Singapore/Manila: Blockchain technology offers an opportunity for smaller banks in the Philippines to boost lending and offer other financial services in rural areas, according to Union Bank of the Philippines Chairman Justo Ortiz.
Union Bank is experimenting with the use of blockchain for remittances, allowing overseas Filipino workers to send money home quickly and efficiently and exercise greater control over who receives the funds and how they're used, Ortiz said in an interview with Bloomberg Television on Tuesday.
By plugging the 500 or so Philippine rural banks into the system, the lenders would get detailed information on the income individuals or families receive from remittances, he said. That would give them greater comfort to offer loans and other banking services to people who often fall outside the formal financial system, he added.
Union Bank recently piloted a blockchain-based remittance between Singapore and the Philippines together with Oversea Chinese Banking Corp. It now hopes to create a "national footprint" of rural banks to use the technology, Ortiz said.
Remittances rose 3.1 per cent to a record of $28.9 billion in 2018.
