Top 5 Fintech Philippines News of the Week (CW 21)by Fintechnews Philippines May 25, 2018
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15 offshore firms investing P1.7b in Philippines’ ‘Fintech City’
The government-owned and-controlled corporation Cagayan Economic Zone Authority (CEZA) has secured up to P1.7 billion in investments from 15 offshore fintech and blockchain companies set to be locators in the Cagayan Special Economic Zone and Freeport (CSEZFP) ― the launching ground for the first “Fintech City” in the Philippines.
Among the early offshore companies to ink MoUs (Memorandum of Agreement) with CEZA were the acknowledged world’s leaders in the burgeoning global “currency of the future”, said Sec. Raul Lambino, CEZA administrator and chief executive officer, at the sidelines of “A New Venture in the Valley Unfolds: CEZA FinTech Summit 2018.”
The new contracts for the next two years include application and license fees, to be paid by the cryptocurrency companies that would operate virtual currency exchanges, engage in crypto mining and blockchain production, and initial coin offerings, among others.
Lambino also signed MoUs with Hongkong-based Chinese firms Xin Peng Group, Changwei International Co., Ltd. and ST Union Capital Holdings, the last operating a trading firm in the Philippines’ business capital in Makati City. They are all interested to undertake the creation of an international crypto exchange platform and other related businesses.
Other players, who rounded out the first batch of fintech corporations in the growing roster, include Hachiman Technology Sdn BHD, MX Exchange Ventures, Coin Bundle, IPE Global PTE, Inc. Superieur Tech Pte. Ltd., CSM, Madison Blockchain Strategy Investment Company Ltd., Asia Pacific Blockchain Association, Pacificnet Strategic Investments Ltd., SuperAngels Ventures Ltd., and ANX International.
Based on the agreement, each company would get full tax perks. In return, each locator is required to invest USD 1-million USD in two years and pay yearly license fees.
First Philippine blockchain association formed
The first local blockchain-related organization has been formed to be led by UnionBank Chairman Justo Ortiz, a report said. Called Blockchain Association of the Philippines (BAP), it will have its formal launch during the Blockchain Applications and Economics Forum 2018 from May 28 to 30, which aims to educate Filipinos on blockchain application and opportunities.
Ortiz explained in a press conference that there are huge opportunities for blockchain technology in the country and that educating Filipinos is critical for its growth. He said UnionBank aims to have 25,000 blockchain programmers over the next two years. The bank only has 30 blockchain programmers at present. Unionbank is one of the first enterprises in the country to integrate the blockchain system in its business operation.
Blockchain is a digital ledger with large network of entities where data is stored in “blocks” — not in any single location — that are continuously updated and are secured using cryptography. Blockchain is considered a new business collaboration tool that is applicable to a wide variety of industries. It is the technology behind the first decentralized cryptocurrency Bitcoin.
Ortiz added Unionbank seeks to cover more rural banks in its blockchain initiatives thru the company’s project i2i, a real-time, cost-effective and secure retail payment system in the blockchain that aims to connect a rural bank into the country’s main financial network.
DOF pushes for fintech adaption of rural banks
The Department of Finance (DOF) announced it is pushing for three initiatives in rural banking to widen financial inclusion, especially in the rural areas.
DOF is looking into three rural banking reforms to widen financial inclusion, especially in the rural areas to reduce the number of unbanked Filipinos, and these initiatives include:
(1) The Secured Transactions Reform Bill also known as the Financial Inclusion Bill
(2) A fully automated credit information system
(3) Consolidation Program for Rural Banks
Finance Secretary Carlos Dominguez III said it is “not a good indicator,” that majority of Filipinos remain unbanked even when economy is growing at a fast pace because this means they have neither access to financial services nor ways to participate in investments.
Finance Secretary Dominguez is hoping that rural bankers would be at the forefront of national efforts to adapt to technological change, as this development would “immeasurably contribute to the dramatic transformation of our economy.”
He pointed out that the Philippines is now one of the best performing economies in Asia, second only to Vietnam’s 7.4% and matching China’s growth rate of 6.8% in the first quarter of this year.
Go-Jek entering PH, SG, Thailand, Vietnam
Indonesian ride-hailing app Go-Jek will be doing business ventures abroad for the first time launching operations in the Philippines, Thailand, Vietnam, and Singapore, stepping up competition with rival Grab for Southeast Asian customers.
Go-Jek said it would spend $500 million on the regional expansion, and was still working with regulators to smooth the way for its new operations.
The company added its overseas businesses will initially focus on ride hailing but eventually expand to other services such as food delivery. Go-Jek earlier this year got a cash injection from investors including Google and Tencent.
Micab, IDOOH to deploy 5,000 digital in-vehicle screens
Ride-hailing app Micab Philippines and Singapore-based IDOOH International have signed a Memorandum of Understanding (MOU) on May 24 to deploy 5,000 of IDOOH’s In-Ride Out-of-Home (OOH) digital media screens in Micab partner taxi fleets by 2019.
The agreement will commence with an initial in-taxi screen roll-out to 500 cars in Cebu, Davao and Manila by July 2018, followed by a more comprehensive in-ride commercial service offering for consumers and brands to 1,500 vehicles across five cities by December 2018 and another 3,000 cars in 2019, IDOOH noted.
The fully interactive 10-inch media tablets will provide high-quality entertainment, information and full e-commerce ability. Micab is IDOOH’s second transport partnership in Asia Pacific, following its tie-up with ComfortDelGro’s outdoor advertising arm Moove Media in April 2018. Micab received accreditation from the Land Transportation Franchising and Regulatory Board (LTFRB) for its ride-hailing service last April 30.