Cebu Rep. Eduardo Gullas said the aggregate annual cost of OFW remittances was based on an International Monetary Fund (IMF) study, which put at 13.5 percent the average transaction cost for money transfers to the Philippines.
OFWs pay anywhere from $15 to $26 for a typical $200-remittance, according to a separate US government study cited by Gullas.
"If global remittance charges are just cut into half, it could mean up to $675 million in cost-savings that could go into the pockets of hundreds of thousands of low-income Filipino families struggling to make both ends meet," Gullas pointed out.
"This, apart from the fact that $675 million is a lot of foreign exchange that could help the country stave off a full-blown financial crisis," Gullas said, adding that the Philippines needs about $5 billion to refinance its foreign debt this year.
The Department of Labor and Employment expects OFW remittances to hit a record $10 billion this year, $1.5 billion or 17.6 percent over the $8.5 billion posted in 2004.
From January to May this year, OFW remittances had hit $3.95 billion, up $650 million or 19.2 percent from the $3.3 billion posted in the same period last year.
Gullas said the Philippines should coalesce with other large recipients of remittances "so that we work shoulder to shoulder in getting industrialized countries to reduce global remittance charges."
The Philippines is the world’s third largest recipient of remittances. The other top recipients are India, Mexico, Egypt and Turkey.
In all, 90 developing countries got a total of $126 billion worth of remittances in 2004, according to the IMF.
The Philippines’ main sources of remittances are the US, Saudi Arabia, Italy, Japan, the United Kingdom, Hong Kong, Singapore and the United Arab Emirates.
Gullas, meanwhile, stressed the need for the Bangko Sentral ng Pilipinas "to take deliberate steps" to build up competition that would drive down the remittance charges of local banks and other money transfer agents.
He cited the case of one large publicly listed local bank that netted at least P2 billion in remittance fees last year. "In some cases, the remittance charges collected by local banks are just too onerous," Gullas said.