Again and again and again I get these messages, or read them on someone else’s site …
Hi ….where do I go to get answers to my husband’s queries on banking here in our city.
He’s a retired xxxx and depends solely on his pension from bank of America for a living.
Lately we cannot make one time cash advance from his bank of America debit card at Banco de Oro. We need to get one time cash advance…
Well let me take this opportunity to pass on a tip or two about Living in the Philippines. You can find plenty of cries for help like the one I quoted above, any day of the week. Here are a few rules and suggestions that can help you avoid being one of the ones in dire straights asking for help.
As a general observation, Americans in particular need to get their banking terms straight … because when it is your money, you need to use the proper terms. A bank ATM card gives you cash by withdrawing it directly from your bank account. This is Not a Cash Advance. A Cash Advance is the use of a credit card to obtain cash where the money goes into your credit card account the same as a purchase. Fees are imposed and you have to pay back the debt, and interest if applicable. Some bank ATM/debit cards are ‘dual purpose’, they can function as either a debit (direct withdrawal) or a credit (Cash Advance) card. Don’t go into a bank, or use a teller machine, and use the term :Cash Advance: unless you mean to incur the fees and the debt. Most banks will happily process the request as a “Cash Advance” instead of a “Withdrawal”, if you say so, because typically they make a lot more money on the deal … so, precision in speaking is required here if you ant to save yourself money.
First a Rule: (No it isn’t really a rule documented anywhere, but it’s “Dave’s Rule” and it has served me well so far). Do not attempt to live here on one ATM card. It is like playing Russian Roulette without even knowing how many cartridges are in the cylinder. Why?
ATM cards can get lost or stolen. Shouldn’t have to expand much on this, but if you have only one card and it gets stolen, have you any idea how long it will take your bank in the US to send you a replacement? Will they even send a replacement to the Philippines? Have at least another, independent card (that you don’t carry with you)as a backup.
ATM’s here in the Philippines may ‘eat” your card, capturing the card and refusing to return it. This is a common anti-fraud measure. If you committed no wrong doing, can you get your card back? Normally, yes, through the head office of the bank who runs the ATM. How long? Figure weeks, not days.
For some reason unknown to you, your bank may terminate or suspend your account. especially in today’s “War On Terror” hyperbole, foreign money transactions are always monitored by various agencies of the US government and by commercial security agencies, perhaps under contract to your bank and/or the card issuer. How could this happen if you do nothing wrong?
No way I can say, but if it happens, do not expect to get the matter resolved via a simple phone call. My advice. Have more than one bank or credit union, either in the US or here and in the US so that one “backs up” the other.
Your bank may be totally out of line in taking such an action, and maybe you can sue tem, and write your Congressman, etc., but the bottom line is, if this happens to you, you ain’t getting cash
ATM’s here in the Philippines are sometimes notorious for “Failure to Dispense”. You card is accepted, the transaction is processed and charged to your US account but no cash comes out. If you asked for cash up to the limit of the card, guess what, you can’t even try again until tomorrow.
Will you get your money back? Most likely yes. But here’s the way it works.
The bank here who owns the ATM which failed to dispense is acting solely as a service provider to your US bank. They are not responsible to give you a refund, and they certainly won’t. They are required, and normally will, report the “no dispense” to your US bank, and the end of the next banking day here in the Philippines.
Your US bank them, is responsible to credit your account for the money erroneously charged. How long will this take? Last time it happened to me, it was back in my account in three days, with only ne phone call to the States. Got time to wait for that before you go to the grocery store?
What do I recommend? belt and suspenders, or even multiple belts.
Carry a US bank debit card. Also carry a US “name brand” credit card, like Visa or MasterCard. If your US debit card fails, you can try the Credit Card, either in a machine or an over the counter cash advance from any major bank.
There are fees that come with a cash advance, but hey, you can still eat while you straighten out the mess.
I go several steps farther. I have a bank account here in the Philippines. I carry an ATM card for that account. No fees and much easier to straighten out any screw ups that might occur.
I also carry a Philippine-issued master card, and I could buy groceries, go to the drug store or even get a cash advance on that card if I was in those “dire straights” we mentioned earlier.
But there is another pair of suspenders which I highly recommend. It’s free, and I wonder why more long-term visitors don’t take advantage of it.
Not only do I r3ecommend you have a bank account here, I highly recommend you introduce yourself to, and take time to notice and act courteously to the branch manager, his or her deputy, the chief security guard, etc. Do I mean be an asskisser? Those who know me will quickly realize I don’t mean that.
But these folks are fellow humans, and they control, to a great extent at times, just how easy (or hard) it is to live here. My branch manager is Mr. Favro. It costs me nothing to pass by his desk on the way out and say hello. Matter of fact, he often has something interesting to say. And recently, when I came back from Florida, he and I had a very interesting conversation for about half an hour regarding the real estate credit crunch in the US, how things were similar and also different here, and so on. I know I certainly learned some things of value. I hardly consider enjoyable conversations like that currying favor, but hey, as we say here in the Philippines, ‘Sup to you’.
All can say is, works for me … instead of having the adversarial relationship so many foreigners seem to have with their banks here, why not find yourself one managed by humans, and, in turn, treat them like humans in return. For me, it has paid dividends in convenience and peace of mind. Thanks to all the great folks at the SM Marilao branch of BDO, who help me out most every day.
Philly,
Are there any US banks with branches in Manila that might offer services for expats ?
Hi Laurence,
Thanks for dropping by so regularly and for your comment.
US Banks in the Philippines can be a surprisingly volatile subject … a lot of strong opinions out there .. but this is what _I_ believe to be true.
No. Any bank with a US name in the Philippines is a separate corporation from it eponymous US counterpart. The US, especially since the so-called Patriot Act refuse to allow direct connection between foreign accounts and US accounts.
One gentleman took me to task not long ago about this, and told me, “Before I put my money in a blankety-blank-blank Filipino bank, I’m going to open an account in the Philippines with the same good old American company I use now, HSBC.
I really and truly did not know how to answer LoL.
By the way the law works the same in reverse, Philippine National Bank in New York is one of the oldest banks in the US under the same name …I think the oldest, actually … but it does not offer direct access between PNB New York and PNB Manila accounts. Same common name, two distinct banking entities.
Also, FWIW, a bank in Manila would be very inconvenient to me … it could take hours to get to and from. I like my local branch here, open 7 days a week (even during most Philippine holidays), 9 hours a day … becuase one thing I neglected to not in my article is, my last pair of suspenders is, my accounts are good old passbook savings accounts .. I can walk up to the counter and slap the passbook and a withdrawal form on the counter and walk out with cash, even if all the ATM communication lines are down. And being known by the manager helps, I was in a pickle one day when no ATM’s were working, went into the bank (my passbook was at home) and asked for a withdrawal. First answer was “No”, but when I asked them to “make paki usap” … talk nice nice … to Mr. Favro, he gave the girl the OK to just give me P25,000 over the counter, no passbook needed. Try that at a teller machine
, or some faceless bank in Makati.
Hi Philly, I hope the ‘Big wind’ did not do to much damage around your neck of the woods…
.anyway, my question to you is about you having 2 savings accounts there in the RP….
Do you also have a USA Checking account to deposit your funds with a USA check into your RP savings A/C? IF you do, does your bank charge you for that transaction? Do you have a USD savings a/c and the other is in Pesos? Do you pull out USD if you do have a USD savings a/c and us a money changer or do you pay the bank fee on the exchange rate transfering USD to pesos? If you do, how much does the back take % wise?
Hello Denny,
Yes. I have a US dollar savings account and a Philippine peso savings account here in the Philippines. I also have a standard US checking account with a federal credit union in the US (I don’t do US commercial banks, too crooked for me). My monthly annuity payments and most of my online business profits auto deposit into my US credit union account. I manage some savings and investment accounts in the US via my US online banking service (I can also send a check to anyone in the US via that service, in case I happen to owe anyone or any company money back in the USA). Every month I write a regular personal check drawn on my US credt union checking account and deposit it, over the counter, in my Philippine dollar account.
There is no charge from either bank for this, except, of course the few pennies each check costs, I brought 600 checks with me .. at one check per month, they ought to last until about the year 2056 .. . when I’ll be 111. If I still want checks then, I can easily order more through my credit union’s online system. Some Philippine banks charge for depositing checks, mine (BDO, recommened) does not.
If I think I know of a good deal on peso conversion, I withdraw US dollars from my Philippine dollar account and carry them to whatever money changer I am going to use. I very seldom do this. Carrying cash around and using hole-in-the-wall money changers is dangerous, in my opinion, but many do make a hobby out of this.
Normally, I just ask for a withdrawal from the dollar account and ask the bank to convert on the spot. There are no fees for this ..the rate is always very close to any published rate, and I then deposit most of his money back into my Philippine pesos account. (this action is slated to go online soon now, I hope it does). I pay most of my bills with my Philippine BDO online banking system, and for the times I ned, I draw money from an ATM with my free BDO debit card.
When you ask, “how much does the bank take % wise”?, you have to tell me what you are using as a benchmark. The published exchange rate you see every day from the BSP? That’s the official figure the government of the Philippines will use to settle debts with that day, it really has nothing to do with the commercial exchange rate which floats throughout the day … any bank or money changer can charge any rate they feel like … they seldom vary by more than a few fractions of a percent, but many people have the idea there is some ‘fixed rate”, and that just ain’t the case. Selling dollars (which is what dollar to peso exchange really is), is just like selling a used car … the best price you get is the best price you get.
Dave: There actually is also a Philippine law prohibiting it too, I believe. All branches here need to be 100% Filipino owned… they are more like franchises, borrowing the name. I just had to open an account at KEB in Seoul for my pay. KEB Manila (Also a pain to travel to Makati for me…) can offer me “partial” service, but not “full” service, though I met with the branch manager and they were very helpful in resolving a wire transfer problem. One big problem with banking here is that, though it is easy to send money TO the Philippines, sending money to the States or elsewhere can be a real PITA, requiring BSP approval on even small transactions. Paying US bills from a Philippine account is really not very easy.
Hi John,
Yes, sending money OUT of the Philippines can be aproblem .. the Central Bank requires that you get permission for even relatievly small amounts … there is aloophole for this, though, as I discussed with my bank manager early this year when I was toying with the idea of buyig a home in the US.
In layman’s terms, i fyou want to take out _dollars_ and the _dollars_ came in from foreign sources, (as all mine did), can do. But don’t gte caught with too many Pe-).
As an aside, I wonder how that heavily advertised Western Union Send Money Abroad service works from the Philippines, and how much money you can move with it?
As a further aside, wonder who, five years ago, could have predicted popular TV shows being sponsored in the Philippines by companies who send money OUT of the Philippines. World-wide global recession? Not for everyone …
Thank you so much Philly for your very detailed repy to my questions. I do appreciate it!!
Bangko Sentral ng Pilipinas (BSP) Is I think, what you are referring to when you said;
My question = “how much does the bank take % wise”?,
your repy;
‘you have to tell me what you are using as a benchmark. The published exchange rate you see every day from the BSP?”‘
Again, I did not know about this bank….I looked up this central bank and did not know that it was the benchmark in the RP for the exchange rate (USD) with banks there…..
I have been using other exchange rate sites that show rates of exchange with the peso. OANDA. com is one of them I use to get the day rate of exchange….they give all sorts of different rates….Bank rates, credit card rates, etc…
I see now that there is a benchmark used in the philippines with the BSP as the guide to use…..Do all banks in the philippines use BSP (rule of thumb) for the exchange at the counter of a bank??
Denny
Hi Denny,
The Central Bank (BSP) rate is actually set at the end of the business day in the Philippines. It is a very legal and official rate in the sense that, if you have business with the government of the Philippines … as in you bought bonds from them you are cashing in, or you sold them something under contract, then this is the rate your dollars (or any other currency they publish a rate for, then that is the rate they are going to pay you off at. There’s a lot of good data here:
But banks and other currency trading is a free market system in the Philippines …”The Bangko Sentral ng Pilipinas (BSP) maintains a floating exchange rate system. Exchange rates are determined on the basis of supply and demand in the foreign exchange market. … there really is no ‘set’ rate, just as there is no government agency (yet?) in the US who tells you what price you can sell your house for. In some counties there is, indeed, and “official” rate (China is a great example with all the recent furor over the US wanting them to let the Yuan “float” and their resistance to do so), but the Philippines is not that type of system.
I usually use this as a guideline if I am thinking of moving any money:
http://finance.yahoo.com/q/bc?s=USDPHP=X+Basic+Chart
Over the years I find the rate BDO gives me averages about one or two centavos less than the Yahoo rate, which (I believe) comes from the New York currency exchange. But there are a couple times I have felt I beat the system where I actually got a centavo or two _more_ than the rate on line, becuase the market moves every minute while the bank, normally, sets a rate for the day in the morning (an offer to buy and sell) , and that is their offer, take it or leave it.