BSP mulls options in case US banks close remittance business
MANILA – The Bangko Sentral ng Pilipinas (BSP) is looking at measures to maintain cash transfers from Filipinos abroad following plans of US banks to drop the remittance business.
“We will be monitoring developments on this front see how we can explore, if needed, other possible ways to facilitate money transfer, that will continue to uphold the integrity and safety of the remittance process,” BSP governor Amando Tetangco Jr. said.
US banks earlier announced that due to regulatory pressure, it may abandon low-cost money transfers.
This decision came after the US government intensified its campaign to curb money laundering activities, including those involving drug trafficking and terrorism.
The move is expected to adversely affect immigrants who will be required to pay higher fees for cash transfers.
“The remittance business, especially the leg through the United States, now constitutes a volume that is not insignificant,” Tetangco said.
The US accounts for the biggest amount of remittances sent home by overseas Filipinos.
In 2013, OFW remittances from the US reached $9.91 billion, making up 43 percent of the total $22.97-billion worth of cash remittances posted that year.
“In addition, the Filipino remitters from overseas have already come to appreciate the benefits of coursing remittances through the formal system,” Tetangco said.
“There is therefore a business case for this type of money flow and as such an incentive to find viable solutions for the partner Philippine banks, should their US counterparts in fact abandon money transfer businesses,” he added.
Remittances sent from abroad made up more than 8 percent of the country’s gross domestic product in 2013.