[Exclusive] The bank shutdowns that pulled down Pinoy remittances from Greece

 

MANILA (The Filipino Connection)—Remittances from Filipinos abroad, on a global aggregate, continue to increase even with economic turmoil affecting not just host countries but also superpowers like China that have multi-layered economic links to many countries.

But what about Greece? Since the country tinkered with its inability to pay sovereign debts that led to an almost-cashless banking system, Filipinos from that Mediterranean country literally cannot send more money home.

Filipinos in Greece (like these Filipinos who congregated in Athens) experienced difficulties in sending money home from late June to August 29. This was after the nearly-bankrupt Greece instituted capital controls, to include disallowing overseas remittance transactions, so that the country's banking system remains liquid. Greece got a third bailout package from creditors led by the European Union to avoid bankruptcy (photo from the Facebook page of Kasapi-Hellas, a Filipino group based in Athens)

Filipinos in Greece (like these Filipinos who congregated in Athens) experienced difficulties in sending money home from late June to August 29. This was after the nearly-bankrupt Greece instituted capital controls, to include disallowing overseas remittance transactions, so that the country’s banking system remains liquid. Greece got a third bailout package from creditors led by the European Union to avoid bankruptcy (photo from the Facebook page of Kasapi-Hellas, a Filipino group based in Athens)

This resulted in a visible drop of remittance flows from Greece during the month —July— when Greece was trying to elude bankruptcy and stay in the eurozone. Filipinos were also reportedly doing various ways to send money home when overseas remitting was disallowed by the Bank of Greece.

Latest data from the Bangko Sentral ng Pilipinas covering July showed Filipinos in Greece sent home only US$11.975 million compared to US$26.447 million in June.

Land-based Filipino migrants in Greece sent only US$0.104 million while seafarers sending money through Greek remittance channels sent home only US$11.971 million.

Prior to the July events in Greece when a referendum happened that allowed the Greeks to negotiate for a new bailout plan with the European Union, remittances from Greece were some US$24.39 million less if data from the first seven months of this year (US$170.06 million) are to be compared from the same period last year (US$194.4 million).

That seven-month year-on-year comparison alone is a 12.52 percent drop.

 

Debts

Since the year 2009 when the Greek government first faced its sovereign debt crisis in the latter part of that year,

(Graph by The Filipino Connection)

(Graph by The Filipino Connection)

total remittances by Filipinos from that country were on a roller-coaster ride: from an annual growth rate of 11.2 percent between 2009 and 2010, the volume of remittance flows even went down to minus-5.76 percent in 2011-2012. (From 2008 to 2014, Filipinos in Greece sent home a total of US$1.735 billion.)

Most of the remittances from Greece come from seafarers since Filipino merchant marine fleet work in ships with Remittances from GreeceGreek flags. An estimated 61,716 Filipinos work and live in Greece (with some 55,625 of them temporary migrant workers (mostly seafarers) and an estimated 6,000 are irregular migrants).

Since early July, the BSP said the situation in Greece will not affect the global volume of Filipino remittances since the country is not a major source of Filipino-remitted foreign exchange by volume. (This July, BSP’s latest data release for remittances, the global total for that month is US$2.077 billion while the seven-month total is US$14.162 billion.)

In late June, the Greek government was scrambling to get creditors on the table and request for additional debt relief. But on June 28, the Greek parliament approved a referendum to be held the week after to get the people’s pulse should they reject or approve a new set of bailout terms by creditors led by the European Union. Fear then was this will lead to the country’s exit into the Eurozone (the “Grexit”) and European markets will tumble down.

Also on the last week of June, Greeks were withdrawing money from their bank accounts for fear that the Bank of Greece will close these banks until the country is liquid.

But majority of voters in the referendum the week after rejected the bailout terms, leading world markets to tumble. This allowed the government, led by then Prime Minister Alexis Tsipras, to negotiate newer terms with creditors led by the EU and the International Monetary Fund (IMF).

By July 13, Eurozone leaders have given Greece a third bailout program to save the country from not just bankruptcy but from exiting the Euro. However people protested the terms of the €85 billion new bailout package, with provisions such as tax hikes, spending cuts and reforms in the pension system which the Greek parliament approved last July 15.

Tsipras, elected last January 15, resigned August 27.

 

Controls

Since late June, capital controls have been instituted that led to images of Greeks queuing at ATM counters. The online community news outfit Pinoy News sa Greece / Tsismosa Online reported that at 3 a.m. on August 18, Finance Minister Euclid Tsakalotos and some members of the Greek parliament have agreed on some loosening up of the country’s capital control measures.

For example, depositors cannot withdraw more than €420 per week (€60 a day). Importers can also now make transactions of up to €5,000 through bank branches. As for remittances to be sent outside of Greece, a migrant is allowed to send up to only €500 a month.

So Western Union, the world’s leading MTO, restarted its operations only on August 30 through Western Union’s partner-agent WorldBridge Payment Institution. After the August 18 announcement from Tsakalotos, offices of the MTO Thireos Exchange, S.A. in Marousi and Omonioa Square in Athens opened August 20.

Filipino- and Greek-run remittance agents did not open right away given Tsakalotos’ August 18 announcement until they opened August 30.

Pinoy News sa Greece reported an isolated incident of a Filipina almost committing suicide since she cannot send money for her son’s tuition and the child was about to be kicked out. (The Police Department of Ampelokipoi area in Athens said the Filipina was out of harm’s way.)

Another isolated incident August 20 saw a 45-year-old Filipina with the surname “Villanueva” jailed by Greek airport authorities after allegedly bringing €50,000 in her carry-own bag, in violation of anti-money laundering laws. But the Filipina claimed she was waiting at the lounge for her brother who’s said to bring the cash to her house in Ampelokipoi.

 

Relief

With the recent re-opening of remittance services, Philippine Ambassador to Athens Nestor Ochoa told Filipino leaders in a Sept. 10 community meeting the instituting of a €500 monthly limit for out-bound money “is still a positive sign.”

“(Thank God) it’s over,” said John Ramos, news director of Pinoy News sa Greece / Tsismosa Online, in reference to the months the Bank of Greece disallowed the sending of overseas remittances.

Ramos also cited reports Greek police investigating some Filipino cargo businesses that did remittance services for Filipinos but do not have a license from the Bank of Greece to operate as a remittance agent.

“They (cargo businesses) keep the money in Euro here and with a call or email their office in Philippines. They gave the money in pesos there (but operate the remittance service) without a permit from Greece,” Ramos told The Filipino Connection in a Facebook private message. There were also reports these remittance agents “charged very high commission.”

The Filipino practice of padala, or the hand-carrying of money to the Philippines by a returning Filipino migrant, also occurred during the period of the capital controls. That was what the lady “Villanueva” reportedly did, bring home €1,000 from some 50 Filipinos, Ramos quoted reports as saying.

 

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About JEREMAIAH M. OPINIANO