(Some things you just can’t shake off like the rising peso and climbing oil prices. The sooner Filipinos accept that, the better. Photo from AFP)
Sometimes, the most effective solutions to complex problems are the simplest. Like transparency, for instance. One of the simplest ways to reduce corruption is to require government offices to regularly report audited figures on the unit cost of everything they spend public money on. As you all know, information is a currency recognized in all countries and it levels the playing field like nothing else can.
While doing research on fund transfers for an article I was writing, I was so frustrated to find so many banks holding on to remittance charges, breakdown of costs and delivery time as if these were state secrets. Some even said these were proprietary information. Duh.
The Bangko Sentral ng Pilipinas’ move to compel banks to make these data available to anyone is a good move, but I hope no one shoots me for asking, “What took so long?” I mean, no one had to revise a law or hire a rocket scientist for something as simple as a policy on transparency, right?
Better now than later. This policy should heighten the competition even more, especially as new technology is being developed all the time to make remittances very affordable.
An Indian company for example, aurionPro, has claimed it can bring down banks’ cost for each transaction to as low as $1 for real-time delivery, regardless of where the money is coming from. Their technology will even allow an OFW to be serviced from his home or office (the park nearby, if necessary) through a handheld device that a bank staff can bring to him. Mind-boggling isn’t it? Naturally, banks will have to add a few more dollars to that cost, but hey, a dollar for real-time money transfer whether you’re in HongKong or North America ain’t bad.
Discussion on the peso-dollar exchange rate is deepening, as the Senate orders a probe on its appreciation and former labor secretary Patricia Sto. Tomas and now DBP chairman backs a proposal to create a special exchange rate for OFW remittances over a specific period.
As this developed, Energy Secretary Angelo Reyes went over to the Senate today and became an instant sensation when he announced he would look into possible price fixing among oil companies. Here you are worried that gas prices will hit P50 by yearend, only to be told that there could be collusion among oil companies to bring the prices even higher?
I understand why he became an instant hit with transport groups and some senators, but unfortunately, the good secretary cannot hide the fact that oil prices are going up everywhere. No amount of price-fixing busting will bring oil prices down in this country. We all have to deal with the rising oil prices one way or another. Just like the peso-dollar rate. There are some things you just can’t shake off. I know these are tough, but the sooner we all accept that, the better.
November 23rd, 2007 at 1:01 pm
@Don2x, BSP would be crazy to defend the US dollar.
@pinoy investor, that’s a very hot discussion among bankers. how active is active? What does regulation and playing the market really mean. As you are well aware, the government is an expert in all the different shades between black and white.
@paetechie, thank you for the link. will check it out.
@PBF, that has been the common sentiment, but will that kind of reasoning hold in court? I’m not so sure. If anybody is serious about going after the big four, I hope some real proof comes out.
November 23rd, 2007 at 1:50 am
i think bsp has the power to intervene in the forex market if the rate change is too fast. but i’m just wondering if it’s also their job to defend the us dollar against the appreciating peso.
November 22nd, 2007 at 3:14 pm
salve, the role of BSP is to regulate, not to be an active market participant. PSE regulates the stock market but it doesn’t play the stock market like BSP plays the forex market.
Everytime central banks play the forex market they usually lose big. Soros made $1 billion in just a few days when UK’s central bank tried to ‘defend’ the sterling. If a currency is weak or strong, the cause and solution is economic not market manipulation. BSP is a regulator not a speculator.
November 22nd, 2007 at 10:15 am
sorry, here’s the correct link on ATM Charges in the Philippines for BancNet, Megalink, ExpressNet and Cash Advances
November 22nd, 2007 at 10:12 am
There is a probability of collusion among big players of oil companies. you can see the news that the big four are always first to increase prices of oil. flying v, sea oil, etc will just follow next maybe for two reasons: 1) the oil prices really caught them up 2) they think it is not too obvious anymore to take profit by increasing prices.
I cannot believe that none of these oil companies do not have bilateral agreements with oil suppliers abroad. bilateral agreements fixes the supply and price of oil, so that the buyer is protected from oil price volatility. just like meralco and napocor, and we can see that electricity rates are not increasing every week. when news arrives that oil is at all time high, and the next day oil companies increase prices, does this mean they juct bought oil from that day? I don’t think so. There’s got to be bilateral trade, or they bought in advance where prices are much lower. I think these oil companies ought to be transparent on how they are making money out of all of us.
On remittances, i think the bsp ordered banks to post in their windows the remittance charges so that people can shop around which bank offers the lowest charges. With the surge of OFW remittances, I think the most lucrative business right now is remittance centers!