Banks should cut remittance fees by 50 percent—lawmaker
Manila—A member of Congress has called for cuts in the “excessive” transfer fees imposed by foreign and local banks as well as global payment processing firms on the personal cash remittances of overseas Filipino workers (OFWs).
“We reckon that Filipino workers abroad will spend US$3.1 billion in bank charges when they send home US$29.3 billion this year,” ACTS-OFW Rep. Aniceto “John” Bertiz III said in a statement.
“A migrant Filipino worker pays an average of US$10.57 in bank charges for every US$100 wired home,” Bertiz said.
Citing a World Bank (WB) study titled “Remittance Prices Worldwide,” Bertiz said the global average cost of a personal cash transfer through bank channels was 10.57 percent in the first quarter of 2018.
“Slashing remittance fees by half would easily mean US$1.5 billion in cost-savings and extra cash in the pockets of migrant Filipino workers and their families here,” Bertiz said.
“There’s really no reason why banks cannot reduce fees, considering that non-bank money transfer agents are already charging as low as three percent,” Bertiz said.
Despite the growth of non-bank remittance channels, Bertiz said Filipinos still prefer to send their money home via banks.
In the first quarter of 2018, OFWs remitted US$7 billion through the banking system, according to the Bangko Sentral ng Pilipinas (BSP).
In the whole of 2017, they wired home US$28.1 billion using bank channels, the BSP said.
All told, the Philippines received a total of US$33 billion in personal cash remittances in 2017, according to a separate WB report.
The report implies that US$4.9 billion in remittances last year were coursed outside of the banking system.
The Philippines is the world’s third-largest recipient of personal cash remittances, after India and China, the WB said.