- MEXICO CITY -- Cash
remittances sent from the US to Mexico reached $1.12bn (Euro1bn, £700m)
in July, an increase of 33 per cent over the same month last year, as sharply
lowering prices continued to spur Mexican immigrants to send more money
home.
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- The total sent in the first six months of this year,
according to figures released by the Bank of Mexico, the nation's central
bank, was $6.13bn, an increase of 29 per cent over 2002 that put remittances
on course to outstrip last year's record volume of $9.81bn.
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- After this sharp growth, immigrant remittances have so
far exceeded foreign direct investment and tourism as sources of foreign
funds. Mexico's huge petroleum industry remains its biggest generator of
foreign income.
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- In four central states with a strong tradition of immigration
to the US - Jalisco, Michoacan, Guanajuato and Zacatecas - the amount sent
via remittances actually exceeded the amount they received from the federal
government.
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- Several of the largest banks in the US have started competing
aggressively in the market in recent months, led by Citigroup, which owns
Mexico's largest bank Banamex, and Wells Fargo, which has an alliance with
BBVA Bancomer of Mexico.
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- This has helped to drive down the price of remittances,
and encourage migrants to send more money home. There has also been an
effort by the US and Mexican authorities to inform customers.
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- Condusef, a government-backed financial services watchdog,
now publishes detailed comparisons of the amounts charged by different
operators, while state governments are hoping to offer advisory services
through migrant clubs in the main centres for Mexican immigrants, such
as Chicago and Los Angeles. The US Treasury claimed that in 2001, migrant
workers spent more than $1bn in commissions.
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- The Banco de Mexico figures suggest that money orders,
which were traditionally the most popular means of sending money, until
large banks entered the market, may now be recovering in popularity. However,
this may be attributable to improvements in the bank's collection of data.
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- Overall, 85.7 per cent of remittances so far this year
were sent electronically, compared with 43.7 per cent a decade ago, while
the proportion sent by money order declined from 46.6 to 12.6 per cent
over the same period, according to figures produced by Condusef. The proportion
sending cash dropped from 8.2 to 1.6 per cent.
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- Reduced commissions may have been behind a trend for
immigrants to send smaller amounts of money in each remittance, but to
send much more often.
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- © Copyright The Financial Times Ltd 2003.
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