LEVERAGING REMITTANCES FOR ASSET BUILDING:

Product Evolution, Partnerships and Challenges

REMITTANCES AND DEVELOPMENT: THE PHILIPPINE PERSPECTIVE AND EXPERIENCE

Presentation of

Secretary Imelda M. Nicolas Chairperson, Commission on Filipinos Overseas

The Philippines ranks third globally

in terms of remittances -$24 billion

These remittances constitute 8.5% of the country’s GDP.

Sources: World Bank and Bangko Sentral ng Pilipinas

REMITTANCES TO THE PHILIPPINES, 1974-2012

FOOD – 95.4% EDUCATION – 67% HEALTH – 54.9% DEBT – 42.1%

SAVINGS – 39.4% APPLIANCES – 25.9% INVESTMENTS –3.8%

HOW REMITTANCES ARE SPENT

Source: BSP Consumer Expectations Survey, 2nd Quarter, 2013.

“an inclusive financial system which provides for the evolving needs of a diverse public.”

bring more

people into the

financial system

especially those

previously

unserved and

unbanked

Financial inclusion

involves delivery

of a wide range of

financial services

such as savings,

credit, insurance,

remittances and

payment services;

Delivery channels in a

truly inclusive financial

system are wide and

ubiquitous where both

bank and non-bank

based delivery

channels can combine

to reach the financially

excluded more

effectively.

“Policymakers will need to focus on leveraging remittances as a tool for economic development.

While remittances are private transfers, the government can ensure that the policy environment

is conducive to the use of remittances for investment in well-considered financial products, in productive

activities such as entrepreneurial undertaking as well as in better housing, education and healthcare for

remitters and their beneficiaries, improving the financial education of the overseas Filipinos

community and implementing measures to further promote the flow of remittances through the financial

system that would help catalyze the development role of remittances.”

Addressed the goal of harnessing the potential of overseas remittances for

poverty reduction and consequently, local economic

development

Supports policies that transform overseas remittances for

development, savings and investments, and build a viable

collective remittance fund

The ReDC is both an advisory and policy recommending body

and a venue for regular dialogues and feedback on

issues regarding remittances

Per 2012 GFMD, the only one of its kind in the world

Members include migrants’ associations, banks and remittance service providers, migration-related government agencies, multi-lateral

organizations like UNDP and the World Bank, the academe, and non-

governmental organizations.

COMMISSION ON FILIPINOS OVERSEAS

Citigold Center, 1345 Quirino Avenue corner Pres. Osmeña Highway, Paco, Manila 1007, Philippines Tel. nos. (632)552-4700 local 401; (632)561-8291 Fax no. (632)561-8332

E-mail: info@cfo.gov.ph Website:

www.cfo.gov.ph

Please use minimum font size 24.

Gera Voorrips

Can it be taken out?

Educación Financiera

Creación de Empresas

Vacaciones y Escolaridad

Migroseguros

Vivienda Completa

Capital de Negocios

PRODUCTOS RELACIONADOS CON REMESAS

Producto Remesas Resultados:

Creación del vínculo con los receptores de remesas

en las diferentes comunidades y, con los

emisores en EEUU y España.

Al 31 de Agosto del 2013 entrega de : 94,220

remesas por un monto de RD$1,392,748,355.00

(equivalentes a USD$32,540,849.42)

7,513 pólizas de Micro seguros vendidas a

receptores de remesas. En general se han vendido

19,547.

Mas de 1,208 beneficiarios de remesas capacitados en Educación

Financiera.

Mas de 100 beneficiarios de remesas realizaron el Programa de Creación de

Empresas.

“Leveraging Remittances for Asset Building: Product Evolution,

Partnerships and Challenges”

ASKI Greg Macapagal

Bank

Product EvolutionCreates value added services such as

1. MFI loan disbursements and repayments2. Savings3. Banking4. Airtime prepaid loading5. Bills payment

PartnershipsNetwork building with

1. Banks2. Money Transfer Operators (MTO)3. Cooperatives4. Product suppliers

Challenges1. “Customers” are not willing to trust an unfamiliar

system.2. Agents are located in city/town proper.3. Regulatory issues.4. Competition5. Pricing6. Exclusivity clause of partner remittance company.7. Weak signal of telecommunication’s network on

remote areas.

Strategies1. Ready market for remittance services.2. Aligned loan product that can be a channel of

remittance services.3. Coordinated transactions with an entity who is

allowed to do remittance.4. Established satellite offices to render program

and services closer to communities.

L’UMPAMECAS et ses partenaires pour les envois de fonds: évolution et défis

Adama Ba, Pamecas

Présentation de l'UMPAMECAS• Date de création : avril 1995 entre le gouvernement

sénégalais et le gouvernement canadien• Nombre de membres: 570 000 membres• Actif du réseau: FCFA 56 milliards (USD 110 millions)• Encours de crédit: FCFA 37 milliards (USD 73 millions)• Encours d’épargne: FCFA 30 milliards (USD 59 millions)• Nombre d’agences: 80 agences• Produits et services offerts: épargne, crédit, transfert d’argent

international et domestique, virement salaire et pension, assurance santé, finance islamique et gérance immobilière

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Présentation de notre volet transfert d’argent

• Nos produits de transfert sont:– Cash-to-cash (depuis 2005)

• Cash to cash 2012: USD 27 millions payés pour une commission perçue de USD 254 000

– Cash-to-compte (depuis 2009): 3,841 transactions USD 1,5 millions

• Les corridors les plus importants:

– Italie- Sénégal– Espagne – Sénégal– Gabon - Sénégal– Etats-Unis – Sénégal

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Les partenariats: quelle est la meilleure stratégie?• Pamecas a signé des contrats avec 6 partenaires de transfert

d’argent pour les envois de fonds internationaux:– Moneygram, Money Express, RIA, Moneytrans, Western

Union et Choice Money Transfert

• Deux modèles d’affaires cohabitent actuellement:– Un modèle d’affaires négocié directement avec les

banques ( cas Moneygram et Western Union)

– Un modèle d’affaires où ce sont les opérateurs de transfert qui ont négocié directement avec le réseau et nous ont mis en relation avec la banque

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Les partenariats: quelle est la meilleure stratégie?• Choisir un partenaire idéal:

– Accès à la plateforme et/ou Avoir un seul plateforme pour le volet transfert pour éviter d’ouvrir plusieurs plateformes à la fois

– Distinguer le cash-to-compte et cash-to-cash dès l’émission (tarification)

– Être prêt à développer un plan de communication conjoint

– Accepter de faire un suivi formel et régulier du partenariat

– Un système de reporting adapté à nos besoins

– Respect des engagements par les partenaires transfert 31

THANK YOU