Philippines: OFWs remitting more through formal channels, less on 'padala'

y JEREMAIAH M. OPINIANO
OFW Journalism Consortium

The amount of remittances being sent by overseas Filipinos through “padala”, or the money brought home by vacationing overseas Filipinos, has reached a seven-year low, based on data from the Philippines’s central bank.

Migration and remittances experts call these cash — amounting to $506 million in 2007— as “informal remittances.” This includes money that did not pass through “formal” banking channels.

Usually, informal remittances are sent through door-to-door companies, in particular those without partner banks, and courier services. Increasingly, some Filipino-run money transfer organizations with door-to-door services have partnered with commercial banks.

That 2007 figure was the lowest since the BSP, following the fifth edition of the Balance of Payments manual of the International Monetary Fund (IMF), started computing the amount of informal remittances in 2001 when the total volume was $1.69 billion. [Read more]