution, said the bank helps overseas workers by making account opening easier.
BDO has initiatives and efforts, which are anchored on addressing the main concerns of Filipinos abroad, Gloria said.
BDO actively participates in projects of government and non-government institutions concerned in the generation of jobs, migration, development of financial literacy and preparedness, she added.
BDO recently formed a synergistic alliance with DBS Bank to serve the remittance requirement of Filipinos in Singapore.
The partnership agreement between BDO and DBS Bank, two of the largest banks in the Philippines and Singapore, gives clients in Singapore fast, convenient and safe way of remitting funds to the Philippines, she added.