Visa expects outbound remittances to Filipinos abroad to grow over $151 billion as more local entrepreneurs source raw materials overseas.

In a virtual media briefing on Wednesday, Visa country manager for the Philippines Jeffrey Navarro said 70 percent of micro, small and medium enterprises (MSMEs) acquired goods, services, and raw materials outside the Philippines.

He added that 60 percent of MSMEs sought ways to pay for these products and services.

Navarro shared these data as he discussed the Visa’s Money Travels: 2024 Digital Remittances Adoption Report which shows data collected from 22 February to 22 March. Visa analyzed 20 countries.

“Because of the digital economy, a lot of us are coming up with ways to create small businesses and that increases the requirement to source goods abroad and pay for them,” Navarro said.

Out of the total $264 billion money movement in and out of the Philippines, the Euromonitor International’s research for Visa 2023 said 57 percent was outbound while 43 percent was inbound.

Navarro said over 1 million MSMEs could increase production as global institutions project the Philippine economy to grow by over 6 percent this year and the next partly due to strong household consumption of goods and services.

“Filipinos are very enterprising. During the pandemic we came up with small businesses; we baked bread for our friends. We got a lot of raw materials and goods from China, India, Thailand, and elsewhere,” Navarro said.

Education support

Aside from MSME purchases, Navarro said families back home also send remittances to support the education of their children abroad.

He said there are 50,000 Filipinos studying abroad and this population grows by 8 to 10 percent year-on-year.

“The economy is growing and as such there are more aspirations to send our kids abroad for schooling,” Navarro said.

To send out remittances to 12 million Filipinos working and/or living abroad, Navarro said 75 percent of Filipinos used mobile apps.

Digital growth

Majority or 58 percent of Filipinos prefer to move their money digitally compared to 24 percent who choose physical remittances, Navarro shared.

“Major pain points for Filipino remittance include high fees, inconvenient or lengthy processing, and the need to go to a physical location,” he said.