Retail tycoon Lucio Co’s Puregold Price Club Inc. is seeking a piece of the lucrative Philippine cash remittance industry with the creation of a new subsidiary called “Purepadala Inc.”
Puregold disclosed to the Philippine Stock Exchange on Monday its board of directors had approved the incorporation of this new subsidiary, which will enter into a partnership with banks, financial institutions and other financial technology (fintech) entities.
According to the firm, subsidiary Purepadala is “intended to operate a cash remittance business for the benefit of the customers and shoppers of Puregold group of companies.”
But before operating as such, Puregold would have to undergo the regular process and seek approval from regulatory government agencies, the disclosure said.
By creating this new subsidiary, Puregold seeks to create a new earnings stream by offering remittance services, riding on its geographical footprint across the country. Other retailers and even pawnshop operators have likewise entered the remittance business in partnership with financial institutions and fintechs.
As of end-June, Puregold group is already operating a total of 393 stores nationwide. These include 341 Puregold stores, 16 S&R membership shopping warehouse and 36 S&R New York Style pizza fast-food chain.
This year, Puregold expects to deliver 25 new Puregold stores and two new S&R warehouse stores.
Cash-rich third party entities with many outlets that conduct regular business in fixed locations anywhere in the country, such as convenience stores, pharmacies and other highly accessible retail outlets, are seen as good alternative channels for remittances or as “agents” of banks.
Remittances from overseas Filipinos reached $28 billion in 2017 compared to $26.9 billion in 2016, based on data from the Bangko Sentral ng Pilipinas (BSP). Domestic remittances are likewise seen as a big business.