BSP waives bank fees on OFW remittances

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has agreed to waive the fees imposed on banks that use the Philippine Payments and Settlements System (Philpass) remit system as part of efforts to reduce the cost of sending money by overseas Filipino workers (OFWs).

BSP Governor Amando Tetangco Jr. told reporters that the central bank’s Monetary Board approved the lifting of the imposition of fees on banks that service OFW remittances through the central bank’s facility for six months.

“The Monetary Board has approved the waiver for six months of fees for banks servicing overseas Filipinos transacting through Philpass. This will help enable banks to lower their remittance fees,” Tetangco stressed.

OFWs and their beneficiaries are expected to enjoy lower remittance fees starting this quarter with the complete operation of the Philpass remit system resulting in savings of between P100 and P500 per transaction.

The system would reduce the charges to P50 for each remittance transaction as the current system charges between P150 and P550 per transaction.

OFW families are expected to save at least P92 million to as high as P922 million due to the faster and cheaper delivery of remittances to the beneficiaries at a lower rate.

The system also eliminates the need for courier services by commercial banks for the mode of fund transfer involving credit-to-other banks once the project becomes operational.

The Philpass Remit System involves the use of the BSP-Philpass as the local clearing house for the transfer of remittances from a local bank to another bank where the OFW beneficiary maintains an account.

The project is one of the initiatives undertaken by the BSP in coordination with the Association of Bank Remittance Officers, Inc. (ABROI) through a memorandum of agreement (MOA) last December.

The BSP said the full implementation of the project was originally scheduled in the first quarter of the year but only one bank has been able to migrate to the new system since the signing of the MOA.

According to the BSP, other member banks would be coming on stream once they resolve the remaining issues on hardware and system connectivity.

Other ABROI members expect to complete their migration to the new system only by end-May or end-June while two banks have indicated that they could comply only by end-September this year.

Last year, remittances went up by 5.4 percent to a new record level of $17.348 billion last year from $16.426 billion and exceeded the revised four percent growth forecast set by the central bank due to the steady growth of OFW remittances to the sustained demand for skilled Filipino workers overseas, particularly engineers, medical practitioners, and teachers.

The BSP recently upgraded its growth forecast for the amount of money sent home by overseas Filipinos to eight percent instead of six percent due to the strong demand for Filipino skilled workers.

So far, OFW remittances went up by 6.6 percent to $5.86 billion in the first four months of the year from $5.49 billion in the same period last year.