August 8th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) criticized high transfer fees for the use of Instapay and PesoNet, interbank transfer systems, charged by some banks, and called on the Bangko Sentral ng Pilipinas to issue regulations capping the charges.
“We are experiencing elevated inflation. Key policy rates have gone up as a result. Meanwhile, very few if any banks have raised their interest rates on deposits, to at least transfer some of the benefits to savers. And yet, bank transfer fees remain high for several banks,” Salceda said.
“If this is not avarice, I don’t know what is. The BSP should cut it.”
According to the “Summary of Corresponding Fees of BSP Supervised Financial Institutions (BSFIs) from the Disclosures Submitted as of 30 April 2022” published by the BSP, interbank transfers using Pesonet can be as high as P2,100 per transaction, with P550 being the highest charge by a purely-local bank, while fees for the use of InstaPay can be as high as P35.
Salceda also slammed transfer fees within the same bank.
“There are even charges for supposedly ‘unenrolled’ accounts, which to me is just friction. What is the value-add that the bank is charging for?”
“Even money for pickup within the same bank can be charged as high as P100. Again, what is the value-add that merits charging?”
“There isn’t even a guarantee that these transfers are safe. Just a few months ago, we saw mass incidents of bank transfer fraud and interception.”
Salceda cited that a cap on fees could force traditional banks “to innovate and be more retail-consumer-friendly.”
“Look at the virtual banks. Very high depository interest rates, of up to 6% per annum. No traditional bank matches this. Very low to zero fees, even interbank. If virtual banks are capable of offering the most retail-friendly services at very low fees, I don’t see why our biggest banks can’t.”
“I think a cap would force them to innovate, and force them to really offer loans and other financial services instead of milking the small client.”
“I looked at the quarterly reports of the largest private banks in the country, and all of them would still make profits even if all fees and commissions were reduced to absolutely zero. And I’m not saying they do that. I’m just saying keep fees low and reasonable.”
“And, the larger the bank, it seems, the larger fees are as a share of total net income. Not capping fees sends a very bad signal and incentive to large banks: that they can make money off the average wage earner, without performing their crucial role as sources of capital for economic growth. All they need to do is keep raising fees.”
Salceda also renewed calls for the enactment of the Virtual Banking Act (HB 677) and the Financial Technology Development Act (HB 659), both Salceda proposals which the tax panel chair says would accelerate innovation and encourage new players in the banking sector.
“I think our banks are starting to get too relaxed, and are believing they can get away with such things as exorbitant fees. Regulation will be good, but they will eventually find ways to circumvent regulation. Competition is much better, because then they will have to straighten up for survival.”