BSP acts to improve OFW remittance services

The Bangko Sentral ng Pilipinas (BSP) will implement a number of initiatives to address issues confronting overseas Filipino workers (OFWs), particularly bank remittance services. 

Monetary Board (MB) member Vicente Valdepeñas said in an OFW Journalism Consortium forum that the BSP’s initiatives would aim to improve the magnitude of remittances being channeled via banks through the reduction of the cost of remittance services, improvement of quality and variety of remittance services available to clients, and increased access to banks by the remitters.

The MB is the policy-setting body of the BSP. 

Valdepeñas said the BSP is continuously in discussion with banks, through the Association of Bank Remitting Officers Inc. (ABROI), to identify and evaluate measures to reduce costs and increase the volume of OFW remittances.

"One way of enhancing banks’ ability to bring down the cost of these remittances is by expanding the operations of their overseas offices and thus optimize operational costs," he said.

The monetary official said in line with this, "we are preparing proposals for foreign regulatory authorities to allow Philippine banks abroad to remotely open bank accounts for OFWs." 

He said the BSP is also discussing ways for greater domestic interconnectivity in the financial system. 

According to Valdepeñas, mechanisms to enhance the interconnection of players such as credit cooperatives, rural banks and the postal bank, with the rest of the financial system can extend the accessibility of financial services, including remittances, to a wider area with an expanded geophysical reach.

The BSP is also encouraging creativity among banks in providing avenues for investments by OFWs.  "Banks can tap OFWs as market for such products as the unit investment trust funds (UITFs)," he noted. 

The monetary authority pointed out that there are a number of banks that have actually put up their OFW-oriented UITF investments.

"We want the banks to help our OFWs set aside some of their income for investments in financial products or investments directly in small or micro enterprises," Valdepenas said.

Banks, for their part, have also initiated marketing schemes to improve their respective OFW remittance services, which include incentives such as low maintaining balance, low service charge or free insurance.

Some banks have even participated in providing electronic money transfer services through mobile phones.

The BSP, through the Anti-Money Laundering Council (AMLC), has worked with other government bodies to complete the major requirements of the Paris-based Financial Action Task Force (FATF) which led to the removal of the Philippines early this year from the list of non-cooperative countries in the fight against money laundering.

"The delisting is a key factor in enhancing the speed of remittance and in reducing the cost of transactions of Philippine banks and remittance agents will no longer be subjected to more rigorous and costly scrutiny by foreign financial institutions," Valdepenas said.