Philippines remittance charges remain cheapest globally

In its latest Migration and Development Brief, the World Bank said remittance charges to the Philippines cost less than 5%, or $10, for every $200 transfer, remaining the cheapest globally.

The Philippines maintained the lowest remittance fees in Q4 of last year on money sent by OFWs from Singapore, Kuwait, United Arab Emirates, and Spain.

The South Africa to China corridor has the highest cost for remitting cash at close to 20% for a $200 transfer. Thailand to China and Thailand to Indonesia followed at roughly 15%, while Thailand to Vietnam and Japan to Thailand range between 10% and 15%.

According to the report, the Philippines last year ranked fourth in the world in terms of remittance inflows with $35 billion trailing India’s $83 billion, China’s $60 billion, and Mexico’s $43 billion, but outpacing Egypt’s $30 billion, Pakistan’s $26 billion and Bangladesh’s $22 billion.

Within East Asia and the Pacific, the Philippines was second next to China and ahead of Vietnam’s $17.2 billion, Indonesia’s $9.7 billion, and Thailand’s $8.3 billion.

As a contribution, remittances made up 9.6% of the Philippine economy and were fourth behind the Marshall Islands’s 13.2%, Samoa’s 18.7%, and Tonga’s 37.7%.

On a regional scale, remittances to East Asia and the Pacific declined by almost 8% to $136 billion last year but the World Bank expects this figure to grow by up to 2.1% this year based on the recovery of host countries, particularly that of Saudi Arabia, UAE, and the United States.

However, sending nations may struggle to supply the host economies with workers due to travel restrictions applied to contain the spread of the virus as governments are expected to limit the exit of health workers to fill their own gaps on the medical front.

The Philippines brought down its overseas deployment by as much as 75 % last year. The decline was attributed to the outbound cap of 5,000 yearly on health workers to ensure that the country has enough medical respondents to carry out pandemic duties locally, among others.

In February, the Bangko Sentral ng Pilipinas said remittances managed to beat the odds by slipping less than 1% to $33.19 billion in 2020, from $33.47 billion in 2019.

Around 40% of the remittances were sent by OFWs from the US, followed by those from Singapore, Saudi Arabia, Japan, and the United Kingdom.

SOURCE: Phil Star