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As the Philippines continues to ride with the global paradigm shift from competition to collaboration between banks and firms, the Financial Technology (Fintech) industry in the country is emerging as one of the booming economic drivers today.
According to the ASEAN FinTech Census 2018, companies in the Philippines have raised US$78 million in funding in 2017, which is 13 times more than the fintech investment funding for 2016. This industry is forecasted to continue its pace as it is pegged with an annual growth rate of 16.4%. By 2022, forecasters believe that transactions from the industry can reach the half-trillion-peso mark.
Since companies and local regulating bodies have adopted a more concrete and more consumer-oriented definition, fintech services are made available to a larger number of players. Earlier this year, the Bangko Sentral ng Pilipinas pledged to prioritize the promotion of fintech in the country by developing appropriate safeguards against risks. Newly appointed BSP Governor Benjamin Diokno has committed to the goal of turning least a fifth of the country’s payments into electronic transactions. This will fall under online payments, one of the biggest categories of the local fintech landscape in the Philippines.
On the other hand, the cryptocurrency and blockchain industry in the Philippines has also significantly grown in recent years. The central bank has also issued Circular 944 in 2017, which defines and specifies the guidelines for Virtual Currency (VC) exchanges in the country.
To support this goal, the Cagayan Economic Zone Authority (CEZA) has granted Liannet Technology Ltd. an offshore crypto exchange license in July 2018. It is the third company to be awarded with the Financial Technology Solutions and Virtual Currency (FTSOVC) license, which allows the company to engage in crypto-trading activities and participate in digital coin trading.
A subsidiary of the international Apsaras Group, Liannet is a blockchain technology company also has stakes in industrial, manufacturing, infrastructure, and other asset investments. It is registered as a manufacturing firm that ventures into electronics according to the Hong Kong Trade Development Council (HKTDC). It is being managed by Mr. Jian Lee and has major markets in Africa, Australia, Central & South America, Europe, Hongkong, Japan, and Korea.
CEZA Administrator and Chief Executive Officer Raul Lambino said during a blockchain summit hosted by the said company that this is just the beginning for the fintech industry in the country. With the goal of making the Cagayan Special Economic Zone and Freeport (CSEZFP) as "Asia's Silicon Valley," and the biggest cryptocurrency hub in Northern Luzon.
Lambino stated that they have been inviting offshore cryptocurrency companies to locate and operate in the Philippines. As of July 2018, there are 17 other fintech and offshore virtual currency firms have already paid in full the application and license fees for the digital coin trading, while 19 companies are in the pipeline to pay their application and license fees to the agency.
“We at the Cagayan Economic Zone Authority would like to be a significant part of this envisioned future,” Lambino said. “That is why we are offering to Asia and to the world CEZA as a haven for fintech innovations to grow, and for business opportunities of technology to rise,” he added.