Rep. Ong calls for reduced remittance fees

 

 

By Rose de la Cruz

 

Burdened as they are with working overseas and dealing with different cultures, the overseas Filipinos should be relieved of the added burden of numerous costs on their remittances to their families by the banks and remittance agents.

 

This was the scenario painted by Rep. Henry Ong, 2nd district of Leyte and vice chair of the committee on banks and financial intermediaries, as he said that Bangko Sentral ng Pilipinas should enjoin banks and remittance agents to reduce the costs being shouldered by OFWs in their remittances to their loved ones, practically eroding the savings they send home.

 

Following the signing of the crucial Philippines-Kuwait MOU on OFW welfare and the partial lifting of the deployment ban to Kuwait, he urged the BSP, the banks and remittance sectors to craft and execute an action plan to reduce to three percent the cost of sending cash remittances from OFWs to their dependents.

 

I hope OFWs, not just in Kuwait, but elsewhere around the world, have their mobile phones always with them, so that, among others, they can quickly respond to finance emergencies of their families here in the Philippines, Ong said.

 

Financial technologies (fintech) for sending remittances using smartphone mobile applications, he said, would be best suited for OFWs.

 

Our banks and remittance firms ought to be at the forefront of providing fintech to OFWs at minimal reasonable cost, he emphasized.

 

The three percent target is among the United Nations’ sustainable development goals.

 

To reduce costs, the Bangko Sentral, banks and financial intermediaries must work in concert to streamline the cost structure, reduce cost barriers, and eliminate red tape.

 

“Globally, sending remittances costs an average of 7.13 percent of the amount sent. This figure is used to monitor the progress of the global effort for reduction of remittance prices,” according to the World Bank.

 

The World Bank estimates that "if the cost of sending remittances could be reduced by 5 percentage points relative to the value sent, remittance recipients in developing countries would receive over $16 billion dollars more each year than they do now. This added income could then provide remittance recipients more opportunity for consumption, savings, and investment in local economies.”

 

For the Philippines, key factors for reducing remittance costs are transparency, speed of transfer, margins on the exchange rates, systems security, and availability of remittance outlets near the residences of OFW dependents.

 

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Thursday, 15 November 2018
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