Sen. Edgardo Angara called yesterday for the lowering of remittance costs in the Philippines to help cushion the impact of a strong peso especially on overseas Filipino workers (OFWs).
Angara also suggested that remittance firms in the country be regulated under the Bangko Sentral ng Pilipinas (BSP) to ensure that the remittance costs they charge are fair and reasonable.
He noted that the strong peso had been decreasing the value of OFW income while its nominal value remained the same.
“The cost of transmitting remittances in the Philippines is relatively high, compared to other countries like India and those in Latin America,” Angara said.
Lowering this high cost of remittance, according to Angara, will mitigate the adverse impact of the strong peso to the income of OFWs and their families.
Angara, chairman of the Senate committee on banks and financial institutions, said placing remittance firms in the country under the supervision of the BSP would also help cushion the adverse impact of the strong peso to the income of the Filipinos abroad.
“But we should keep of thinking of more options. It is high time we show a gesture of concern to our OFWs, whose remittances power our economy, and amount to more than double our official development assistance from other countries,” Angara said.
According to Marilou Uy, World Bank director for financial sector operations and policy, reducing remittance fees is likely to increase annual remittance flows to developing countries.
Aside from regulating remittance firms to lower the cost of remittance, Angara also recommended giving a preferential exchange rate to OFWs earning in dollars as a temporary mitigating measure to the strong peso.
“Perhaps, as a temporary mitigating measure, we can apply a two-tiered exchange rate, with an additional peso or so rate of exchange for OFWs earning in dollars,” the senator said.
In the new BSP charter that Senator Angara authored, the central bank can use transparency mechanisms that give it more teeth to supervise formal and informal remittance firms. This in turn should protect OFWs from usurious practices in money transfer, he said.
Angara is also pushing for the Personal Equity and Retirement Act, which aims to provide voluntary pension fund for OFWs.