I Love Pinoys

By JEREMAIAH M. OPINIANO
Specially written for abs-cbnNEWS.com

KUALA LUMPUR, MALAYSIA - A city that glows because of its skyscrapers, bright lights at night time, and tourist-friendly infrastructure would give tourists and foreign workers an impression that everything’s slick and formal here.

Wait ‘till one gets to a shopping mall located in Jalan Silang and Jalan Cheng Lock junctions. the headquarters of Maybank dwarfs over the said junctions, but the small mall’s 30-to-60 square meter shops glitter with conduits of many developing Asian countries’ financial lifelines—the Philippines included.

Four-storey Kota Raya mall is nearly three decades old, says Filipina Pilar de la Cruz-Sangaran so is the practice by Asian migrant workers to send money home there. If Singapore has Lucky Plaza, the beehive of Filipino and Asian migrant workers, Malaysia’s peninsular side has Kota Raya.

There’s Western Union on the ground floor, and that floor’s escalator has been plastered by the yellow advertisement of the world’s largest money transfer organization.

On the second floor is IME Impex Sdn Bhd (“Sdn Bhd” is a Malaysian acronym for its registered businesses), and Globe Telecom’s text remittance channel greets would-be Filipino remitters. IME started out with Nepal, and it now services Indonesians (Malaysia’s largest foreigners group) and Filipinos.

Not just a shopping Mecca
Filipino remitters, especially low-skilled workers, find Western Union an affordable conduit: if credit to account the charge is P150; if pick-up at remittance-recipients’ bank accounts in the Philippines, it is P175.

Filipinos are also Western Union’s top ethnic clientele in Malaysia with 5,000 average monthly transactions, compared to Indonesians’ 2,600 or Vietnameses’ 4,000.

The long-standing door-to-door remittance channel also prevails, and Western Union has rates for such: if within Metro Manila, the charge is P200 while the charge will become P250 for provincial door-to-door services.

The charge will be affordable to Filipino workers like executives, engineers, and architects which also work for Malaysian companies here. But for domestic workers, most of whom are women, the remittance charge is big money: a 2006 Asian Development Bank (ADB) study bared that Filipinos in Malaysia remit an average of US$132 (sent at least 10 times a year), and Indonesians US$151 (sent at least six times a year).

The same study affirmed why Kota Raya is a beehive of customers scampering for cheap remittance fees: the informal remittance system “is well entrenched” because these remittance channels “are convenient, cheaper and, most importantly, fast.”

“There is door-to-door delivery, and the recipient (in the home country) faces no hassle at all,” the ADB study titled “Workers’ Remittance Flows in Southeast Asia” added.

Even freight forwarding companies run by Filipinos assist Filipino workers sending money home, the ADB study found—even as their charges are higher than those of Western Union.

But the disadvantaged remitters are the undocumented migrants—those whom the Malaysian government wants to send home such as today’s spate of deportations from Sabah. Since these migrants have expired visas, money transfer organizations will not allow them to remit money.

Bank Negara’s action
Malaysia’s central bank, Bank Negara, is aware of informal channels for remittances while the country, in general, has little formal competition in the remittance business.  “Since it is difficult to identify and there is no audit trail, not much could be done,” the ADB study wrote.

The biggest challenge, Negara officials interviewed by ADB said, is how to encourage migrants to remit through Malaysia’s 26 commercial banks and some foreign banks. Or better yet, how can their remittance charges be competitive.

The volume of Filipino remittances from Malaysia alone is eye-popping. ADB’s estimates, assuming that its data of an estimated one million Filipinos in Malaysia is correct, 70 percent estimated volume of remittances is US$948.143 million, while the 90 percent estimate is US$1.219 billion.

Philippine government data as of 2006 showed that there are some 239,373 Filipinos: some 125,000 of them are undocumented (mostly based in Sabah), 88,372 are temporary migrant workers, and 26,001 are permanent residents.

Bangko Sentral’s per-country remittance data covering January-to-October 2007, and all of which were sent through banks and money transfer organizations with bank partners, showed that Filipinos in Malaysia sent home some US$48.627 million, higher than the US$32.751 million of the same 10-month period in 2006.

Various studies on remittances globally and within countries all say that informal remittances are at least one-half of the remittances recorded by countries’ balance of payments measurements.

The Philippines received US$14.449 billion in 2007.

And these remittances, say for the Malaysia-based Filipinos surveyed in ADB’s 2006 study, are used for food expenses, schooling, and some savings.

So is for shopping in Kota Raya. Filipinos can take their pick of Filipino products in Kota Raya’s various outlets—from shoes, junk food, condiments like suka, or even Dr. Vicky Belo’s latest beauty products.

Go to that mall Sundays, where sending money home, cracking Filipino jokes, buying latest Filipino movies on DVD, and migrant workers’ Filipino identities all swarm that three decade-old mall’s cash registers.

(Jeremaiah M. Opiniano, 32, teaches at the Journalism program of the University of Santo Tomas and runs two nonprofit organizations in the overseas Filipinos sector.)