With the increasing number of overseas Filipino workers (OFWs) globally, money remittances have been constantly boosting our country’s economy. This has been an ongoing trend in our recent history. Our modern-day heroes have proved to be a vital source of financial support for their families’ daily consumption needs, investments, and savings. OFWs work selflessly away from their loved ones to fulfill their dream of providing them with stable and financially secure lives.
Aside from that, it has been shown that international remittances lead to increased investments in various sectors, including health, education, and small businesses. At the national level, receiving large amounts of international remittances has increased opportunities for accelerated growth and development.
What is Money Remittance?
Money remittance is the act of transferring money from one city or location to another. This process works similarly to a money transfer, as none of the parties need a bank account. Many people rely on money remittance because of convenience. The entire transaction can be completed in a matter of seconds, and the sender can choose to have the money delivered to the receiver via cash pick-up or bank transfer. Money remittances are also regarded as a major source of income for people in developing countries, as many of their residents working in foreign locations send money back to their loved ones.
You can send money either via online transfer or by mail. This financial service can also be facilitated through wire methods. The funds collected from money remittances make a significant contribution to the economy of the receiving country.
According to the World Bank’s 2018 report, the Philippines received $32.6 billion, or P1.72 trillion, in remittances in 2017. During that year, our country was the third largest recipient of remittances worldwide. Additionally, the majority of those remittances are sent by OFWs. This demonstrates the critical role of remittances, especially those sent by hardworking overseas Filipno workers, in our country’s financial flow. The figures also highlight the importance of workers in foreign lands not only to their respective families but also to our nation.
How Do Money Remittances Work?
Now that you know what money remittance means, it’s time to learn how this service works. Money remittances are a significant source of cash inflow for any country. The transfer of funds benefits developing countries greatly.
The process involved with money remittances is relatively simple. First, the money is transmitted through a wide range of legal channels, such as mail, bank transfer, money order, or through an authorized money transfer operator. The funds will then be transferred from the sender’s current location to the recipient who is in a different location.
These funds are calculated and converted automatically based on the current exchange rates. After that, the money will be credited to the receiver’s account or be made available through cash pickup using their country’s currency.
Money remittances are classified into two types, depending on the nature of the transaction. These are outward remittances and inward remittances.
Outward remittance is also known as wire transfer outward remittance. This means that the remitting bank will send the funds to the correspondent banks using a specific instrument. The equipment will then transmit instructions for the designated payee to send a specific amount.
Telegraphic transfer, mail transfer, and draft transfer are prime examples of outward remittance instruments.
When someone who lives and works in a foreign country sends money home, this is also considered an outward remittance. This type of money remittance is usually employed to meet ongoing financial obligations in their home country. Some of its primary purposes are to pay mortgages and to support family members.
Outward remittance has also been shown to benefit remitters. Aside from the lower cost of the draft transfers, using this method can help you avoid an array of trade risks. These include not receiving goods after payment, goods shortage, and poor product quality. To protect yourself from these unfortunate circumstances, you should use outward remittance as a cash-on-delivery payment method when your goods are delivered.
In contrast, an inward remittance indicates that money was transferred into your bank account. It can be either domestic remittance, where money is sent within the country, or international remittance, where the money is sent from another country. Inward remittances contribute significantly to a country’s economy, especially the gross domestic product rates.
This type of remittance can be done in exchange for the export of goods or services, investment, donations, gifts, and so on. When you make this type of transaction, you will be given a certificate that extensively explains the details of your remittance.
Aside from that, inward remittances are known as the main method used by institutions to provide relief to various countries and areas in need. These are prevalent during natural disasters such as floods, earthquakes, and tsunamis.
Money Remittance vs Money Transfer
Now that you understand how money remittance works, it is important to know how it varies from money transfer. These two are sometimes confused as the same thing, although this is not the actual case. Knowing the distinction can be extremely beneficial if you are going to transfer money to your loved ones.
Money transfer and money remittance serve the same function, which is to deliver money from one person to another. However, money remittance refers to the process of sending funds to another country. An example would be an OFW transferring money to family members in the Philippines. Money transfer, on the other hand, refers to any cashless payment methods in general, such as bank transfers, digital or mobile wallets, or credit and debit cards.
The History of Money Remittance in the Philippines
Money remittances have a long history in the Philippines. This is largely affected by the number of OFWs throughout the years, as these workers send money back to their loved ones here in the ountry.
There are two types of Filipinos who send money back home: immigrants and overseas workers.
Immigrants are persons who have completely relocated to a foreign country. The immigration process in the Philippines began in the early 20th century, following the Spanish-American War, which resulted in the Philippines becoming a US territory.
There is a widespread misunderstanding that the Middle East is the preferred destination for OFWs. However, that notion did not begin until the 1970s.
It was made possible by the government’s overseas employment program, which enabled Filipinos to work in the Middle East, particularly in Gulf Cooperation Council countries (GCC). Following this event, between 1906 and 1934, there was an inflow of around 120,000 Filipino immigrants in Hawaii who chose to work on sugarcane and pineapple farms.
Overseas workers, on the other hand, typically sign a short-term contract to work in a foreign country for a set period of time. They are not entitled to citizen benefits because they are on a temporary contract. Nonetheless, they still receive the perks provided by the organization for which they work.
The present tendency of Filipinos signing up for work in the Middle East began in the 1970s, when foreign workers made up the majority of Filipinos who were offered the opportunity to work abroad. This also expanded to pop cultural references in Filipino entertainment, with movies and dramas depicting protagonists traveling overseas to offer financial assistance for their families.
Other than the Middle East, OFWs may be found in the United States, Canada, New Zealand, and Australia. After all, in the early 2000s, non-Pacific and Middle Eastern nations became a focus point for certain Filipinos.
Both the immigrants and OFWs highlight the importance of money remittances to the Philippine economy. It’s not only the families of OFWs who are reaping the benefits of their effort in foreign countries, but the entire country as well.
OFW remittances contribute to the country’s domestic consumption and growth. In fact, they account for 10% of the nation’s gross domestic output (GDP). According to data collected by the Bangko Sentral ng Pilipinas (BSP) in 2017, total cash remittances sent home by overseas Filipino workers increased by 4.3&, which translates to $28.1 billion.
What are the Benefits of Money Remittance?
Money remittances have shown to be extremely beneficial to all Filipinos as well as our country’s economy. Many poor nations have trouble borrowing money, which is why they are more likely to rely on remittances. These allow countries to support development in their own way.
Furthermore, OFWs and their relatives back home have benefited from money remittances. Families have been able to acquire needs such as food, clothes, shelter, and other products and services because of this manner of transaction. If the money given is saved, they may be able to obtain loans for business ventures.
Things to Consider When Doing Money Remittance
Before you conduct your first money remittance transaction, there are a few things you should keep in mind. Money remittance transactions are quick and simple, but failing to remember important reminders may result in money loss or your loved ones not receiving the fruits of your labor.
Choose a Reliable Remittance Company
Nothing beats selecting a reputable money transfer firm that actually cares about its customers. Conduct research on several remittance companies and read all their reviews. You may also inquire with other OFWs about their experiences with these companies. This way, you’ll know which remittance firm is worthy of handling your hard-earned money. For instance, a remittance provider with few to no positive reviews may be too suspicious, which means you risk financial loss in every transaction.
Secure the Money Remittance Transaction Details
If you are the sender, you should keep your money remittance transaction details safe. Before discarding the remittance transaction slip, ensure that the money has already been claimed by the receiver. If you lose the transaction slip before the receiver claims the money, notify the remittance company promptly and, if possible, request a reimbursement. This will keep strangers from claiming your remittance if they find your transaction slip.
In addition, be wary of anyone who contacts you claiming to be a loved one or relative and asking to borrow your money while giving their bank account information. This is a common ploy among scammers who prey on OFWs. Before proceeding with a transaction, confirm with your relatives over secure lines that they have truly altered their contact information.
Check the Control Number
Always double-check that you are delivering the right control number to the intended recipient. Usually, all money remittance operations end with the sender texting the control number to the receiver. With that in mind, ensure that the control number, as well as the recipient’s number, are correct. Otherwise, the money may be received by the wrong person.
Aside from that, the recipient must select the appropriate remittance firm or payout center that utilizes adequate security measures. Before paying out any transaction, a remittance business or payout center will normally need government-issued identification. They do not pay out transactions unless the recipient’s name in their system matches the valid ID presented when claiming the transfer.
Cebuana Lhuillier’s Pera Padala
Now, you’re aware of money remittance in the Philippines and its numerous advantages. However, you still need to find quick and dependable providers of money remittance services in the country. You don’t have to worry, because Cebuana Lhuillier’s Pera Padala service is the solution to your problem.
The Pera Padala service from Cebuana Lhuillier is a fast and secure way to send and receive money inside and outside of the Philippines. The recipient may claim the funds as soon as you complete the remittance process. Sounds easy, doesn’t it?
To send money, follow the steps indicated below:
- Fill out the Pera Padala form at the nearest Cebuana Lhuillier branch in your area.
- Present the completed Pera Padala form to the branch personnel, together with your valid ID. You may also bring your 24k card if you have one.
- Kindly provide the total amount to be paid.
- Secure the Pera Padala form and count the change, if you have received any.
- Give the 10-digit control number to the recipient or beneficiary of the money remittance.
Please keep in mind that while claiming the remittance, the recipient or beneficiary must submit the control number as well as a valid ID. The same is true for Cebuana Lhuillier’s other remittance method.
However, to claim your money, you must follow the procedures below:
- Fill out the Pera Padala form at any Cebuana Lhuillier branch.
- Present the completed form and your valid ID to the branch personnel. You must also provide your 24k card if you have one.
- The branch personnel will provide you the remittance money. To be sure, count the money you’ve received before leaving the branch.
The Pera Padala Service also helps OFWs who wish to send money to their loved ones through international remittance. Here’s how to transfer money to the Philippines from abroad:
- Fill out the send form at any of Cebuana Lhuillier’s foreign partners.
- Submit the completed form and a valid ID.
- Provide the total amount to be paid to branch personnel.
- Take a copy of the official receipt or other proof of remittance.
- Give the reference number to the receiver or beneficiary.
If you’re from the Philippines and want to transfer money to someone in another country using Moneygram or Western Union, here’s how:
- Fill out the Pera Padala form at your nearest Cebuana Lhuillier branch.
- Provide the completed Pera Padala form, valid ID, and 24k card to the branch personnel.
- Kindly provide the total amount to be paid.
- Secure the Pera Padala form and count the change you have received, if there’s any.
- Give the 10-digit control number to the receiver or beneficiary.
Digital Money Remittance in the Philippines
Due to the global spread of the COVID-19 virus, most people are now hesitant in venturing outdoors to make their own financial transactions.
As a solution, Cebuana Lhuillier has created an online application that will allow any Filipino to simply access financial services from the comfort of their own homes.
Online Money Remittance via eCebuanaApp
Cebuana Lhuillier had introduced the eCebuana app, an application that will assist consumers in obtaining financial services from the company. These include money remittance, micro savings, bill payment, and e-load services, among others.
Users may utilize this program to transfer money from one Micro Savings account to another, or to have the money picked up at any Cebuana Lhuillier bank for 20% less in fees. They may also use Instapay to transfer money to other banks.
All you have to do is download the eCebuana app from Google Play or the App Store. Click “Register Now,” and provide your personal information as well as a valid ID. Once completed, respond to the Customer Risk Profiling and wait for the email that will authenticate your account.
Aside from boosting the country’s economy, money remittances have a long history with Filipinos, particularly OFWs. This is why there is a need for a dependable and fast money remittance center to assist you in sending money to your loved ones.
Fortunately, Cebuana Lhuillier is here to assist you. Visit your local branch or download the eCebuana app from Google Play or the App Store!