Philippines Remittance Market Size and Forecast (2018–2028) - Share and Growth Analysis By Mode of Transfer (Digital and Traditional), By Type (Inward Remittance, Outward Remittance), By Channel (Banks, Money Transfer Operators)
Executive Summary
The remittance industry in the Philippines serves as a pivotal pillar of the nation's economy, offering a substantial influx of foreign currency and serving as a crucial support system for millions of Filipino families. Notably, the Philippines ranks as the world's fourth-largest remittance market, trailing behind India, China, and Mexico, as outlined by the World Bank. These remittances from overseas Filipinos contribute significantly, equating to 9.6% of the country's GDP. Moreover, approximately 48% of total remittances to East Asia and the Pacific Islands, excluding China, find their way into the Philippines.
In 2021, Filipino workers abroad sent a record-breaking USD 31.4 billion in cash remittances, substantially aiding the Philippines' economic recovery post-pandemic. The inward remittance segment emerged as the leading revenue contributor in 2022, driven by the increasing migration of Filipinos seeking enhanced job opportunities.
Industry Dynamics and Technological Advancements
The remittance landscape in the Philippines is marked by dynamism and competitiveness, featuring various stakeholders, including banks, money transfer operators (MTOs), fintech entities, and financial institutions. Technological innovations such as mobile banking and digital wallets have significantly reshaped the industry, making transactions more convenient and widely accessible.
Partnerships and Challenges
An example of industry collaboration includes the August 2022 partnership announcement between Roxe, a blockchain infrastructure company, and Cebuana Lhuillier, a prominent money transfer service provider. This collaboration aimed to facilitate seamless cross-border remittance payments in the Philippines by leveraging Cebuana Lhuillier's extensive fund distribution methods alongside the Roxe blockchain network. Despite its resilience, the industry grapples with challenges such as high transaction fees, currency fluctuations, regulatory compliance costs, and competition from emerging fintech disruptors.
Market Segmentation
By type: By type, the remittance market is segmented into domestic and international remittances. International remittances account for the major share. The full-year 2022 personal remittances also reached an all-time high of USD 36.14 billion. This level was 3.6% higher than the USD 34.88 billion in remittance flows in 2021. The robust inward remittances reflected the increasing demand for foreign workers amid the reopening of economies.
By Flow: The inward remittance segment accounted for the largest revenue share in 2022. The increasing migration of Filipinos in search of better job opportunities is driving the growth of the segment.
Mode of Transfer: Traditional transfer methods are mostly used by Filipinos. Cash is king in the Philippines- no wonder most OFWs opt to send money home via traditional money transfer services, which allow their families to receive them over-the-counter at brick-and-mortar pick-up locations such as pawnshops and local branches of remittance companies.
By channel: The most popular channels are banks, which make up 57%, followed by local agents/pawn shops and agency/local office. Experience has shown that competition and improved technology can enhance access to remittance services via the banking sector and significantly reduce the fees for such services. The technological advancements in artificial intelligence and blockchain technology are expected to drive growth.
Countries: In terms of country sources, the U.S. posted the highest share of overall remittances in 2022, followed by Singapore and Saudi Arabia.
Future outlook
As indicated by Makreo's analysis, the personal cash remittance market is anticipated to experience a Compound Annual Growth Rate (CAGR) of 3.7% from 2023 to 2030. This optimistic trend is driven by a growing inclination towards deployed workers and immigrants, painting a favorable picture for the industry's future.
The remittance sector in the Philippines is poised for continued transformation, utilizing technological advancements and strategic partnerships to effectively navigate challenges. This proactive approach is expected not only to strengthen the industry's substantial contribution to the country's economy but also to enhance the well-being of Filipino families. The evolving landscape suggests a dynamic and resilient future for the Philippines' remittance industry.
Scope of the Study
Makreo Research has published a study on the Philippine remittance market titled “Philippines Remittance Market Size and Forecast (2018–2028)”. The study evaluates the Philippine Money Remittance Market inward and outward flow and provides a detailed assessment of past and present market trends. This holistic approach enhances the overall analysis and makes the study a valuable resource for individuals or organizations interested in exploring the domestic and international remittance markets, digital and non-digital channels, and inflow and outflow by country. The report provides comprehensive coverage of key companies operating within the remittance market, with a particular focus on BDO Bank of the Philippines, Bank of the Philippines Island, and Metro Bank. These companies represent a diverse array of players within the market. The report examines various aspects related to these companies and the industry as a whole, including M&A, funding, and company profiles. The report contains a good balance of macroeconomic and microeconomic analysis, both qualitative and quantitative.
The report examines the Philippine Money Remittance Market in terms of market revenue and further breakdown into market segmentation:
- By Type (Domestic Remittance & International Remittance)
- By Flow Type (Inward & Outward Flow)
- By Payment Method (Traditional & Digital)
- By Channel (Banks, Money transfer Operator, Online Platform, Others)
- By Countries (United States, China, Japan, India, Singapore, Others)
- By End Users (Migrant Labour Force, Personal, Small Businesses, Others)
Companies Covered
- Banco de Oro Universal Bank (BDO Unibank)
- Bank of the Philippine Islands (BPI)
- Metro Bank
- Western Union
- Luzon Brokerage Company (LBC Express)
- Cebuana Lhuillier Pawnshop
- Palawan Pawnshop
- Villarica Pawnshop, Inc.
- Tambunting Pawshop
- Raquel Pawnshop
Period of Study
- 2018-2022 : Past and Present Scenario
- 2022: Base Year
- 2023-2028 : Future Outlook of the industry
Key Questions Answered
- How Philippine economy has performed in the past and what is the future expected growth outlook?
- At what rate Philippines Money Remittance market revenue grew in the past and what is the present state of the industry?
- What are the major driving factors accounted for a push to the industry in the past?
- What is the expected future of the Philippines Money Remittance market?
- What is share of digital and non digital payment method in Philippines Remittance Market?
- Which are the Philippines' top recipient nations for remittances abroad?
- Who are the Tier 1 Players in the Philippines Remittance Market?
- Who are the Key Players among Pawnshops in Philippines?
- What are the Key Business Highlights of the Players?
- What are the Major Mergers & Acquisitions that Happened in the Past in the Philippines Remittance Market?
- What is the market share of key players?