MANILA, Philippines — The fledgling financial technology (fintech) sector in the Philippines received a shot in the arm after Voyager Innovations Inc. raised $167 million to finance the foray of PayMaya into the digital banking space, according to Fitch Solutions Country Risk & Industry Research.
In its latest commentary, the research unit of the Fitch Group said mobile banking applications in the country gained momentum after a period of sustained investment including the fresh capital infusion from parent firm PLDT Inc., global investment firm KKR, and Chinese technology company Tencent.
Another new investor in Voyager was IFC Financial Institutions Growth Fund, a fund managed by the IFC Asset Management Co. (AMC), a division of the World Bank’s International Finance Corp. (IFC).
“Through supporting mobile banking in the Philippines, PLDT and its co-investors will be well-positioned to make gains over the medium-term from the burgeoning fintech market,” Fitch Solutions said.
For PLDT, it said mobile banking services offer an alternative vertical to explore – away from traditional voice and data services that offer stagnated revenue growth.
Fitch Solutions said regulatory backing from the Department of Information and Communications Technology via the Connect, Harness, Innovate and Protect and the Bangko Sentral ng Pilipinas under its three-year Digital Payments Transformation Roadmap has created a supportive environment for the uptake of mobile banking services, giving a positive outlook for investors.
It noted that the large unbanked population in the Philippines is one of the highest in Southeast Asia, creating a sizable market on which to leverage fintech services that offer investors positive returns.
“The COVID-19 pandemic has underscored the importance of developing a robust digital infrastructure given the emphasis on social distancing and global pivot away from cash and physical banks,” it said.
As of end-2020, GCash of Ayala-led Globe Telecom had 31 million users, followed by PLDT’s PayMaya with 28 million.
“Gaining competitive edge in the market will be challenging but Voyager recently moved into adjacent verticals such as providing business loans and health insurance to augment its offering. The surge in market players indicates powerful investor sentiment towards the fintech space, supporting competition and innovation,” Fitch Solutions said.