One hot summer night, 80 people with varying interests in blockchain technology convened in a co-working startup’s small events space. Four of these people were having a lively debate on how much decentralization should take place, touching on topics such as cryptocurrency exchanges and data ownership, while two others diligently took notes on a whiteboard on what had been discussed. Glasses of an icy, milky, sweet concoction were distributed to attendees, some of whom came prepared with questions for the debaters, and most of whom had finished a full day of work on fintech- and crypto-related projects and endeavors.
This kind of event happens every week in this city. No, we’re not talking about Silicon Valley, Shanghai, or Singapore -- the usual suspects. We’re in Metro Manila, the economic center of a vaguely familiar island-nation called the Philippines. This specific debate is organized by the Binance Filipino Community, with the help of some of the thought leaders in the blockchain industry.
Philippines: A Story of Leaps and Barriers
The Philippines, a nation of more than 7,000 islands and 100 million people, is blessed with abundant resources and beset with unfathomable challenges. The country is home to the third-biggest English-speaking population, which makes for a population that is competitive in the labor market worldwide, as well as an embarrassment of natural riches, from world-famous beaches such as Boracay and El Nido to the islands’ abundant flora and fauna.
Recently, the nation’s economy has been looking up, with the fastest GDP growth rates (6% to 7% yearly for seven years running) in Asia over the past few years, in addition to long-term projections of leapfrogging in the economy rankings from 34th-largest in 2017 to up to 12th-largest by 2060.
But the many islands that give the Philippines its natural richness have also represented the harsh divides and tumults that the country experiences from time to time. The sheer number of islands in the country has made it logistically difficult to deliver various needs. The nation is also one of the most vulnerable in the world when it comes to natural disasters, -- the strongest typhoon ever recorded in history had ravaged the country in 2013.
Various hardships have forced some 10 million Filipinos to seek work in just about every other country in the world, and this overseas population brings in about $30 billion every year to their families back home. The country’s banking industry has remained competitive and innovative in various fronts, to cater to those who need to use financial services for remittances and money transfers. However, only 30% of Filipinos have access to banks, while credit card penetration is at an even lower 10%.
Financial technology (fintech) solutions and remittance centers have risen up to take on this logistical challenge. It is estimated that there are about 23 million users* of various e-money apps in the country, and that number is expected to double in just two to three years. And more than 20% of the user base for e-money in the Philippines is served by crypto wallet apps. In other words, around 5 million people are already using blockchain and cryptocurrency services in the country.
Online-Savvy Now, Blockchain-Savvy Soon
The Philippines’ pivot to financial technology, especially blockchain technology, is in full swing, despite the fact that the country’s Internet speed is among the slowest in Asia. Two-thirds of the nation (more than 67 million) are connected to the Internet, three-fourths (73 million) use mobile phones, and virtually everyone has active SIM cards. And those who use the Internet stay on longer than the rest of the world; the average Filipino spend 10 hours online, a full 30 minutes more than the next Internet-heavy country.
Against all odds, cryptocurrencies are gradually taking center stage in Philippine financial technology. Virtual currency transactions doubled from $189 million in 2017 to $390 million in 2018, despite the bear market experienced last year. Factors that played into this increased transaction volume include better awareness of blockchain services, the use of cryptocurrency as a viable remittance and payment solution, and more.
The combination of a favorable playing field and the growing interest in crypto among Filipinos has allowed many blockchain advocates in the Philippines, in various levels of society, to continue their projects for crypto adoption. For instance, one of the major banks in the Philippines has launched a Bitcoin ATM kiosk in Manila, while at least two banks are considering the creation and use of stablecoins powered by private blockchain networks.
In the community level, there are weekly events from various startups and enthusiasts where discussions of crypto and blockchain technologies are encouraged. For instance, the Binance Filipino Community has organized three meetups in the Philippines, with a fourth coming along on May 17, 2019. Sign up here to join that meetup,
At the end of the day, it would be prudent to continue building on this momentum for blockchain adoption in the Philippines.
* Based on combined latest estimates of 10 million users for GCash, 8 million users for PayMaya, and 5 million users for Coins.ph. This figure does not include smaller services but is meant to be a conservative estimate.
** Sources for various statistics in this report: the International Monetary Fund, HSBC, Bangko Sentral ng Pilipinas, CNN, and Coindesk.