10/22/2007 | 03:52 PM
The Philippines ranked as fourth top recipient of overseas remittances in Asia, receiving $14.65 billion in 2006, a United Nations report showed.
The report, released in time for the Oct 19 opening of the International Forum on Remittances in Washington DC, said the $14.65 billion remittances sent to the Philippines was based on "a conservative estimate."
The amount includes the $12.8 billion remittances coursed through the banks, as reported by the Bangko Sentral ng Pilipinas, plus OFW earnings sent through informal channels such as door-to-door delivery.
The report titled, "Sending money home: Worldwide remittances to developing countries" by the United Nations' International Fund for Agricultural Development (IFAD) listed India on top of the list, receiving $24.5 billion, followed by Mexico with $24.2 billion and China with $21 billion.
Russia, with $13.7 billion, ranked next to the Philippines.
Lower remittance charges
The report prompted Sen. Loren Legarda, chairman of the Senate committee on economic affairs, urged the government to “quickly draw up and execute a roadmap toward purposely driving down excessive remittances charges."
"We have to consciously bring down burdensome remittance fees. This is the single most efficient way for us to truly make full economic use of remittance inflows," Legarda said.
The senator lamented that migrant workers spend a staggering total of up to $1.72 billion every year to pay for remittance fees, or 13.5 percent of the $12.8 billion that they sent home through banks in 2006.
Legarda said her estimate was based on a study by the International Monetary Fund, which pegged at 13.5 percent the average transaction cost of remittances to the Philippines, with OFWs paying anywhere from $15 to $26 in transfer fees for a typical $200-remittance.
"If we reduce by half the amount spent by OFWs to pay for remittance charges, this would easily translate into an additional $860-million worth of inflows every year. This is a lot of extra money coursed through the pockets of their families here and the economy," she said.
Remittances, the bulk of which go to poor families in the rural areas, could contribute to prosperity in the countryside, according to the IFAD report.
The IFAD is a special UN international financial institution dedicated to fighting poverty and hunger in rural areas of developing countries. - GMANews.TV