Palawan Pawnshop is easily one of the most recognizable brands in the Philippines, with more than 3,000 locations, 5,000 if you include their agent partners.
That’s when I realized that I knew nothing about Palawan Pawnshop. And was surprised to know that its founder Bobby Castro, didn’t actually start Palawan Pawnshop himself. He acquired it when it only had one location, and grew it to the ridiculously massive company it is today.
In this blog post, I’m gonna talk about:
- What Bobby Castro was doing before he worked on Palawan Pawnshop.
- The early days of Palawan Pawnshop.
- The brilliant strategies they used to grow exponentially fast.
- And the next frontier of Palawan Pawnshop - Palawan Pay, Palawan Pawnshop’s new mobile app and e-wallet.
You can also watch this video on my YouTube channel.
Before the incredible rise of Palawan Pawnshop, we have to talk about the journey of the man behind the success of the brand - Bobby Castro.
Bobby Castro studied in Philippine Science high school, and eventually studied in UP Diliman. Learning about story, it’s safe to say that this guy is pretty steadfast with what he believes in considering the fact that he was a fierce activist - to the point that he actually got imprisoned at Camp Crame during the height of Martial Law.
He was in prison for over a year, and as soon as he was released, this guy still went back in and rejoined the movement. Total hardcore movement, btw, especially since he would actually have a near death experience when bullets actually hit him in the head and the shoulder - followed by being detained again for another year.
Tiny fun fact, Bobby Castro met his wife way back in high school, and she too was also part of the movement lol. When he got released, they got married , and they figured it was probably time to head back to Puerto Princesa, Palawan.
As soon as he got there, he started working on a few odd jobs, and started a couple of businesses, and even got himself a degree in Business Education. And it was pretty timely that it was around this time that he and his wife decided to start a family because things were about to get pretty busy for Bobby Castro.
In an interview, Bobby Castro shared that he had no entrepreneurial background at all, neither did his parents, and neither did his grandparents. It was simply not in their family DNA.
But all that was about to change when they decided to have a building constructed.
So his father was able to secure a loan from the DPB, and along with his dad’s retirement fund, they were able to have a commercial building constructed. They called it CIRCON.
It was a mix of a businesses really. There were rooms for rent, it had a restaurant, there was even a disco, and it was partly a hotel too.
Bobby Castro was the one managing this whole thing, and on the side, he began working on these side hustles. Like he was dabbling in buying and selling diapers, bangus fry, wild honey, gift items, and even operated a small karinderia.
But then Bobby Castro felt that something was still missing. He wanted to start his own business.
And coincidentally, in 1985, a small pawnshop nearby was being put up for sale, and this was Palawan Pawnshop.
Palawan Pawnshop was founded by the Rodriguez family a couple of years prior.
This is the reason why Bobby Castro doesn’t really address himself as the founder of Palawan Pawnshop. A better comparison is that he’s more of a Ray Kroc of McDonald’s.
So remember how McDonald’s was actually founded by the McDonald’s brothers, but then Ray Kroc was actually the one who turned it into the mammoth brand it is today, well in this case Bobby Castro is the Ray Kroc of Palawan Pawnshop.
When Bobby Castro was asked, why Palawan Pawnshop, why the pawnshop business? Well, there was no backstory. His answer was simple: that was the only one available during that time. He didn’t even have a clue how to operate a pawnshop business. None of them had the experience. But since that was the only option, he just went for it.
So he asked his father about whether this would be a good idea, and his dad was like sure why not, how much does it cost?
And the price of the business was apparently around P40,000.
Luckily for Bobby Castro, his dad had 40,000 saved in the bank. And he shared that once they used their life savings of 40,000 to acquire Palawan Pawnshop, there really was nothing left, and so they needed to save again.
Once they started running Palawan Pawnshop, like I said, they knew nothing about the business, but just like everything in life, you can learn things along the way. And that’s exactly what they did.
In order to have an edge, his wife studied jewelry appraisal in Manila, and when she came back, she helped out in running the store. In the early days, it was really just the two of them running their one and only branch.
The business was earning, but it was earning very little. He shared that it was only bringing roughly around P5,000 pesos a month. But that didn’t bother Bobby Castro, his game plan was clear.
As he was running Palawan Pawnshop, he was still the manager of the CIRCON complex, the commercial complex that his family owns.
So he was still earning a salary while managing the business. So his plan was, whatever he’s earning from CIRCON, he’ll use that to sustain himself, and his family.
Whatever Palawan Pawnshop earns, he will reinvest everything back into the business. He said that as long as the business doesn’t lose money, everything will be reinvested, and if there’s enough money saved, that’s the time he’ll open another branch. Rinse and repeat.
2 years later, in 1987, they opened their second branch. And 2 years after that, their third branch in Narra, Palawan.
Bobby Castro shared that one key reason why they were able to dominate Palawan early on, was, well, aside from taking care of their customers, they also didn’t have any competitors. This is why, even though they didn’t know much about the business, when they were getting started - they had time to make errors. They had time to master how to run this particular business properly.
After 13 years, they would have over 13 locations all over Palawan.
But remember, at this point, Palawan Pawnshop was still just a pawnshop.
This part is the story of how it ended up starting the Palawan Pera Padala - which was the game changer that triggered Palawan Pawnshop’s ridiculous growth.
Around this time, there was this ferry line, Negros Navigation. Negros Navigation made it easier for people to travel to other cities in the Visayas since it had a route which went from Puerto Princessa in Palawan, to Iloilo, then to Bacolod, then to Puyo.
And so they figured, you know what, since travelling is much easier now, why don’t we open a branch in Negros. And luckily for them, Bobby Castro had a relative who was based in Negros, and so that relative kinda played as their guide in that area. And so with all that in place, they opened their branch there.
Now that they had a Palawan Pawnshop branch in Negros, they discovered how high the demand was. Since lots of people were pawning their stuff, Palawan Pawnshop naturally needs to have lots of cash on hand to give to people in exchange. Now since the demand was pretty high, they needed to have more cash sent to their Negros branch.
And so this was a problem for them, until someone recommended, since we’re gonna be sending cash to that branch, why not allow other people to do the same? Why not accept people’s money instead?
And so they launched the Pera Padala service. And this is when they discovered the insane demand for this service.
Bobby Castro shared that one particular strategy that they had which allowed them to grow really fast was that, they weren’t scared of opening branches in locations that their competitors were avoiding.
Their competitors may consider a specific area as “not ready” or maybe “too rural”, Palawan Pawnshop didn’t care. They’d expand there anyway.
They wanted to be the first in an area.
With their first-mover advantage, coupled with their superior Pera Padala service, its unsurprising how they managed to grow to more than 3,500 branches today.
In an interview, Bobby Castro was asked at what point did he feel like he made it, that he’s successful.
He said that he started feeling this when he would have friends who would contact him, telling him, hey I’m in this province in Mindanao, and I see a Palawan Pawnshop branch. Nakakatuwa naman bilang Palawenyo, they’d say. So there really is a feeling or pride for people from Palawan that their name is plastered all over the country because of this company.
And I get why they’re feeling this way, like ako I’m from Iloilo, and every time a restaurant selling “La Paz batchoy” in Manila, La Paz being from Iloilo, I get a sense of pride, even though I had nothing to do with it lol. So I get why they feel this way.
Now the amazing thing about Palawan Pawnshop is that they seem to have established themselves as the go-to brand for sending and receiving money.
But then the downside of Palawan Pawnshop is that you still really need to head to a physical location. And today, we all know that with the likes of Gcash dominating the Philippine market, and Southeast Asian competitors such as Shopee Pay and Grab Pay trying to make their way into the country - the threat of payment apps and e-wallets is real, and it’s already here.
When the pandemic happened and lockdowns forced Filipinos to stay in their homes, people were forced to try out these new payment apps.
Gcash and the rest of the payment apps experienced a surge of new users, while Palawan Pawnshop was out of reach.
Although nowadays, Palawan Pawnshop is back to having those long lines of customers, the shift to digital during the pandemic was a huge wake up call for the company.
And that’s why they came up with Palawan Pay.
Palawan Pay was launched in April 2022 - it is Palawan Pawnshop’s own e-wallet app.
Bobby Castro proudly shares that this whole project was the handled by his children, which I like. It’s only fitting that the next generation which is Bobby Castro’s kids handle the next generation’s version of Palawan Pawnshop which is Palawan Pay.
From the app, Filipinos can now send and receive remittances anytime, anywhere. Bills payment, buying load, sending money, renewing of pawns - all that on the app.
Oh and did you know that Palawan Pawnshop apparently offers accident insurance?
As Palawan Pay partners up with more and more merchants, you’ll be able to pay using Palawan Pay by simply scanning their QR codes - I’m actually seeing more people starting to do this with Gcash, and surprisingly with Shopee Pay.
Remember when Shopee Pay used to be only something you used on Shopee, but now, the number of their merchant partners are growing, so this is Shopee Pay pushing you to use their wallet outside of Shopee.
And this is what Palawan Pay hopes to do as it grows its number of merchant partners.
I personally think that Palawan Pay is going to be a big threat to incumbents because sure, GCash has a big chunk of the market, has had the first-mover advantage, and is kind of the go-to app for sending and receiving money.
But remember, you will still sometimes need physical cash. That’s why Gcash partners up with banks, so that if someone sends you money on Gcash, you can transfer to BPI or BDO, and you can withdraw it there. Or you can withdraw it in 7-Eleven.
Now in the case of Palawan Pay, if you need to withdraw your cash, not only will you be able to do by transferring your money to your own bank of choice, or by withdraw it in 7 eleven, you can now also do it in any of the 3,500 locations of Palawan Pawnshop.
I know for most of us, this may not be a big deal, especially if you’re not really the type who actually goes to Palawan Pawnshop, which I think is unnecessary if you have a bank account.
But remember, so many Filipinos still do not have access to banks. A lot of Filipinos still use Palawan Pawnshop to send and receive money.
And that’s a huge advantage of Palawan Pay.
One other edge of Palawan Pay is that it benefits from carrying the Palawan Pawnshop brand.
Palawan Pawnshop already has already established itself as the top-of-mind brand for pera padala, especially with the CDE market, or the lower income groups.
The idea of Palawan Pawnshop and sending and receiving money is already pretty strong.
If they execute it right, they may be able to translate people’s love for Palawan Pawnshop to their love for Palawan Pay.
I’m genuinely curious how this will play out, because I know that when it comes to tech, when it comes to apps, it’s success often times isn’t equated to how much money you throw at it.
I mean think about it, if it was a money thing, Shopee Pay, Grab Pay, and Maya would be crushing it right now, but somehow GGcash was the one that cracked the code.
So I’m personally rooting for the success of Palawan Pay because I think Palawan Pawnshop is a great company, and it has helped a lot of people, and this may allow it to help even more.
And just a side note, did you know that Palawan Pawnshop actually holds this annual tennis tournament in the Philippines. I have no idea, actually, but they’re really into this. The 2022 tournament had several hundred participants and it’s playing a big role in developing our country’s future tennis stars.
But that’s pretty much it, guys.
Now you know the brand origin story of Palawan Pawnshop.
My name is Chris - and I talk about brands in the Philippines. Subscribe to my YouTube channel for more videos.
You can also listen to this story on the podcast.