Sending money to the homeland

By Deborah Adamson
Advertiser Staff Writer

A small, nearly obscure white-and-blue sign peeks out from a second-story window in Kalihi, humbly heralding the recent opening of a new business at suite 201: The Chartered Forex Inc.

Kazutoshi Masuda, of Forex Interweb Japan, left, and Adam Cua-Oh, of Chartered Forex Inc., are in the business of helping "economic migrants" send money overseas. The global Filipino remittance market alone is worth $6.4 billion. Jeff Widener • The Honolulu Advertiser

That's just the amount sent through official channels. The true count could be much higher, industry insiders said. In May, the U.S. Treasury and the Philippine Ministry of Finance agreed to work together to make the remittance market more competitive and efficient.

Foreign-exchange remittance is a business activity nonimmigrants rarely notice or understand: Every year, a great number of Hawai'i's 170,000 Filipinos — nearly 276,000 if you include mixed races — send money on a regular basis to their homeland. This money supplements their relatives' incomes in the Philippines, many of whom make meager livings by U.S. standards.

"It's about culture and the spirit of filial piety, the bond of family, and knowing the importance of helping one another," said Adam Cua-Oh, general manager of Chartered Forex. "That's what the money remittance industry is all about."

Just ask Waipahu resident Maybelle Sarmiento.

She sends $200 to $300 a month to two sisters and a brother in the Ilocos Norte province of the Philippines. If there's a special occasion, like a birthday, she'll be extra generous and send more than $500.

One of her sisters is a teacher, who makes the equivalent of $300 a month. The other is a former nurse who quit her job to take care of her baby. Sarmiento's brother is in the public transportation business; he owns a jeepney — a gaily decorated, elongated jeep with roots in World War II — and two tricycles.

They make enough money for daily needs but there's not much left over for other expenses, such as engine and home repairs, Sarmiento said. So she does what a loyal sister is expected to do: help with costs.

"It's very important," she said. "It adds to their spending money."

People like Sarmiento are "economic migrants. They go abroad for jobs and send money back to support their families," said Elizabeth Grieco, a data manager at the Migration Policy Institute, a Washington, D.C.-based think tank that studies international migration.

The Philippines is the third largest recipient of remittances in 2001 among developing countries, according to the think tank. Indeed, remittances amount to 9 percent of its economy, as measured by the gross domestic product, she said.

But there's a social toll: Workers have to leave their families to look for jobs in North America or other parts of the world, Grieco said. They may live in dormitories or urban centers where it's not convenient for their families to settle. They may go back home only once to three times a year.

"The overseas Filipino is a modern-day hero," said Jaime Carino, founder of Virginia-based Forex Family of Companies, which is affiliated with Chartered Forex.

The remittance industry was created to serve the needs of overseas Filipino workers to more easily and cheaply send money home, he said.

Traditional banks charge at least triple the $12 to $15 flat fee imposed by remittance agencies. Moreover, relatives in the Philippines also need an account for wire transfers.

That's inconvenient for many folks in the Philippines, who might have to commute several hours to reach the nearest bank, said Cua-Oh. It also assumes they have a bank account in the first place, which many don't, he added.

Sending money by mail can be a hazardous affair, since the money can get lost or stolen, he said.

Unlike Western Union, Filipino remittance companies also provide hand-delivery service. Couriers will go pretty much anywhere — whether it's a hut deep in the jungle or tucked high in the mountains, he said. They'll travel by car, bus, motorcycle, canoe, jeepney or on foot.

Chartered Forex's corporate slogan is "dahil kailangang makarating" — which means "because it must get there."

At Forex, customers give the Hawai'i office any amount they wish to remit to relatives. Then, one of the company's Philippine branches will release the money to the recipient within several hours to a few days, depending on the location.

Forex is new to the Honolulu remittance market, which is dominated by the local remittance arm of the Philippine National Bank.

Luis "Jun" David Jr., general manager of Philippine National Bank's Honolulu agency, said people send $200 to $300 a month on average to the Philippines.

Hawai'i, which hosts the second largest population of Filipinos in the United States after California, is a big market for the remittance business, he said.

PNB is one of three major Philippine-based banks to set up a remittance business in the state, he said. The others are MB Remittance, a unit of MetroBank, and RCBC.

Other competitors have popped up over the years, from small shops to Western Union, David said.

But Cua-Oh, who's entering a rather crowded market, believes the market is big enough for them all.

"There is room for everybody to survive," he said.

Reach Deborah Adamson at 525-8088 or dadamson@honoluluadvertiser.com.

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The big business of foreign-exchange remittance