Increasing job opportunities, weakening currency of recipient countries, declining remittance charges and rising inflation rates in Abu Dhabi and Dubai were the key factors driving growth in the remittance and bill payments market in Philippines.
UAE is known for its extraordinary rate of expatriate population. The international remittance market of the country is led by the workers remittance outflows from more than a decade. The country possesses a wide range of job opportunities which attracts job seekers from various parts of the world. Largely, due to the geographic proximity majority of the expatriates are from the South Asian countries. Exchange houses are the major players in the market owing to the convenience of transfers offered by them and the rate of unbanked population in the country. The country employs people from across the globe including India, Pakistan, Philippines, Indonesia, US, UK and other GCC countries. UAE-India is the dominant remittance corridor as majority of the expatriate population in the country is from India. Like all developing nations, UAE also comprise of both developed and non-developed emirates, which raises the rate of internal migration from non-developed emirate to developed emirate in search of better job and living opportunities.
Over the past few years, the currencies in the majority of recipient countries have weakened against AED and there had been a decline in the remittance charges leading to an increase in the transaction volume. Rising consumer price inflation, have increased the utility charges from 2015 in Abu Dhabi and Dubai, augmenting growth in the bill payments market. Rising water and electricity consumption has induced the government to discontinue the subsidies on these utilities for citizens and to raise charges for expatriates. Stringent banking regulations forcing local banks to disengage with exchange houses and threat of money laundering activities are some of the issues that hinder growth in the remittance market.
The report titled “UAE Remittance and Bill Payments Market Outlook to 2021 – Rising Expatriate Population, Growing Business Activities and Increasing Demand for Utilities to Foster Growth” by Ken Research suggested that the remittance and bill payment industry will register multi bagger CAGR in terms of transaction volume and number of transactions in the next 5 years till 2021.
Ankur Gupta, Head Marketing & Communications