Makati City Rep. Luis Campos Jr. has challenged GCash and other Philippine-based mobile money operators to go global and help drive down high remittance charges that have been a burden to overseas Filipino workers (OFWs).
“We want GCash and other mobile money technology players to forcefully compete with banks in the remittance market to put a downward pressure on transaction costs,” Campos said.
Citing the World Bank’s Remittance Prices Worldwide report, Campos said OFWs currently pay an average of 6.3 percent (of the amount sent) in fees to send $200 home to their families.
Mobile money allows users to receive, store, and transfer funds using their mobile phone.
Citing the World Bank’s Remittance Prices Worldwide report, Campos said OFWs currently pay an average of 6.3 percent (of the amount sent) in fees to send $200 home to their families.
“Lower remittance fees will mean higher disposable income for Filipino households dependent on cash from abroad, and more money flowing into our economy,” Campos, one of the authors of the law creating the Department of Migrant Workers, said.
At present, banks dominate 87 percent of the remittance market, and they also collect the highest fees at an average of 11.69 percent of the amount sent, according to Campos.
The United Nations’ (UN’s) Social Development Goals include the target to slash remittance costs to an average of 3 percent globally by 2030, Campos pointed out.
Campos said the UN estimates that remittance-receiving families around the world would save an additional $20 billion annually once fees are reduced to an average 3 percent.
Bangko Sentral ng Pilipinas statistics show that OFWs sent home via the banking system a total of $32.5 billion in cash remittances in 2022, up 3.6 percent from $31.4 billion in 2021.
The World Bank estimates that the Philippines received up to $38 billion in remittances from all channels in 2022, making the country the world’s fourth-largest recipient of money from overseas workers, after India, Mexico and China.
GCash previously obtained regulatory approval to offer its services abroad to users even without a Philippine-registered Subscriber Identity Module (SIM).
Once they are fully verified, overseas Filipinos will soon be able to access GCash services using a foreign SIM.
