Money Transfer Agencies Philippines,Remittance Flow Philippines,Online bill payment services in the Philippines

1. June 2017 Philippines Domestic and International Money Transfer Industry Outlook to 2021 Growing Number of Overseas Filipino Workers and Technological Advancement to Aid Market Growth COMPANIES MENTIONED Palawan Pawnshop, Western Union, Cebuana Lhuillier, Money Gram, M Lhuillier, LBC Express, Pinoy Express, iRemit, Wells Fargo, Banco de Oro, The Bank of Philippine Islands, Philippine National Bank, Metropolitan Bank, Xoom PRODUCTS MENTIONED • Domestic Money Transfer • International Money Transfer • Bill Payments

2. 1. 2. Executive Summary Macro Environment in Contact with Remittance Industry Performance Domestic Remittance Market Domestic Bill Payment Market International Remittance Market Philippines Domestic Money Transfer Market 2.1. Philippines Domestic Remittance and Bill Payment Introduction Overview Remote Money Transfers and Bill Payments Players in the Domestic Remittance Market Role of Payment Service Providers 2.2. Philippines Domestic Remittance Market Size, 2011-2016 2.3. Philippines Domestic Remittance Market Segmentation, 2016 2.3.1. By Major Remittance Channels: Bank vs. Non-Bank, 2016 2.3.2. By Types of Services (Door to Door, Online, Branch Pick-Up, Prepaid Cards and Direct Credit to Bank Account), 2012-2016 2.3.3. By Major Flow Corridors, 2016 Migration to Manila Major Reasons for Migration Remittance Recipient Regions 2.4. Growth Drivers of Philippines Domestic Remittance Market Decline in Unbanked Municipalities Decline In the Number of Pawnshops, 2011-2016 Surge in BPO Employees in the Philippines, 2011-2016 Infrastructural Development Higher Remittance During Festival Months Robust Growth in the Tech Industry 2.5. Competitive Landscape of Major Players in Philippines Domestic Remittance Market 2.5.1. Market Share of Major Players in Philippines Domestic Remittance Market, 2016 2.5.2. Strengths and Weaknesses of Major Non-Bank Domestic Remittance Players 2.5.3. Service Positioning, Strategy and Key Performance Indicators 2.5.3.1. Palawan Pawnshop 2.5.3.2. Cebuana Lhuilier 2.5.3.3. LBC Express 2.5.3.4. Western Union 2.5.3.5. M Lhuilier 2.6. Philippines Bill Payment Market Size, 2011-2016 2.6.1. Philippines Domestic Bill Payment Market Segmentation, 2016 2.6.2. Market Share of Major Domestic Bill Payment Service Providers, 2016 Transaction Fees Comparison 2.7. Remittance Cost and Regulatory Changes (Domestic and International Remittance) Transaction Fees Decreasing Remittance Costs Regulations on Cost of Remittance Table of Content

3. 2.8. Rising Penetration of Mobile Money Transfers 2.8.1. Introduction 2.8.2. Mobile Money Transfer Mobile Money Transfer Platforms Benefits of Mobile Money Transfer 2.8.3. Near Field Communication (NFC) 2.8.4. Mobile POS 2.9. Barriers to Entry and Relative Comparison of Bank and Non-Bank Remittance Players (security and compliance issues) 2.10. Philippines Domestic Remittance and Bill Payment Future Projections and Outlook, 2015-2019 2.11. Analyst Recommendations Recommendations for Banks Philippines International Remittance Market 3.1. Global and Philippines International Remittance Industry Introduction Overview – Global and Philippines Remittance Flows Remittance Inflow and Philippines Economy Players in International Remittance Market 3.2. Remittance Working Model 3.3. Products and Services in Bank and Non-Bank Channels Overview Special Banking Products and Services for OFWs Remittance Products from Thrift or Savings Banks Unbanked Recipients Interlink Between Banks and Money Transfer Companies 3.4. Philippines International Remittance Market Size, 2011-2016 3.5. Philippines International Remittance Market Segmentation, 2011-2016 3.5.1. Major Flow Corridors, 2011-2016 3.5.2. Average Remittance Transaction per OFW on the Basis of Place of Work, 2013 - 2015 3.5.3. Average Remittance Transaction per OFW on the Basis of Major Occupation Group, 2013 - 2015 3.5.4. Average Remittance Transaction per OFW on the Basis of Mode of Remittance, 2013 - 2015 Agencies/ Local Offices, Banks, Door to Door, Friends/Co-Workers and others 3.5.5. Distribution of OFWs by Cash Remittance Sent, 2013 - 2015 3.6. Trends in Philippines International Remittance Market Stable Growth in Philippines Remittance Inflow Wherein Global Remittance Declined Seasonal Remittance Patterns Digital Trends in International Remittance Rate of Unbanked Population Adaptation of Latest Technologies 3.7. Competitive Landscape of Major Players in Philippines International Remittance 3.7.1. Market Share of Major Banks and Non-Bank Channels, 2016 3.7.2. Strengths and Weaknesses of Banks and Major Non-Bank International Remittance Players 3.7.3. Service Positioning, Pricing Strategy and Key Performance Indicators Regulatory Acts and Laws Table of Content 3.

4. 3.8. Philippines International Remittance Market Future Outlook and Projections, 2017- 2021 3.9. Cause and Effect Relationship in Philippines International Remittance Market Macro Economic Factors Affecting Philippines Remittance Market 4.1. Gross Domestic Product of Philippines, 2011-2021 4.2. Population and Number of Households in Philippines, 2011-2021 4.3. Trade Scenario and Exchange Rate Fluctuations in Philippines, 2011-2016 4.4. Disposable Income per Household in Philippines, 2011-2021 4.5. Overseas Filipino Workers, 2010-2015 4.5.1. Number of Land-Based and Sea-Based OFWs, 2010-2015 4.5.2. Land-Based OFW Distribution Across Countries And By Occupation, 2010-2015 4.5.3. Demand For Money Transfer 4.6. Number of Bank Branches and ATMs in Philippines, 2011-2016 Research Methodology 5.1. Market Definitions 5.2. Abbreviations 5.3. Market Size and Modeling Approach – Market Sizing Variables (Dependent and Independent) Final Conclusion Disclaimer Contact Us 3.7.3.1. 3.7.3.2. 3.7.3.3. 3.7.3.4. 3.7.3.5. 3.7.3.6. 3.7.3.7. 3.7.3.8. 3.7.3.9. Banco De Oro The Bank Of The Philippine Islands Philippine National Bank Western Union Metro Bank MoneyGram iRemit WELLSFARGO Xoom Table of Content 4. 5.

5. Figure 2-1: Philippines Domestic Remittance Market Size on the Basis of Transaction Volume in USD Million, 2011-2016 Figure 2-2: Philippines Domestic Remittance Market Segmentation on the Basis of Number of Transactions from Banking Channel and Non-Banking Channel in Percentage, 2016 Figure 2-3: Philippines Domestic Remittance Market Segmentation on the Basis of Types of Services Available along with their Contribution on the Basis of Number of Transactions in Percentage, 2012-2016 Figure 2-4: Migration Trend in the Philippines in 2010 and Estimates for 2012, 2014 and 2016 Figure 2-5: Number of Pawnshops in the Philippines, 2011-2016 Figure 2-6: Number of BPO Employees in the Philippines in Thousand, 2011-2016 Figure 2-7: Philippines Domestic Bill Payment Market Size on the Basis of Transaction Volume in USD Million and Number of Transactions in Million, 2011-2016 Figure 2-8: Philippines Bill Payment Market Segmentation by Types of Payment on the Basis of Number of Transactions in Percentage, 2016 Figure 2-9: Market Share of Bill Payments Service Providers in the Philippines on the Basis of Number of Transactions in Percentage, 2016 Figure 2-10: Process of Sending Domestic M-Remittances through Cash-in/Cash-out in the Philippines Figure 2-11: Process of Sending Domestic M-Remittances through Mobile Phones in the Philippines Figure 2-12: The Philippines Domestic Remittance and Bill Payment Future Projections on the Basis of Transaction Volume in USD Million, 2017-2021 Figure 3-1: Global Remittance Market Size on the Basis of Transaction Volume in USD Billion and the Contribution of the Philippines in Percentage, 2011-2016 Figure 3-2: Remittance Working Model Figure 3-3: Philippines International Remittance Market Size on the Basis of Transaction Volume in USD Million, 2011-2016 Figure 3-4: Philippines International Remittance Market Future Projections on the Basis of Transaction Volume in USD Million, 2017-2021 Figure 4-1: Gross Domestic Product of Philippines in USD Billion, 2011-2021 Figure 4-2: Population and Number of Households in the Philippines in Million, 2011-2021 Figure 4-3: Philippines Trade Scenario by Exports and Imports on the Basis of Value in USD Billion, 2011-2016 Figure 4-4: Exchange Rate of the Philippine Peso against US Dollar, 2011-2016 Figure 4-5: Disposable Income per Households in Philippines, 2011-2021 Figure 4-6: Number of Deployed Overseas Filipino Workers in Million, 2010-2015 Figure 4-7: Number of Bank Branches in Philippines, 2011-2016 Figure 4-8: Number of ATMs in Philippines, 2011-2016 LIST OF FIGURES

6. Table 2-1: Rationale and Description for Philippines Domestic Remittance Market Size, 2011- 2016 Table 2-2: Philippines Domestic Remittance Market Size on the Basis of Total Number of Transactions in Million, 2014-2016 Table 2-3: Rationale and Description for Philippines Remittance Market Segmentation by Major Remittance Channel, 2016 Table 2-4: Philippines Domestic Remittance Market Segmentation on the Basis of Number of Transactions from Banking Channel and Non-Banking Channel in Million, 2016 Table 2-5: Rationale and Description for Philippines Remittance Market Segmentation by Type of Services, 2012-2016 Table 2-6: Philippines Domestic Remittance Market Segmentation on the Basis of Types of Services Available along with their Contribution on the Basis of Number of Transactions in Million, 2012-2016 Table 2-7: Unemployment and Underemployment Rate in Different Region in the Philippines in Percentage, 2016 Table 2-8: Region Wise Urbanization Rate in the Philippines in Percentage for 2010, 2012, 2014 and 2016 Table 2-9: Number of Banked and Un-Banked Municipalities in Philippines, 2011-2016 Table 2-10: Number of Banked and Un-Banked Municipalities in Philippines on the Basis of Percentage, 2011-2016 Table 2-11: Major Festivals in the Philippines Table 2-12: Major Players in Philippines Domestic Remittance Market Table 2-13: Market Share and Transaction Volume of Major Players in the Philippines Domestic Remittance Market in Percentage and USD Million Respectively, 2016 Table 2-14: Strengths and Weaknesses of Major Non-Bank Players in the Philippines Domestic Remittance Market Table 2-15: Competitive Landscape for Palawan Pawnshop Company Overview, Services, Branches and Other Parameters Table 2-16: Palawan Pawnshop’s Rates for Domestic Remittance in the Philippines, 2016 Table 2-17: Competitive Landscape for Cebuana Lhuilier Company Overview, Services, Branches and Other Parameters Table 2-18: Cebuana Lhuilier Rates for Domestic Remittance in the Philippines, 2016 Table 2-19: Competitive Landscape for LBC Express Company Overview, Services, Branches and Other Parameters Table 2-20: LBC Express’ Rates for Domestic Remittance (Same Day Delivery) in the Philippines, 2016 Table 2-21: LBC Express’ Rates for Domestic Remittance (Next Day Delivery) in the Philippines, 2016 Table 2-22: Competitive Landscape for Western Union Company Overview, Services, Branches and Other Parameters Table 2-23: Western Union’s Rates for Domestic Remittance in the Philippines, 2016 Table 2-24: Competitive Landscape for M Lhuilier Company Overview, Services, Branches and Other Parameters LIST OF TABLES

7. Table 2-25: M Lhuilier Rates for Domestic Remittance in the Philippines, 2016 Table 2-26: Rationale and Description for Philippines Bill Payments Market Size, 2011-2016 Table 2-27: Domestic Bill Payment Market Size in the Philippines in USD Million, 2016 Table 2-28: Major Entities Involved in Philippines Bill Payments Market Table 2-29: Competitive Landscape of Smart Money Table 2-30: Competitive Landscape of Smart Money Table 2-31: Overview of Online and Mobile Payment Gateways and Payment Methods in the Philippine Bill Payments Market Table 2-32: Barriers to Entry and Relative Comparison of Bank and Non-Bank Remittance Players Table 2-33: Relative Comparison of Banking and Non-Banking Remittance Channels Table 2-34: Future Outlook for Philippines Domestic Remittance and Bill Payments Market on the Basis of Revenue, 2017-2021 Table 2-35: Analyst Recommendations for Money Transfer Companies and Pawnshops Table 2-36: Analyst Recommendations for Banks Table 3-1: Rationale and Description for Philippines International Remittance Market Size, 2011-2016 Table 3-2: Rationale and Description for Philippines International Remittance Market Segmentation by Major Flow Corridors, 2016 Table 3-3: Philippines International Remittance Market Segmentation by Inflows from Major Flow Corridors on the Basis of Transaction Volume in Percentage, 2011-2016 Table 3-4: Philippines International Remittance Market Segmentation on the basis of Inflows from Major Flow Corridors in USD Million, 2011-2016 Table 3-5: Average Stated Transaction Fee, Hidden Currency Conversion Cost and Total Fees Charged for Remittance of USD 1,000 for the US-Philippines Flow Corridor in USD, 2016 Table 3-6: Average Stated Transaction Fee, Hidden Currency Conversion Cost and Total Fees Charged for Remittance of GBP 1,000 (USD 1,355.9) for the UK-Philippines Flow Corridor in USD, 2016 Table 3-7: Average Stated Transaction Fee, Hidden Currency Conversion Cost and Total Fees Charged for Remittance of CAD 1,000 (USD 755.03) for the Canada-Philippines Flow Corridor in USD, 2016 Table 3-8: Average Stated Transaction Fee, Hidden Currency Conversion Cost and Total Fees Charged for Remittance of EUR 1,000 (USD 1,106.8) for the Western Europe- Philippines Flow Corridor (Germany, France, Italy and Others) in USD, 2016 Table 3-9: Average Stated Transaction Fee, Hidden Currency Conversion Cost and Total Fees Charged for Remittance of AUD 1,000 (USD 743.7) for the Australia-Philippines Flow Corridor in USD, 2016 Table 3-10: Average Cash Remittance per Male and Female Overseas Filipino Worker on the Basis of Place of Work in PHP Thousands, 2013 - 2015 Table 3-11: Rationale and Description for Philippines International Remittance Market Segmentation – Average Remittance Transaction per OFW by Major Occupation Group, 2016 LIST OF TABLES

8. Table 3-12: Average Annual Cash Remittance per Male and Female Overseas Filipino Worker on the Basis of Major Occupation Group in PHP Thousands, 2013 - 2015 Table 3-13: Average Cash Remittance per Overseas Filipino Worker on the Basis of Mode of Remittance in PHP Thousands, 2013-2015 Table 3-14: Distribution of Overseas Filipino Workers by Amount of Cash Remittances Sent in Units and Percentage, 2013-2015 Table 3-15: Distribution of Overseas Filipino Workers by Amount of Cash Remittances Sent on the Basis of Percentage of Cash Remittance Set Aside for Savings, 2015 Table 3-16: Distribution of Overseas Filipino Workers by Amount of Cash Remittances Sent on the Basis of Percentage of Cash Remittance Set Aside for Savings, 2014 Table 3-17: Distribution of Overseas Filipino Workers by Amount of Cash Remittances Sent on the Basis of Percentage of Cash Remittance Set Aside for Savings, 2013 Table 3-18: Month-wise Overseas Filipino Remittances in the Philippines in USD Million, 2011 - 2016 Table 3-19: Major Players in Philippines International Remittance Market Table 3-20: Market Share and Transaction Volume of Major Players in the Philippines International Remittance Market in Percentage and USD Million Respectively, 2016 Table 3-21: LBC Express International Remittance Transaction Volume in USD Million, 2011- 2016 Table 3-22: Strengths and Weaknesses of Banks and Major Non-Bank International Remittance Companies Table 3-23: Competitive Landscape for Banco De Oro Company Overview, Services, Branches and Other Parameters Table 3-24: Competitive Landscape for the Bank of the Philippine Islands Company Overview, Services, Branches and Other Parameters Table 3-25: Competitive Landscape for Philippine National Bank Company Overview, Services, Branches and Other Parameters Table 3-26: Competitive Landscape for Western Union Company Overview, Services, Branches and Other Parameters Table 3-27: Competitive Landscape for Metro Bank Company Overview, Services, Branches and Other Parameters Table 3-28: Competitive Landscape for MoneyGram Company Overview, Services, Branches and Other Parameters Table 3-29: Competitive Landscape for iRemit Company Overview, Services, Branches and Other Parameters Table 3-30: Competitive Landscape for Wells Fargo Company Overview, Services, Branches and Other Parameters Table 3-31: Competitive Landscape for Xoom Company Overview, Services, Branches and Other Parameters Table 3-32: Future Outlook for Philippines International Remittance Market on the Basis of Transaction Value, 2017-2021 Table 3-33: Cause and Effect Relationship Analysis between Industry Factors and Expected Industry Prospects of the Philippines International Remittance Market LIST OF TABLES

9. Table 4-1: Rationale for Gross Domestic Product of Philippines, 2011 - 2021 Table 4-2: Rationale for Population and Number of Households in Philippines, 2011 - 2021 Table 4-3: Rationale for Trade Scenario and Exchange Rate Fluctuations in Philippines, 2011 - 2021 Table 4-4: Rationale for Disposable Income per Household in Philippines, 2011 - 2021 Table 4-5: Philippines Household Final Consumption Expenditure at Constant Prices in USD Million, 2011-2016 Table 4-6: Rationale for Number of Land-based and Sea-based OFWs in Philippines, 2010 - 2015 Table 4-7: Number of Land based and Sea based OFWs from Philippines, 2010-2015 Table 4-8: Rationale for Number of Land-based and Sea-based OFWs in Philippines, 2010 - 2015 Table 4-9: Deployed Land-Based Overseas Filipino Workers on the Basis of Country of Residence, 2010-2015 Table 4-10: Rationale for Number of Bank Branches and ATMs in Philippines, 2011 - 2016 Table 5-1: Correlation Matrix of Philippines Remittance and Bill Payments Market Table 5-2: Regression Coefficients Output for Philippines Remittance and Bill Payments Market LIST OF TABLES

10. 10 Philippines Remittance Market WHAT IS THE SCENARIO OF REMITTANCES IN THE PHILIPPINES? Philippines has been one of the fastest growing economies in the ASEAN regions during the past five years. With an improvement in economy which has been facilitated by an increase in trade, the country plans to achieve more than 6% GDP growth rate in the coming years. The market for domestic money transfers in the Philippines has been exceedingly dynamic and has matured since the last five years. Filipinos have a gamut of alternatives available in terms of the presence of numerous formal payments service providers (PSP) in a market with high competition. The market has also been flooded with informal means of making payments which include friends, family and vehicle drivers. The total market for domestic remittances was valued at USD ~ million in 2016 and witnessed expansion from USD ~ in the year 2011. Remittances sent by cross border migrant workers are a traditional means of financial support to family members back home. The Philippines has been the nation of source of one of the biggest Asian migrant Diasporas, with its economy greatly reliant on remittances from Filipinos residing and working in around 239 countries and territories. The Philippines was the third largest remittance market in 2016, with India and China being the top two. Personal remittances from OFWs accounted for ~% of the country’s GDP in 2016. The largest portion of remittances came from land-based workers, who remitted USD ~ million in 2016. On the other hand, remittances from sea-based workers in the same year amounted to USD ~ million. Publication Price: Single User: USD 1,800 Hard Copy: USD 2,500 Enterprise wide: USD 3,600 Pages: 167 billion-dollar Related Reports India Bills Payment Market Outlook to 2020 - Rising Internet Penetration and Advent of Mobile Wallet to Shape Future Growth Figure: Philippines International Remittance Market Size on the Basis of Transaction Volume in USD million, 2011-2016 Philippines Pawnshop Market Outlook to 2020 - Convenience with Pawning and Remittance Services to Stimulate Growth UAE Remittance and Bill Payments Market Outlook to 2021 - Rising Expatriate Population, Growing Business Activities and Increasing Demand for Utilities to Foster Growth 2011 2012 2013 2014 2015 2016 © Licensed product of Ken Research; should not be copied

11. 11 Philippines Remittance Market PHILIPPINES DOMESTIC REMITTANCE AND BILL PAYMENTS MARKET PHILIPPINES INTERNATIONAL REMITTANCE MARKET Domestic money transfers encompass both remote money remittances and payment of bills. A remote money remittance is termed as the transmission of funds from one person to another through either an agent, or through individual-to-individual transfers from one bank account or e-wallet to another. The total market for domestic remittances was valued at USD ~ million in 2016 with around ~ million transactions. In-country Filipinos, characterized by domestic migrants who have moved for better economic and employment opportunities and permanent residents together, accounted for approximately ~% of the total domestic remittances. The increase in local migration over the years has been favorable to the growth of domestic money transfers. The bill payment market in the Philippines was recorded to be USD ~ million, in terms of volume of transactions taking place in 2016. Payments of utility bills such as electricity, telephone and water bills dominated the bill payment landscape in the same year. A greater part of bill payments took place through the non-banking channel, of which convenience stores were the most preferred location for making payments. The amount and frequency of bills payments for utilities has been considerably high in the country, largely because the high cost of electricity and water provision to an average Filipino Remittances sent by cross border migrant workers are a traditional means of financial support to family members back home. Over the past several years, as the number of migrant workers have increased, remittance flows have also showcased an upward trend. The Philippines international remittance market registered a total of USD ~ million in inbound remittances from other countries in 2016. The total remittances from OFWs accounted for ~% of the country’s overall economic output in 2016. The largest portion of remittances came from land-based workers, who remitted USD ~ million in 2016. On the other hand, remittances from sea-based workers in the same year amounted to USD ~ million. A momentous proportion of remittances were received from the US, followed by Saudi Arabia and UAE. Even though the US has not been amongst the leading destinations for Filipinos, it has continued to dominate the remittance inflows in the Philippines over the past five years. OFWs which worked as government officials were observed to remit the highest during the year 2016 in comparison to other professions such as technicians, clerks, farmers and others. Officials of the government and corporate executives remitted average of amounts of PHP ~ thousand and PHP ~ thousand for males and females respectively during the complete year of 2016. Few of the most popular modes of money transfer include private agencies, banks, door to door service providers and friends/ co-workers. Cash remittance agencies have been one of the most popular modes of transactions. Figure: UAE Genset Market Future Outlook and Projections on the basis of Revenue in USD Million, 2017-2021 USD Million 2016 2017 2018 2019 2020 2021 © Licensed product of Ken Research; should not be copied

12. 12 Philippines Remittance Market WHICH ARE THE MAJOR FLOW CORRIDORS IN PHILIPPINES INTERNATIONAL REMITTANCE MARKET? WHICH CHANNEL DOMINATES THE DOMESTIC REMITTANCE MARKET? Philippines ranked as the third largest recipient of remittances worldwide in 2016 after India and China, followed by France, Germany, Bangladesh, Belgium, Spain, and Nigeria. The Philippines received remittances from all over the globe. However, a momentous proportion of remittances were received from the US, followed by Saudi Arabia and UAE. Even though the US has not been amongst the leading destinations for Filipinos, it has continued to dominate the remittance inflows in the Philippines over the past five years. Filipinos have been recorded as the second largest immigrant group in the US, with the category being led by Mexican immigrants. Saudi Arabia was observed as the biggest employer of Overseas Filipino Workers. The country has the largest Filipino population in the Middle East. Filipinos account for the fourth largest group of expatriates in Saudi Arabia. Filipinos in the UAE mostly constituted migrant Overseas Filipino Workers working in the marketing, construction, energy, retail, architecture, information technology, cargo shipping, medical, tourism, design engineering, real estate and telecommunications domains or employed as domestic helpers. The non-bank channel, comprising of money transfer companies and pawnshops operating in the Philippines, accounted for the major share in domestic remittance market in 2016, in terms of number of transactions with a share of ~%. Banks hold a meager share of ~% in the market. Lack of banking offices in several regions in Philippines has led to the emergence and growth of several other financial service providers (FSPs) such as pawnshops, money changers (MCs), money transfer companies, remittance agents (RAs) and FX dealers. These entities have greatly helped to increase the access to financial services in un-served and underserved regions in the Philippines. The lower income class of the Filipino society has been significantly served by the pawnshops for their remittance requirements since this cluster constituted the unbanked members of the population. Majority of the banks in the country are concentrated in NCR, CALABARZON and Central Luzon, leaving regions such as ARMM, Eastern Visayas, Caraga and SOCCSKSARGEN with a substantially low prevalence of banks. Table: Philippines Domestic Remittance Market Segmentation by Remittance Channel on the Basis of Number of Transactions in Percentage (%), 2016 Table: Philippines International Remittance Market Segmentation by Major Flow Corridors on the Basis of Transaction Volume in Percentage (%), 2016 Segments Non-Bank Bank Percentage (%) ~ ~ Countries US Saudi Arabia UAE UK Others Percentage (%) ~ ~ ~ ~ ~ © Licensed product of Ken Research; should not be copied

13. 13 Philippines Remittance Market WHAT HAVE BEEN THE MAJOR TRENDS AND CHALLENGES IN PHILIPPINES REMITTANCE AND BILL PAYMNETS MARKET? 1. The reach of the financial system in the Philippines has been a direct measure of the distribution of financial institutions in the country. Banks were noticed as the primary players in financial services with banking entities directly responsible for approximately 80% of the total resources of the financial system. Bank branches and ATMs have functioned as the fundamental distribution channels of financial services. The Philippines has been regarded as a thought leader of financial inclusion in the light of its early initiatives and gains in microfinance and mobile banking services. 2. A pawn shop has been categorized as a business which provides services of money lending with collection of certain collateral property. Pawnshops in the Philippines have been a major source of money transferring since the past decade. The lower income class of the Filipino society has been significantly served by the pawnshops for their remittance requirements since this cluster constituted the unbanked members of the population. 3. The Business Process Outsourcing industry has been an important component of Philippines’ economic growth. The Information Technology and Business Process Management industry has grown to be the second largest source of dollar income for the Philippine economy. During 2016, the industry generated ~ million direct jobs and USD ~ billion in revenues. The revenues grew by ~% from ~ million in 2014 and are expected to overtake the overseas Filipino Worker Remittances by 2017. 4. The government of Philippines has taken concrete steps to bolster infrastructural development in the country. 5. Remittances to developing countries are experiencing a declining trend from the last two years. However, Philippines stood as one among those countries that defied the declining trend and continued to show a decent growth rate. Remittances to the East Asia and Pacific region declined an estimated ~% to USD ~ billion in 2016 amid low oil prices and weak economic growth in the Gulf Cooperation Council (GCC) countries and the Russian Federation. 6. International remittances showcased strong seasonal patterns, with month on month increases particularly huge in the months of March and December. March is the month for graduation in the Philippines and remittances have showcased significant incline in this month over the past five years. 7. Major digital trends that are expected to revolutionize the mobile financial services in the country are virtual currencies, wearable technologies and biometrics. The bitcoin is expected to have a large impact on the global remittance market, particularly in developing countries such as the Philippines where remittances help support families and communities. 8. New players and startups are offering different forms of money transfer services. With the advent of digital currency and blockchain technology, companies are becoming adaptable for currencies like bitcoin to enable remittance services. © Licensed product of Ken Research; should not be copied

14. 14 Philippines Remittance Market HOW THE COMPETITION IS PREVAILING IN PHILIPPINES DOMESTIC REMITTANCE MARKET HOW THE COMPETITION IS PREVAILING IN PHILIPPINES INTERNATIONAL REMITTANCE MARKET The continued expansion of remittances in the past several years has been impelled by the sustained innovation on the part of banks, money transfer companies and other financial institutions which provide remittance services to overseas Filipino workers. Majority of the money remittances received by Filipino households are routed through commercial banks. In 2016, banks absorbed ~% of the total remittances, indicating Filipinos’ mounting faith on this channel instead of sending money back home by means of friends or relatives. Remittances transferred through banks have showcased an inclining participation over the last five years. On the other hand, money transfer companies such as I-Remit, LBC Express, Western Union, Xoom and MoneyGram were also important remittance channels for OFWs in the Philippines, recording a contribution of ~% to the total international remittance transaction volume in 2016. The domestic remittance space in Philippines has largely been a cash-to-cash market, with the money flowing from several informal modes of payment such as friends, family, drivers and others. As majority of the population in the Philippines has continued to remain un-banked, coupled with the fact that cash-to-cash mode of payment is not fitting to banks’ transaction services, regulatory and compliance structure, a large portion of the country’s inhabitants continue to resort to exchange of hard cash. In addition to the prevalence of informal remittance modes in the Philippines, a gamut of formal payment methods are also common. Pawnshops have been an important part of Philippines’ financial sector, surpassing banks in terms of physical reach. There were a total of ~ pawnshops in the Philippines in 2016, of which approximately ~ were entirely in the pawning business, while the remaining had other revenue generating operations, chiefly remittance services. Comparing to other financial institutions, pawnshops outnumbered savings and loans associations, universal and commercial banks, and rural banks. Palawan Pawnshop, Cebuana Lhuillier and M Lhuillier are three of the largest pawnshop businesses in the Philippines, offering a variety of money transfer services. Table: Market Share of Major Players in the International Remittance Market in % Companies Banco de Oro The Bank of Philippine Islands Philippine National Bank ~ Metropolitan Bank Wells Fargo Western Union iRemit MoneyGram Xoom LBC Express Market Share (%) ~ ~ Table: Market Share of Major Players in the Domestic Remittance Market in % ~ ~ ~ ~ ~ ~ ~ Companies Palawan pawnshop LBC Express Cebuana Lhuillier Western Union M Lhuillier Pinoy Express iRemit Banks Market Share (%) ~ ~ ~ ~ ~ ~ ~ ~ © Licensed product of Ken Research; should not be copied

15. 15 Philippines Remittance Market WHAT IS THE FUTURE OUTLOOK FOR PHILIPPINES INTERNATIONAL REMITTANCE MARKET The domestic remittance market is expected to augment at a CAGR of ~% from USD ~ million in 2016 to USD ~ million in 2021. Rapid growth in the introduction and use mobile technologies in the country for money transfer and bill payments are a factor that depicts the growth of domestic remittance and bill payments market of the Philippines. Continued growth in internal migration is expected to sustain the growth of money transfers taking place in the Philippines. The Philippines has outshined India in terms of voice-based outsourced projects and has become the worldwide leader in the call center industry. A noticeable amount of FDI inflows was invested in BPO, electronics and energy sector. With the continual growth in FDI flows in the BPO sector, there are expected to be more employment opportunities leading to large scale migrations to urban cities. This and the continued zeal of domestic Filipinos to send money to their families will provide a major thrust to the domestic remittance market. The bill payments market is expected to grow at a CAGR of ~% during the forecast period 2017-2021. One of the major factors that are expected to augment the bill payment factor is the mobile phone penetration in the country. Internet subscriptions in the Philippines have grown considerably and now cover more than one- third of the country’s total population. The increase in the number of water connections, and mobile, internet and cable TV subscribers, is likely to result in a healthy demand for bill payment services in the Philippines. The expansion of payment centers to the semi-urban and rural setting will also see the number of bill payment transactions increasing in the coming years. International remittance market in the Philippines will continue to be driven by the increasing deployment of Filipinos in other countries. Unskilled workers and laborers will uphold their status as the largest deployed fraction of overseas workers and will continue to account for the largest share of aggregate remittances. Even though the demand of OFWs will be high from countries in the Middle East, the US will continue to account for the highest amount of remittances in the coming years, as the amount of money sent is likely to be higher compared to other nations. The unaccounted remittances to an extent would be properly channeled and is expected to raise the transaction volume in the coming years. Moreover, the average amount remitted to Philippines per person is expected to increase as the Filipinos are gradually getting enrolled into jobs that require professional skills and qualifications owing to their year on year improving educational qualifications and such jobs are paid better. Increased earnings of OFWs would raise the amount of remittance. Figure: Philippines Remittance and Bill Payments Market Future Projections on the Basis of Transaction Volume in USD Million, 2017-2021 USD Million 2017 2018 2019 2020 2021 © Licensed product of Ken Research; should not be copied

16. 16 Philippines Remittance Market COMPANIES CITED IN THE REPORT Companies Covered in the Report List of Companies • Palawan Pawnshop • Cebuana Lhuillier • LBC Express • Western Union • M Lhuillier • Banco De Oro • The Bank of the Philippine Islands • Philippine National Bank • Metro Bank • MoneyGram • iRemit • Wells Fargo • Xoom Major Players in Philippines Remittance and Bill Payments Market COMPETITIVE LANDSCAPE COVERED IN THE REPORT Parameters Company Overview Strategy Services Key Performance Indicators Number of branches, 2016 Description • • • • • KEY FACTORS CONSIDERED IN THE REPORT •Comprehensive analysis of Philippines Domestic and International Remittance and Bill Payments Market and its segments • Listed major players and their positioning in the market • Identified major industry trends in last few years and assessed the future growth of the industry • Technological Advancements in Philippines Remittance and Bill Payments Market © Licensed product of Ken Research; should not be copied

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