Filipinos working overseas remitted a record $31.418 billion in 2021, representing a 5.1-percent increase from $29.903 billion in 2020. Remittances grew by another 2.9 percent in the first half this year to $15.347 billion from $14.918 billion a year ago, giving the economy a lifeline amid the challenging environment.
WorldRemit, a digital payments service that disrupted the industry, expects cash inflows from overseas Filipino workers to keep growing in the second half.
“For 2022, the growth is expected to increase by another 4 percent. In light of the demand for OFWs in host countries that are reopening their economies to foreign workers, actual OFW deployment, and the shift to digital finance, we estimate that remittances will continue to grow and support the country for years to come,” said WorldRemit country director Earl Melivo, who has more than a decade of experience in banking and financial technology.
Disruptor
Melivo says digital technology is changing the finance sector for the better. “While around 47 percent of Filipino adults remain unbanked, the digital economy has provided many alternatives for them to access digital finance such as digital wallets,” he says.
“They now prefer digital finance over offline banking. Eighty percent of unbanked Filipinos who turned to digital alternatives say they will continue to use digital banking post-pandemic because it’s convenient, accessible in many countries, and at times offers better rates than traditional banks, especially for those who send money from overseas,” says Melivo.
Digital technology also enables the more than 10 million Filipinos based abroad to send money to their families in the Philippines faster and more conveniently. “Digital remittance services offer their dependents a trusted and reliable means to receive money regularly from overseas. As a result, they provide crucial support to the Philippine domestic economy, especially during challenging times such as today,” says Melivo, who obtained BS degree in Economics and Public Policy from San Beda University in 2007.
Melivo worked for top local companies such as BDO Unibank Inc., Metropolitan Bank & Trust Company, and Smart Communications Inc. before joining WorldRemit, where he also serves, on an interim basis, as APAC managing director for send and receive markets.
WorldRemit helped change the brick-and-mortar remittance business in the Philippines. “In an industry that has previously been dominated by offline legacy players, we have disrupted the norm by making international money transfers online safer, faster, and lower-cost. With a wide partner network to support our customers sending and receiving how and when they want, as well as buffed security mechanisms, WorldRemit has adjusted to the rapid changes in financial technology by prioritizing convenience and cost-effectiveness,” he says.
He says that since the company opened transfers to the Philippines in 2011, WorldRemit users around the world sent billions of dollars to the Philippines. “As of the first half of the year, WorldRemit users globally have sent over $600 million to the Philippines this year,” he says.
WorldRemit covers 50 sending countries and 130 receiving countries. “We operate in more than 5,000 money transfer corridors worldwide and employ around 1,500 people globally,” says Melivo.
WorldRemit’s robust payout network allows users to connect to more than 100 banks, leading mobile wallet services and 25,000 cash pick-up locations in the Philippines, providing customers the flexibility to send and receive however they prefer, he says.
Fully digital
“In terms of sending money, WorldRemit is 100-percent digital, with increased convenience and enhanced security features. On the receiving end, we offer a wide range of options including bank deposit, cash collection, mobile airtime top-up, and mobile money. Since we are a fully digital service having proprietary platforms, we enable such transfers to the Philippines 24/7—securely, reliably, and most importantly, in a cost-effective manner for both our senders and recipients,” says Melivo.
He says with a variety of ways to send money including bank transfer, cash pickup, and mobile money, WorldRemit makes sure money is delivered quickly and easily. “Our fees are competitive, traditionally lower than brick-and-mortar competitors due to our digital offering and 95 percent of transfers are completed within minutes,” he says.
Melivo says digital technology has empowered Filipinos and people all over the world to take control of their finances, wherever they may be.
“The simplicity and accessibility of digital remittance services are able to regularly connect OFWs with their loved ones and boost their spending capacity for essential expenses,” he says.
“Amid economic headwinds and global inflation, remittances remain a trusted source of income for many families, and the availability of payment services online has greatly improved their efficiency. Even when there are physical limitations to money transfers, pandemic-related or otherwise, online remittances can still be carried out. Ninety five percent of WorldRemit app’s transactions, for example, are received within minutes,” he says.
Plans
Melivo says given the rapid advancements in financial technology, service providers are challenged to adapt to the changing needs of remittance senders and receivers. There remain a lot of opportunities to widen payout networks to reach and accommodate more users as well as to explore even tighter security with the rise of online scams, he says.
“In the next few months, WorldRemit plans to continue working with our Philippine payout network to offer services that benefit our customers. We also have our current and consistent initiatives to further improve our customer platforms to provide better value and the most competitive price points for our senders,” he says.