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Transferring money from one country to another can be expensive because of the high exchange rates and transfer fees. Moreover, if you are looking for ways to send money to the Philippines from the US, you will be glad to know that several tech platforms made this process easy and cost-effective.
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Are you looking to send money to a family member or friend living in the Philippines? In this Pacific Prime article, we will discuss the best ways to send money to the Philippines, along with some tips on how to avoid expensive transfer fees.
Money Transfer Partners
According to the Philippines Statistics Authority, the total remittance sent to the Philippines in 2021 was around USD $83 billion, making it one of the top countries for receiving remittances in the world. However, the transfer fees still remain to be high, and here’s why…
For many years now, the money transfer industry has been slapped with regulations related to anti-money laundering and national security and controlled by other powerful industries.
However, in recent years the industry has been experiencing a shift with new players challenging the old ways and disrupting the industry.
FinTech has completely transformed the way money transfers work. It makes the whole process more transparent and tells you how much you are being charged every step of the way.
But mind you, it’s still a business, and the best FinTech companies are also looking after their own profits, so you will still be charged a slight amount for transferring money from one country to another.
Let’s take a look at the two different ways money transfer companies make money: one is via currency exchange rate margins, and two, transfer fees. Here’s how it works:
“Banks and money transfer companies usually offer exchange rates that are similar to the mid-market rates, which are the rates you see on websites like XE.com or Google. However, these companies often offer customers a lower exchange rate than the one they get themselves. For example, if the money transfer company gets a rate of 1 USD/50 PHP, they might offer their customers a rate of 1 USD/49 PHP. This means that if you send 100 dollars at this rate, your recipient will receive 4900 pesos. The money transfer company profits from the difference between the two rates, which in this case is 100 pesos.”
Otherwise, money transfer companies make money via a transfer fee, and they charge a flat price for every transaction. Note that some traditional money transfer companies charge both, which can be quite expensive to just send money from one country to another.
The “Hidden Fees”
Did you know that traditional banks are the most expensive when it comes to transferring money from the US to the Philippines? That is because banks have some of the most unfavorable exchange rates and fees that are hidden. Here are some “hidden fees” that you need to keep an eye out for:
- Wire transfer fee
- Remittance service charges
- Foreign transaction fees
- SWIFT charges
- Returned transfer fee
- ACH bank transfer fee
- Currency conversion fee
The Average Cost of Sending Money from the US to the Philippines
Sending money from the US, in USD, to the Philippines will incur a small flat fee of USD $7.43 along with 0.57% of the converted amount.
If you’ve ever sent money to another country, you might have encountered expensive fees that were not clearly stated at first, such as “hidden fees” and “transfer fees”. You might have felt like you had no choice but to pay the fee in order to successfully transfer the money.
However, there are some ways to save money while sending money abroad, depending on how urgent the transfer is and several other factors.
- The total amount
- Payment option
- Payout option
- Speed of transfer
Is it Possible to Avoid Transfer Fees While Sending Money Abroad?
While it may be difficult to avoid transfer fees every time you send money abroad completely, you can definitely save on the fees. For instance, many money transfer companies offer discounts and offers from time to time, especially if you are a first-time customer.
In a situation like this, you can take advantage of their offers and save or avoid transfer fees. However, if a company offers a free transfer fee, there might be a catch, like lower exchange rates. So, make sure you are not losing out on the best exchange rate possible.
Best Apps to Send Money to the Philippines
Over the years, the Philippines has become a hub for money transfer companies, with companies like Western Union and Moneygram being the most popular choice. Here are some other efficient platforms that offer competitive exchange rates and transparent transaction or transfer fees:
Frequently Asked Questions
What are the best ways to send money to someone in the Philippines?
Undoubtedly banks are the best way to send money from one country to another if you are planning to send a huge amount. Otherwise, you could use other trusted money transfer platforms like Western Union, MoneyGram, etc.
Is there a limit on how much money you send to the Philippines?
In theory, you should be able to send up to USD $19,000 to the Philippines per day. However, your personal daily limit will depend on the service you choose and your transfer history.
Why are traditional banks the most expensive when it comes to transferring money from the US to the Philippines?
Banks have some of the most unfavorable exchange rates as well as hidden fees. This makes traditional banks the most expensive option in transferring money from the United States to the Philippines.
Conclusion
When it comes to sending money to the Philippines, banks are the most expensive due to exchange rates and hidden fees. If you’re considering using a different money transfer company, make sure to choose one that is open about their fees and charges reasonable rates.
If you’re planning to move to the Philippines as an expat or digital nomad, we have a comprehensive list of places for you to consider, along with the best beaches in the country.
Additionally, it’s important to have international health insurance to protect you in case of an emergency and cover any hospital bills. Contact a Pacific Prime advisor today to explore your options.
He graduated with a Bachelor’s Degree in Communication Arts, Media & Communication major (concentration: Creative Content) from Mahidol University International College (MUIC). During the compulsory major elective period in the summer of 2021 and voluntarily during the summer of 2022, he also interned as a video and photo editor at Mbrella Films.
He has experience working as an English Content Writer at a real estate buying/renting/selling platform in Thonglor. There, he crafted company blog posts on a multitude of topics. Topics include market trends, legal issues and disputes in property businesses, financial guides, expat guides, home insurance, home decoration and maintenance, and weekly real estate news quick-recaps. Occasionally, as part of the blog-writing process, he would also translate existing Thai blogs to English.
In his free time, Guy enjoys doing scriptwriting and storytelling for comic strips, watching movies, and listening to music (particularly film scores).
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