Starting a US to Philippines remittance business
In the Philippines, personal remittances from overseas Filipinos have taken on a remarkable role in the nation's economic landscape. With personal remittances reaching a record high of $34.884 billion in 2021, equivalent to 8.9 percent of the country's Gross Domestic Product (GDP), these financial flows have significantly contributed to the Philippines' economic stability.
State of Remittance in the Philippines
The inflow of remittances remains relatively steady thanks to large numbers from the U.S., Singapore, Saudi Arabia, Japan, and the U.K. Likewise, it is due to the rising Overseas Filipino Workers (OFW) deployment, the reopening of host economies' demand for OFWs, and the use of digital remittance platforms.
"OFW" or "Overseas Filipino Worker" is a term officially recognized by the Philippine government. It refers to significant and diverse Filipino citizens who are employed or working abroad. They are a vital part of the Philippines' labor force, and their remittances contribute significantly to the country's economic stability.
In December 2021 alone, personal remittances rose 5.7% to reach U.S. $ 3.49 billion, a new record. For the year 2021, personal remittances stood at $36.14 billion, equivalent to 8.9% of GDP and 8.4% of Gross National Income (GNI). Cash transfers via banks rose notably by 5.8% to Php 879 million in December 2022 (land-based workers accounted for 40% while seafarers made up the remaining). Remittance from the United States accounted for the largest share of remittances followed by Singapore and Saudi Arabia.
The numbers show that migration significantly helps the Philippine economy by providing important income for many households and revealing the global economic connections.
Remittance companies that cater to the Philippines population
OFWpay: As the name suggests, OFWpay is designed for Overseas Filipino Workers (OFWs). It's tailored to meet the unique requirements of Filipino workers abroad and offers various remittance options, making it convenient for them to send money to the Philippines.
Coins. Ph: A Filipino-based mobile wallet and remittance app. While it is used within the Philippines and by Filipino expatriates, it's designed to provide a comprehensive financial ecosystem for Filipinos, including remittances, bill payments, and other financial services.
Cebuana Lhuillier Pera Padala: Offers domestic and international remittance services with real-time transfer speed, with over 3,000 branches operating from early morning to midnight. Has reward programs for discounts and privileges.
GCash Padala: Includes online and traditional remittance options available 24/7. Maintaining a balance is not a requirement, and they accept PayPal and Payoneer transfers.
LBC Instant Peso Padala: Offers door-to-door cash delivery with same-day and next-day delivery options available seven days a week in over 6,400 branches.
BeamAndGo: A social impact FinTech that enables migrant workers to meet their family's financial needs and aspirations.
Denarii Cash: Enables mobile wallet-based money transfers for overseas workers with zero fees.
iRemit: The largest non-bank Filipino-owned remittance company offering global remittance services.
Tapping into the U.S. to Philippines Remittance Corridor
Entering the competitive Philippine market with a remittance business can be a lucrative opportunity. The Greater Los Angeles metropolitan area is a vibrant and culturally rich home to the largest population of Filipino Americans in the United States, numbering around 606,657. Los Angeles County alone boasts over 374,285 Filipinos, making it the single largest concentration in any county in the U.S. The Los Angeles region is the second-largest Filipino population center globally, surpassed only by Manila.
But building a digital remittance app requires understanding not only of the local markets, but also compliance regulations , and technology that goes behind the app.
Collaboration with payment processors and banks is arguable the toughest part of the process.
Machnet's Remittance-as-a-Service (RaaS) Program:
Machnet's RaaS platform is ideal for aspiring remittance providers setting up money transfers from the United States to the Philippines. Walking through all of these complexities of this model —from very rigorous regulatory standards to highly innovative technologies— our RaaS platform is a mighty pillar for your business to thrive. Going into the world of the U.S. to the Philippines, money transfer is not just a business venture; it's a commitment to connect families, support communities, and stimulate development.
By combining deep market insights with ironclad regulatory compliance and technology excellence, you can lay the foundations of a thriving money transfer platform that doesn't just keep families together but fuels broader economic development.
If you are eager to learn more about how Machet's RaaS program can add value to your business, go ahead and shoot us a message.