LEYTE Representative (2nd Dist.) Henry Ong has urged the Bangko Sentral ng Pilipinas and the banks as well as the remittance sector to find a way to reduce to three percent the cost of sending cash remittances from overseas to OFW dependents.
“Our banks and remittance firms ought to be at the forefront of providing fintech to OFWs at minimal reasonable cost,” said Rep Ong, Vice chairman of the Committee on Banks and Financial Intermediaries.
“The three percent target is among the United Nations’ sustainable development goals,” added Ong.
A member of the ICT, Trade and Industry, and nine other committees in the House of Representative, Ong made the statement following the signing of the crucial Philippines-Kuwait Memorandum of Understanding (MOU) on OFW welfare and the partial lifting of the deployment ban to Kuwait.
“I urge the Bangko Sentral ng Pilipinas and the banking and remittance sectors to craft and execute an action plan to reduce to three percent the cost of sending cash remittances from overseas to OFW dependents,” he stressed.
To reduce costs, the Bangko Sentral, banks and financial intermediaries must work in concert to streamline the cost structure, reduce cost barriers, and eliminate red tape, Ong said.
Citing World Bank, Ong said that globally, sending remittances costs an average of 7.13 percent of the amount sent. This figure is used to monitor the progress of the global effort for reduction of remittance prices.
Based on World Bank estimates, “if the cost of sending remittances could be reduced by 5 percentage points relative to the value sent, remittance recipients in developing countries would receive over $16 billion dollars more each year than they do now. This added income could then provide remittance recipients more opportunity for consumption, savings, and investment in local economies.”
For the Philippines, key factors for reducing remittance costs are transparency, speed of transfer, margins on the exchange rates, systems security, and availability of remittance outlets near the residences of OFW dependents. (AC)