Remittances by overseas Filipino workers reached a record $32.21 billion in 2018, according to the Bangko Sentral ng Pilipinas.
Remittances consistently account for 10 percent of the country’s gross domestic product, but information solutions provider TransUnion says OFWs can participate in the local economy more when cross-border data sharing, or the exchange of credit information between states, becomes institutionalized.
“Cross-border data sharing will assist OFWs in participating in the credit economy of their resident country and even after they decide to come home for good. It will help open up more opportunities to access credit for purposes like entrepreneurship, obtaining mortgages and personal loans, or accessing the rental housing market, which can translate into more income for remittance, expenditure, or investment,” said TransUnion Philippines president and chief executive Pia Arellano.
It is currently only done in the European Union via limited inter-country reporting between credit bureaus and registries due to regulatory uncertainty, legislation changes and non-agreement on risk assessment guidelines that are hampering credit reporting data harmonization between countries.
The infrastructure to allow a credit bureau in one country to send a consumer report—at the consumer’s request—to a lender in another country is still in a nascent stage and potentially faces some of the same regulatory uncertainty as bureau-to-bureau sharing.
“It’s a long way to go before we can fully benefit from cross-border credit data sharing. For one, we have yet to establish wider access to credit information among Filipino consumers right here in the Philippines. However, helping OFWs, which in turn translates into tangible economic benefits for the Philippines, is also a priority for us because it’s part of what we view as Information for Good,” Arellano said.
TransUnion is also currently exploring opportunities to permit consumers to request online that their report be provided directly to a lender in another country.
“Eventually, it will all spur further growth in our economy. When the OFWs raise their standard of living through credit, the Philippine economy benefits through remittances, local expenditures and further investments,” Arellano said.