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Cashing in on gift remittances

Marketplace Staff May 9, 2007

Cashing in on gift remittances

Marketplace Staff May 9, 2007


BOB MOON: Last year Filipinos abroad sent nearly $13 billion in cash back home to the Philippines. That adds up to more than 10 percent of the country’s gross domestic product. Now there’s a new way to ship home affection: Online services offer doorstep delivery of food, computers, even washing machines to the most remote villages of the island nation. Lenora Chu has more.

LENORA CHU: Caring for family and friends back home is central to Filipino culture, and in the last few years, large corporations and mom-and-pop shops alike have scrambled to launch services that offer an alternative to sending home cash.

At websites like myayala.com, customers can browse through pictures of birthday cakes, Barbies, dinette sets and plasma TVs. Type in an address in the Philippines, pay with a credit card and many gifts will appear the next day on Uncle Sal’s doorstep in Manila.

Ferdinand Ibon says sending a physical gift is different from wiring cash, which is too easily frittered away or spent on mundane bills.

FERDINAND IBON: So people from here, if they want to send gifts, they just send the gift.

In 2004, Ibon launched philregalo.com out of his Southern California home. His goal? To connect fellow Filipinos earning American salaries with relatives who could use a little help back in the Philippines.

Philregalo partners with about a dozen retailers in the Philippines, including florists, appliance wholesalers and even butchers. Business is booming.

This worries Eric Villafranca. He manages Johnny Air Cargo, a direct-to-the-Philippines air freight service. It’s built a business on shipping home goody boxes that customers pack with anything, from chocolates and clothing to computers.

Villafranca says the new online gift sites are targeting his loyal customers.

ERIC VILLAFRANCA: They go online, that’s competition. They prepare to send, to use them instead of us.

But Villafranca is hoping most Filipinos will prefer packing their own boxes to entering credit card numbers on a website. Plus, he says, online services charge a premium.

VILLAFRANCA: Because it’s expensive and they don’t even know who these people are. They just come out from the website, or whatever.And who knows, they might be fly-by-night.

But Ibon says he’s in for the long haul. Philregalo.com’s customer base is now 3,000 strong and growing.

In Los Angeles, I’m Lenora Chu for Marketplace.

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