Advertisement

Banks hit on OFWs’ wired cash

The ACTS-OFW partylist has said that  Philippine banks and their foreign correspondence are taking ‘unreasonably high cuts’ out of the cash wired home by migrant Filipino workers.

ACTS-OFW Rep. Aniceto Bertiz III this would mean that Filipino workers are now projected to pay $3.2B in bank remittance fees this year, to send home $29.8 billion in cash.

Citing the World Bank’s periodic Remittance Prices Worldwide Report, Bertiz said that in the first quarter of 2019, banks remained the most expensive type of service provider, charging an average of 10.90 percent of the amount sent.

“We expect OFWs to send home an aggregate of $29.8 billion in cash via the banking system this year, up three percent from $28.9 billion in 2018,” Bertiz said.

“To transfer the entire $29.8 billion home, OFWs will be forking out 10.90 percent, or some $3.2 billion, to pay for bank fees,” Bertiz said.

Remittances represent a huge source of income for millions of Filipino families, and a key driver of national economic growth, according to Bertiz.

“If we can get banks to slash their remittance prices by one-half, this would mean an extra $1.6 billion (P83.2 billion) flowing into low- and middle-income Filipino households and into the economy,” Bertiz said.

The additional P83.2 billion every year would go a long way in enabling millions of remittance-dependent Filipino families to acquire new homes, send their children to college, buy health and life insurance protection, or to start small enterprises, Bertiz pointed out.

The United Nations has a social development goal to reduce the global average price of a remittance to just three percent of the amount sent, while the G20 has committed to help lower the cost to five percent.

Banks capture up to 85 percent of the remittances from OFWs. The rest is picked up by postal offices, money transfer operators (MTOs) and mobile money service providers, Bertiz said.

Bertiz said postal offices charged an average of 7.26 percent in remittance fees in the first quarter, while MTOs such as The Western Union Co. and MoneyGram International Inc. collected an average of 6.06 percent.

“Mobile money” service providers remained the cheapest, charging an average of only 2.92 percent, Bertiz said.

The Philippines ranks No. 4 among the world’s top five remittance recipients, receiving an estimated $34 billion in 2018, according to the World Bank. The amount includes some $5 billion coursed through non-bank channels.

The other top remittance recipients in 2018 were India ($79 billion), China ($67 billion), Mexico ($36 billion) and Egypt ($29 billion).

Topics: ACTS-OFW , overseas Filipino workers , Rep. Aniceto Bertiz III , bank remittance fees
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementKPPI
Advertisement