Overseas Filipino Workers (OFW) stand to save P100 to P500 when sending money to the Philippines once the new Philippine Payments and Settlements System Remit System starts operating before the fourth quarter of the year.
Also known as the Philpass Remit System, the new settlement system for money transfers would eliminate third party courier services between commercial banks in remittances involving bank credits, the Bangko Sentral ng Pilipinas said Monday.
“This will reduce the cost of remitting money from the OFW remitter to the beneficiary,” the BSP said.
“Under the existing system, beneficiaries pay from P150 to P550 as back-end processing fee. With the migration to the new system, the fee will be reduced to P50 for each remittance transaction as the BSP will be charging banks a minimal amount for the settlement of transactions,” the BSP explained.
With the Philpass Remit System, families of OFWs would be able to save from P92 million to P922 million a year in remittance fees, the central bank said.
The central bank said the Philpass Remit System is a “safer, faster, and cheaper means of remittance transactions,” as it uses the BSP-Philpass clearinghouse in moving remittances from a local bank to another bank where the OFW beneficiary maintains an account.
The system is an initiative of the BSP and the Association of Bank Remittance Officers Inc. (ABROI), under a memorandum of agreement (MOA) signed in December.
The Philpass Remit System was originally scheduled to start in the first quarter, but only one bank was able to migrate to the new system since the MOA was signed. The BSP did not name the bank.
“Only this bank therefore will be able to service the processing of incoming and outgoing remittances at P50 per transaction as back-end processing fee charged to the OFW beneficiary, while the rest of the ABROI member banks might still charge the old rate,” the central bank said.
According to the BSP, other member banks would come on stream once the remaining issues on hardware and system connectivity have been resolved.
Other ABROI members expect to migrate to the new system this month at the end of June, while two banks would be able to comply with the new system at the end of September.
Remittances by OFWs grew by 7 percent to $4.339 billion in the first quarter of the year from $4.057 billion a year earlier.
Last year, the money transferred by OFWs to relatives in the Philippines went up by 5.4 percent to a record $17.348 billion from $16.426 billion
The BSP expects OFW remittances to grow by 8 percent this year.
About 81 percent of total remittances reported by local banks in the first quarter came from the US, Canada, Saudi Arabia, UK, Japan, Singapore, Italy, and the United Arab Emirates. —VS, GMANews.TV