Filipino Consumers and Businesses Lost P50 Billion to Forex Markups in 2024

The Scale of Hidden Costs

Filipino consumers and businesses lost approximately P50 billion to foreign exchange markups on cross-border transactions in 2024, according to data from Wise, a London-based international payments firm. The figure marks a sharp increase from the P8.37 billion estimated for the previous year, which covered consumer transactions only.

The losses stem primarily from forex markups embedded in currency conversion rates that often remain invisible to customers sending or receiving money internationally. These hidden spreads are layered on top of explicit transfer fees, compounding the actual cost of moving money across borders.

Areson Cuevas, country manager for Wise Philippines, stated that consumers typically pay between three and five percent in combined fees and foreign exchange markups, compared to the company's average cost of approximately 0.5 percent. The difference represents a substantial drain on household budgets and business margins, particularly for families dependent on overseas remittances and small enterprises dealing with foreign suppliers or clients.

The Philippines received $15.74 billion in personal remittances during the first five months of 2024, up 2.6 percent from $15.34 billion in the same period the previous year, according to central bank figures. The country ranks among the world's largest remittance recipients, making pricing transparency in cross-border payments an issue with broad economic impact.

Awareness Gap and Market Behavior

A key challenge remains consumer awareness. Many Filipinos do not fully understand how forex markups affect the final amount they receive or pay when converting currencies. The spread is often hidden within the exchange rate itself rather than disclosed as a separate line item, making it difficult for customers to compare the true cost across different service providers.

Wise has been engaging with regulators, industry participants, and freelancers to push for greater transparency in cross-border payment pricing. The company argues that improved disclosure would enable consumers to make more informed choices and intensify competitive pressure on providers to lower fees.

Currency behavior among Filipino customers has also shifted in response to peso weakness. More users are holding funds in foreign currencies rather than immediately converting to pesos, choosing to time conversions based on exchange rate movements or actual spending needs. Wise's platform allows users to hold and transact in more than 40 currencies, giving freelancers and overseas workers the flexibility to manage currency exposure.

Infrastructure Expansion

Wise is pursuing partnerships with Philippine banks to extend its cross-border payment infrastructure beyond its direct customer base. The company already collaborates with GoTyme Bank, enabling that institution's customers to send money internationally using Wise's rails.

Cuevas confirmed that the firm is in discussions with additional banks and remains open to working with non-bank financial players, although no such partnerships have been announced in the Philippines. Expanding distribution through local institutions would broaden access to lower-cost cross-border payment options, particularly for customers who prefer to transact through established banking relationships.

The P50 billion estimate underscores the scale of inefficiency still embedded in the remittance and business payment corridors serving the Philippines. As digital payment rails mature and regulatory frameworks evolve, pricing transparency and competition remain central to capturing those leakages and returning value to households and businesses.