Filipinos love their families so much that they are willing to do it all to provide them a life of comfort. So, it’s no surprise that Filipinos make up one of the largest groups of overseas workers in certain countries and are also one of the secrets behind the Philippines’ growth in Gross Domestic Product (GDP).
In December 2017, the Bangko Sentral ng Pilipinas reported that remittances were at $2.74 billion, bringing the full-year amount to $28.1 billion — 4.3% higher than the $26.9 billion in 2016. This is the largest December remittance inflow on record, with transfer coming in from the US, United Arab Emirates, and Singapore.
Remittances from other Asian countries like Japan and Taiwan rose by 7.3%, while personal payments also posted a record high of $3 billion. These personal remittances, sent by migrant workers both in cash and in-kind, accounted for 10% of GDP.
OFW (Overseas Filipino Workers) remittances contribute to the overall financial growth of the country, but at the end of the day, they remit to address the needs of their loved ones. That is why it is essential for OFWs to find a channel for remittance that is guaranteed safe and cost-effective.
Factors to Consider When Sending Money to PH
Nowadays, there may be a lot of ways available to remit to your family in the Philippines from Japan, but not all of it would be accessible or beneficial to you or to the people you’re sending to, all the time.
These are some of the factors you should look out for:
Transaction cost is nothing new when it comes to money transfer, but the actual fee depends on different factors such as turnaround time, amount to send, and the exchange rate to PHP of the currency you have.
As much as possible, you want the money to be sent and received quickly, especially when it’s urgently needed. Fortunately, some remittance centers offer same-day or next-day delivery options, albeit may cost more.
It’s always risky to send money abroad, so you want a company that has an excellent reputation and makes an effort to be transparent with the whole process, often done through a tracking number which is inputted on a tracking tool to show you the status of the remittance.
Before the birth of websites and mobile apps, transfers could only be done over the counter. Claiming is also easier now that more locations and branches cater to remittances such as banks, pawnshops, and even drugstores.
Comparing Your Options
Gone are the days when you still had to send out money through the postal service. Here are some of the new options available that are way better, cheaper, and faster compared to the post office. Compare its details to one another and see which one will work best depending on your needs.
Remittance through banks are often expensive and can be quite complicated, albeit being the most reputable and secure way. Like its counterparts in the Philippines, Japanese banks would likely require you to sign up for an overseas remittance service that is separate from the account.
Of course, your recipient should also have a bank account, which could be a problem considering that only a few people aged 15 and above — or around 31% — have a bank account in the Philippines, according to World Bank’s Global Findex.
Bank transfers are also quite expensive, as the Remittance Prices Worldwide reported that an average of 10.99% or around Y3,500 additional fee is paid for the transfer although the specifics and costs for each bank vary. Recipients may have the money deposited into their accounts within three to five banking days.
PH banks like BPI, BDO, PNB, and Metrobank have remittance partners in Japan, including Japanese banks like Japan Post Bank and Seven Bank. Bank-to-bank remittance is no doubt safer, and with such collaborations, may also help make the process easier for both senders and recipients.
BDO Remit is available in Tokyo. From here, you can send money through a BDO Kabayan savings account (if available). Having an account will allow the recipient to claim the remittance within an hour.
Aside from this, BDO also offers Cash Pick-up Anywhere wherein the money can be claimed from a BDO branch or SM mall.
Cost depends on the remittance type and whether the receiving bank account is a peso or dollar account.
BPI has a foreign office in Japan where you can do the transfer. If the recipient also has a BPI account, remittance will be credited in real time.
However, if the transfer is to a different bank, money can be withdrawn within two to three banking days. The transaction fee is based on the type of remittance service and the speed of transmission.
2. Remittance Outlets
Also called agent, a remittance outlet may be a delivery company, a pawnshop, or any other enterprise that offers money remittance services. They have physical locations where both senders and claimant can go to for remittance.
The sender will give the agent the cash and transfer it to another agent. This agent will collect the money and give it to the receiver who has the right control number. Naturally, both agents in the Philippines and Japan should be affiliated.
Despite being faster, these outlets are also expensive and prone to fraud. However, it’s good to use for emergencies or if the recipient has no bank account or Internet access.
Local outlets include LBC Remit, M Lhuillier, Cebuana Lhuillier, and Palawan Express, while the internationally-known counterparts are Western Union and Moneygram.
Transfer through Western Union can be done over the counter or via its website or mobile app. For over-the-counter transfers, senders can remit by bank account, credit card, debit card, or cash.
They also have a great same-day and next-day delivery options. The company has thousands of locations in the Philippines, allowing cash pickups in malls, pawn shops, supermarkets, and drug stores.
Costs depend on the chosen turnaround time, amount, and exchange rate of the foreign currency. Online transfers through a bank account are cheaper but may take several days to complete.
A zero fee for transfers up to $5,000 may be applied if it is done via the website or mobile app to an eligible bank account in the Philippines.
Same-day withdrawal is possible if money sent through Moneygram is deposited to a bank account. Cash pickup can also be done the same day.
The service fees depend on the remittance amount and exchange rate of the foreign currency in the Philippines, with maximum amount allowed per transaction at $2,999.
3. Online Money Transfer Services
This is the fastest and cheapest way to send money because it is done digitally. However, online money transfer is still prone to fraud and even malware attacks, which can put both your device and your money in danger.
When money is sent through Xoom, recipients can either pick them up in various locations including banks, pawnshops, and grocery stores within hours after the transfer or have it delivered which can take a day or two depending on the address.
Xoom is part of PayPal and is regulated by US government agencies. It has money-back guarantee in case the remittance doesn’t go to the intended recipient.
This service uses peer-to-peer technology that matches currency flows and finds a person who will convert your foreign currency into peso, allowing exchange rate costs to be reduced, with no hidden charges.
However, completion of the transfer may take more than a week. TransferWise fees start at $5, which can increase depending on the amount to transfer.
A mobile wallet is basically an app where you can store money, make payments, and transfer money to another mobile wallet.
The most popular mobile wallet for Japan-to-Philippines money transfer is GCASH. You have to load or deposit the money into your mobile wallet first (in Yen only) before it can be transferred. The recipient can use remit either through their own GCASH account or bank transfer.
Cryptocurrency is heavily regulated in Japan, allowing its citizens to use these blockchain-enabled coins for everyday purchase including money transfer. However, it’s still not yet being widely by Filipinos in Japan to send money to the Philippines.
This may soon change as more people are recognizing the benefits of remittance through crypto, such as little to no processing fees, less waiting time, and increased security through better transparency.
OFWs in Japan can look forward to more remittance services in the future that utilize crypto, one of which is Ark Remit that uses NOAHCOIN. Ark Remit works by allowing OFWs to convert Yen into NOAHCOIN at select Nippon Pay locations and depositing it into the Ark Wallet of their family in the Philippines.
There is no one right way of sending money to your family. Each one has its boons and banes that may or may not address your considerations. You can either stick with one method or constantly change it if it meets both you and your relatives’ needs.
The same can be said about the currently available methods for money transfer — banks used to be the only choice, but thanks to technology, OFWs can now do it with just a press of a button.
Soon enough, disruptors to the system like blockchain or NOAH’s Ark Remit may become a permanent solution to remittance worries.