Central bank waives fees on bank-remittance transactions
Instead of just cutting to about a tenth of the usual the cost that banks incur for using the central bank’s real-time gross settlement system (RTGS) so that migrant workers can benefit from the arrangement when remitting, the government is waiving the fees altogether, starting immediately, for six months.
The Bangko Sentral ng Pilipinas (BSP) announced on Friday that charges will no longer apply on such transactions as an apparent further concession to a sector whose contribution to nation-building is immense.
“The Monetary Board has approved the waiver for six months of fees for banks servicing overseas Filipinos transacting through the Philippine Payments and Settlement System, or Philpass. This will enable banks to lower their remittance fees,” BSP Governor Amando Tetangco Jr. said in a text message.
This means charges will be reduced substantially as the BSP, as operator of the RTGS, has waived the transaction fees it normally charges Philpass.
The waiver of the fees starts immediately. The BSP, in partnership with the Association of Bank Remittance Officers Inc. (Abroi), had agreed late last year to reduce so-called back-end fees, that averaged from P100-P550 per transaction, to only P50 per transaction, starting in July 2010.
But as a service to some 8 million overseas Filipinos who send their foreign-exchange earnings to their families in the Philippines through the banks, executives and regulators alike agreed to waive these charges altogether, even if only for a limited period.
Despite the impact of the euro zone crisis and the lingering effects of the global economic woes that originated in the United States, remittances from overseas Filipino workers (OFWs) have kept flowing, reaching $17.3 billion in 2009.
In the first four months of 2010, remittances grew 6.6 percent higher, reaching a total of $5.9 billion.
Not all banks make use of the RTGS under Philpass and not all the banks are members of the Abroi.
But late last year the industry heeded calls by the BSP to reduce their remittance fees for OFW clients to P50 per transaction instead of the usual charge of P100-P550.
However, divergent technology systems prevented Philpass-accredited banks from making the transition to uniform charges quickly enough so that remittance beneficiaries could enjoy sharply reduced remittance costs, according to the BSP.
Technicians have to make adjustments so that each bank “talks” to Philpass in the same electronic language that everyone else uses and understands, the BSP added.
Such charges add up substantially, given that banks such as the state-owned Land Bank of the Philippines manage thousands of remittance transactions daily.
Privately owned banks as the Metropolitan Bank and Trust Company and the Bank of the Philippine Islands handle much more OFW-related transactions at any given time. BusinessMirror
