PAWNSHOPS THRIVING AMID CHALLENGING TIMES

The pawnbroking industry in the Philippines saw total assets grow by 4.7 percent to P96.9 billion in 2021, partly due to operators’ efforts to diversify and digitize even as the economy continues to recover from recession.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the industry— which the BSP supervises and regulates—was also expanding in terms of network and capitalization alongside product and service offerings.

Diokno said that at the end of March 2022, there were 15,506 head offices and branches of pawnshop companies, increasing from 15,388 head offices and branches three months earlier.

There were pawnshops in 1,361 or 83 percent of the 1,634 cities and towns across the country.

The core business alone— pledge loans or “sangla”— grew by 2.7 percent to reach a combined portfolio of P54.5 billon at the end of 2021.

“Items being pawned have also evolved,” Diokno said. “Besides jewelry pieces, pawn shops now accept high value electronic gadgets, watches, musical instruments and luxury items such as designer bags and accessories.”

Also, there was a 2.6-percent growth in industry capitalization, which was pegged at P42.2 billion—enough to support risk-taking activities.

“Aside from extending loans on pledged assets, pawnshops have diversified their products and services to include activities such as remittances, money changing, bills payment, and cash agency,” Diokno said.

At the end of 2021, about four out of every five (82 percent) of pawnshop offices have corollary businesses, being engaged in both pawning and the money service businesses of remittance and money changing or foreign exchange dealing.