Sending Money to the Philippines

IJsselstein, Friday, 31 December 2004 01:01:47

Many Filipinos living abroad and their foreign partners regular send money to the Philippines. There are a number of ways to send money to the Philippines, each with their own pros and cons.

Sending Money in Letters

The cheapest but most insecure mode of sending money is putting banknotes in a letter. You're changes that it actually arrives are probably smaller than that it disappears, unless you use registered mail or a courier service such as DHL or FedEx. However, in such cases the cost will quickly make the other options more attractive.

Some post-officers seem to have a sixth sense for detecting money in a letter. If you ever wondered how these small tears in the edge of the envelope appeared: they might have been made by somebody checking the inside. After that, even a small hole is big enough to get a banknote out. The trick is easy. Take two cocktail sticks, put one on each side of the bank note and start turning them, until the entire note is rolled around the sticks, after which it can easily pulled out of the envelope without making a tear of more than a quarter inch. If this knowledge doesn't discourage you enough, please also realize that in rural areas, letters are often not delivered but kept at the post-office, often a small office inside the municipal hall. If a neighbor happens to pass by, he gets all letters for delivery to people in his barangay (neighborhood) - and the temptation to look inside on the long walk home can be quite big.

Finally, it is a hassle for the recipient to exchange small denominations (such as one-dollar notes), and although not impossible, the recipient will receive a bad exchange rate. If you have some left-over 20 or 50 peso notes after your trip, carefully folding one or two inside a letter can be nice little gift for the recipient. That is, if they arrive at all.

Using Philippine Banks Abroad

A number of Philippine banks have conveniently opened branch offices in the US and Europe. They normally require the recipient to open an account with a bank in the Philippines (which can be somewhat inconvenient, as most banks require a minimal balance of about 5000 pesos, more than a month's salary for many people). However, they work quite efficient, and the money is normally available to the recipient within a week. This is currently my preferred method of sending money. The costs are in the order of $6 to $10.

The PNB (Philippine National Bank) offers a remittance service. A list of foreign branches can be found here.

The Equitable PCI Bank offers the PCI Express Padala service, which I find somewhat better than that of the PNB, as they will quote you the exchange rate beforehand.

Sending Personal Checks

In my experience, sending checks or using bank transfers using banks in your own country is both expensive and time-consuming. I've had money transfers from my own bank in the Netherlands to the Philippines take up to six months, and then, they can cost over 40 euros. Personal checks can be extremely difficult to cash, and fees will be subtracted from the amount. They can take up to several months to clear. Not really recommended.

Specialized Money Transfer Agents

There are a number of companies specialized in sending money. They have in common that they are fast, but can be rather expensive.

Western Union has large number of outlets in the Philippines, as well as in the US and other countries (in the Netherlands every post-office). The money can be available to the recipient within minutes, but the fees are in the order of 10 to 15 percent of the sum being transferred. Payments can be in pesos or U.S. dollars.

A similar service, supposedly somewhat cheaper, is offered by MoneyGram (In the UK at every post-office), but they have a considerable smaller number of offices in the Philippines.

Sending an ATM or Credit Card

Convenient if you want to sent money regularly to the same trusted person. Get a second debit or credit card from your bank (if possible with a separate account or low spending limit), and send it to the recipient. When the card has arrived, you can give them the PIN by phone. Some banks don't like this, and might block the card if this is detected, so instruct the recipient not to use the card too often.

Depending on your bank, a transaction fee will be levied in the order of $1.50 upwards per transaction. The exchange rate is normally good.

A Warning About Some Readers' Comments on this Article

Please be warned you may find recommendations in these comments that come from a few money remitting companies or their agencies themselves. Placing such fake recommendations is against the rules of this website and is a kind of fraud (and who would trust his or her money to somebody committing fraud?). I will normally try to remove such recommendations, but unfortunately can't detect them all.

Money-remitting companies and agencies who would like to advertise here can contact the webmaster, or buy advertisements coupled to keywords in Google's Adsense Program.

Jeroen Hellingman