It’s All about Remittances – the Current Philippine Bitcoin Situation
Last year, I’ve written a piece on LinkedIn about the Bitcoin situation in the Philippines. Nothing has changed much, and the Bitcoin situation in the Philippines is still about remittances. In the past few months, the decentralised cryptocurrency has flourished, set to be a principal ICT growth catalyst in the country. And due to the immense amount of overseas Filipino workers depending on remittances, new payment platforms are sought after, creating potential investment opportunities for multiple startups.
Joe Maristela, an investor, has stated with local media that Satoshi Citadel Industries (SCI) goal of broadening financial solutions, noting the significance of building new industries in the tech sector. SCI had raised an extra 100,000 USD in seed backing to follow the notable expansion in its first year. It currently holds one of the biggest cryptocurrency ventures in South East Asia with seven startups, ranging from Bitcoin exchanges to remittance services.
“We must stop thinking about how we can grow our current industries and begin to think about which new ones we can create. Philippine tech is the path to this future, and investors must pave the way,” Maristela stated in a release.
Last year, the typical rate of sending a 200 USD transfer was at 8%, whist charges from more customary remittance providers in the country are close to 10% for little transactions of up to 300 USD as per a report in the Bitcoin Magazine. Overseas Filipino workers prefer to utilise these services because of drastic delays from traditional banks with wire transfers taking approximately 5 banking days or more to complete the process. Another factor is the slightly high minimum deposit requirements. Hence, there is no wonder that the Philippines has become a signifant one with a total of 28 billion USD last year in comparison with 64 billion USD in China and 70 billion USD in India.
The majority of the Philippine populace are considered “unbanked” with only an estimated 27% registered credit card users as determined by the MasterCard Worldwide Center for Inclusive Growth. Therefore, the general community are more inclined to avail pricey remittance services instead of direct bank wire transfers.
To face this problem straightforwardly, a bunch of payment platforms based on cryptocurrencies have taken it to themselves to be the main source of provision of more convenient remittance services for overseas workers. These include Coins.ph, Bitmarket.ph, Buybitcoin.ph, and Rebit.ph.
For instance, Coins.ph, which launched their services last year, has partnered with various banks link Banco de Oro (which we have used), Bank of the Philippine Islands, China Bank, Hong Kong and Shanghai Banking Corporation, among others. It has also started providing services to pay utilities and insurance, and it has made partnerships with e-commerce platforms like Metrodeal.
“The beneficiary doesn’t need to know that those funds were ever transmitted via Bitcoin, they only know that the sender had to spend a little less money while doing so. There’s no volatility risk as the recipient never touches Bitcoin; all risk is managed by the service,” said Luis Buenaventura in a TechCrunch article.
For what it’s worth, fluctuations in the Bitcoin price is still very volatile, but the number of Bitcoin startups in the Philippines continue to grow. Bitcoin adoption will become more mainstream, and it may be sooner than expected.