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A Christmas gift for OFWs

There are no words to describe the heroism and sacrifice of our overseas Filipino workers. Feeling homesick and lonely, they still make sure to send extra money back home, so their families could experience an extra special Christmas celebration even without them.

This selfless practice has resulted in a notable surge in remittances during the last months of the year, particularly in December. Even with the global financial crisis, the Bangko Sentral ng Pilipinas said remittances hit $1.4 billion in December alone last year, an increase of 0.8 percent over the same period in 2007.

BSP Deputy Governor Diwa Guinigundo said that remittances continue to account for around 10 percent of the country’s Gross Domestic Product and equivalent to 10 times the country’s foreign direct investments.

According to Guinigundo, the realization of the Philippine economy’s long-term growth potential also depends on how remittances can be harnessed as an important tool for sustainable development.

In an effort to enhance the remittance environment for migrant Filipino workers, BSP Governor Amando M. Tetangco Jr. last week signed an agreement with the Association of Bank Remittance Officers, Inc.. (ABROI), represented by Carmelita Araneta, Bankers Association of the Philippines (BAP), represented by Aurelio Montinola III, the Chamber of Thrift Banks (CTB), represented by Pascual Garcia III, and the Rural Bankers Association of the Philippines, represented by Joseph Omar Andaya.

The agreement will enable the groups’ members to use the Bangko Sentral’s Philippine Payments and Settlements System (PhilPass) — a system that enables banks and other non-banks with quasi-banking functions (NBQBs) to settle their payments in real time — for interbank remittance transfers.

According to Deputy Governor Armando L. Suratos Jr., who manages the PhilPass, the use of the PhilPass’ technology will not only allow faster and safer transmission of remittances from an OFW to his beneficiaries; it will also significantly reduce the fees they have to pay for the transaction.

Under the present setup, OFWs have to pay anywhere from P100 to P500 when the bank where they deposited their remittance is different from the bank of their beneficiaries back home. This bank would have to hire the services of a courier to deliver the funds to the other bank.

Banks could also use the Electronic Peso Clearing System (EPCS) of the Philippine Clearing House Corporation (PCHC), which provides a check clearing system for member banks. However, OFWs have to pay additional back-end processing fees and risk delays in transactions with this method.

BSP Governor Amando Tetangco Jr. said that given these delays and the disturbing incidents of theft and robbery involving a number of couriers tasked to deposit remittances, PhilPass is seen as a safer, faster, and more efficient option for migrant Filipino workers.

With PhilPass, participating banks can charge a significantly lower standard back-end processing fee of only P50 per remittance transaction.

The use of BSP’s payment and settlement system will also allow for a feedback interbank mechanism that will ensure the real time transmission of the remittance.

Tetangco said the systems integration of ABROI member banks with the BSP’s PhilPass will be completed before the end of the year, and is expected to be operational by late February or March next year.

BSP estimates that remittance transactions average 66 million per year, of which transmissions through “credit to other banks” account for eight percent or an average of 5,000 transactions daily.

Tetangco said this will result in savings of at least P75 million in annual remittance fees for migrant Filipinos — a very significant “consuelo” and Christmas gift for our modern-day heroes.

* * *

Last Thursday, BSPers witnessed the annual traditional lighting ceremony at the Bangko Sentral ng Pilipinas. Against the backdrop of the recent global financial turmoil, the BSP’s yearly tradition means a lot.

I look at the BSP’s Christmas lights as a symbol of hope to the Filipino people, especially during this special time of the year when optimism should abound. That despite the darkness brought about by the global crisis, the Philippine economy stays strong and resilient, and that there is indeed reason to hope amid the many challenges we face as a people.

Congratulations to BSP Managing Director Manuel Torres and his staff who put together the impressive displays that adorn the facades of the BSP fronting Roxas Boulevard and Mabini Street, as well as the BSP lobby. Ninety percent of the materials used were recycled from glass diffusers!

Note: You may e-mail us at totingbunye2000.

A Christmas gift for ofws
By : Manila Bulletin

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Filed under: Bank Services, Sorsogon News Updates,

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