Should You Send Money to the Philippines Through Your Bank?
Using your main street bank account to send money to your friends and family in the Philippines might seem convenient, but do money transfer companies provide a better service? Our helpful guide compares the two, breaking down the financial jargon and investigating the costs involved. Read on to discover the best option for your US to Philippines remittance.
Introduction
The Philippines is one of the most popular remittance destinations from the United States, meaning there are a myriad of options out there. Our useful guide looks at the difference between using banks and money transfer companies to send money and aims to give our readers a better understanding of the factors and costs of sending cash to the Pearl of the Orient.
The Cost Sending Money to the Philippines Through Banks vs. Money Transfer Providers
Transferring money from the USA to the Philippines is not without costs, and before you make your transfer there are two key costs to look at: the exchange rate margin and any associated transfer fees.
When banks transfer currency between each other they use something called the interbank rate, which fluctuates regularly down to changes in the market. The interbank rate, also known as the mid-market rate, is reserved for big banking corporations, but the difference in percentage between this rate and the rate consumer banks or money transfer companies offer the currency to consumers is known as the exchange rate margin. With popular currency pairings such as the US Dollar to the Filipino Peso it is typical for the exchange rate margin to be less than 5% above the interbank rate. At the time of writing (Sep 23, 2022) WorldRemit has an exchange rate margin of 3.44%.
Banks are often less transparent about their exchange rate margins, making their currency convertors only available to account holders. However, at the time of writing Bank of America had an exchange rate margin of 7.10% above the interbank rate and Wells Fargo a whopping 10.08%.
This means that if you were to send USD 1,000 to the Philippines, with WorldRemit your family member would receive PHP 56,677 and with Wells Fargo they would receive just PHP 53,259.48.
Banks and money transfer companies also charge a transaction fee for initiating the remittance. The table below highlights the charges that each provider charges for sending money from the United States to the Philippines via bank transfer.
| Provider | Cost | Time |
| Chase Bank | There is a USD 5 fee or no fee if sending over USD 5,000. | 1-2 days |
| Bank of America | According to their website there are no fees for international wire transfers (although documents elsewhere state USD 35) | 1-2 days |
| Wells Fargo | Fees are disclosed at the time of the transaction but range from USD 35-40. | 1-2 days |
| U.S Bank Corp | USD 50 for personal account holders. USD 70 for business account holders. | 1-3 days |
| CitiGroup | These range from USD 0-35 depending on your account type. View our Citigroup guide for a breakdown. | 1-2 days |
| WorldRemit | Range from USD 1.99-3.99 depending on the pick-up method and paying-in bank. | Instant |
As you can see it is common for banks to charge up to USD 50 in fees for processing a remittance, while the same transaction with WorldRemit has a maximum fee of USD 3.9
Sending Money to the Philippines through Banks Pros and Cons
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Sending Money to the Philippines through MoneyTransfer Providers Pros and Cons
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Sometimes time is of the essence when sending remittances and unfortunately banks, unlike money transfer companies, aren’t open 24 hours a day. Wire transfers can only be processed during bank opening hours and usually take up to two business days to arrive.
It’s important to note that banks have daily cut-off periods and any remittances received after this time will be processed the next day. Banks also close for the weekend, and therefore a remittance sent after the cut-off period on Friday afternoon will be processed the following Monday morning, meaning your transfer will arrive with your recipient on Wednesday. Any bank holidays taking place in the Philippines, or the United States can also affect the arrival time of your remittance.
The following table displays the cut-off time for the five main banks in America and WorldRemit.
| Provider | Cut Off Time | Delivery Time |
| Chase Bank | 16.00 (EST) | 1-2 business days |
| Bank of America | 17.00 (EST) | 1-2 business days |
| Wells Fargo | 17.00 (EST) | 1-2 business days |
| US Bank Corp | 16.00 (EST) | 1-3 business days |
| CitiGroup | 17.15 (EST) | 1-2 business days |
| WorldRemit | 24 Hours | Immediate |
Should You Send Through Your Bank or an Alternative Provider?
With excessive exchange rate margins, high transfer fees, and slower arrival times it's difficult to see any positive benefits of using a bank rather than a money transfer company to carry out your remittance to the Philippines. If you’re looking to send payment quickly and ensure that your recipient receives as much of it as possible then it's clear that money transfer companies offer the current best rate.
