Money transfer boom not just for Filipinos in Philippines
MANILA, Philippines—No matter what the global financial situation, there’s growth in remittances.
Why? Because overseas workers make ends meet to make sure their families back home do not feel the strain, according to officials of MoneyGram International, the second-leading money transfer firm in the world.
“We see our business growing by high double-digit this year. This is especially because OFWs (Overseas Filipino Workers) will make the adjustments if they have to, just so their families do not feel the impact,” MoneyGram International country manager for the Philippines Alex Chan Lim says.
Lim notes that with about 300 Filipinos leaving monthly for work abroad, and with “practically none” returning to the Philippines, money transfers can only grow going forward.
The Philippines, despite its small size, is the fourth-largest recipient of remittances globally after India, China, Mexico and France, officials of the money transfer company say.
“India and China have much larger populations. But Filipinos’ strong family ties really sustain the flow of remittances into the Philippines,” Lim says.
And the money transfer company is not just targeting growth among Filipino OFWs anymore.
Apparently, the influx of Chinese entrepreneurs into the Philippines is an emerging growth market.
There may be some 40,000 Chinese nationals that remit some $1,200 a month, Lim says.
“Chinese people who open stores here, they send money back home to their families and they may include payment for materials or things they need for the business. It’s also a growing market for us,” Lim says.
Lim also says remittances passing through the country’s banking system have been growing six to 10 percent for the year.
Meanwhile, officials of MoneyGram say that they are not overly concerned with the economic chaos affecting the eurozone and the United States market.
MoneyGram International executive VP and chief marketing officer Juan Agualimpia says that after the 2008 financial crisis, the Philippine economy and individual Filipino workers have learned to adjust to global shocks.
“We felt the impact of the financial crisis in 2008 but right now we’re not feeling it,” Agualimpia says.
According to the Bangko Sentral ng Pilipinas, remittances grew by 11.1 percent annually to $1.7 billion in August, bringing January-to-August remittances to $13 billion (a growth of 6.9 percent) despite economic uncertainties abroad.
Much of these remittances came from the usual sources: the United States, Canada, Saudi Arabia, the UK, Japan, United Arab Emirates, Singapore, Italy, Germany and Norway, according to government data.
Remittances make up about 10 percent or more of the Philippines’ gross domestic product, depending on the source of data.
Although China leads the remittances table in the region, such flows account for only 0.9 percent of the country’s GDP, according to the World Bank.
In contrast, remittances amount to 11 percent of GDP in the Philippines, 7 percent in Vietnam, and 3.5 percent for Fiji.
The World Bank’s Migration and Remittances Unit sees a pickup from 6 percent gains for all developing countries in 2010 to 6.3 and 8.1 percent for 2011 and 2012, respectively, to reach $375 billion by the latter year.
That’s a lot of good prospects for money transfer firms.
