Phlilippines to benefit from P1.76 billion Paywatch fresh funding

MANILA, Philippines —  The Philippine market is expected to benefit from the P1.76 billion fresh funding that earned wage access (EWA) service provider Paywatch secured in a bid to cut financial stress among Filipinos who often run low in cash as they await the next paycheck.

In a statement, Paywatch said it raised $30 million (P1.76 billion) in funding from a mix of equity and credit facilities that will allow it to enhance employee wellness solutions and expansion across Southeast Asia.

Paywatch is currently present in the Philippines, Malaysia, Indonesia and South Korea. In the country, the EWA provider just entered the market last year.

Broken down, Paywatch received $14 million (P821 million) in Series A equity investment led by Third Prime and a consortium of US investors including Vanderbilt University and University of Illinois Foundation, with participation from new investors Octagon Venture Partners and Wooshin Venture Investment Corp.

The company also secured $16 million (P939 million) in credit facilities from global banks to fund its product expansion.

EWA allows employees to access a portion of their wages before the end of their payroll cycle, lessening the need to apply for short-term loans to cover day-to-day expenses or emergencies.

It is not a loan but is the actual money that an employee has already earned.

Paywatch Philippines president Rowell del Fierro said the rapid adoption of EWA in the country offers Filipino workers increased flexibility in managing their finances and reduces their vulnerability to debt traps.

Seven in 10 Filipinos struggle in managing their finances amid debts and rising costs of commodities.

“The Series A funding underscores our commitment to Filipino workers. This achievement propels our broader impact, enabling us to reach more enterprises who share our vision of financial inclusivity and enhancing the country’s economic resilience,” del Fierro said.

“The Philippines represents a pivotal market for Paywatch. The positive reception to EWA in the country is encouraging,” he said.

There are close to 50 million employees in the Philippines but short-term liquidity is normally sold via credit cards which are only at around seven million holders.

This means that the majority use alternatives such as digital lending companies or informal credit through friends and families.

According to Paywatch, its solutions have decreased employees’ dependence on loans, alleviated household debt and enhanced financial management.