The Bangko Sentral ng Pilipinas (BSP) announced today that the settlement of overseas Filipinos (OF) remittances through the Philippine Payments and Settlements System (PhilPaSS) Remit System will be completely operational by the third quarter of this year. The PhilPaSS project is one of the initiatives undertaken by the BSP in coordination with the Association of Bank Remittance Officers, Inc. (ABROI) to enhance the remittance environment for OFs and their families.
The PhilPaSS Remit System involves the use of the BSP-PhilPaSS as the local clearinghouse for the transfer of remittances from a local bank to another bank where the OF beneficiary maintains an account. Once the project becomes operational, the need for courier services by commercial banks for the mode of fund transfer involving credit-to-other banks will be eliminated. This will reduce the cost of remitting money from the OF remitter to the beneficiary. Under the existing system, beneficiaries pay from P150 to P550 as back-end processing fee. With the migration to the new system, the fee will be reduced to P50 for each remittance transaction as the BSP will be charging banks a minimal amount for the settlement of transactions. The PhilPaSS ensures safer, faster, and cheaper means of remittance transactions.
This project of the BSP and the ABROI started in 2008 with full implementation targeted in the first quarter of 2010, after the signing of the memorandum of agreement in December 2009. However, to date, only one has been able to migrate to the new system. Only this bank therefore will be able to service the processing of incoming and outgoing remittances at P50 per transaction as back-end processing fee charged to the OF beneficiary while the rest of the ABROI member banks might still charge the old rate.
Other member banks will be coming on stream once they resolve the remaining issues on hardware and system connectivity. Most of the banks expect to complete their migration to the new system only by end-May or end-June 2010 while two banks have indicated that they could comply only by end-September this year. The BSP will call a meeting with the heads of the participating banks to facilitate the use of the PhilPaSS and ensure that OF remitters will benefit from further reduction in remittance charges.