Oppressive remittance costs

Migrant Filipino workers in the United States spend an average of $12 79 to send $500 home to their families in the Philippines, or an average of $11 45 to remit $200

Filipino workers in the United Kingdom shell out an average of $17 75 to wire $500, or $14 40 to transfer $200

Those in Italy spend an average of $22 28 to send $500, or $19 05 to remit $200, while those in Germany pay out an average of $13 06 to forward $500, or $11 07 to convey $200

Those in Spain have to shell out an average of $12 42 to dispatch $500, or $10 64 to transfer $200

Meanwhile, Filipino workers in the Kingdom of Saudi Arabia spend an average of $6 93, whether they transmit $500 or $200

These average remittance costs, recently disclosed by the Trade Union Congress of the Philippines (TUCP), are based on a World Bank study of global money transfer charges as of the first quarter of 2009

These costs are oppressive and burdensome, to say the least  They are definitely excessive, considering that in this day and age of modern technologies, seamless and cost-efficient money transfers are already possible through such platforms as the Internet and international mobile-telephone short-messaging

Any potential savings realized by overseas Filipino workers (OFWs) from lower remittance charges would surely allow more funds to flow into the Philippine economy

The Philippines should combine forces with other top remittance-receiving countries such as India and Mexico, and find ways to step up pressure so that multinational banks would reduce their money transfer fees

Annual remittances from OFWs have steadily grown from just $105 million in 1975 to a whopping $16 426 billion in 2008, making the Philippines the world’s fourth-biggest collector of money from migrant workers

In the five months to May this year, remittances from OFWs reached $6 98 billion, up $190 million, or 2 8 percent compared to the $6 79 billion they wired home in the same five-month period in 2008

Western Hemisphere leaders, at the Special Summit of the Americas in Monterey, Mexico, way back in January 2004, had called for the cost of remittances to be cut in half

This call was echoed by the finance and central bank chiefs of the Group of Seven (the US, the UK, Canada, France, Germany, Italy and Japan), who also declared in April 2004 that, “on remittances, we will continue to work on our initiatives to reduce barriers that raise the cost of sending them and integrate remittance services in the formal financial sector ”. –Ernesto F  Herrera, Manila Times