RIYADH, 8 October 2004 — Plans by officials in Manila to bring down further the remittance fees for Filipino workers in the Kingdom may not be feasible at this time, some Filipino banking executives say.

Labor Secretary Patricia Sto. Tomas had said lowering the cost of money transfer to the Philippines could encourage overseas Filipinos to send more of their earnings home and help keep the economy afloat.

“I understand that in some places, our workers pay to remit money to the Philippines... (and) their relatives also pay a fee for receiving it here (Philippines). What happens is that the money is charged twice for services,” she said.

Usman Navarro, country manager of Philippine National Bank (PNB) in the Kingdom, said reducing the cost of remittance fees may be the aim of every Filipino bank but local conditions allow the players to do only so much.

“We want to reduce the charge in sending money to the Philippines but our problem is we’re operating under the sponsorship of local banks which have control over the remittance fees,” he said.

Navarro noted that from the late ‘70s to the early 1990s, remittance through the PNB was free of charge when it was still under the sponsorship of the Philippine Embassy.

For the first six months of this year, OFWs remitted about $4.7 billion to the Philippines.

Last year, overseas Filipinos remitted $7.8 billion. These figures, however, include only those sent through banks.

There were estimates that dollars sent through other channels, such as the “underground” door-to-door services, sent home by workers through their friends, or which workers bring home during vacation, could cover 25 percent of the total remittances through banks.

Another banking executive said the claim that there are front-end and back-end charges is not true.

“However, for ‘marketing purposes’, the banks merely split the remittance payment so that it doesn’t appear cumbersome to the remitter in the of the OFW’s place of work,” said the executive, who asked not to be named.

That’s why, he said , there are charges when an OFW remits in the Kingdom and the recipient also pays a certain amount when he receives the money in the Philippines.

A survey by Arab News showed that the banks charge different rates.

One bank charges SR26 for cash delivery to the beneficiary’s doorstep without back-end charge.

Starting Sept. 27, another bank cut its cash delivery to a bank account in the Philippines to SR19.

Another charges only SR15 for remittance to a bank account in the Philippines if the account is from the same bank.

Another bank charges SR20 here and its counterpart in the Philippines deducts 140 pesos from the money delivered in Metro Manila and P180 pesos if the delivery is in the province.

The practice of back-end and front-end charges started in the United Arab Emirates, according to another executive, and it was implemented in Saudi Arabia as a marketing strategy.

OFWs had mixed reactions regarding the possibility that the charges in remitting money could be reduced.

“Let’s hope for the best although it’s premature to make statements now. But if it’s true that the DOLE succeeds in bringing remittance fees down, it would be for the benefits of overseas Filipinos,” said Benny M. Quiambao, president of the Calabarzon group in Riyadh.

“But what matters at the end of the day is customer satisfaction (both remitter in the Kingdom and beneficiary in the Philippines) and the reliability of service rendered,” still another bank executive said.

In the Eastern Province, Buddy Alpuerto, Saudi Arabia Hiligaynon president and building superintendent of Al Rashed Towers, said: “I hope that Secretary Sto. Tomas’ announcement is not a mere press release. If she succeeds, it will be for the benefit the OFWs indeed.”

Sto. Tomas told a press during the recently concluded ministerial conference of Asian labor-sending countries that talks would be held with the Asian Development Bank (ADB) and the World Bank (WB) on the feasibility of lowering the cost of remitting money to foreign workers’ country of origin.

Labor ministers and senior officials from Bangladesh, China, India, Indonesia, Nepal, Pakistan, Thailand, Vietnam, Sri Lanka, Afghanistan and the Philippines met in a bid to come up with policies aimed at ensuring the protection of migrant workers.