RatesRemit LogoRatesRemit
Back to Blog
Philippines

Complete Guide: Sending Money to the Philippines from Japan

ByRatesRemit Team

Introduction

Remittances from Japan to the Philippines represent a significant financial flow, supporting families, covering expenses, and fueling investments. Finding the most cost-effective and reliable way to send money is crucial to maximize the amount received in Philippine Pesos (PHP). This guide provides a thorough overview of your options.

Importance of Finding the Best Transfer Method

Choosing the wrong transfer method can lead to substantial losses due to fees and unfavorable exchange rates. Factors like exchange rate volatility, hidden charges, and varying processing times all contribute to the final amount received. This guide helps you navigate these challenges.

Popular Money Transfer Methods

  • Bank Transfers (Traditional): Japanese banks (MUFG, Mizuho, SMBC, etc.) allow direct transfers to bank accounts in the Philippines. This is generally secure but often slower and more expensive due to higher fees and less favorable exchange rates.
  • Online Money Transfer Services: Services like Wise (formerly TransferWise), Remitly, WorldRemit, Xoom (a PayPal service), and others often offer much better exchange rates and lower fees compared to traditional banks. They are usually user-friendly, with online platforms and mobile apps.
  • Peer-to-Peer (P2P) Platforms: While theoretically possible, finding reliable and secure P2P options for international transfers between Japan and the Philippines is difficult. Exercise extreme caution.
  • Cash Pickup Services: Western Union, MoneyGram, and other services offer cash pickup at numerous locations in the Philippines. This is convenient for recipients without bank accounts, but fees are generally higher, and exchange rates are less favorable.
  • Mobile Money Transfers: Services specializing in mobile money transfers might be an option, especially for sending to mobile wallets popular in the Philippines.

Factors to Consider When Sending Money

  • Exchange Rates: The conversion rate between Japanese Yen (JPY) and Philippine Pesos (PHP) is crucial. Even small differences can significantly impact the amount received. Compare the offered rate to the mid-market rate.
  • Transfer Fees: Charges can be flat fees, percentages, or a combination. "No fee" offers often hide costs in the exchange rate.
  • Processing Times: How quickly does the money need to arrive? Bank transfers can take several days, while online services and cash pickup are often faster.
  • Security and Reliability: Choose a licensed and reputable provider with robust security and good customer feedback. Verify regulation by the Japanese Financial Services Agency (FSA).
  • Limits: Each provider may have daily, weekly and monthly limits.
  • Payment and receiving method: Decide how you will pay for the transfer and how the recipient will receive the funds.

Step-by-Step Guide to Sending Money

  1. Choose a Transfer Method: Select the best method based on your priorities (cost, speed, convenience).

  2. Compare Providers: Use online comparison tools (like RatesRemit) to compare exchange rates, fees, and processing times from different providers.

  3. Gather Necessary Information: You'll typically need:

    • Recipient's full name (matching their ID)
    • Recipient's address and contact information
    • Recipient's bank name and address (for bank transfers)
    • Recipient's bank account number
    • Your identification (passport, residence card, etc.)
    • Your My Number (especially for larger amounts)

  4. Initiate the Transfer: Follow the provider's instructions. Create an account, enter recipient details, and specify the amount.

  5. Track the Transfer: Most providers offer tracking to monitor the progress.

Best Money Transfer Services for the Philippines

(Note: This is not an exhaustive list; always do your own research.)

  1. Wise (formerly TransferWise): Known for its transparent fees and mid-market exchange rates. Often a very cost-effective choice for bank-to-bank transfers.

    • Pros: Excellent exchange rates, low and transparent fees, fast transfers.
    • Cons: May not offer cash pickup.

  2. Remitly: Offers competitive rates and fast transfers, often with options for different delivery speeds and associated fees.

    • Pros: Fast transfers, good for urgent needs.
    • Cons: Fees can vary depending on delivery speed.

  3. WorldRemit: Provides various delivery options, including bank transfers, cash pickup, and mobile money.

    • Pros: Multiple delivery options.
    • Cons: Exchange rates may not always be the best.

  4. Xoom (a PayPal Service): Allows transfers to bank accounts and cash pickup locations. Leverages PayPal's infrastructure.

    • Pros: Fast and convenient, especially for PayPal users.
    • Cons: Exchange rates may not be as competitive as Wise.

  5. SBI Remit: A popular option within Japan.

    • Pros: Multiple delivery options, including cash pickup.
    • Cons: Exchange rates are not very transparent, fees might be higher.

Tips for Getting the Best Exchange Rates

  • Timing: Exchange rates fluctuate constantly. Monitor rates and try to send when the JPY is strong against the PHP. Predicting currency movements is difficult.
  • Forward Contracts: Some providers offer forward contracts to lock in an exchange rate. This provides protection but means you might miss out on improvements. More relevant for larger, planned transfers.
  • Avoid Hidden Fees: Read the fine print. "No fee" offers often have less favorable exchange rates. Compare the total cost.

Legal and Tax Considerations

  • Reporting Requirements: In Japan, transfers exceeding a certain threshold (typically 1 million JPY) must be reported to authorities. This is a standard anti-money laundering measure. Be prepared to provide information about the source of funds and purpose.
  • Tax Implications: Remittances are generally not considered taxable income for the recipient in the Philippines. However, for large amounts, consult with tax advisors in both Japan and the Philippines. Gift tax implications may exist in Japan depending on the amount and relationship.

Common Pitfalls and How to Avoid Them

  • Hidden Fees: Look beyond advertised fees; compare the total cost.
  • Unfavorable Exchange Rates: Don't assume all providers offer the same rate. Compare.
  • Delayed Transfers: Check estimated processing times, especially for urgent needs.
  • Incorrect Information: Double-check all recipient information to avoid delays.
  • Scams: Be wary of unsolicited requests for transfers.

Frequently Asked Questions

  1. What is the cheapest way to send money to the Philippines?
    Online services like Wise are generally the most cost-effective.

  2. How long does it take?
    It varies. Online services can be very fast (minutes to hours), while bank transfers take longer (several business days).

  3. Do I need a My Number?
    Yes, likely for larger transactions, to comply with Japanese regulations.

  4. Can I send to a mobile wallet?
    Some services support mobile wallet transfers in the Philippines.

  5. What is the limit?
    Limits vary by provider and are subject to Japanese regulations. Check with the provider.

  6. Is online money transfer safe?
    Yes, if you use a reputable, licensed provider with strong security.

  7. What information do I need from my recipient?
    Usually, their full name, address, bank name, and account number.

Conclusion

Sending money from Japan to the Philippines can be efficient and affordable with the right knowledge. Understand your options, compare providers carefully, and be aware of potential pitfalls. Utilize comparison tools to get the best rates and fees. Consult with financial and legal professionals for personalized advice, especially for large transfers.