Policy and Regulatory Framework for Remittance - Philippines

This report provides an overview of the policy and regulatory framework for remittances in the Philippines. Migrant workers from the Philippines averaged 4.8 million over the last five years. The officially recorded remittance income of these workers represented around 11.8% of GNP in 2006. Financial institutions technological innovations and wide network abroad enabled “Overseas Filipino Workers (OFWs)” to access formal channels for remitting funds to beneficiaries back home. Characteristics of the remittances regulatory framework are:

• The Bangko Sentral ng Pilipinas (BSP) monitors and regulates remittance transfer through formal channels;
• Key regulations that affect remittance transfers are anti-money laundering law and banking laws;
• BSP ensures that financial organizations adhere to pre-qualification, risk management and other prudential standards;
• Government provides tax exemption on remittances to OFWs and allows them to select the type of currency and instrument in which they maintain remittances.

Incentives that make the remittance market more efficient include:

• Procedure simplification;
• Regional financial literacy campaigns for OFWs and their beneficiaries;
• Innovative products and services provision to OFWs and their beneficiaries.