Banks urged to course remittances via Philpass

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is urging other banks and financial institutions to course the remittances of overseas Filipino workers (OFWs) through the central bank’s electronic payment and settlement system so that beneficiaries of Filipinos working abroad could enjoy lower fees.

To date, the BSP said about 12 banks are currently coursing their OFW remittance transactions through the central bank’s Philippine Payments and Settlements System (Philpass).

Banks that are currently using the Philpass platform include Allied Bank, Asia United Bank, Banco de Oro, Bank of the Philippine Islands, China Bank, Development Bank of the Philippines, Land Bank of the Philippines, Metrobank, Philippine National Bank, Rizal Commercial Banking Corp., Philippine Savings Bank, and the United Coconut Planters

The BSP said the 12 banks have established their connectivity with the Philpass Remit System and have been transmitting batches of remittance transactions to the BSP gateway server for processing and settlement since May 4 this year.

The central bank has issued a circular encouraging banks’ full participation in the Philpass Remit System for electronic settlement of OFW remittances for credit to accounts of beneficiaries maintained in banks other than the remitting banks.

“For this purpose of such, all banks and other financial intermediaries performing overseas remittance business are hereby enjoined to participate in the Philpass,” the BSP stressed.

The Philpass Remit System involves the use of the BSP-Philpass as the local clearinghouse for the transfer of remittances from a local bank to another bank where the OFW beneficiary maintains an account. 

The project is one of the initiatives undertaken by the BSP in coordination with the Association of Bank Remittance Officers Inc. (ABROI) through a memorandum of agreement (MOA) last December.

The full implementation of the project was originally scheduled in the first quarter of the year but only one bank has been able to migrate to the new system since the signing of the MOA. Now, a total of 12 banks have connected to the system since the full implementation of the project last October.

The BSP said the settlement of OFW remittances through the Philpass Remit System would result in savings of between P100 and P500 per transaction as current system charges between P150 and P550 per transaction. OFW families are expected to save at least P92 million to as high as P922 million due to the faster and cheaper delivery of remittances to the beneficiaries at a lower rate of P50 per transaction instead of the current range of between P100 and P550 per transaction.

Furthermore, the BSP added that the system provides safer means of sending OFW remittances via the formal banking channel at lower fees. The Philpass Remit System is also equipped with an efficient feedback mechanism that would enable OFW remitters to trace the status of their remittances.

Last year, remittances went up by 5.4 percent to a new record level of $17.348 billion from $16.426 billion and exceeded the revised four-percent growth forecast set by the central bank.

For this year, the BSP upgraded its growth forecast for the amount of money sent home by overseas Filipinos to eight percent instead of six percent due to the strong demand for Filipino skilled workers.