BANSAN C.
CHOA
Chairman
and CEO
iRemit
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the presentation of
Bansan Choa of iRemit
PUBLISHED SPEECH
Mr. Richard Mills, Chairman of the Asia CEO
Forum; Ms. Rebecca Bustamante, President of Chalre Associates
Executive Search; Mr. Don Felbaum; Mr. Bob Bustamante; friends
and colleagues in business and industry; Ladies and gentlemen:
It is a great privilege and honor to be able to address you
today and talk about the remittance industry and our company,
I-Remit, Inc. I thank the organizers of the Asia CEO Forum for
this welcome opportunity to give you an insider�s view of this
interesting phenomenon associated with our country.
The invitation that I received from Mr. Mills mentions that
there are a lot of misconceptions about our business and that it
is of interest for people to understand how and why the business
works, how important the industry is to the nation and
individual families, and what unique contributions the company
has made to the industry.
I-Remit, named as the Business Mirror Most Innovative Company in
the Asia CEO Awards � Philippines 2011, remains the largest
Filipino-owned non-bank remittance company in the country. The
award couldn�t have come at a better time as the awarding
ceremonies were held right on the eve of the company�s
observance of its tenth year of being of service to overseas
Filipinos.
Let me therefore, begin my talk with a brief background on
Filipino migrant workers and the more than 20 billion dollar
industry that this phenomenon has created.
Stories abound on how and when Filipino overseas employment
actually began.
Many claim that the first large scale migration of Filipino
workers began over a hundred years ago when Filipinos from the
northern regions left the country from 1906 to 1929 to work in
the sugar plantations of Hawaii.
However, some contemporary historians point out that the history
of Filipino migrant workers may have started much earlier.
There is, in fact, an anecdote about the national hero, Dr. Jose
Rizal who made a brief stopover in Japan in 1888 on his way to
Europe. While taking a walk in Hibiya Park, he met some
Filipinos who introduced themselves as musicians of a Japanese
orchestra that had just finished playing Strauss.
Still, there are those who mention that Filipino crews manned
the Spanish vessels that plied the Manila-Acapulco route of the
galleon trade between 1575 and 1815. These early sailors may
therefore be regarded as precursors of today�s Filipino
seafarers who remain very much in demand. Some of these crew
members who jumped ship later settled in the Saint Malo village
of the State of Louisiana, U.S.A. and became known as the
�Manila men.�
Regardless of when Filipino labor migration actually began,
there have been observed trends that have characterized the
distinct waves of Filipino workers that have left the country in
the more contemporary setting that are closely associated with
global economic and demographic shifts.
The first major modern-day mass migration of Filipinos followed
the immigration reforms in the United States in the mid-1960s.
This wave was in response to the need for more professionals,
particularly in the medical and allied fields. Thousands of
Filipino professionals, mostly doctors and nurses, arrived in
the U.S. with their families. Most of them ended up in the East
Coast as distinct from the earlier migrants that had settled in
the West Coast and Hawaii.
In the mid-1970s, overseas employment gained considerable
national importance as it was adopted by the administration of
President Ferdinand E. Marcos as a temporary measure to curb
unemployment and prop up the sagging economy. The idea of
contract workers actually came from the great patriot and
statesman, Ka Blas Ople, the �Father of OFWs� who was also
behind the framing of the Labor Code of the Philippines. It was
also during his tenure as Minister of Labor that the Philippine
Overseas Employment Administration and the Overseas Workers
Welfare Administration were created, thus making labor export a
conspicuous feature of national economic policy for many years
to come. He was also instrumental in the creation of the
National Manpower and Youth Council, now the Technical Education
and Skills Development Authority or TESDA, another key agency in
the deployment of Filipino workers.
The decade was marked by a construction boom in the Middle East
and Northern Africa. This next wave of migrant Filipinos
consisted mostly of construction and production workers on fixed
term contracts that sought opportunities provided by the massive
infrastructure developments fueled by petro-dollars. Hence,
originally, these workers were referred to as �overseas contract
workers� or OCWs.
In the 1980s, the emergence of the tiger economies in Asia
shifted the direction of deployment to countries such as Hong
Kong, Singapore, South Korea, and Taiwan and the focus of
recruitment became service workers, particularly domestic
helpers, and blue collar workers.
In the 1990s up to the present day, the rapidly-ageing
populations of developed countries in Europe and Asia and the
emergence of the knowledge economy gave rise to a new wave of
Filipino migrant workers consisting of professionals in the
medical and health care fields, information technology workers,
and business professionals.
Today, overseas Filipino workers are often hailed as the
country�s �modern day heroes� and as �saviors of the Philippine
economy,� and their remittances to the country have been one of
the main drivers of the engine of growth.
Official government statistics place the number of OFWs at nine
billion while more recent estimates place the number of OFWs at
around 12 million in 232 countries, territories, and
jurisdictions around the world including those that are
undocumented and the direct hirees.
Based on the figures of the National Statistics Office, 52.2
percent are male while 47.8 percent are female. It is also
estimated that 20 percent are single with many having financial
responsibilities for their parents and siblings. Among female
workers, 60 percent are legally single though not necessarily
without children.
The largest numbers of OFWs are in the age group 25 to 29 at
23.6 percent and 30 to 34 at 22.6 percent.
In terms of origin, most of them come from Calabarzon, Central
Luzon, and the National Capital Region with 16.5 percent, 14.3
percent, and 12.5 percent respectively.
The United States is the leading migrant destination of
Filipinos at 33 percent while Saudi Arabia is the top employer
of overseas Filipinos, employing about 16 percent of the total,
followed by Canada and UAE with shares of 7 percent each.
In the 1970s, OFW deployment averaged from 14 to 15 thousand a
year which has since then ballooned to more than a million a
year in recent years.
According to the findings of noted economist, Dr. Bernardo
Villegas, most OFWs are not really the �poorest of the poor.�
They are from middle income households that earn an equivalent
of two to ten dollars per capita per day and thus, are able to
afford the high financing costs required by recruiters. Many of
them choose to migrate mainly because of the significant wage
and income differential between what they can earn here and what
they will receive if they work abroad. This is the very reason
why, over the long term, there will always be Filipino
professionals going abroad to work, even if the Philippines is
able to eradicate poverty completely. Due to the demographic
winter in the advanced economies and the exceptional talents and
personal qualities of Filipinos, knowledge workers from the
Philippines will always be in great demand abroad.
Remittances to the country come predominantly from land-based
workers who contribute 78 percent of the inflows while sea-based
workers account for 22 percent. The government targets an annual
deployment of one million or more workers. Among the land�based
workers being deployed, about 70 percent are �rehires� while
only 30 percent are �new hires.�
The World Bank currently ranks the Philippines as the fourth
largest recipient of remittances in the world after India,
China, and Mexico.
The origin of the money transfer or remittance business dates
back to over 140 years ago and it is most closely associated
with the use of the telegraph and the telegram as a means of
communication. In the 21st century, international electronic
fund transfer facilities have replaced the telegraph and many
banks and non-bank remittance companies have begun utilizing the
Internet to provide money transfer services. A few have already
extended their services to include the use of mobile phones and
personal hand-held devices and non-traditional entities such as
convenience stores for their customers to be able to send money.
In the early years of organized overseas deployment by the
Philippines, OFWs often encountered difficulties in accessing
the money transfer facilities of banks in their host countries.
Large Philippine commercial banks with branches abroad, courier
and cargo companies, and unregulated money transfer providers
filled the gap. A considerable number of overseas workers also
relied on informal means of sending money home such as through
�padala� or the �hand-carry system.� Locally, family members and
beneficiaries of OFWs found it intimidating to receive funds
sent to them through local bank branches. Hence, courier
companies began to offer �door-to-door� cash deliveries. From
the 1980s to the early 1990s and as more workers were deployed
to more countries, Philippine banks opened new offices abroad
and established partnerships with foreign banks and foreign
exchange companies to tap more of the increasing OFW
remittances.
The industry is dominated today by the country�s five largest
universal banks that lay claim to 85 percent share of the total
remittances flowing through the formal channels. However, this
figure does not fully capture the breadth and depth of the local
money transfer industry which includes many more players
including thrift banks, rural banks, microfinance institutions,
pawnshops, money changers, courier companies, payment centers,
and even telecommunications companies that all participate in
fulfillment services so that hard-earned funds of overseas
workers will reach their ultimate beneficiaries.
Today�s remittance industry is a confluence of these trends that
have shaped its development over the last four decades and yet,
the business is still evolving as new technological developments
come into play that may determine the dynamics of competition in
the years to come. The emergence of more affordable mobile
phones, personal computers, and hand-held devices, and the
increased usage of social media networks are helping OFWs keep
in touch with their families and at the same time are also
changing the nature and competitive dynamics of the money
transfer business.
OFW remittances to the Philippines account for about 14 to 16
percent of the country�s gross domestic product or GDP and over
20 percent of personal consumption. These figures do not include
the �multiplier effect� as these remittances find their way into
the basic essentials of food, clothing, and utilities,
education, and investments in housing and other residential
units.
Remittances have proven to be the more stable source of foreign
currency than many other non-trade sources and have also
contributed positively to the country�s current account balance.
With assured inflows, these partly make up for the loss of cost
competitiveness by the export sector when the peso is
appreciating.
Remittances also tend to be constant as these are based on the
spending needs of Filipino families and, in fact, tend to
increase as OFWs are forced send more with the loss of
purchasing power associated with an appreciating local currency.
These have also proven resiliency remaining largely unaffected
by business cycle downturns and financial crises. While many
expected weaknesses in foreign labor markets because of crisis,
the OFW sector in fact exhibited growth both in terms of
deployment and inward remittances � the former attributable to
the deployment of higher skilled workers in less cyclical
industries such as healthcare; the latter mainly due to the
strengthening of the peso.
Let me now talk a bit about our company and how it has grown and
managed to compete effectively against the bigger players of the
industry.
I-Remit traces its beginnings to its former parent company,
iVantage Corporation, now Vantage Equities, Inc., that was
involved in strategic investments in technology and financial
services. The company was acquired by the three of its current
four major shareholder groups consisting of JTKC Equities, Inc.;
Surewell Equities, Inc., and JPSA Global Services Company. With
less than twenty employees, holding office at the 38th floor of
the Discovery Centre in Pasig City, the company�s directors
worked hands-on to establish its global presence by opening
offices in Hong Kong, Singapore, Taiwan, and Canada. On its
second year of commercial operation, the company began its foray
in the Middle East by establishing forging partnerships in
Bahrain, Qatar, and the United Arab Emirates. Soon, more
countries followed.
Early in its history, I-Remit�s pioneering undertakings in the
local remittance industryhave already gained recognition. In the
2004 study of the Asian Development Bank on the enhancement of
the efficiency of OFW remittances, the company was cited as a
significant non-bank player and its use of the Visa debit card
was considered an innovation in the industry.
I-Remit revolutionized the remittance business in the
Philippines by being the first to utilize the Internet platform
in providing remittance services. It utilizes its unique
technological capabilities to provide faster and cheaper
remittance services. The innovative use of technology has been
the hallmark of its operational success. It also became the
first remittance company to be registered with the Board of
Investments as an information technology service firm.
In October 2007, I-Remit affirmed its pioneering spirit as it
ventured and tested its ability to tap the local capital
markets. The company offered 140 million common shares,
representing about 26 percent of the company�s equity, for
subscription through an initial public offering. The fact that
the IPO was oversubscribed proved the confidence of the
investing public in the company. The offering made I-Remit the
first publicly-listed remittance company in the country. The IPO
raised some 475 million pesos in funds that were earmarked for
the company�s expansion program, investments in technology, debt
retirement, and compliance with regulatory bond requirements to
operate new offices. The listing also confirmed investors�
belief in the company�s potential for long-term growth amidst
the already highly-competitive remittance market.
I-Remit currently maintains presence in 24 countries and
territories throughout the world through its network of
subsidiaries, joint ventures, strategic partnerships, and
tie-ups. It intends to further expand its presence globally by
opening more offices in countries where there are considerable
numbers of Filipino workers and migrants.
The company has benefitted immensely from the institutional
knowledge that it has acquired and accumulated consisting of the
industry�s best practices in technology and customer service,
foreign exchange management, risk management, and regulatory
compliance, thus making it a truly global player in the
industry.
In 2008, I-Remit took a significant step towards its goal of
becoming a truly global player in the money transfer business by
forging a partnership with the Bank of China. The Chinese
perhaps have a longer history of overseas migration that began
in the 19th century as the Qing Dynasty went into economic and
social decline. Since then generations of Chinese have
established communities and contributed to societies and
cultures all over the world. They became important members of
communities throughout Southeast Asia, North America, Australia
and the Pacific long before the emergence of the modern China.
China is the second largest remittance-receiving country which
the World Bank estimated in 2010 as amounting to 51 billion
dollars.
Last 2011, I-Remit�s subsidiary in London, IRemit Global
Remittance Ltd. has acquired the status of an �authorized
payment institution� from the Financial Services Authority of
the United Kingdom under the European Payment Services Directive
that provides the legal foundation for the creation of a
European Union-wide single market for payment services,
including money remittance. I-Remit�s subsidiary company has
acquired the right to establish its presence and offer its
services in any of the European Union and European Economic Area
member states after proper notification of the regulatory
authorities. In obtaining its authorization, I-Remit had to
undergo a stringent examination process to ensure that it has
sufficient capital resources, robust liquidity, sound governance
practices, and adequate organizational, control, and IT security
mechanisms. Today, I-Remit has invoked its rights as a payment
institution in Europe and established its presence in Vienna,
Austria; Rome and Milan; and Frankfurt, Germany. Soon to follow
are the countries of Ireland and The Netherlands.
After obtaining authorization from the Japanese Financial
Services Agency, the company opened new offices in Tokyo and
Nagoya. Previously, only banks licensed under the Banking Act of
Japan were allowed to engage in the money transfer business.
However, with the passage of the Payment Services Act in 2010,
non-bank companies are now allowed to offer remittance services.
The signing of the Japan-Philippines Economic Partnership
Agreement opened new opportunities for Filipinos particularly in
nursing and healthcare fields. I-Remit is considering expanding
its presence in other areas in Japan such as Osaka and Yokohama.
In June 2012, I-Remit sealed a strategic partnership with Bank
Internasional Indonesia, a unit of Malayan Banking Berhad or
Maybank, the largest financial services conglomerate in
Malaysia. The agreement now allows I-Remits offices all over the
world to receive remittances from Indonesian workers. The
company believes that Indonesia, also a labor exporting country,
is poised to be a major player in the global labor export market
in the near future.
I-Remit has also partnered with companies such as Jollibee Foods
Corporation, the Home Shopping Network, Inc., and Nestle
Philippines to deliver gifts and �pasalubong� to the families of
Filipino workers since the focus on the family is a very
important Filipino value. Since most of an OFW�s earnings are
earmarked for basic needs, I-Remit also allows OFWs to pay
amortizations for home mortgages, insurance premiums, and
pre-need contributions. Recognizing the fact that many OFW
households dream of having their own homes, the company has also
tied-up with a number of real estate developers. I-Remit also
now accepts donations to CBN Asia and the 700 Club and
participates in their activities with OFWs abroad.
I-Remit is a major contributor in ensuring that Filipinos
overseas continue to have access to the government�s social
security and development programs such as those administered by
the Social Security System, the Home Development Mutual Fund or
Pag-IBIG, the Philippine Health Insurance Corporation, and the
Philippine Retirement Authority. These are vital for ensuring
that OFWs have the necessary social and financial support
mechanisms when they eventually return to be re-integrated into
the local economy or to retire. I-Remit also works closely with
these government agencies in disseminating information about
these programs.
For its efforts, I-Remit has reaped awards from these government
agencies. The company was named by SSS as the Balikat ng Bayan
Awardee as Best Collecting Agent for OFW Remittances in 2010 and
2011. In 2010, the company was cited by PhilHealth as an
exemplary partner in service delivery and ensuring access to its
members while last May it was recognized as one of PhilHealth�s
best collecting partners for fully automated scheme for
Individually Paying Members category.
In 2011, I-Remit�s total collections for the SSS amounted to
about 315 million pesos, while those for Pag-IBIG and PhilHealth
amounted to 150 million and 13 million pesos respectively. Much
remains to be done in this area. For instance, out of 2.5
million OFW PhilHealth members, only 775 thousand are actually
making payments. I-Remit is an active partner of these
government agencies to ensure that the financial security and
healthcare needs of overseas Filipinos are adequately protected.
In conducting its business, I-Remit is fully aware that it must
also contribute to the betterment of Filipino society. Its
corporate social responsibility program is focused primarily on
youth education. It is a constant contributor in sponsoring
scholars of the Tuloy Aral project of the Overseas Workers�
Welfare Administration.
It has also partnered with non-governmental organizations such
as Synergeia and CBN Asia�s Operation Blessing. In cooperation
with Synergeia, I-Remit provided assistance to grade one pupils
of the P. Guevarra Elementary School in Tondo, Manila. The
company�s employees also participated actively in tutoring
sessions and other educational activities in the school.
Likewise, in cooperation with CBN Asia and the 700 Club, I-Remit
is spearheading the construction of a schoolhouse for the
children the Dumagat tribe in Rodriguez, Rizal and also provides
assistance by way of food, clothing, and school materials.
The company works closely with non-governmental organizations,
the Kabalikat ng Migrantentg Pilipino, Inc. or KAMPI, and
Kabalikat ng OFW, Inc., two non-governmental organization that
extend financial, livelihood, and education assistance to
families of OFWs.
I-Remit also supports the Philippine embassies and consulates,
the Philippine overseas labor offices, and Filipino communities
and associations in its host countries to promote the welfare of
overseas Filipinos, and if needed, to provide assistance to
distressed OFWs.
The company continues to exhibit business growth and financial
strength as it continues to outpace the industry growth of
inward remittances.
Last year, the company posted a record volume of 1.4 billion
dollars representing roughly 6.3 percent of the remittance
inflows to the country.
It has a consistent record of earnings and continues to provide
attractive returns to its shareholders through annual cash and
stock dividends.
There are many factors that have contributed to the success of
I-Remit and have shaped it into the organization that it is
today.
I-Remit�s future direction emanates from its vision: �To be the
ultimate choice remittance service provider globally.� I-Remit
pursues this vision and relentlessly relies on the innovative
drive of the organization to be able to provide more meaningful
and more accessible services to its customers.
Immediately, it would seem that banks have a big advantage over
money transfer firms like I-Remit because of their access to
global electronic fund transfer systems, their ability to handle
foreign exchange positions better, and their significantly
higher levels of capital. However, I-Remit operates with more
focus and on a scale that is significantly smaller than the
banks. This fact allows it to be more nimble and quick to take
advantage of the opportunities that the money transfer markets
provide. It is not encumbered by the many regulatory
requirements and hurdles that financial intermediaries have to
comply with.
The company has also achieved more success than its non-bank
competitors as it has the ability to create its own markets.
This means that I-Remit is quick to recognize emerging trends
and capitalize on these to complement its core business. This
emanates from the many years that it has operated in the
Philippines as well as in its many host countries globally and
its intimate knowledge of overseas Filipino workers and their
needs.
The company continuously seeks ways to improve its business
processes to offer a wider set of alternatives, and better
products and services to its customers. It strives to be able to
make the idea of making remittances seem as natural that it fits
into their lifestyles and long held-routines of customers. One
such innovation is the introduction of I-Remit direct online or
iDOL, an online Internet-based remittance facility that seeks to
complement the company�s brick-and-mortar outlets particularly
in countries with wide geographical expanses and extreme weather
conditions.
I-Remit maintains one of the widest and diversified networks for
service fulfillment in the Philippine remittance industry
through its partnership with commercial banks, thrift and rural
banks, and pawnshops. It provides continuous 24x7 customer
service support through its team of customer service officers
and call center agents.
Let me now dispel some of the common misconceptions about OFWs
and the remittance industry and discuss some of the emerging
trends.
The first of these misconceptions that is often reported in the
news is that the largest source of remittances to the
Philippines is the United States. It is not. The figure that
appears in �official� statistics as remittances from the U.S.
include inflows originating from other countries on their way to
the country that are in transit with American correspondent
banks.
Another often misreported item is the rate at which remittances
are growing. It was revealed that in 2011, the inflow of
remittances grew by seven percent against 2010, from 18.7
billion dollars to 20.7 billion dollars.
If expressed in peso terms and considering the appreciation of
the peso against the U.S. dollar, the growth in peso terms was
only three percent from 846 billion pesos to 871 billion pesos.
Between the two years the peso gained on the dollar from 46.32
in July 2010 to 42.42 in August 2011, or three pesos and ninety
centavos per dollar. OFWs simply had to remit more in foreign
exchange to meet the fixed cost obligations of their families
back home. Some have even speculated that part of the dollar
inflows reported in official statistics are remittances that
previously were coursed through informal channels but are now
being transmitted through formal channels as regulatory
authorities implement stricter measures on registration and
licensing of money transfer firms.
In the first six months of this year, OFW remittances amounted
to about 10.1 billion dollars with the June figure of 1.8
billion dollars being the highest recorded on any given month.
The BSP expects that remittances will still increase this year
although at a slower pace of five percent which may be
attributed to the still increasing deployment of workers. The
POEA recently reported that the number of workers deployed
reached 1.68 million in 2011 growing by 15 percent from 1.47
million in 2010.
While we foresee that OFW deployment will continue for many more
years down the road, it is not unlikely that it will taper off
and decline. Recently, the POEA has already announced a
five-year phase-out plan for domestic workers.
Dr. Villegas, in a recent presentation, claims that the
Philippine economy is reaching its �tipping point.� Global
banking giant HSBC sees the country leapfrogging as the 16th
largest economy in the world by 2050, jumping by 27 notches from
its current ranking of 43. HSBC�s report entitled �The World in
2050� projected the GDP growth of countries using factors such
as income per capita, rule of law, democracy, education, and
demographic change. The bank cited the strong fundamentals and
powerful demographics as the factors that will propel the
country�s growth. HSBC projected that the Philippines will have
an average GDP growth of 8.4 percent from 2010 to 2020; 7.3
percent from 2020 to 2030; 6.6 percent from 2030 to 2040; and
5.8 percent from 2040 to 2050. The improvements in the domestic
economy may translate into more local jobs, which may in turn
result in a declining number of Filipinos leaving for jobs
abroad.
It is not a remote possibility that Philippine overseas labor
and the remittances it provides may be overtaken by other
nationalities as they take over some of the jobs that previously
have been dominated by Filipinos.
One country that presents a threat to Filipino migrant workers
is Indonesia. This year, Indonesia�s population is expected to
reach 248 million � two and half times bigger than that of the
Philippines, making it the world�s fourth most populated nation.
It is the only Southeast Asian member of the G-20. Like other
Asian countries with a surplus of labor, Indonesia is a major
global source of migrant workers. The estimates on the number of
Indonesian workers vary from four to six million and it ranks
only 17th among remittance recipient countries with inflows of
7.1 billion dollars in 2010. However, between 2010 and 2050, its
working age population is expected to increase by 17.9 percent.
Thus, it is expected to be a major participant in the labor
export market in the years to come. For instance, in Taiwan,
Indonesians already make up 40 percent of the foreign worker
market which used to be dominated by Filipinos and Thais.
Indonesia ranks much lower as a remittance-recipient country at
17th. As of 2010, it is estimated that Indonesia experienced
inflows of roughly 7.1 billion dollars. Indonesia may have
started late in terms of labor deployment, however, it is fast
catching up with the Philippines. Over a seven-year period from
2003 to 2010, its total inward remittances grew by more than
five times compared to those of the Philippines which only
doubled. It is also worthwhile to also consider the findings
cited in the study on the effect of the global crisis on
remittances and poverty in Asia published by the ADB. The study
reveals that only 30 percent of migrant Indonesians utilize
formal channels in sending money back home. If that were the
case, Indonesia�s remittance inflows may, in fact, be even
bigger than that of the Philippines.
Whenever remittance figures are reported every month, one
statistic that often receives very little attention is the
proportion of processed job orders to the approved job orders
for deployment, which remains almost constantly at one-third.
One can speculate that perhaps, many job orders remain unfilled
because the skills needed by the global labor markets are
already lacking in the Philippines and the demand is being
filled by other nationalities.
Without doubt, OFW remittances have greatly contributed to
Philippine economic growth, these are not without corresponding
costs � particularly, social costs. In his recent publication
�The Book of Virtues and Values,� Dr. Villegas refers to the OFW
phenomenon as �the necessary evil forcing numerous households to
sacrifice their social and spiritual welfare in favor of
economic progress.� In last Tuesday, issue of the Philippine
Daily Inquirer, the phenomenon was aptly described by Professor
Mary Lou Alcid of UP�s College of Social Work and Community
Development described as �transnational Filipino families,�
where family members, parents as well as siblings are in various
countries all over the globe. OFW migration is changing our
views on family, family values, work and even our perspectives
on employment and wealth. It has definitely diminished the
traditional shared moments of family members and altered our
values and outlook for the quality of life as a family. It has
aggravated the social costs of having separated families, broken
homes, neglect in parental guidance, and the difficulties in
communicating between spouses and parents and their children.
Much has to be done in terms of fully understanding the social
costs of labor migration to the country and its impact on
individual families. One can merely look at some of today�s
disturbing statistics.
Some recent figures from the Office of the Solicitor General,
whose task it is to challenge annulment cases, are alarming.
From 2001, the country had 4,520 cases and 8,282 in 2010. This
brings a daily average of at least 22 cases filed every day. The
figures represent only those spouses that have decided to
separate using the processes of the courts.
Recently, the Department of Education revealed that 5.6 million
pupils and students in the country between the ages of six to 15
have dropped out or have never gone to school. The rising school
dropout rate is alarming considering that in the next decade,
these children will be aged 16 to 25, physically grown up but
uneducated and without the ability to land decent jobs.
In the last six years, the student and pupil dropout figures
have become worse as a constant 40 percent of the youth between
ages 12 to 15 failed to enroll in secondary schools translating
into 3.4 million dropouts in 2010.
The social costs of labor export, as cited also in Professor
Alcid�s study, includes the cases of illegal recruitment, cases
of violence and physical abuse, including death, and those who
end up in jail or are meted death penalties for crimes such as
drug trafficking.
Definitely, the separation of families and the rising number of
school dropouts are just some of the symptoms of the changing
dynamics of Philippine society, whether borne out of labor
migration or otherwise. These have corresponding social costs
that eventually will become big economic costs.
The fact that OFW remittances have contributed greatly to
Philippine economic growth is undisputable. However, while the
country�s growth drivers have similarities to those of a
developed country where services dominate in terms of
contribution to GDP, many of our countrymen remain poor. The
country has actually lagged behind its Asian neighbors in
reducing poverty even as economic growth kept pace.
Earlier, I had mentioned that OFWs are not the �poorest of the
poor� but they come mainly from middle income households who in
turn drive personal consumption spending. The World Bank�s World
Development Indicators show that the poorest 20 percent of
Filipinos account for a meager 5.4 percent of the country�s
consumption spending. The bank�s studies have also shown that
countries with more unequal distribution of consumption � or
income � have a higher rate of poverty. Unfortunately, the
Philippines when compared to its Asian neighbors, ranks among
the highest.
Thus, while remittances have contributed greatly to economic
growth, these have done very little by way of reducing poverty
and may even have contributed in widening the gap between the
�rich� and the �poor.�
Great efforts must be exerted by the government and the private
sector to help OFWs and their families make better use of
remittances by building up savings and directing these into
investments in small and medium-scale enterprises that, in turn,
can generate more jobs. In doing so, OFWs can participate more
meaningfully in Philippine economic development.
Given the �pluses� and �minuses� of OFW remittances, how then
does a company like I-Remit foresee its future?
The first decade of our company was a period that may be called
the �building stage� of the organization in terms of
infrastructure, technology, and capabilities. It is now poised
to capitalize on the investments in its early years to transform
itself into a global player in the money transfer business.
The phenomenon of labor migration is not unique to the
Philippines. About three percent or 215 million people live
outside their countries of birth. The World Bank estimates that
global remittances shall reach 533 billion dollars this year and
517 and 615 billion dollars in 2013 and 2014 respectively, the
latter representing growth rates of 7.1 and 7.7 percent
respectively. In absolute amounts, remittances are expected to
surpass private debt and portfolio equity and official
development assistance as sources of foreign exchange inflows.
While the World Bank still predicts increases in global
remittances, the rates of growth are considerably lower than
those seen prior to the global financial crisis. The bank cites
as downside risks the uncertain economic prospects in
destination countries such as those in Europe and the potential
immigration controls that could kick in should the crisis
deepen.
I-Remit has already set its sights on the larger market global
remittance market.
Though comprising still a small part of its core business,
I-Remit has already embarked on tapping various remittance
corridors around the world involving Filipinos and non-Filipinos
as well. An example of such a remittance corridor would be
Filipinos in Canada remitting money to a relative in Hong Kong.
I-Remit has also forged alliances with banks such as the Bank of
China and Bank Internasional Indonesia for the remittances of
overseas Chinese and Indonesians to their homelands.
We further see that potential future inflows of remittances to
the Philippines may come not from Filipinos but from the large
pool of retirees in many countries. We call this the �silver
lining from the silver market.�
The Philippines is a relatively �young country� by global
standards. The proportion of senior citizens � or those aged 65
years old and above is only 4.3 percent. By 2015, it is
estimated that the total retirees globally will reach one
billion individuals.
In the United States, the first of the American baby boomers
turned 65 last January 1, 2011 and the rest have started to
retire at the rate of 10,000 per day, and this is on top of the
35 million American seniors that are already in retirement.
If we look at our neighbors in Asia, Japan has the highest
proportion of elderly citizens with 22.7 percent over the age of
65. It is projected that this will increase to 25.6 percent by
2030. Taiwan�s elderly population is near 2.5 million, or 10.9
percent out of 23 million. Singapore is also another country
that faces the twin challenges of low fertility and an ageing
population. The proportion of those aged 65 and above is
estimated to have already reached 9.2 percent this year.
Admittedly, the programs to make the Philippines a leading
retirement destination for the world�s retirees, seniors, and
elderly are still at the nascent stage. The country is faced
with tough competition from the aggressive players notably
Ecuador, Panama, Mexico, and Costa Rica in the Americas, and
Thailand, Malaysia, and New Zealand in Asia-Pacific. The
Philippines is only eyeing a small portion of one million or 0.1
percent to retire here.
Over the last few years, the Philippine Retirement Authority and
the Philippine Retirement, Inc., the latter of which I am the
current president, have strengthened their programs for the
deployment and approval of strategic retirement villages and the
conversion of residential housing projects into retirement homes
that will contribute to the growth of the industry. We see the
global retirees market as contributing to the local economy just
like OFW remittances by encouraging investments in hotels,
retirement villages, condominiums, and private homes, sports and
recreational facilities, healthcare facilities, and other
related infrastructure developments. In addition, more jobs will
be created to cater to the needs of these retirees.
Consider these: One million retirees bringing in 1,500 dollars
per month translate into 18 billion dollars of remittances into
the country, roughly 90 percent of the remittances of OFWs
today.
I-Remit intends to capitalize on this market considering that it
has established its presence in many countries with graying
populations and the partnerships and alliances it has with
Philippine banks, real estate developers, and government
agencies.
Another attractive market for remittances is the steadily
growing population of foreigners who are now in the Philippines,
mostly to study. Official statistics released by the Bureau of
Immigration last February show that there are more than 61,000
foreigners studying in various schools and learning institutions
in the Philippines. The government actually started enticing
foreign students to study in the Philippines as far back as the
1980s but this was mainly for specialized fields. Today, the
widespread use of English and the relatively cheap cost of
education are driving more and more foreign students into the
country.
These opportunities that I have just described are just examples
of how I-Remit creates its own markets and uses the innovative
drive of its organization to be the successful Filipino
remittance company that it is today.
I hope that over the last few minutes, I was able to provide you
with meaningful insights into the remittance industry, the
development of I-Remit as a premiere remittance company, and the
future directions that our company intends to take.
Let me end by stating that it is our fervent hope that the
government will continue to provide the needed support for the
continuing development and success of the remittance industry in
the country not only with respect to Filipino workers abroad but
also for the yet untapped potential presented by other markets.
Thank you.
RESUME
Bansan Choa has been
the Chairman and Chief Executive Officer at iRemit Incorporated
since 2005. He has been Treasurer of Banwood Construction
Center, Inc. since 1976 and Vice President of Organization of
Socialized Housing Developers since 2001. He has been First Vice
President of Subdivision and Housing Developers Association
since 2008.
PROFESSIONAL PORTFOLIO
I-REMIT, INCORPORATED
Chairman and Chief Executive Officer
2005 � Present
SUREWELL EQUITIES, INC.
Chairman and Chief Executive Officer
2001 � Present
STERLING BANK OF ASIA, A Savings Bank
Director
2007 � Present
CONFED PROPERTIES, INC
Chairman
1991 � Present
SURE FORTUNE PROPERTIES, INC
Chairman
2001 � Present
BANWOOD CONSTRUCTION CENTER, INC.
Treasurer
1976 � Present
KASSEL CONDOMINIUM CORP.
Chairman and Board of Trustees
2001 � Present
KABALIKAT NG MIGRANTENG PILIPINO, INC.
Chairman and Board of Trustees
2001 � Present
PROFESSIONAL
REGULATION COMMISSION
Real Estate Broker
Real Estate Appraiser
Real Estate Consultant
2010 �Present
PHILIPPINE RETIREMENT, INC.
President
2009 � Present
SUBDIVISION & HOUSING DEVELOPERS ASSOCIATION
Board Adviser
2009 � Present
ORGANIZATION OF SOCIALIZED HOUSING DEVELOPERS ASSOCIATION OF THE
PHILIPPINES
Board Adviser
2009 - Present
NATIONAL REAL ESTATE ASSOCIATION
Member
1998 � Present
PHILIPPINE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
Member
1976 � Present
PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE
Board Member
2010 � March 15, 2012
Lifetime Member
RECOGNITIONS
Awardee:
May 2011 � Awarded as one of the Top 10 Entrepreneurs in
Singapore
Awarded by OFW Pinoy Star, the leading Filipino community
magazine in Singapore.
Awardee:
2009 �
BizNews Asia Real Estate Who is Who (BREW)
A prestigious award giving body for the Real Estate sector and
other Business Icons in the Philippines.
Finalist:
2011 � Asia CEO Awards for Global Filipino Executive of the Year
The Asia CEO Awards Philippines represents the grandest alliance
of local and international business people ever created to
promote the Philippines on the world stage. It involves the most
active business leaders in the Asia Pacific region.
Finalist:
2006 � Ernst and
Young Entrepreneur of the Year Philippines
The Entrepreneur of the Year Philippines is a program of the SGV
Foundation, Inc. Supporting the program as strategic partners
are the Asian Institute of Management, Department of Trade and
Industry, Philippine Business for Social Progress and the
Philippine Stock Exchange.
.