Eyeing more liquidity, Japan's MUFG Bank offers free bank transfers to customers in Philippines
MANILA, NNA – Major Japanee lender MUFG Bank will offer free remittance services to customer companies when sending money to its Philippine partner Security Bank Corp. from March to provide better service and expand its client base in one of the fastest growing Southeast Asian economies.
This means the money remitted from the local unit of MUFG Bank to Security Bank, its affiliated local lender, and vice versa will be free of charge, according to sources. It is believed to be the first time the mega Japanese bank will remove transfer fees for local partners in Asia.
The bank reportedly told its customers, mostly Japanese companies, that they no longer have to pay fees for both for peso and dollar transfers within the Philippines from March 2.
Transactions through PESONet, an electronic transfer service for companies and institutions, will be free of charge for peso remittance. Dollar transfers through the Philippine Domestic Dollar Transfer Service System will also waive the fee.
Currently, the Manila branch of MUFG charges 250 pesos ($4.93) for transfer in pesos and $15 for U.S. dollars to Security Bank. Transfer fees from MUFG to other banks and vice versa will remain the same.
The local unit of MUFG Bank has been working with Security Bank since 2016 after it bought a 20 percent stake in the company. Since then, the banks have been working together on services like salary transfers and loans for corporate employees. In the corporate sector, they have been promoting businesses by matching local and Japanese firms.
The sources also told NNA that MUFG and Security Bank are confident that the fee waiver would promote more client transactions between the two banks.
About 100 companies have accounts with both the Manila branch of MUFG Bank and Security Bank. This represents 10 percent of the branch customers, which have deposited a total 130 billion yen ($1.17 billion).
With the fee waiver Japanese bank expects an increase in the number of its clients, which would translate into improved fund liquidity, the sources said.
MUFG Bank has been strengthening its footprint in Southeast Asia with mergers and acquisitions of several banks in the region. As Japan’s financial market shrinks, the Tokyo-based bank has focused on oversea growth opportunities such as partnering with local banks in the Philippines.
Other Japanese financial institutions also have collaborative partnerships with major commercial banks in the Philippines. Such as Sumitomo Mitsui Banking Corp. whose partner is the Metropolitan Bank & Trust Co., while Mizuho Bank has a tie up with the Bank of the Philippine Islands of the Ayala conglomerate.
Companies need funds to grow their business quickly in the robust Philippine economy where strong domestic consumption has helped pushed growth to 5.9 percent in 2019. The government has also carried out extensive infrastructure developments which would make the country a more competitive economy and conducive to business growth.
To seize opportunities brought by these developments, Japanese businesses and investors in the Philippines would need more funding in sectors like real estate, infrastructure, retail and food and beverage.