Banks ordered to disclose domestic remittance fees

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has directed banks and financial institutions to disclose all charges for domestic remittance transactions to level the playing field.

BSP officer-in-charge Ma. Almasara Cyd Tuaño-Amador issued Circular 952 directing all BSP-supervised entities with domestic remittance transactions to disclose domestic remittance charges.

The BSP is pursing the efficient delivery of competitively-priced remittance services by banks and other remittance service providers by promoting competition and the use of innovative payment systems, strengthening the financial infrastructure, enhancing access to formal remittance channels in the source and destination countries, deepening the financial literacy of consumers, and improving transparency in remittance transactions, consistent with sound banking practices.

“This is in line with the objective of the BSP to foster a robust consumer regulatory environment to enable citizens to make wiser financial decisions and to contribute actively to the promotion of financial stability,” she said.

Tuaño-Amador said the new circular approved by the Monetary Board states that all fees to domestic remittance transactions should be charged upfront by banks from the sender or remitter’s end with appropriate disclosure to the sender or remitter of the components of the fees being charged.

Domestic remittance transaction is a transfer of funds between a sender or remitter and a beneficiary or between two accounts within the Philippines.

“The intention is to improve the transparency of remittance charges and enable consumers to determine the most cost-efficient means of sending remittances,” she added.

The BSP OIC said all BSP supervised entities have until April 27 to comply with the provision of the new circular.

The new circular is applicable to all non-bank BSP-supervised entities that offer domestic remittance transactions.

The BSP earlier enhanced its oversight over the operations of money service businesses (MSBs) that include remittance and transfer companies, money changers and foreign exchange dealers to promote a more effective compliance with the Anti-Money Laundering Law.

As of June 2016, there are more than 18,000 BSP-registered MSBs consisting of 5,300 head offices and 12,700 branches. Of the total number, 6,700 are also BSP-authorized pawnshops.

The MSB in the Philippines is continuously growing and evolving to support the expanding needs of its customers. It now includes, among others, the electronic money business subsidiaries of telecommunication companies.