THE allegedly “excessive” transfer fees imposed by foreign and local banks, as well as global payment processing firms on cash remittances of overseas Filipino workers should be reduced to put extra cash in the pockets of the OFWs and their families, a representative from ACTS-OFW party-list said on Thursday.
Marking the celebration of Migrant Workers’ Day, Party-list Rep. Aniceto D. Bertiz III of ACTS-OFWs are seen paying $3.1 billion in bank charges to send home $29.3 billion this year.
“We reckon that Filipino workers abroad will spend $3.1 billion in bank charges when they send home $29.3 billion this year,” said Bertiz.
“A migrant Filipino worker pays an average of $10.57 in bank charges for every $100 wired home,” he added.
The lawmaker, citing a World Bank study, titled “Remittance Prices Worldwide,” 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 $1.5 billion in cost savings and extra cash in the pockets of migrant Filipino workers and their families here,” Bertiz said.
According to Bertiz, there’s no reason banks cannot reduce fees, considering that nonbank money transfer agents are already charging as low as 3 percent.
Despite the growth of nonbank remittance channels, Bertiz, however, said Filipinos still prefer to send their money home via banks.
In the first quarter of 2018 the solon, citing the Bangko Sentral ng Pilipinas, said OFWs remitted $7 billion through the banking system.
In 2017 he said Filipino overseas workers wired home $28.1 billion using bank channels.
Meanwhile, Bertiz, quoting a World Bank report, said the Philippines received a total of $33 billion in personal cash remittances in 2017.
He said $4.9 billion in remittances last year were coursed outside of the banking system.
Bertiz added the Philippines is the world’s third-largest recipient of personal cash remittances, after India and China.
Bill for remittance protection
Meanwhile, Rep. Aurelio D. Gonzales Jr. of the Third District of Pampanga has already filed House Bill 4740 to protect the remittances of OFWs.
“These OFW remittances are transferred from the OFWs, to intermediaries, such as financial and nonbank financial institutions, before it reaches beneficiaries. In the course of transfer of the funds, the amounts remitted are subjected to several fees and high remittance charge, which result to the depletion of the amount to be remitted and received by beneficiaries,” he said.
The bill seeks to provide for a limit on the amount of remittance fees to be imposed, provide for discounts to OFWs and for tax incentives to the discount-giving establishments.
It also encourages establishments and institutions to provide loans to OFWs and mandates government agencies to give financial education to OFWs and their families.