Wednesday, November 02, 2005

Remittance standards urged to protect OFWs

Wednesday, November 02, 2005 / 4:09:31 PM

TO protect overseas Filipino workers and their families from abuses, a lawmaker has urged the Bangko Sentral ng Pilipinas and the Departments of Trade and Industry and Labor and Employment to work out and establish minimum standards for banks, money transfer agents, door-to-door dispatchers and other entities engaged in the remittance business.

"Owing to the remittance boom, just about everyone wants to be in on the trade. In fact, no less than the DTI has warned the public about the emergence of a number of fly-by-night remittance agents. Regulators must now step in and make sure that all remittance handlers operate according to a minimum set of standards,"

Rep. Eduardo Gullas said. "The agencies concerned are duty-bound to protect our OFWs and their families, not just from outrageous transfer fees, but also from foreign exchange conversion short-changing as well as sloppy delivery services," he said.

To prove his point, Gullas cited the complaint of a Filipino nurse working in California, who recently sent $600 to her family in Cebu City. The money was coursed through a leading Manila-based door-to-door parcel courier that has since ventured into the remittance trade.

Gullas said the courier's California office guaranteed that the peso equivalent of $600 would be delivered to the consignee within two days. However, the money arrived after seven days. He also said the courier converted the $600 at the exchange rate of 1:55.15 (P33,090). Yet, on the day the remittance was taken, the Philippine Dealing System's average exchange rate was 1:55.65.

"In effect, besides paying the $12 (P661.80) transfer fee, the nurse or her beneficiary incurred a hidden loss of $5.44 (P300) upon conversion of her dollars into pesos. And the loss of 50 centavos for every dollar became the courier's P300 (foreign exchange) gain," Gullas said. The nurse thus spent $17.44 (P961.81), or about three percent for the $600 remittance. And yet the money was delivered five days late, Gullas said.

"Government has to set minimum standards, to possibly include reasonable and transparent limits to foreign exchange gains that may be realized by handlers at the expense of our OFWs," he stressed.

Handlers that repeatedly fail to deliver remittances within the promised period, including banks that delay the crediting of cash to a beneficiary's account in the case of direct deposit transfers, should also be penalized, Gullas added.

The BSP expects remittances to hit $10.3 billion this year, up 22 percent from the $8.5 billion posted in 2004.

The $10.3 billion does not include some $3 billion in transfers coursed through informal, non-banking channels, such as those hand-carried by returning laborers on behalf of co-workers. #

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