AGENT BANKING THRU THE PHILPASS REMIT SYSTEM

Vicente S. Aquino Deputy Governor

Resource Management Sector & Security Plant Complex

Remittances to the Philippines

The Philippines ranks 3rd highest in the world as a remittance

destination.

References: Changing Patterns of Global Migration and Remittances by PEWRESEARCH Center, the United Nations and the World Bank

Remittances to the Philippines

Overseas remittances represented 9.09% of the country’s GDP

in 2013. Overseas remittances in 2013 amounted to approx. 26.1

billion USD

Uses of Remittances in the lives of the beneficiaries:

Spending for: Family Consumption Education Health care Leisure

Entrepreneurial activities like putting up own business Capital spending on transportation & communication services,

and manufacturing activities Investments in bonds, stocks, mutual funds, etc.

Advocacies of the BSP The Bangko Sentral ng Pilipinas, the country’s central monetary authority, undertakes various bank-related initiatives to improve the remittance environment and to channel remittances to productive undertakings. Through these initiatives, the BSP is able to help maximize the benefits accruing from remittances by:

(1) ensuring the smooth inflow of remittances through the payments and settlements system, and

(2) promoting their developmental usage through nationwide public information campaigns so that these funds can be mobilized for lending and other productive endeavors.

Conventional Remittance Modes

For the remittances to reach beneficiaries maintaining accounts with banks other than the receiving banks, three options are available: 1. The Philippine Clearing House Corp. (PCHC) : - Electronic Peso Clearing System (EPCS) for peso remittances ;

and - Philippine Domestic Dollar Transfer System (PDDTS) for US

dollar remittances. 2. Courier service through banks and other financial entities

(formal) 3. Courier service through hand-carried remittances ( informal)

Conventional Remittance

OFW

Family COURIER

Peso/Dollar Clearing House

Local Partner Bank International Remittance

Agent/Partner

Bank of Beneficiary

OPTION 1

OPTION 2

OPTION 3

Latest Remittance Mode

(The PhilPaSS REMIT System) What is the PhilPaSS REMIT System? It is a system which aims to provide an efficient interbank

clearing facility for the settlement of overseas remittances for credit to the bank account of the beneficiary via the Philippine Payments and Settlements System (PhilPaSS). This REMIT system was developed by BSP in 2009 in coordination with the Association of Bank Remittance Officers Inc. (ABROI), Bankers’ Association of the Philippines (BAP), Chamber of Thrift Banks (CTB) and the Rural Banks Association of the Phils. (RBAP).

The system was launched in May of 2010 to actualize and realize BSP’s advocacies to primarily help Overseas Filipinos (OF) to safely, rapidly, economically, and efficiently send their hard-earned money to their families back home.

Remittance via the PhilPaSS REMIT System Foreign Remittance Agent/Partner Bank

Local Partner Bank (Philippines)

BSP-PhilPaSS REMIT

Funds Transfer from Participating Bank A to Bank B

OFW Beneficiary Account with Bank B

Features: - Rules are covered by a MOA between BSP, BAP, CTB, RBAP and ABROI,

- Same day Bank-to-Other-Bank settlement

- Lower costs

- Effective feedback mechanism

- Safe and smooth operations

Remitting Customer

1 2

3

4

5

6

– Lower remittance cost Remitting Bank (international) - market driven front-end fees - P5.00 per transaction from the Remitting Bank (local)

Receiving Bank (bank of the beneficiary) - P50.00 back-end processing fee

– Safer and faster credit to the accounts of the beneficiaries. – Efficient Feedback mechanism – Encourages beneficiaries to open an account with the local bank,

thus, contributes to the country’s financial inclusion program.

Benefits from the PhilPaSS REMIT System

PhilPaSS REMIT Transactions

2010 2011 2012 2013

VOLUME VALUE VOLUME VALUE VOLUME VALUE VOLUME VALUE

112,638 P4,003,799,183 ($90,995,435) 320,845 P12,629,064,648

($287,024,196) 380,150 P14,944,215,196 ($339,641,254) 392,587 P15,808,316,496

($359,279,920)

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2010 2011 2012 2013

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THANK YOU