FROM THE OFFICE OF PUBLIC AFFAIRS

The U.S. Treasury Department and the Philippines Ministry of Finance today agreed to work together to improve mechanisms for overseas remittances services to the Philippines.  In the presence of Philippine President Gloria Arroyo, U.S. Treasury Under Secretary John Taylor and Philippine Finance Secretary Jose Camacho signed a Memorandum of Intent to work toward that end. 

The primary goals of the initiative are to reduce costs through greater competition and increased efficiency, enhance access to remittance services in the formal financial system, and ensure compliance with counter-terrorist financing and anti-money laundering standards.

In welcoming the initiative, Under Secretary Taylor noted that: “Achieving these goals will benefit the Filipino overseas workers, the Philippine economy and the global financial system.”

According to government statistics, over seven million overseas Filipino workers sent over US$6 billion in remittances to the Philippines in 2001.  Of this, approximately 70% was sent through banks and wire transfer services, with fees reaching as high as 15% of the value of the remittances. Experience has shown that competition and improved technology can enhance access to remittance services via the banking sector and significantly reduce the fees for such services

The Treasury Department in collaboration with the Federal Deposit Insurance Corporation and the Federal Reserve will work with their Philippines counterparts to identify deficiencies  in currently available channels to send remittances to the Philippines; jointly understand the role of the private sector in this area; strengthen the critical financial infrastructure that supports remittances and minimize any vulnerabilities that may exist; promote financial literacy among those who do not use traditional banking channels; and ensure proper implementation and full compliance with international anti-money laundering and counter-terrorist financing standards.