MANILA - The Bangko Sentral ng Pilipinas (BSP) has signed a memorandum of agreement (MOA) with bank associations to lower the cost of money transfer services by as much as P922 million a year.

The MOA's signatories include the BSP, the Bankers Association of the Philippines, the Rural Bankers Association of the Philippines, the Chamber of Thrift Banks, and the Association of Bank Remittance Officers Inc.

The deal allows banks to use the BSP's Philpass system for their remittance services. The Philpass system uses wire transfers (bank to bank) instead of the commonly-used courier services, which BSP Governor Amando Tetangco said are more expensive and time-consuming.

Once implemented, a fixed fee of P50 will be charged for every remittance transaction. Tetangco said the amount is much smaller compared to current charges, which range from P100 to P550.

"The amount of savings per transaction therefore stands at P50 to P500," Tetangco said during the MOA signing at the BSP headquarters on Wednesday.

Transactions involving remittances average at 1.844 million every year, data from the BSP showed. With savings of at least P50 per transaction, total savings for the year are estimated at P92.2 million.

With savings of P500 per transaction, the total savings are estimated at P922 million.

"This project will benefit families of overseas Filipino workers," Tetangco said.