OFW recruiters seek return of old remittance system

To help overseas Filipino workers cope with the depreciation of the dollar, the local recruitment industry yesterday proposed the re-imposition of the “pay-rolling” system of sending remittances from abroad.

Recruitment leaders said the pay-rolling system – which requires OFWs to remit 70 percent of their monthly pay back home – will dramatically reduce the money spent on remittance fees.

Lito Soriano, president of the LBS E-Recruitment Solutions, said the pay-rolling system would also increase and speed up the flow of remittances into the local banking sector.

“With this kind of system, service charges will drop since there will be a one-time charge only for the employer abroad sending the funds for the payroll of the local manning agency that will in turn deposit the salaries for the intended beneficiaries in their bank accounts,” he said.

Service contractors with construction projects overseas are also amenable to such a system for it would reduce banking costs while local banks earn through the “float of the dollar proceeds” before converting the funds into pesos and depositing the salaries in the accounts of the workers.

“This was the most efficient form of sending the salaries of workers in the 1970s since the costs were lower per worker and the dollars were captured by the banking system, which in turn increased the dollar reserves during the time of (then) President Marcos when the country had a dollar reserve crisis,” Soriano said.

But years later, the Department of Labor and Employment and the Philippine Overseas Employment Administration (POEA) came out with a policy that allows only manning companies to comply with the system.

Soriano called on the government to hold a national summit on remittances to discuss the system and other measures that could reduce remittance fees.

The amount of total remittances from overseas Filipinos is projected to reach $15 billion this year even with minimal growth in the number of Filipinos hired abroad.  – Mayen Jaymalin