The Philippines continues to be one of bitcoin’s most promising countries, posting a 20 percent growth in smartphone shipments for Q1 2016. That figure makes it the fastest-growing smartphone market in Southeast Asia.
In comparison, Indonesia’s economy — Southeast Asia’s largest — grew almost 5 percent year-on-year in Q1 2016, but smartphone shipments increased only by 3 percent.
In other countries, smartphone numbers actually fell. Malaysia and Thailand fell by 20 percent, while Singapore was down 13 percent and Myanmar 1 percent.
Jerome Dominguez, Market Analyst for Mobile Devices, IDC Philippines, said the Philippines market probably had the most to gain.
“While many of the more mature smartphone markets of the world already displayed signs of saturation, the Philippines smartphone market continues to enjoy robust growth owing to a relatively low smartphone penetration rate (30% in 2015), active local brand presence, and healthy consumer spending.”
The majority of smartphones shipped to the Philippines sell for 3,500 pesos ($75 USD) or less, with local vendors like MyPhone, Cherry Mobile, CloudFone, and O+ maintaining an over 50 percent share of new sales.
Other Asian manufacturers like Samsung, Huawei and Asus are also competing more aggressively, though in a higher-priced ($130 USD and above) handset segment.
The Philippines economy also grew by 6.9 percent in the same period, with household spending and investment up at the same time government spending slowed.
Huge Remittance Market, Huge Potential for Bitcoin
The Philippines has been prominent in Asian Bitcoin news over the past few years, mainly due to high rates of overseas remittances flowing into its economy.
The country’s massive contingent of expat workers sent $6.56 billion in cash remittances home in Q1, up 4.4 percent on the same period last year.
Over 75 percent of those remittances came from the US, Saudi Arabia, the UAE, Singapore, Hong Kong, UK, Japan, Qatar, and Kuwait.
Local startups are looking to serve that market, such as Satoshi Citadel Industries (SCI) — which offers a number of bitcoin-based services — remittance-focused Rebit.ph, exchange BuyBitcoin.ph and merchant payment processor BitMarket.ph.
Another exchange targeting the remittance market is Coins.ph, which also offers mobile apps for Android and iOS.
Both companies are attempting to solve perhaps the largest problem in remittances to the Philippines — getting actual cash into the hands of recipients, who may not have ready access to bank accounts.
Local Bitcoin entrepreneur Luis Buenaventura claimed last October that while bitcoin enabled money to cross borders much more easily, the logistics of turning that bitcoin back into usable physical cash remained an expensive problem.
A Few Growing Pains for the Philippines
Despite its potential, the Philippines still has a long way to go before becoming a lucrative market for bitcoin and other technology companies — though that challenge should be part of its appeal for problem-solving entrepreneurs.
There are regular complaints that its physical infrastructure is not up to standard, with frequent traffic chaos in large cities like Manila and slow Internet speeds compared to other parts of Asia.
The country’s central bank also recently said it would seek to increase regulation for bitcoin exchanges, as part of new cybersecurity and anti-money laundering measures.
Does Bitcoin have the most potential in growing markets like the Philippines? Should entrepreneurs be looking to solve problems like remittances before offering daily spending solutions?
Images courtesy of Wikimedia Commons, AFP.