Creation of OFW bank pushed
Vice President Jejomar Binay, concurrent Presidential Adviser on OFWs Concerns, in a recent letter to President Benigno S. Aquino III, has recommended the creation of a bank especially for overseas Filipino workers (OFWs).
The Vice President said in his letter that having such a specialty bank “will provide an alternative yet viable economic financial and remittance institution for our kababayans (compatriots) at the local and international levels.”
Binay said OFWs themselves have long clamored for the creation of an OFW Bank, as they claimed having been “victims of exorbitant remittance rates charged by financial intermediaries and money brokers.”
“The (hoped-for) bank will provide fair competition towards the reduction/lowering of remittance/transaction costs and provide a productive outlet for our overseas Filipinos’ savings as bank investors and shareholders,” he added.
In Binay’s concept, the OFW Bank would be “initially funded and underwritten by government financial institutions,” and later “sold to and controlled by OFW investors and stockholders.”
According to the records of the Bangko Sentral ng Pilipinas (BSP), OFW remittances from January to October this year grew to US$ 15.5 billion a year-on-year growth of 7.9 percent.
A major bulk of remittances came from the United States of America, Canada, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Singapore, Italy, Germany and Norway.
The OFW Bank project was conceptualized in 2006 to consolidate the financial assets and operational capabilities of government financial institutions like the Land Bank of the Philippines, Development Bank of the Philippines, Overseas Workers Welfare Administration, and the Philippine Postal Corporation.
The financial institutions, together with its subsidiary Philippine Postal Savings Bank, are to be the lead entities for an OFW bank.
But the project was deferred due to, among others, the global recession. Eventually, LandBank and DBP launched their respective remittance business projects/programs.
Also, according to the Office of the Vice President, the OWWA did not infuse the P1 billion seed money that was approved by the Cabinet at the time.
The proposed partners likewise concluded that the PPSB had neither the capital nor the information-communications technology to make the project possible, the OVP said.*PNA
