By Charissa Luci-Atienza
ACTS-OFW partylist Rep. Aniceto Bertiz III cited Sunday the pressing need to cut the bank fees imposed to overseas Filipino workers (OFWs) for sending their remittances back home.
He disclosed that the OFWs are expected to pay up some $3.2 billion in bank remittance charges this year to send home $29.8 billion in cash.
“Philippine banks and their foreign correspondents are taking unreasonably high cuts out of the cash wired home by migrant Filipino workers,” he said in a statement.
He noted that the expected $29.8 billion cash remittances this year is up three percent from $28.9 billion in 2018.
“To transfer the entire $29.8 billion home, OFWs will be forking out 10.90 percent, or some $3.2 billion, to pay for bank fees,” Bertiz laments.
He noted that in the first quarter of 2019, banks charge an average of 10.90 percent of the amount sent, making them the most expensive type of service provider, citing
the World Bank’s periodic Remittance Prices Worldwide Report.
“If we can get banks to slash their remittance prices by one-half, this would mean an extra $1.6 billion (P83.2 billion) flowing into low- and middle-income Filipino households and into the economy,” Bertiz pointed out.
Instead of having it paid for the remittance fees, the additional P83.2 billion every year “would enable millions of remittance-dependent Filipino families to acquire new homes, send their children to college, buy health and life insurance protection, or to start small enterprises,” he said.
Bertiz cited that the United Nations has a social development goal to reduce the global average price of a remittance to just three percent of the amount sent, while the G20 has committed to help lower the cost to five percent.
“Banks capture up to 85 percent of the remittances from OFWs. The rest is picked up by postal offices, money transfer operators (MTOs) and mobile money service providers,” Bertiz said.
Postal offices charged an average of 7.26 percent in remittance fees in the first quarter, while MTOs such as The Western Union Co. and MoneyGram International Inc. collected an average of 6.06 percent, he said.
“‘Mobile money’ service providers remained the cheapest, charging an average of only 2.92 percent,” Bertiz said.
The World Bank said the Philippines ranks No. 4 among the world’s top five remittance recipients, receiving an estimated $34 billion in 2018, which includes some $5 billion coursed through non-bank channels.
The other top remittance recipients in 2018 were India ($79 billion), China ($67 billion), Mexico ($36 billion) and Egypt ($29 billion).