“Most of the banks expect to complete their migration to the new system only by end-May or end-June 2010 while two banks have indicated that they could comply by end-September,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.
By “new system,” the BSP referred to the Philippine Payments and Settlements System (PhilPaSS) Remit System.
The central bank and the Association of Bank Remittance Officers, Inc. (ABROI), Bankers Association of the Philippines, the Chamber of Thrift Banks, and the Rural Bankers Association of the Philippines had signed a memorandum of agreement in December that would allow these banking groups’ members to use PhilPaSS for interbank remittance transfers.
The remittance system -- envisioned to reduce the cost of remittance transfers to P50 per transaction from P150 to P550 at present -- should have been operational in the first quarter.
But as the BSP explained, banks were hounded by “hardware and system connectivity” problems. It did not elaborate.
It said only one bank, which the BSP did not name, was able to migrate to the PhilPaSS Remit System.
“The BSP will call a meeting with the heads of the participating banks to facilitate the use of PhilPaSS and ensure that overseas Filipino remitters will benefit from further reduction in remittance charges,” it said.
PhilPASS was established in 2002 as the central bank’s electronic payments system. It allows banks, non-bank financial institutions and those with quasi-banking licenses to have real-time settlement of their transactions.
The PhilPaSS Remit System was essentially initiated by the BSP and ABROI to eliminate the use of couriers in bank-to-bank crediting of remittances -- a mode of transfer that has proven to be expensive and risky.
At present, a Filipino working abroad will make a deposit in a bank, which then hires a courier to deliver the funds to another bank, where the Filipino worker’s relatives claim the remittance.
“PhilPaSS ensures safer, faster and cheaper means of remittance transactions,” the central bank stressed.
ABROI members number 11, including the country’s biggest banks.
Remittances grew by 7% to $4.3 billion in the first quarter. The BSP sees remittances growing by 8% this year from $17.35 billion last year.