Settlement of reduced-rate remittances through the Bangko Sentral ng Pilipinas’ (BSP) Philippine Payments and Settlements System (PhilPaSS) REMIT will start in December.

BSP Payments and Settlements Office (PSO) Director Bella S. Santos said in a report that the system will be ready for implementation on December 1, which would bring down remitters’ back-end processing fee to a minimal charge of P50 per transaction from P150 to P550.

Last month the BSP decided to suspend for six months transaction fees charged to overseas Filipinos using PhilPaSS REMIT or from June to November.

In a letter to the Monetary Board, Santos said the PSO decided to waive the billing of PhilPaSS transactions because the BSP’s Information Technology Sub-sector would need the time to enhance PhilPaSS billing system for the automated billing of each remittance transaction settled.

The PhilPaSS REMIT was created by the BSP with the Association of Bank Remittance Officers Inc. (ABROI) to facilitate the electronic settlement of overseas Filipinos’ remittances through the BSP’s real time gross settlement system. The memorandum between BSP and the involved banks was signed last December 2. The remit system started operation last May 4.

BSP data show that remittance transactions average 66 million per year, of which transmission through "credit-to-other banks" accounts for eight percent or an average of more than 5,000 transactions daily.

By using PhilPaSS, remittances can be received within the same day at lower costs.

The PhilPaSS REMIT functions as a local clearinghouse for the transfer of remittances from a local bank to another bank where the beneficiary maintains an account. Once the project becomes operational, the need for courier services by commercial banks for the mode of fund transfer involving credit-to-other banks will be eliminated, said the BSP.

ABROI members include Banco de Oro Unibank, Metropolitan Bank and Trust Co., Bank of the Philippine Islands, Philippine National Bank, Land Bank of the Philippines, Rizal Commercial Banking Corp. and China Banking Corp.