REMITTING PROCEEDS ABROAD

Can a Philippine property sale be settled in a foreign currency, with the proceeds remitted to a foreign bank account?

Most bank relationship managers will tell you: “Not possible.”

But...it IS possible.

Bank RMs usually say no because the process is a hassle. It requires back-and-forth between the branch, the RM, and the bank’s Treasury Department. It also carries real regulatory risk (AMLA scrutiny) for the remitting branch—while earning the bank almost nothing.

So for many RMs, the easiest answer is simply: “Not allowed.”

But as long as the transaction is legitimate and properly documented, banks can remit funds abroad.

How it’s typically done (simple guide)

Assume the Seller is overseas and appoints the Buyer (yes, the BUYER) as Attorney-in-Fact (AIF) for the limited purpose of remitting the sale proceeds.

1) DOAS should still be in Php

Even if the settlement will be in USD, the Deed of Absolute Sale should state the price in Php, because Philippine taxes (CGT, DST, etc.) are computed based on the peso amount.

2) Execute a supplementary FX agreement

Before closing, the parties should sign a document stating:

when conversion will happen, and

what exchange rate will be used

Example:

“Converted using the prevailing USD selling rate of ___ Bank on ___ date.”

3) SPA must clearly authorize the Buyer (as AIF)

The Seller’s SPA should explicitly authorize the Buyer to:

a) convert the funds into foreign currency

b) remit the funds to the Seller’s foreign bank account

4) Remittance execution

On closing day, the Buyer (as AIF) requests the branch to:

purchase the foreign currency, and

process the outward remittance

Funds usually arrive within 1–3 banking days.

Final Comment:

You may have to coordinate directly with the bank’s Treasury Department to make this work (that’s what we ended up doing—I even had to reach out to former colleagues inside the bank).

But as long as the transaction is legitimate, the Buyer’s funds are clean and properly sourced, and the paperwork is complete, there should be no valid reason for the bank to prohibit the outward remittance.