The Philippine Stock Exchange (PSE) may have to wait before it sees its first e-wallet IPO, as experts suggest that leading players in the sector will hold off until market conditions improve and their financial positions strengthen.
Analysts interviewed by The Philippines STAR pointed to a mix of economic risks and internal challenges as factors delaying the initial public offering of an e-wallet on the local stock exchange.
The current borrowing rates set by the Bangko Sentral ng Pilipinas (BSP) are one factor affecting e-wallets, particularly in their lending businesses. GCash, a prominent e-wallet, has provided loans to over four and a half million borrowers as of March, while digital bank Maya Bank Inc. has disbursed at least P34 billion in loans to about one million borrowers.
Juan Paolo Colet, managing director at China Bank Capital Corp., mentioned that potential listings like GCash are likely to wait for a shift in monetary policy. The BSP has maintained the benchmark rate at a 17-year high of 6.5% but is expected to cut this by 50 basis points within the year.
Juan Paolo noted,
“Large IPOs will probably get pushed back until we see a dovish shift in monetary policy and sizable foreign fund flows into our market.”
Japhet Tantiangco, research manager at Philstocks Financial Inc., highlighted the financial differences between GCash and Maya as a consideration for listing. Japhet pointed out that Maya is still working towards profitability, having reduced its losses to around P400 million in the first quarter from about P600 million a year ago.
In contrast, GCash remitted P962 million in earnings to its parent company Globe Telecom Inc. between January and March and is expanding its user base abroad.
Japhet explained that the current market performance and low trading activity are challenging for conducting an IPO. He suggested that GCash might be waiting for better market conditions before going public, while Maya still needs to demonstrate profitability and sustainability.
Juan Paolo also emphasised the need for the Philippine e-commerce market to diversify beyond its usual applications of bills payment and online shopping, noting that GlobalData projects the e-commerce space in the country to reach P968.9 billion by 2026.
As the largest e-wallet in the Philippines, GCash has hinted at filing an IPO as early as 2023 but remains open to new investors and possibly an overseas listing. Meanwhile, Maya has expanded its deposit balance to P29 billion and customer base to 3.4 million, aiming to break even this year and achieve profitability by 2025.
Featured image credit: Edited from Freepik
