Automatic ‘tong’ machine

The efforts of Congress to look into ‘excessive’ fees being charged to depositors and customers using the automated teller machines (ATM) by cardholders of other banks is indeed a welcome initiative taken up last week by Party- List Representative Joel Villanueva. The solon from the Party-List group, Citizens Battle Against Corruption (CIBAC) is the son of Jesus is Lord Movement Brother Eddie Villanueva who ran but lost in the May 2004 presidential elections.

I must hastily add though, the young solon, as far as I know, is not a relative of ours even though my late grandfather traced their roots in Bulacan like the family of Bro.Eddie. Setting this clear, it is a refreshing development that the young Villanueva has put back his mind into public service after previous preoccupation to his father’s electoral contest versus President Arroyo.

Actually, there has been similar initiatives in a House Resolution authored by lone Catanduanes Rep. Joseph Santiago filed last March 31 this year. The great public interest of this matter made me file Santiago’s press release issued that day. Santiago came up with a list of ATM fees on withdrawal and balance inquiry charges imposed by banks on cardholders of other banks.

"We are disseminating this comparative list, based on a survey by the Bangko Sentral ng Pilipinas (BSP), to empower consumers – bank clients – so they can get more value for their money by using cheaper ATMs and avoiding the costlier ones," Santiago pointed out. "We are also doing this to enliven free market competition that, we hope, will help drive down burdensome ATM user charges," Santiago added.

As early as that time, Santiago has been batting for the abolition of ‘excessive’ bank and credit card charges. He is author of House Bill 4630, which seeks to prohibit banks from arbitrarily exacting service fees or penalty charges. The last time he checked on the status of his bill, he found it languishing in the House committee on banks chaired by Rep.Jaime Lopez (Lakas, Manila). I gathered that there seemed to be a strong lobby, of course, by the banking industry against it since obviously it would cut their additional source of earnings and reduce their profit margin.

How heartless bankers could be in charging as much as P10 per transaction on withdrawal via ATM of depositors of other banks. This is like extorting depositors to cough up this amount before they could withdraw or get their own money. We could not however, begrudge banks to charge such service fees to non-depositors of their banks to cover for administrative cost it may entail.

But P10 is too much, especially for small depositors whose every P1 means a lot to keep body and soul together. Worse for these people who have no choice but to suffer in silence because they have to get their salary through ATM. If there is no available ATM of their bank in case they need to withdraw, they have to resort from the ATM of other banks and get P10 less of their hard-earned salary.

Consider the official BSP statistics that show there are over 18 million Filipinos who are ATM cardholders. Currently, there are three banking service networks – BancNet, Megalink and ExpressNet – 58 universal, commercial and thrift banks with over 5,800 ATMs spread nationwide.

These figures were secured by Santiago from the BSP as of March 31,2006 but more or less, I think it is safe to assume these numbers have not drastically changed five months after.

According to the research done by Santiago, BancNet earlier reported that it processed over 123 million transactions in 2005, while Megalink said it handled up to 645,000 transactions daily last year. Withdrawals accounted for almost half or 49 percent of the transactions processed by the two networks. No data were available for ExpressNet transactions.

Based on the same list, it showed the following seven banks under ExpressNet have the lowest service charges – ranging from P5 to P9.50 per withdrawal – on cardholders of other banks: HSBC Savings Bank, P5; Bank of the Philippine Islands (including BPI Family Savings Bank and BPI Direct Savings Bank), P7; Banco de Oro Universal Bank, P7; and Land Bank of the Philippines, P9.50.

The HongKong and Shanghai Banking Corp. Ltd. (the universal bank, not HSBC Savings, the thrift bank) is the only ExpressNet bank that does not collect any service charges on withdrawals made by cardholders of other banks. All ExpressNet banks allow cardholders of other banks to freely make account balance inquiries without paying any service fees.

Among the 23 Megalink banks, service charges range from P10 to P11 per withdrawal by cardholders of other banks. An exception is the Philippine Veterans Bank, which charges only P5. Union Bank of the Philippines Inc. imposes the stiffest service fee, at P12 per withdrawal by a cardholder of another bank.

Megalink banks that collect P11 per withdrawal include Equitable PCIBank Inc., Equitable Savings Bank, Philippine National Bank, United Coconut Planters Bank, Bank of Commerce, International Exchange Bank and LBC Development Bank.Megalink banks that levy P10 per withdrawal include AsiaTrust Development Bank Inc., Development Bank of the Philippines, Keppel Bank Philippines Inc., Maybank Philippines Inc. and Premiere Development Bank.

Among Megalink banks, only Philam Savings Bank and Robinson Savings Bank Corp. do not collect any service fees on withdrawals made by cardholders of other banks. Except for Philam Savings, Robinsons Savings and Planters Development Bank, all Megalink banks also charge P1 to P2 for every balance inquiry made by a cardholder of another bank.

Meanwhile, the 28 BancNet banks impose P8 to P10 per withdrawal, except for one small bank, Centennial Savings Bank Inc., which collects P5. BancNet banks that uniformly collect P10 per withdrawal made by cardholders of other banks include Metropolitan Bank and Trust Co., Rizal Commercial Banking Corp., RCBC Savings Bank Inc., Allied Banking Corp., Philippine Savings Bank, Security Bank Corp., Standard Chartered Bank, Philippine Trust Co., East-West Banking Corp., Chinatrust Commercial Banking Corp., Banco Filipino Savings and Mortgage Bank, Citystate Savings Bank Inc. and The Manila Banking Corp.

BancNet banks with a lower charge of P8 per withdrawal include China Banking Corp., Export and Industry Bank Inc. and Asia United Bank Corp. Two BancNet banks -- Citibank N.A. and Citibank Savings Inc. – do not collect any service fees on withdrawals made by cardholders of other banks.

At that time Santiago got this list last March, all BancNet banks also do not collect service charges on balance inquiries made by cardholders of other banks. However, East-West Bank, a BancNet member, started imposing last month P1 fee to balance inquiry by ATM cardholders of other banks. I should know because we at The STAR also have ATM payroll at the East-West Bank.

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