Senators call for bank fee freeze

Senator Juan Edgardo Angara on Thursday appealed to the banks and mobile payment systems to suspend the collection of fees for digital transactions while the country was still dealing with the COVID-19 pandemic.

On the other hand, Sen. Imee Marcos slammed the “token suspension” of fees that banks and financial technology (fintech) companies planned to impose this October, saying it must be extended until the COVID-19 pandemic clearly subsideD.

Marcos, who chairs the Senate committee on economic affairs, said that suspending transaction fees until the latter half of next year, when a vaccine could be available, would make a real difference in promoting the growth of small businesses online.

“We made a big push with the help of the Bangko Sentral ng Pilipinas to give a 60-day debt moratorium to the public, only to be offset by new charges,” Marcos explained.

In a related development, House Deputy Majority Leader Bernadette Herrera lauded some of the country’s largest banks for heeding the call to extend the waiver of fees for online fund transfers until the end of the year.

Herrera expressed elation that Metropolitan Bank and Trust Co. and its subsidiary Philippine Savings Bank, Philippine National Bank, China Banking Corp., and Rizal Commercial Banking Corp. had abandoned their plan to start charging inter-bank fund transfer fees from Oct. 1.

These banks, which are among the 10 of the largest in terms of assets, have joined 26 other commercial banks and e-money issuers in suspending fees on the use of both Instapay and PESONet until Dec. 31, based on the list released by the Bangko Sentral ng Pilipinas as of Sept. 30, she said.

“It is commendable that these banks are willing to forgo huge amounts of income just so their online customers will continue to enjoy relief from the payment of fund transfer fees and encourage them more to use a safe and convenient digital payment system during this time of pandemic,” Herrera said.

Among the fees Marcos wants postponed longer are service charges of 15 pesos for money transfers, 20 pesos for over-the-counter transactions and for cash withdrawals via Mastercard, and fintech fees of 1 percent to 2 percent on cash-in and over-the-counter transactions of P8,000 and above.

Owners of small online businesses that have barely started have complained that the sudden introduction of fees makes it more difficult for them to cope with the economic crisis.

Some 75,000 online businesses are registered in the country and use the services of almost 200 fintech companies that deal in money lending, bill payments, digital wallets, and remittances.

For his part, Angara said several banks and mobile money services resumed their collection of fees in spite of an appeal by the BSP for them to extend their waiver for PESONet and InstaPay transactions.

Angara aired his full support to the efforts of the BSP to promote the use of digital payments in order to reduce physical/cash transactions while also providing some relief to consumers during these extraordinary times.

“Right now every family is penny pinching due to the impacts of the COVID-19 pandemic so every peso saved goes a long way. We appeal to our banks and financial institutions to suspend their collection of fees for digital transactions during this very challenging time,” Angara said.

The BSP has noted that several banks will resume charging fees for digital transactions this month, including some of the biggest commercial banks in the country.

Among the banks and mobile money services that will resume charging fees today are BDO Unibank, Inc.; Metropolitan Bank and Trust Company; Bank of the Philippine Islands; China Banking Corporation; Bank of Commerce; Robinsons Bank Corporation; Philippine Savings Bank; PayMaya Philippines, Inc; China Bank Savings, Inc.; Philippine Bank of Communications (extending its P1.00 fee due to system constraints); and Equicom Savings Bank, Inc.

At least 12 banks have decided to waive their fees for PESONet and InstaPay transactions until December 31, 2020 based on a list released by the BSP last August.

These include Union Bank of the Philippines; Asia United Bank Corporation; Land Bank of the Philippines; Development Bank of the Philippines; Security Bank Corporation; Sterling Bank of Asia, Inc.; Standard Chartered Bank; East West Banking Corporation; United Coconut Planters Bank; Maybank Philippines, Inc.; Rizal Commercial Banking Corporation and Hongkong and Shanghai Banking Corporation (waived for retail; for corporate – reduced from P150 to P50 from July 1, 2020).

The following banks have agreed to waive their fees until further notice: Philippine National Bank; MUFG Bank, Ltd.; CTBC Bank (Philippines) Corporation; Bank of China Limited – Manila Branch; BPI Direct Banko; Cebuana Lhuillier Rural Bank; CIMB Bank; Citibank; DC Pay (retail clients); ING Bank N.V.; JP Morgan Chase Bank; Philippine Business Bank; Philippine Trust Company; Bank of Florida.

Angara has filed a bill promoting the adoption of digital payments for financial transactions of government and all merchants.

Senate Bill 1764 seeks to institutionalize digital payments in government and the private sector in order to improve efficiency, reduce costs and the possible health hazards posed by physical transactions.

Herrera said she could not extend the same appreciation to BDO Unibank Inc. and Bank of the Philippines Islands after the first and fourth largest banks in terms of assets, respectively, decided to resume imposing fund transfer fees starting Oct. 1.

“The big question is: why is it so hard for these two largest Philippine banks to do what other banks, including the relatively smaller ones, have done in terms of providing relief to their distressed clients?” Herrera asked.

Last Monday, Herrera appealed to the country’s biggest banks to defer reimposing fees for online fund transfers “at least until the end of the year” as the country continues to suffer from the social and economic impacts of COVID-19.

Following her appeal, China Bank Savings, Bank of Commerce, and Robinsons Bank also dropped their plan to reimpose fund transfer fees by Oct. 1 and instead extended their waiver until Dec. 31.

Four other largest banks—Land Bank of the Philippines, Security Bank, Development Bank of the Philippines and Union Bank of the Philippines—have decided beforehand to suspend fund transfer fees until yearend.

Topics: Juan Edgardo Angara , COVID-19 , Senate , Imee Marcos , Bernadette Herrera
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