New technologies could reduce money transfer costs by US$ 2.29 billion a year. The Philippines is Southeast Asia’s top nation for foreign migrants and the amount of money they send home is steadily increasing. Filipinos contribute to the workforces of about 100 countries, with 10 million migrants.
Manila (AsiaNews/SEGlobe) – The Internet, cryptocurrencies and blockchain technology could put keep money in the pockets of overseas Filipino workers by reducing the cost of sending funds to family members.
As Southeast Asia’s top exporter of migrant workers, the amount of money Filipinos send home is rising.
In the 1970s, Filipino workers arrived in great numbers in the Middle East to work in the oil industry. By mid-decade, they went to more destinations and increasingly included women.
The government, which realised the need to regulate migration, began monitoring the expanding recruitment of its citizens.
About ten million Overseas Filipino Workers (OFWs) can be found today in about 100 countries, this according to the International Labour Organisation. At least another million emigrate each year.
A World Bank report indicates that, by October 2017, the country was expected to be among the top five countries in terms of overseas remittances, roughly US$ 32.8 billion, a figure expected to increase. Only China and India topped this.
As of June, the World Bank recorded the average global cost of sending remittances to be 6.99 per cent of the amount – a significant improvement from 9.67 per cent in 2009.
But judging from these recent cost estimates, Filipino migrant workers could save another US$ 2.29 billion per year with blockchain technology, tokens or cryptocurrencies.
Using such means money can be electronically transferred to another person in minutes using a code and a “block” that contains an unalterable record of its value, allowing the transfer to be verified without a third party. This cuts down time and the need for an institution such as a bank. The block can then be converted back into regular currency.
Given the large number of Filipinos working abroad and the costs of remittance, money transfers have long been a good business in the Philippines. New financial technologies have helped bring down the cost of remittance.
The World Bank estimates that this form of transfer is the most cost-effective, at an average global cost of 3.2 per cent, a figure that could be pushed down even further when more cutting-edge tech developments come along.