P6.38 remittance fee for OFWs in HK pushed

A senior member of Congress welcomed yesterday the plan of local telecommunications service providers to launch a remittance facility that will enable some 153,000 Filipinos working in Hong Kong to send money home for as low as HK$1 or P6.38 per transaction.

"This gives meaning to our previous call for bold and highly progressive market initiatives that will stimulate free competition and drive down excessive remittance charges," House Deputy Majority Leader Eduardo Gullas said in a statement.

Gullas, who represents Cebu’s first district, said the average five percent remittance fee imposed by banks "is absolutely outrageous."

He has been pushing the use of new technologies, including those made available by highly advanced mobile communication and electronic card-based payment systems, as well as purposeful regulatory action, to force down steep money transfer charges.

In 2005 alone, overseas Filipino workers (OFWs) spent a total of $519 million to pay for remittance charges — an amount equal to almost five percent of the $10.7-billion worth of remittances received by the country in the same year through bank channels, according to the Bangko Sentral ng Pilipinas (BSP).

Gullas, who has been lobbying for a $1 all-in universal remittance fee, said the extra money foreign and local banks have been netting for themselves "should be going to the pockets of OFWs and their families here."

"We have facts indicating that for as low as $1, local banks, their correspondent foreign banks and clearing houses can efficiently transfer funds worldwide, with all of them still getting reasonable margins," he said.

Hong Kong is the Philippines’ fifth biggest source of remittances, following the United States, Saudi Arabia, Italy and Japan, the BSP said.

BSP statistics show that money transfers of Filipino workers in Hong Kong account for more than three percent of all remittances that the Philippines receives each year.

Filipino workers in Hong Kong sent home a total of $338.9 million in 2005, almost 24 percent or $65 million higher than the $273.9 million they remitted in 2004.