Higher fees to weigh on OFW remittances

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THE higher cost of remitting funds to the Philippines may slow the rise in cash remittances by overseas Filipino workers (OFW) this year, according to Metrobank Research.

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In a research note, the think tank of Metropolitan Bank & Trust Co. said remittance centers are concerned about the money transfer firms that closed down in select countries last year to prevent the possibility of opening new channels of funding for terrorist activities.

The shutdowns have been observed in the United States, United Kingdom, Australia and New Zealand, Metrobank Research said, noting the situation translated into higher remittance fees.

“The higher cost of remitting may lead levels [of remittances]to move slower year-on-year in the coming months,” it said.

The think tank expects cash remittances or transfers coursed through banks to move toward the lower end of a 6 percent to 7 percent growth forecast for 2015.

Nevertheless, Metrobank Research said the improving US economy and strong demand for Filipino workers, especially in the Middle East, are expected to support the money transfer business.

Latest central bank data showed the cumulative cash remittances increased by or 5.4 percent to $9.91 billion in the first five months of 2015 from a year earlier.

The US, Saudi Arabia, United Arab Emirates, UK, Singapore, Japan, Hong Kong and Canada were the major sources of the remittances for the five-month period.

Data from the Philippine Overseas Employment Administration showed there were 386,163 approved job orders in January to May 2015.

Of the job orders, 35.4 percent was processed for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan and UAE.

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