IATA-accredited travel agencies in the Philippines are bracing for the July 1 implementation of the Billing and Settlement Plan’s (BSP) new remittance frequency, under which they have to pay weekly instead of every 15 days.
Called Express Weekly Remittance, the shorter payment period is expected to affect the cashflow of agencies, especially those with corporate and multinational clients. These agencies will need to pay the BSP every week yet their corporate clients have a credit line with them of 15 days or longer.
“To prepare for the weekly remittance, we have to renegotiate with our clients for shorter credit terms. We are proposing to them to use their credit cards as a form of payment whenever is possible,” said Frank Khouri, president, Premiere Travel & Tours.
While agencies that are very well organised and with lots of financial fallback will be least affected, “the small ones will find it difficult”, said Travelexperts consultant Arnie Bayag. The Express Weekly Remittance “will challenge the agents in terms of absolute dollars and relationship with clients in re-negotiating their credit terms,” added Bayag.
Marlene S Insigne, manager – tours division, Southeast Travel Corp., said the new weekly remittance will affect those handling big corporate accounts. “They have longer credit lines to agencies especially for international tickets and the amounts involved are in millions of pesos,” she added.
A travel consultant requesting anonymity said the weekly remittance might mean hiring additional people for travel agencies with huge volume of tickets issued to corporate accounts.
And it can be tricky negotiating to shorten credit terms with corporations, especially if you have a long relationship with them. “They’re not going to like it,” he said.
“If an agency doesn’t have good cashflow, it’s easy to default on the weekly payment,” he emphasised.
