Fixed peso-dollar rate for OFWs endorsed
The Trade Union Congress of the Philippines (TUCP) has welcomed the plan of the state-run Development Bank of the Philippines (DBP) to offer overseas Filipino workers (OFWs) a fixed peso-dollar exchange rate.
This will soften the negative impact of the local currency's rise on the buying power.
Under the plan, OFWs may voluntarily subscribe to a program, under which they would agree to send home through DBP's remittance network a fixed amount of dollars every month for at least one year.
In return, the DBP would pledge to convert the dollars into pesos based on a pre-agreed exchange rate.
"We laud this initiative. This will not only protect OFWs and their families from further currency risks going forward, but also heighten competition in the remittance trade, which is crucially important in driving down excessive money transfer charges," TUCP spokesperson Alex Aguilar said.
TUCP has been pushing both the DBP and the Land Bank of the Philippines (LBP), which is also government-owned, to expand their remittance networks abroad and offer cheaper and faster money transfer services to OFWs.
Aguilar said the state-run banks should spare no effort in capturing a bigger share of the remittance trade.
"This is one way for the government to help force down burdensome remittance charges, which are partly due to excessive market control by a handful of private banks," Aguilar pointed out.
He said the remittance market is dominated by six local private entities -- the Bank of the Philippine Islands, Metropolitan Bank and Trust Co., Philippine National Bank, Banco de Oro Universal Bank, United Coconut Planters Bank and Rizal Commercial Banking Corp.
Each of these banks capture about US$ 1-billion worth of remittance inflows every year, Aguilar said.
The DBP expects to corner US$ 115-million worth of remittances this year after opening new satellite offices in Hong Kong, Macau and Milan. The bank also plans to put up additional remittance centers in California, Nevada, New Jersey and Texas.
The LBP, for its part, expects to grab up to US$ 1.05-billion worth of remittances this year, up 23 percent compared to the US$ 850 million that it captured in 2006.
OFWs sent home a record US$ 11.87 billion in the 10 months to October this year, up 15 percent from the amount they remitted in the same period last year.
The peso has gained nearly 27 percent against the dollar since 2004, when the local currency averaged 56 to a greenback, implying that households relying on remittances have lost as much buying power over the same period. The peso closed Friday at 41.21 to a dollar.
This will soften the negative impact of the local currency's rise on the buying power.
Under the plan, OFWs may voluntarily subscribe to a program, under which they would agree to send home through DBP's remittance network a fixed amount of dollars every month for at least one year.
In return, the DBP would pledge to convert the dollars into pesos based on a pre-agreed exchange rate.
"We laud this initiative. This will not only protect OFWs and their families from further currency risks going forward, but also heighten competition in the remittance trade, which is crucially important in driving down excessive money transfer charges," TUCP spokesperson Alex Aguilar said.
TUCP has been pushing both the DBP and the Land Bank of the Philippines (LBP), which is also government-owned, to expand their remittance networks abroad and offer cheaper and faster money transfer services to OFWs.
Aguilar said the state-run banks should spare no effort in capturing a bigger share of the remittance trade.
"This is one way for the government to help force down burdensome remittance charges, which are partly due to excessive market control by a handful of private banks," Aguilar pointed out.
He said the remittance market is dominated by six local private entities -- the Bank of the Philippine Islands, Metropolitan Bank and Trust Co., Philippine National Bank, Banco de Oro Universal Bank, United Coconut Planters Bank and Rizal Commercial Banking Corp.
Each of these banks capture about US$ 1-billion worth of remittance inflows every year, Aguilar said.
The DBP expects to corner US$ 115-million worth of remittances this year after opening new satellite offices in Hong Kong, Macau and Milan. The bank also plans to put up additional remittance centers in California, Nevada, New Jersey and Texas.
The LBP, for its part, expects to grab up to US$ 1.05-billion worth of remittances this year, up 23 percent compared to the US$ 850 million that it captured in 2006.
OFWs sent home a record US$ 11.87 billion in the 10 months to October this year, up 15 percent from the amount they remitted in the same period last year.
The peso has gained nearly 27 percent against the dollar since 2004, when the local currency averaged 56 to a greenback, implying that households relying on remittances have lost as much buying power over the same period. The peso closed Friday at 41.21 to a dollar.
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