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How To Avoid Transfer Fees When Sending Money From The USA To The Philippines?

Updated on Dec 02, 2021
No transfer Fees when transferring fees to philippines

The Overseas Filipino Workers (OFWs), also known as Bagong Bayani, loosely translates to modern-day heroes for their contribution to the Philippine economy through their remittances. Many households rely on the money sent by friends and families from abroad.

According to the World Bank, a whopping USD 35 billion was sent by Filipinos living abroad to the Philippines in 2020. Filipinos in the United States alone sent USD 11.9 billion the same year. The USA is the leading remittance sending country to the Philippines, followed by Saudi Arabia, Singapore, U.A.E., and the United Kingdom

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The sad reality is that for USD 11.9 billion sent from the USA to the Philippines, another whopping USD 476 million of hard-earned money was spent on exorbitant transfer fees and bad USD to PHP exchange rates to send that money. 

Why Is It So Expensive To Send Money To The Philippines? 

For years, the money transfer industry was riddled with legacy technology, regulations pertaining to anti-money laundering, national security, and generally upheld by powerful industry players.

Fortunately, in recent years, the landscape is changing - with new players disrupting the financial industry. Armed with innovative technological advances, FinTech disruptors have changed how we transfer money for good.

By being more transparent about how much users are being charged on every transfer, users are now empowered to make more informed decisions when it comes to sending money. Even with all the advances, it is still expensive to send money.

In the end, money transfer companies are in business - they have to make money to sustain themselves, whether it is a disruptor or an established company.

In order to understand the cost of sending money from a sender's perspective, let's first understand that there are two primary ways money transfer companies make money: 

  • Through currency exchange rate margins 
  • and/or on transfer fees.

Here's how money transfer companies make money through currency exchange rate differences:

  • Banks and money transfer companies get close to mid-market exchange rates
  • Mid-Market rates are the rates you see on XE.com or Google 
  • Let's say the money transfer companies get 1 USD/50 PHP exchange rate
  • They offer customers an exchange rate lower than the one they get, say 1 USD/49 PHP
  • If you send 100 dollars at 1 USD/49 PHP, your recipient will receive 4900 pesos
  • The money transfer company makes 100 pesos, the difference in the currency exchange rates

Alternatively, money transfer companies can make money through transfer fees by simply charging you a flat fee of, let's say, 100 PHP on your USD 100 money transfer.

Traditional money transfer service providers tend to charge both, which is an exorbitant cost just to move money across a geographical border.

While we are talking about ways to avoid transfer fees while sending money, it is worth mentioning that banks are the most expensive ways to transfer money from the United States to the Philippines. 



Banks have unfavorable exchange rates and have exorbitant transfer fees that are usually hidden. Here are a few alternative names of "hidden fees" used by banks and money transfer companies: 

  • Currency conversion fee
  • SWIFT charges
  • Foreign transaction fees 
  • Remittance service charges 
  • Returned transfer fee
  • ACH bank transfer fee
  • Wire transfer fee

What Is the Average Cost Of Sending Money From The US To The Philippines?

World Bank data shows that the average cost of sending USD 200 to the Philippines from the USA is around 4 percent of the total amount being sent - which means your recipient gets only USD 96 for every USD 100 being sent.

The cost can go higher up to 14 percent if you use traditional methods of sending money, including banks. 

If you have ever sent money internationally, you are well-familiar with the exorbitant transfer fees and hidden fees. We will further discuss whether it is possible to avoid transfer fees and find the cheapest ways to send money to the Philippines.

The best depends on the urgency of the need and the following factors: 

  • Amount of money you are sending
  • Payment option
  • Payout option
  • Speed of transfer

Which Remittance Service Provider Offers the Cheapest Money Transfer Fees? 

In the world of cross-border money transfers, the harsh truth is that it is expensive to be poor. In other words, it costs more to less amount, say USD 200, than to send a large amount, say USD 1000, from the US to the Philippines.

If you are sending a higher amount, say USD 1000 and above, most likely you will get a transfer fee-free offer or a much lower transfer fee from the money transfer company. We recommend sending a larger amount one time instead of sending small amounts multiple times, depending on your urgency.

So Is It Possible To Avoid Transfer Fees While Sending Money To The Philippines From The US?

Yes! Here's how -  many companies offer discounts and coupons, especially if you are a first-time user.  So you can avoid transfer fees while sending money internationally by taking advantage of the coupons and offers that money transfer companies run from time to time.

As discussed above, if a money transfer company is offering you a "free transfer fee," they are most likely giving you a lower exchange rate. Make sure you are not being compromised on getting the best exchange rate possible. Too confusing? 

Compare the offers of all money transfer companies on CompareRemit, and choose the one that offers the highest exchange rate and the lowest fees. Don't forget to check out the coupon section to find deals that waive your transfer fees.

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As with any money transfer service, keep in mind that speed is expensive, and some are slower than others.

As you can see in the example above, Ria charges zero transfer fees to send $1000 from the US to the Philippines compared to Pangea Money Transfer's fee of $3.95. However, it will take three days for your recipient to receive the money sent. So depending on your needs and urgency, the cheapest might not always be the best way to send money.

Exchange rates fluctuate, and so do the rates offered by the companies, so there is no single best way to transfer money to the Philippines. See the real-time transfer fees and exchange rates and how much each transfer will cost before sending money.

It is no surprise that the Philippines is an attractive market for money transfer companies; several companies such as Western Union and Moneygram have strengthened their ground in the recent past. Other top money transfer companies that offer competitive exchange rates and transparent transfer fees are: 

  1. Wise 
  2. Pangea 
  3. Onjuno 
  4. Xoom
  5. Remitly 
  6. Instarem 
  7. Xe 
  8. Ria 

How To Send Money To The Philippines Using An Online Money Transfer Service Provider? 

  1. Compare the top money transfer service on CompareRemit 
  2. Sign in or sign up with the money transfer service you have selected 
  3. Provide your details (the sender) in the United States
  4. Provide the beneficiary's details (the recipient) in the Philippines
  5. Fund your transfer by wire transfer, debit, or credit card
  6. Click "send" 

Can I Send Money Online From The US & Have My Family Pick Up Cash In The Philippines?

Yes, you can send money online and have a beneficiary pick up cash in the Philippines from any of the pickup locations within your money transfer service provider's network. 

This option is the best if your recipient does not have a bank account. The recipient can simply pick up the money transfer instantly, usually using a code from any location within their network, including banks and pawnshops.

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One feature unique to the Philippines is its extensive network of pawnshops when it comes to money transfers. Financial services providers, including money transfer specialists, work with many renowned pawn shops such as M Lhuillier, Cebuana Lhuillier, and Palawan Pawnshop in the country to facilitate money transfers.

It is one of the fastest ways to send money. Popular companies such as Xoom and Remitly also offer a home delivery service for your money transfer to the Philippines. 

In conclusion, banks are still one of the most convenient ways to transfer money to the Philippines. However, this convenience will cost you a lot of money. When in doubt, compare options before sending money, and save on every money transfer. Our rule of thumb is to go with the company that offers upfront and transparent fees.

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