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The Impact of Digital Currencies On The Remittance Inflows To The Philippines In 2023 What You Need To Know

The Impact of Digital Currencies On The Remittance Inflows To The Philippines In 2023 What You Need To Know

23 Oct 2023


The world is constantly changing, and sources and modes of digital currencies are rapidly increasing in all countries, including money transfers to Philippines. The same is the case with Digital currencies in the Philippines.

 

To send money to the Philippines, people use digital currencies and flow remittances to the land. Money that is sent home by migrant workers is the lifeline to residents of people in low and middle-income nations. Also, recent data shows that the total amount sent to these countries throughout 2022 has risen by 5% to $626 billion.

 

But this isn't the same with all countries. Not all the remittances being sent are from richer to less well-off lands. The Russian invasion of Ukraine has caused the amount of money sent home by Ukrainians living in foreign countries to rise greatly by pushing worldwide remittances to $794 billion.

 

The biggest opportunity for virtual banks in the Philippines might be the biggest overseas Filipino workforce in the Middle East, Hong Kong, and ASEAN. Digital banking will create new opportunities for the country and its banking sector. It will make it more competitive globally, and that, of course, will include new avenues to expand to regional markets.

 

Size of the Philippines Remittance Market

People tend to send money to the Philippines online, which has helped the remittance market grow immensely in recent years. According to the World Bank, this market is now the fourth largest globally, after India, Mexico, and China. People are sending personal remittances from overseas Filipinos as a crucial source of foreign exchange to the Philippine economy, which is equal to 9.2% of the whole GDP in 2020.

 

The lowly served segment has now created a unique opportunity for the only online banks in the Philippines to grow their overall customer base and revenue more quickly than their peers in the nearby markets. This is true mainly in their very first years of operation. Virtual banks, including the Overseas Filipino Bank Inc. and the Tonik Digital Bank Inc., have said remittance is one of their primary business courses.

 

Online money transfer to the Philippines has caused the Bangko Sentral ng Pilipinas, or BSP, to grant licenses to six online banks in late September. The central bank, by Aug 31, also closed the window for accepting applications for digital banking for three years to let companies build out their businesses.

Are There Chronic Challenges In The Path Of Digital Currencies And Their Growth In The Philippines?

The Philippines, just like all other better and well-developed countries, is hoping virtual banking will help bring its unbanked ratio of the population into the formal banking system framework.

 

Under this central bank's digital banking framework, released in November 2020, the operators must offer complete financial services, Electronic channels also do this and should not have any physical branches.

 

Through innovation and technology, all digital banks will be able to find ways of simply overcoming most of the issues that have kept people from having their basic bank accounts. Digital banking also has the potential to bring millions of unbanked and underbanked people into the financial system.

 

Most Filipinos are still unbanked as they don't have enough supporting documents to help open a bank account. This is because they are either elderly, unemployed, or working in any informal sector. Due to this, setting up physical banking branches in almost 7000 islands wasn't easy.

 

The Philippines falls behind in most of its Southeast Asian neighborhoods in digital banking operations, with only 76% of overall respondents in the VMWare study through July. They are embracing contactless payment compared to the region's average of 85%.

 

Quickly Growing Demand

Money transfer to Philippines digitally has simplified lives and has made them feel differently regarding the mode of payments and receivables of money. Along with all cross-border remittances, local digital payments have increased throughout the Philippines. This has created a fertile ground for the growth of virtual banks.

 

The overall volume of payments made through digital modes has risen to an estimated 17% during the first half of 2020, starting from 10% in 2018. This growth was mainly because of the payments made to merchants and person-to-person payments during the pandemic.

 

How To Send Money To Philippines?

Sending money to the Philippines has become much more straightforward than using a random application on your phone. You should have a good internet connection and a way to send money to the Philippines. ACE Money Transfer offers the best services for sending money digitally worldwide. There is a rise in the flow of digital remittances in and out of nations, all thanks to ACE Money Transfer providing its top-notch services around the globe.

 

Having the app downloaded on the mobiles, a good internet connection, and money to send to your nation is required to send money to Philippines. The constant growth of the rise in digital remittances allows economies to shift.

 

The great technology sector has driven digital remittances to flow to the Philippines and has caused a great shift in their economy. Due to this mode's ease, there are expectations for remittances to grow over time and bring more people into the online banking sector.

 

Cash flowing to the country has increased rapidly, making the Philippines 4th greatest online market globally. With time, the growing transactions will allow Filipinos to make their financial profiles, unlocking access to better financial services.

 

Bottom Line

Online money transfer to the Philippines has helped the country increase its online cash flow and move it to a financially stable position. This rapid increase has moved digital remittances to the country and is expected to keep rising in the year 2023 as well. These services will make life easier for people of the Philippines living in and outside the land. 

 

FAQs

1: What are digital currencies, and how do they impact remittance inflows to the Philippines?

Answer: Digital currencies are virtual or cryptocurrencies like Bitcoin, Ethereum, and others. They impact remittance inflows to the Philippines by offering faster, cheaper, and more efficient cross-border transfer options, potentially reducing transaction fees and time delays.

2: Can I use digital currencies to send money to the Philippines?

Answer: Yes, you can use digital currencies to send money to Philippines. However, it's essential to ensure that both you and the recipient are familiar with digital currency usage and choose reputable platforms or services for secure transfers. 

3: What are the advantages of using digital currencies for remittances to the Philippines?

Answer: Using digital currencies for remittances offers advantages such as lower transaction costs, quicker transfers, accessibility, and the potential for reduced dependence on traditional banking systems, making it an attractive option for many senders.

4: Are there risks associated with using digital currencies for remittance to the Philippines?

Answer: Yes, there are risks. The value of digital currencies can be highly volatile, and scams or frauds are possible. It's crucial to exercise caution, conduct due diligence, and use secure and reputable digital currency exchanges and wallets.

5: What regulations exist for using digital currencies in remittance to the Philippines?

Answer: The Philippines has regulations in place for digital currency transactions. Ensure that you comply with local laws and regulations, report your transactions, and use licensed and regulated service providers to ensure the security and legality of your remittances.


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