Increasing investments and government support to further develop the financial technology space in the Philippines will create a multiplier effect that could spur economic growth and result in greater financial inclusion.
During a panel interview at Bloomberg Breakfast Briefings hosted by Globe Telecom Inc., Globe Fintech Innovations Inc. (Mynt) president Anthony Thomas said promoting fintech through innovations and sound regulatory policies will help greatly benefit the broader Philippine economy.
These benefits, then, will be passed on to the common folk. Today, the fintech environment is going through a tremendous pace of growth, thanks to new investors in the sector, heightened competition, and new innovations that players continuously introduce.
“Enablement now has multiplied capability. A lot of the normal pain points that we see are now being solved — that should apply a multiplier effect to the Philippine economy,” Thomas said.
GCash, operated by Mynt, has enabled over 20 million users with the ability to use their mobile phones for physical and digital transactions. GCash allows users to create a savings account through GSave, earn a credit score and subsequently have access to a credit line through GCredit, pay bills, send money and pay for physical transactions through its innovative QR payments technology, among others.
With access to GCash now made easier through its implementation of a telco-agnostic strategy, and add money touch points growing exponentially, more aFilipinos are adopting the cash-lite lifestyle.
“If you look at the Philippines, adoption happens because others around you are doing the same thing — they are transacting through mobile wallets, using their phones to pay bills, send money and even open a savings account. Vitality happens when the service is remarkable,” Thomas said.
Adoption has led to more businesses and government agencies to jumpstart their digital transformation initiatives and more enterprises to sprout in many parts of the Philippines.
“The moment you make it easy for budding entrepreneurs and freelancers to easily make payments both offline and online — printing their own QR codes, setting up widgets for online acceptance, transferring money through Instapay, and giving other users access to credit and savings — the multiplier effect comes in,” Thomas said.
He added: “Businesses will start to grow at unprecedented rates, people will have greater financial capabilities and consumption will rise as a direct result. These will help spur economic growth for the local economy.”
This paints a rosy picture for the Philippine digital economy which reached $5 billion in 2018, the smallest among six Southeast Asian nations according to a study conducted by Google. This figure is seen to balloon to $21 billion by 2025, but will still remain as the smallest digital economy equal to Malaysia and next to Singapore, Vietnam, Thailand and Indonesia.
Fintech could help accelerate this growth by bridging the gap between the banked and unbanked. Through sound government policies and innovations, the fintech sector could help more Filipinos participate in the digital financial space.
“Our partnership with Ant Financial has immensely helped us in on-boarding a huge number of Filipinos into the GCash platform. Through its cutting-edge facial recognition technology, our KYC (know-your-customer) process is now more seamless, helping previously-unbanked people have access to formal financial tools and services,” Thomas said.
Financial inclusion has always been one of the key missions of GCash since it was incorporated years ago. It has consistently been a strong government partner towards achieving their shared goal of bringing finance for all.
“The whole purpose of why we built GCash in the Philippines is the fact that we saw a huge problem to be solved. We saw that there was a need for financial inclusion and financial access in the Philippines, and what we are doing in GCash is we give people a whole new set of assets that they can capitalize on. GCash is an enabler for small people in the Philippines,” Mynt vice chairman Ernest Cu said.