What is remittances? How to transfer remittances

Currently, Filipino people are living and working abroad a lot. Since then, the demand for remittances to Philippines has also increased rapidly. So what is a remittances? What types of remittances are there?

Let’s find out with Fastloans.PH through the following article.

What is a remittances? What is English remittances?

Remittances is the movement of money from people living and working abroad to their relatives back home. According to the definition of the World Bank (WB), “Remittances are money from abroad originating from the income of workers and migrants abroad”.

  • philippines-remittances

Remittances are freely convertible foreign currencies that are transferred into Philippines in the following forms:

  • Foreign currency transfer through authorized credit institutions.
  • Foreign currency transfer through international postal financial service providers.
  • Individuals entering Philippines who bring foreign currency on behalf of Filipino people must declare to the border gate customs the amount of foreign currency brought from abroad to the beneficiary in the country.

Origin of remittances activities

After knowing what the concept of remittances is, we also need to learn about the origin of this activity. It can be said that people living abroad will often be interested in the lives of their relatives back home.

Therefore, they often support relatives from afar with a remittances. That money can be used to pay off debts and improve the lives of family members with relatives living abroad.

In addition, remittances are also investment money if people abroad are successful and have money to live. Remittances are a way for people abroad to participate in lucrative ways such as financial products, technology, or real estate back home.

More broadly, remittances are also a method to preserve capital and minimize risks in foreign financial markets such as political or economic crises that may occur at any time.

Philippines is a country that always receives high remittances flows. According to statistics, Philippines’s remittances in 2018 reached $32.2 billion.

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The most popular forms of remittances

What are the forms of remittances? Overseas Filipino and foreigners remittance Philippines through the following forms:

  • Remittances remittances through banks – credit institutions.
  • Money transfer through international postal financial service providers.
  • Individuals bring people into Philippines.

Remittances via banks – credit institutions

For this form of money transfer, the person who wants to transfer money can go to any bank or branch at the place of work or live to carry out the money transfer procedure. And if you are abroad and want to transfer money, don’t worry, all major banks in Philippines have very effective remittances services.

You just need to provide the necessary information according to the instructions of the bank staff, declare the information on the money transfer slip, and pay the amount and money transfer fee, and the money will reach your relatives in your hometown.

Note that you need to provide information to identify the depositor. Specifically:

  • If the recipient has a bank account, the account number is required.
  • If the recipient does not have an account number, they must have an ID number or any document with a photo.
  • Besides, you also keep the documents related to the money transfer or receipt as proof of the money transfer has problems later.

Transfer money through international financial services

One of the forms of remittances of remittances to Philippines is using international financial services. These companies will ensure the quick transfer of money to Philippines and your loved ones will also receive the money as soon as possible.

Some international money transfer services you can use are Western Union or Moneygram. You just need to go to the transaction points of these services, fill in the deposit slip and the rest will be taken care of by this service.

As an example of Western Union, after completing the deposit steps, you will receive a 10-digit code. You provide this code to your loved ones, tell them to bring their ID card and this 10-digit code to receive money.

Remittances money transfer through individuals brought into Philippines

You can also ask someone to bring back overseas to your loved ones in cash. However, note that individuals abroad when entering Philippines, bringing foreign currency for Filipino people in the country must declare to the customs the amount of money brought back from abroad.

Amount to declare if you deposit more than 5,000 USD or other currencies of equivalent value.

What are the conditions for transferring remittances to Philippines?

  • Proof of identity documents such as identity card, citizen identification, passport.
  • In addition, you also need to provide documents such as a birth certificate, household registration.
  • Documents and papers proving the purpose of overseas remittances.
  • Besides, you also need to provide full recipient information such as recipient’s full name, recipient’s account number, recipient’s bank name.
  • Anyone can make a money transfer to Philippines for family and relatives and friends. Peso times, senders and recipients only need to have legal documents, no need to declare what the purpose of remittances is.
  • Procedures for remittances of remittances are also very quick, simple, and not too complicated or troublesome.

See also: What is liquidity? Basic information about liquidity you should know

Instructions for transferring remittances via banks

Remittances through a bank is a popular method of remittances because it is safe and highly reliable. So, how do transfer remittances through the bank? Find out below.

Condition of remittances

What are the conditions for remittances? In Philippines, money transfer conditions are very simple. You only need to have identification documents and the recipient’s information.

The money transfer conditions are very simple

When transferring money, you need to bring the following documents:

  • Original ID/Passport.
  • Birth certificate, household registration.
  • Documents proving the purpose of remittances abroad.
  • Recipient information such as Full name, account number, name, and Bank.

The procedure for transferring and receiving money is very simple and fast if you prepare all the required documents above.

How to get money

Receiving remittances from relatives is much simpler than transferring money. When sending money, the sender will have to fill in your account number and the money will be returned to your account immediately.

To use, you can withdraw money through the branch system or ATM. If you withdraw cash at a branch, you will need to provide personal information to receive the money.

If you use a money transfer service like Western Union, you can receive money through its agents in Philippines or you can also receive money through the beneficiary’s bank account.

What is the importance of remittances?

In addition to knowing what remittances are, you also need to know the importance of remittances. This is very important money for many countries. Especially for developing countries like Philippines. The importance of remittances is reflected in the following points:

  • Contributing to offset the trade balance deficit, helping to alleviate hunger and improve living standards of a part of remittances recipients.
  • Create more resources for the Philippines economy. Reducing the imbalance in the balance of payments with foreign countries. Improve foreign exchange reserves and reduce pressure on the exchange rate.
  • Reduce dependence on foreign capital as well as the pressure of the US dollar Peso exchange rate.
  • Contributing to creating more jobs, thereby stabilizing the lives of a part of the population by investing and doing business.

Conclusion

The above article has explained to you what remittances is, how to transfer money and its importance to a country. Hopefully, with the above information, you have gained a lot of useful knowledge about the market.

See also: Overseas Filipinos’ remittances up 13.1% in May 2021

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