Moses Adrian Sambrano and Soleil Ivory Corpuz, graduate students of Ateneo de Manila University

1. The
Philippine
FinTech
Landscape
Moses Adrian Sambrano
Graduate Student
Ateneo de Manila University
moses.sambrano@obf.ateneo.edu
Soleil Ivory Corpuz
Graduate Student
Ateneo de Manila University
soleil.corpuz@obf.ateneo.edu

2. Philippine Macroeconomic Situation
-
5.000
10.000
15.000
20.000
25.000
Agriculture Industry Services GDP
Php
billions
2015 2016 2017 2018 2019 2020
-9.6%
-9.1%
-13.1%
-0.2%
In 2020, the Philippines recorded sharp declines in
its economy due to Covid-19 pandemic…
Philippine GDP, 2015-2020
…with small enterprises bearing much of the
negative effects from multiple lockdowns
Structure of Philippines Businesses
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Number of Establishments Employment Contribution
Micro Small Medium Large
Source: PSA Source: DTI

3. Philippine Business Analysis
0
20
40
60
80
100
Institutions
Infrastructure
ICT Adoption
Macroeconomic
Stability
Health
Skills
Product Market
Labor Market
Financial System
Market Size
Business
Dynamism
Innovation
Capability
Philippines Thailand Malaysia Singapore
Factor Conditions Context for Firm Strategy & Rivalry
Demand Conditions Related and Supporting Industries
• Access to large, educated labor pool, with English
speaking capabilities, but needs specialized
training for specific sectors
• Increase in the physical network of banks
• Promotion of digital infrastructure, which
included easier KYC process and
interoperability among banks and non-banks
• Widespread use of mobile gadgets (mobile
phones and tablets)
• Relatively low ranking in ease of doing business
compared to regional competitors
• General openness to foreign investors, with some
sectors having restrictions on foreign investments
• Presence of competition law and intellectual
property rights code
• Consumer spending of middle income class
families
• High volume of remittances
• High Internet usage among Filipinos
• Recent developments in the ICT
infrastructure of the country; presence of
three telco providers
• Still low Internet penetration level compared
with other countries
• Presence of roadmaps for digital startups and
other Internet-related business activities
• Shifting patterns in retail industry

4. Factor Conditions
Physical Network of Banks in the Philippines
0
5.000
10.000
15.000
20.000
25.000
ATMS Branches
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
9%
5%
Source: BSP
Note: Percentages refer to CAGR for 2010-2019.
• Financial inclusion is one of the mandates of the BSP. A significant number
of Filipinos are still considered as “underserved”.
• Growth of ATMs are faster than bank branches, since it is relatively easier
to set up ATMs even in far locations in the country.
• In comparison with other countries, ATM per 100,000 population is
still lower than those of Thailand, Singapore and Malaysia.

5. Factor Conditions
0
10
20
30
40
50
60
70
80
90
100
Possession of Mobile
Telephone
Possesion of Personal
Computer
Possession of Laptop Possession of
Smartphone
Possesion of Tablet
2015 2016 2017 2018 2019 2020
Possession of Mobile Gadgets, as % of households
Source: Euromonitor
Note: %s outside chart is the CAGR for 2015-2020
• More Filipinos are being accustomed to mobile gadgets and
technologies over the past 5 years.
• Growth in the number of households having laptop, smartphones
and tablets is driven by the use of online services.
1.3%
1.2%
10.7%
9.9%
20.9%

6. Demand Conditions
0 10 20 30 40 50 60 70
Food Expenditure
House rent or rental value
Utilities
Transport
Miscellaneous goods and services
Durable furniture and equipment
Special family occasions
Other expenditures
100,000 – 249,999 60,000 – 99,999 40,000 – 59,999 < 40,000
Source: FIES (PSA)
Consumption Patterns of Households, by income groups
• Middle income class: household with five members
earning Php20,000 to Php115,000 (as of 2017)
• Expenditures are mostly for daily necessities and
considered to be of low value, high volume transactions.
• Thus, cash is more widely used mode of payment.

7. Demand Conditions
• Both domestic and overseas remittances are
primarily used for food, education and medical
expenses.
• Money transfer operators are the primary mode
of transfer of cash remittances.
• For domestic remittances. about 54.3% of
the transactions have amounts ranging
from Php1 to Php5,000.
Overseas Remittances
Domestic Remittances
Source: PSA & UPPI, 2018
Money
transfer
operators
Banks
Family or
Friends Others
Mode of Transfer
Money
transfer
operators
Banks
Family or
Friends Others
Mode of Transfer
0 20 40 60 80
Food
Education
Medical Expenses
Debt Payments
Savings
Use of Remittance
0 20 40 60 80
Food
Education
Medical Expenses
Savings
Debt payments
Use of Remittance

8. Related and Supporting Industries
Source: Euromonitor, “Digital Landscape in the Philippines”
(2020)
The entry of new telco provider aimed to create
competition with existing providers…
• Through Smart Communications, promoted 5G
network in the country
• Planned for a faster Internet speed starting late
2020, focusing on business customers, with the
completion of the undersea cable system called
Jupiter.
• Promoted the product “Globe at Home” prepaid
wifi
• Partnered with Huawei to offer fixed wireless 5G
broadband service for home environment
• New entrant in the telecommunications industry
of the Philippines
• Created agreements with tower construction and
contractors as part of its coverage commitment
• Committed to cover 84% of the Philippines with
more affordable, secure and faster Internet
connections
…but still not enough to be at par with neighboring
countries.
0
20
40
60
80
SG TH BN VN LA MA PH KH MM ID
Download Speed
0
5
10
15
20
25
BN VN SG TH LA MM ID MA KH PH
Upload Speed
Mobile Speed
Fixed Broadband
0
50
100
150
200
250
SG TH MA VN PH LA ID KH MM
Download Speed
0
50
100
150
200
250
SG TH MA VN PH LA ID KH MM
Upload Speed
Source: Ookla Speedtest (as of March 2021)

9. Brief History of FinTech in the Philippines
2000
2001
2004
2009 2017
2021
Banco de Oro (BDO)
partnered with Smart
Communications and
MasterCard to
introduce Smart
Money.
BSP issued its first
guidelines on the
country’s
electronic banking
activities.
Globe Telecom
launched GCash, an
e-wallet where
users can make
purchases and pay
bills through text
messaging.
BSP released
Circular No. 649
intending to
provide necessary
safeguards and
controls to
mitigate risks
associated with e-
money.
Foreign investors
began to recognize
the potential of PH
FinTech companies.
Tencent, IFC, and Ant
Financial poured in
investments into the
sector.
BSP welcomed the
entry of neobanks, a
type of bank that
offers all-digital and
all-mobile retail
banking services.
2011
The government
tapped GCash to
distribute CCT grants.
Smart’s BayadLoad
was used for gov’t
contributions.

10. PH FinTech Cluster Map
Digital Financial Products and Services
Providers
Banks and non-bank financial institutions
Payments
Loans
Investments
Insurance
Blockchain /
Crypto Trading
Regulators
Bangko Sentral ng Pilipinas
Insurance Commission
Securities and Exchange
Commission
Philippine Deposit
Insurance Corporation
Infrastructure
Internet Service
Providers
Telecommunications
Companies
Payment Centers
/ Agents
Consumers
Individuals
Businesses
Government
Trade Associations
Fintech Alliance.PH
FinTech Philippines
Association
Remittances

11. • Users of digital payments are categorized into three:
• Value of digital payments in the Philippines. (US$ Billions):
Consumers
Person (P2X)
• Fees and taxes paid to the government,
payments for utilities, airtime loads,
merchant payments, and person-to-
person payments such as remittances
and lending.
Business (B2X)
• Taxes and fees paid to the government,
payments to suppliers and other
businesses, and payroll payments.
Government (G2X)
• Internal revenue allotments to LGUs,
payments to businesses for supplies
and other expenses, and salary and
social welfare payments
Source: United Nations Better than Cash Alliance (2020)
2019 PH GDP
US$ 376 billion
2019 OFW Remittances
US$ 33.5 billion

12. • BSP’s fundamental mission is to encourage innovation while managing consumer protection and
financial stability.
• The central bank employs a “test and learn” approach which is also termed as a “regulatory sandbox.”
• Recently, the country’s financial sector regulators have signed an MOA on the establishment of a
Cooperative Oversight Framework on FinTech innovation.
Regulators
Regulators
Bangko Sentral ng Pilipinas
Insurance Commission
Securities and Exchange
Commission
Philippine Deposit
Insurance Corporation
Source: newsbytes.ph
BSP Circular 240
Series of 2000
BSP Circular 649
Series of 2009
BSP Circular 1105
Series of 2020

13. Digital Payments Cluster Diamond
Context for Firm Strategy and Rivalry
+ Proactive and adaptive regulators, who are also
responsive to consumer welfare
+ Entrance of foreign competitors are welcomed
+ Presence of IPAs to promote new foreign investments
+ Presence of competition watchdog to monitor market
power
- Lack of awareness for IPR
- Lack of R&D facilities and incubators
Factor Conditions
+ Educated and young labor pool size
+ Digital infrastructure plan to ensure
interoperability among players and promote
financial inclusion
- Lack of specialized educational programs for
FinTech
Demand Conditions
+ Large and growing population, with consumption-driven
lifestyles
+ High volume of overseas and domestic remittances in the
country
+ High adoption to digital financial products, triggered by
the pandemic
- Lack of financial literacy among Filipinos
- Lack of recognized proof of identification for many
Filipinos, which hinder account opening for financial
services
Related and Supporting Industries
+ Presence of industry associations, given that FinTech is
still a young industry
+ Growth in retailing driven by shifting to digital commerce
- Lack of consistency in the quality of telco services by
current providers

14. What lies ahead for the PH FinTech Industry
● Emergence of other FinTech products accompanied by use of advanced
technologies
● Contactless payment is the new payment model
● Industry expansion due to new partnerships and entry of new players
Loans
Investments
Insurance
Blockchain /
Crypto
Predictive Analytics
Blockchain
Machine Learning
Artificial Intelligence
Big Data
Augmented Reality

15. Recommendations
Consumers
• Run information campaign to build trust in digital payments among consumers
• Incentivize shifting preferences for digital transactions
Businesses
• Make funding for Filipino start ups more accessible
• Encourage merchants to use e-money and e-wallet services for payments
Infrastructure
• Enhance connectivity from urban centers to less developed areas in the country
• Less bureaucratic process for telco infrastructure related projects

16. Department of Economics
Rm. 409 4/F, Dr. Ricardo & Rosita Leong Hall
Ateneo de Manila University
Loyola Heights, Quezon City 1108
Philippines
moses.sambrano@obf.ateneo.edu
soleil.corpuz@obf.ateneo.edu
apang@ateneo.edu