The Bangko Sentral ng Pilipinas estimates that for this year, non-bank remittances have been significantly reduced from billion of past years to .6 billion.

The emerging OFW cash figure, excluding nonbank remittances, is .7 billion for 2005, higher than target of .3 billion. Including non-bank fund transfers – these are door-to-door cash deliveries or "padalas," total migrant workers’ remittances will actually reach .3 billion this year. This means about .6 billion are non-bank "padalas."

As of September the total remittances – through banks and the padalas system, have reached billion. About billion were channeled via the banking sector.

BSP Deputy Governor Diwa C. Guinigundo said the central bank are making "all-out" efforts to reduce the "gap" in remittances, meaning that the objective is to bring all fund transfers via the banks for better monitoring of dollar inflows. "Banks have become more aggressive in encouraging OFWs to use the banks to send cash home," he said.

There is an estimated six million migrant workers deployed abroad. The deployment of higher-paid overseas workers such as health workers, seafarers, service staff, professional/technical workers, production related workers boost the level of remittances.

The BSP include OFWs’ non-bank remittances in its accounting of balance of payments figures under personal and transfer accounts. The approximate number is that 20 percent of these fund transfers go through the informal channels but the BSP said outside of the BoP estimates, actual non-bank OFW cash is 30 percent of total, while 70 percent are bank transfers. But this has since been reduced by ten percent.

"More funds are being captured by the banks," BSP Governor Amando M. Tetangco Jr. said earlier.

Tetangco believes banks’ remittance system had improved, which enabled them to lower the fees and charges.

Based on a survey conducted in May this year, service charge by "credit to account (bank)" arrangement is proven cheaper compared to door-to-door, which has the highest service charge in the fund transfer business.

Tetangco was citing the survey presented by the Association of Bank Remitting Officers Inc or ABROI, which said that one of the factors that reduces the cost of remittance is market competition.

In the last five years, the survey said service charges have narrowed from 4.35 percent in 2000 to 1.50 percent this year.

The study enumerates the different remittance types. One which the BSP recommends is the credit to account type where an OFW and his beneficiary has a bank account with remitter-bank and remittance is credited directly to that account.

Another type is crediting other local bank where an OFW/beneficiary has a bank account with another local bank different from the remitter bank and remittance is transferred or credited to that account by the remitter bank.

Fund transfers are also transacted through doortodoor where an OFW sends remittance to a local bank, which, in turn, delivers the money to the beneficiary at his address. The last of four popular modes of remitting cash is the socalled advice and pay, where an OFW sends money to the local remitter bank and the beneficiary is then advised of the remittance and collects it from the bank.