September 30, 2022

Powering the Philippine Economy With Elvis and Zeppelin

MANILA — For more than 30 years, Josetoni Tonnette Acaylar has been singing and playing the piano throughout Asia.

He has provided relaxing background music and taken requests for pop and jazz standards in more five-star hotel lobbies and smoky lounges than he can recall, in Brunei, China, Dubai, Hong Kong and other locales.

In one job in Japan, he was told to take off his tuxedo and work in the kitchen, washing dishes and scrubbing floors. “Sometimes they would pull me out of the kitchen, give me a jacket and yell, ‘Play the piano!’ and I would have to perform,” Mr. Acaylar recalled with a laugh.

Mr. Acaylar is just one of the thousands of musicians from the Philippines who are prominent in bars, lounges and clubs around Asia and the Middle East. But the band used to be much bigger.

In 2002 alone, more than 40,000 entertainers left the Philippines to work overseas, primarily in Japan. After allegations of prostitution among some entertainers, however, the Japanese government found that many of the female musicians could not actually play a musical instrument, and that many of the vocalists did not have much of a voice.

After the crackdown, the number of performers who left the Philippines to work overseas dropped to 4,050 in 2006, from 43,818 in 2004. The figure now hovers around 1,500 to 2,000 a year, government statistics show, with Japan remaining the top destination, followed by Malaysia, South Korea and China.

“We only allow musicians and entertainers to work in legitimate establishments such as cruise ships and major hotels,” said Yolanda E. Paragua, a senior official with the Philippine Overseas Employment Administration. “Not in honky-tonk type places.”

The musicians are among the millions of people from the Philippines who work overseas and help power the country’s economy with remittances. And the Philippine economy is indeed thriving: in 2012, gross domestic product grew 6.6 percent, surpassing the government’s forecast for growth of 5 percent to 6 percent, data released Thursday showed. The country had the second-highest growth rate in the world in 2012, after China, according to Reuters.

Government expenditure in the Philippines jumped nearly 12 percent in 2012, while private spending, which was bolstered by remittances from abroad, was up 6.1 percent, Reuters reported.

In the past, the Philippine Overseas Employment Administration held auditions to verify the legitimacy of musicians seeking to work overseas, said Celso J. Hernandez, the head of the agency’s operations and surveillance division.

After the Japanese crackdown, however, the Philippine government discontinued the practice. These days, the government relies on vetting by licensed recruitment agencies, although it still examines the musicians’ paperwork.

The Philippines has a rich music scene, with bands playing hard rock, reggae, jazz, blues and nearly every other form of music each night in numerous clubs around the country. Musicians in the country, as elsewhere, often dream of writing their own works, signing a deal with a major recording label and achieving fame and fortune. But many of those who do not succeed on that path can still find regular work overseas.

Domingo Mercado Jr., who goes by the stage name Jojo, wrote and performed original music when he left high school, as part of a nine-piece band called Music and Imagination. Some of his friends have had a taste of fame, but he went in another direction.

“I resigned from the band and took a job in Korea,” said Mr. Mercado, 45. “I gave up on my dream.”

Mr. Mercado has performed across Asia as a singer and guitarist since 1994. He recently returned from a six-month job on a cruise ship.

Although singers and musicians from the Philippines can be found performing in many hotel lounges around Asia, the field is actually quite specialized and highly competitive. “A hotel might need many waiters, cooks and housekeepers,” Mr. Hernandez of the overseas employment agency said. “But they only need one or two musicians.”

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Bucks Blog: New Rule Requires Fee Disclosure for Overseas Cash Transfers

A money transfer counter in Miami.Associated PressA money transfer counter in Miami.

People transferring money overseas must be informed of the exchange rate they are paying as well as any fees, under a new rule from the Consumer Financial Protection Bureau.

Under the rule, providers of international money transfers, also known as remittances, must also investigate any disputes and remedy errors. The protections are aimed at making sure customers know exactly how much money the recipient will get at the other end. The rule takes effect next January.

Remittances are generally sent on a cash basis; the sender submits cash at a money transfer location, and the recipient picks up the cash in the foreign country, sometimes within minutes. Fees for the transfers can be substantial, the bureau had previously found — as much as 13 percent on amounts up to $200.

Richard Cordray, the consumer watchdog agency’s director, said in a statement that the new rule would allow customers to know their costs ahead of time and compare prices, and would hold providers accountable for any errors that occur.

Consumers transfer tens of billions of dollars from the United States to foreign countries each year, but the transactions have often involved undisclosed fees, according to the bureau. The Dodd-Frank financial reform act expanded the scope of electronic funds transfer laws to cover remittances and required the bureau to impose new protections.

Under the bureau’s rule, companies offering remittances must disclose the fees, the exchange rate and the amount to be received by the recipient. The disclosures must generally be provided when the consumer first requests a transfer, and again when payment is made. Consumers will have at least 30 minutes after the payment is made to cancel a transaction, and will receive a refund if they cancel.

Remittances are receiving more scrutiny from the new consumer watchdog agency. For instance, the agency is studying whether remittances can be used to help generate credit scores, rather than the usual banks or credit cards.

Have you made use of remittances? What do you think of the new disclosure rules?

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Bucks: Considering Money Transfers in Calculating Credit Scores

Can data about electronic money transfers be used to help create credit scores for people who rely on them?

That’s the subject of a study to be undertaken by the new Consumer Financial Protection Bureau. The agency, which officially opened for business on July 21, was directed to look into the matter by the Dodd-Frank financial reform law. The new agency is also reviewing ways to provide clearer disclosure of the exchange rates and fees charged for the transfers, which can be substantial — up to 13 percent of amounts up to $200, according to a preliminary report from the agency.

The question is whether money transfers, known as remittances, are in any way predictive of a consumer’s ability to repay loans. Remittance users typically rely on the transfers instead of using banks or credit cards. Right now, credit histories generally don’t contain remittance data. So people who rely on money transfers often have trouble getting credit scores, which limits their access to loans and even housing.

Many remittance users were born outside the United States and use the transfers to send money to family members and friends in their native countries. About six million households make personal transfers, mostly to Latin America and Asia, with amounts averaging $200 to $400. The overall volume totals billions annually. The funds are generally sent on a cash basis — the sender submits cash at a money-transfer location like Western Union and the recipient picks up cash in the foreign country, sometimes within minutes.

Remittance payments are usually voluntary transfers, made without any sort of contract. But it’s possible that payment patterns indicate a user’s ability to meet payment obligations. To study whether this may be the case, the bureau is assembling a database of information from a large remittance provider, as well as credit score information from a credit bureau (the report doesn’t identity them, but says they won’t provide any personally identifiable information to the federal government).

“A finding that consumers who send remittance transfers are more likely to repay their debts than other consumers with similar credit histories could suggest that adding remittance data to credit scores would tend to raise credit scores relating to remittance senders,” the report says.

Assuming that there is some connection between regular remittance use and credit behavior, there would still be hurdles to incorporating the data into the credit reporting process. Some users of money transfers prefer to remain anonymous (transmitting companies are required to obtain identifying information only when the customer sends amounts of $3,000 or more), and probably wouldn’t be interested in having their transactions recorded to help establish a credit file.

One way to address this, the consumer bureau noted, would be to give senders the option of reporting their remittance history to a credit reporting agency to “build credit.” “This opt-in approach to reporting,” the report said, “might enable the company to build loyalty among certain remittance senders without alienating other senders who wished to retain their anonymity.”

Do you think it makes sense to consider money transfers in the credit reporting process?

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