Filipinos Lose PHP 8.37B to Hidden FX Fees

Filipinos unknowingly lost PHP 8.37 billion to hidden foreign exchange (FX) fees in 2023, according to new research commissioned by global financial technology firm Wise.

Despite efforts to lower remittance costs, many Filipinos continue to pay excessive fees when sending and receiving money internationally.

Wise’s study found that while 72% of Filipinos believe they understand international payment costs, only 18% fully recognize the impact of hidden FX markups.

Nearly 57% of respondents mistakenly think they understand remittance fees, while 25% are unaware of the true costs of cross-border payments.

For example, an international transfer of USD 10,000 (about PHP 578,000) advertised as “fee-free” could actually cost PHP 21,187 in hidden FX markups if a 3.6% margin is applied.

Hidden FX fees disproportionately affect Filipinos with cross-border financial needs, including overseas Filipino workers (OFWs), gig economy workers, and families supporting students abroad.

“With over 1.5 million gig economy workers and nearly 2 million OFWs, cross-border payments are a crucial lifeline for many Filipinos,” Wise stated.

Gamaliel Natividad, a self-employed freelancer, shared his experience with FX markups.

“As a freelancer, I rely on international payments to receive money from my clients abroad, and I used to receive payments through traditional providers. But I constantly felt like I was losing out due to hidden fees and poor exchange rates,” Natividad said.

He noted that switching to Wise helped him avoid unexpected charges.

“The mid-market exchange rate and transparent fees mean I get more of the money I’ve earned. It has saved me both time and money,” he added.

Wise’s research aligns with the Bangko Sentral ng Pilipinas’ (BSP) push for fair and transparent pricing in financial transactions.

BSP rules require providers to disclose all fees, show FX markups, and stop using misleading terms such as “free” and “0% commission” when hidden charges apply.

“At Wise, transparency isn’t just a promise – it’s built into how we operate,” said Wise Philippines Country Manager Areson Cuevas.

“The Philippines already has a solid regulatory framework to support transparent remittance pricing. By fully aligning with these rules, the country could unlock PHP 8.37 billion for the economy,” he added.

Wise has expanded its presence in the Philippines by integrating with InstaPay for instant PHP transfers of up to PHP 50,000 and introducing PHP Account Details for receiving local payments.

The company aims to provide more transparent and cost-effective international payment options, ensuring Filipinos get the full value of their hard-earned money.