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Tuesday, June 23, 2009

Fw: Drilon says gov't must regulate OFW remittances fees now

Noting a slow but steady increase in the remittances of overseas Filipino workers (OFWs) even in a midst of a global financial meltdown, former Senate President Frank Drilon today urged government to carry out its long-standing promise to reduce remittance fees, starting with the scrapping of 1.5 percent Documentary Stamp Tax on remittances.


At the same time, Drilon said the Central Bank of the Philippines must now regulate the remittances fees imposed by banks and other remittance centers in the country, lamenting that exorbitant charges were practically eating up a big amount of the money sent by OFWs to their families in the Philippines.


In his blog site, Drilon, who is also national chairman of the Liberal Party, noted it was high time that Arroyo administration fulfill its long-standing pledge to help the country's estimated eight million OFWs by taking concrete steps to lower remittance fees.


"In the face of difficulties that come with the global financial slowdown, now is the time for the Arroyo government to show its sincerity and really help our OFWs by cutting down on remittances fees," said Drilon, who served as labor secretary during the administration of then President Corazon Aquino. "Now is the time for government to put its money where its mouth is, instead of merely hailing them as our modern-day heroes."


Under the prevailing market rates, Drilon explained that OFWs are required to pay the 1.5 percent Documentary Stamp Tax and remittance fees ranging from 3.5 percent to 5.5 percent every time they send money to their families in the Philippines.


"On the average, a typical Filipino overseas worker remits $500 (or P25,000) monthly to his family in the Philippines. Under prevailing rates, he is required to pay remittance fees, including the 1.5 percent Documentary Stamp tax, and that translates to sums ranging from P1,125 to a high P1,750 every time he or she sends money to the Philippines," Drilon said. "So for a period of one year, an OFW pays a total of P21,000 in remittances fees alone. These rates are too oppressive and unfair."


Citing a recent study of the International Monetary Fund, Drilon noted that an estimated $1.72 billion or 13.5 percent of the total $12.8-billion remittance in 2006 by OFWs went to remittance fees alone.


"Perhaps, Malacanang, the Department of Labor and Employment and the Central Bank must now put their heads together and implement policy changes to help our OFWs by lowering the remittances," Drilon said.


By reducing these remittance fees, Drilon said, overseas workers would be encouraged to course their remittances through the formal banking channels which would mean higher remittances.


"Our OFW's are our top dollar earners and their remittances are the only reason why our national economy remains afloat. This government must show its sense of gratitude by reducing the charges on the dollars they remit to their families," Drilon said.


Drilon pointed out that despite the global economic slowdown triggered by financial problems in the United States and other developed countries, remittances from Filipinos working abroad remained strong, thus saving an otherwise skidding Philippine economy.


On Monday, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. revealed the OFWs remittances rose by 2.6 percent in the first four months to $5.5 billion, lifting hopes it should still rise this year despite widespread expectations to the contrary.


As labor secretary, Drilon cancelled the licenses of hundreds of delinquent recruitment agencies in a no-nonsense campaign against illegal recruitment and was responsible for the establishment of halfway house shelters for runaway OFWs in several countries hosting Filipino workers.


Earlier, Drilon said the Arroyo government failed to rationalize the remittances fees collected from overseas Filipinos despite a commitment made by US government during President Arroyo's state visit to the United States in May 2003.




The former Senate President said he was disappointed over apparent inaction of the executive department in pushing for the reduction of charges on remittances sent by Filipinos working in the United States to their families in the Philippines.

Drilon recalled that during President Arroyo's 2003 US visit, the Philippine government was able to secure a commitment from then President George W. Bush that the US government would launch a project to lower remittance fees.  


"Despite the commitment of the highest US official then, the Philippine government has not been able to take advantage of the situation to help our overseas Filipinos on the matter of reduced remittance fees," Drilon lamented.


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