Binay pushes OFW Bank

MANILA, Philippines - Vice president Jejomar Binay recommended yesterday the creation of an overseas Filipino workers (OFWs) Bank that will provide OFWs competitive and cheaper remittance rates.

Binay, presidential adviser on OFW concerns, told President Aquino in a letter that the establishment of an OFW Bank would spare the OFWs from falling prey to exorbitant remittance rates being charged by intermediaries and money brokers.

“An OFW Bank will provide an alternative yet viable economic financial and remittance institution for our Kababayan at the local and international levels,” Binay said.

He said OFWs are clamoring for the creation of a financial institution exclusive for OFWs.

“The bank will provide fair competition towards the reduction/lowering of remittance/transaction costs and provide a productive outlet for our overseas Filipinos’s savings as bank investors and shareholders,” Binay said.

He proposed that the OFW Bank be initially funded and underwritten by government financial institution before it is sold to and controlled by OFW investors and stockholders after a period of time.

He cited that OFW remittances from January to October this year grew to $15.5 billion a year-on-year growth of 7.9 percent, according to the Bangko Sentral ng Pilipinas (BSP). Most 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 first conceptualized in 2006 to consolidate the financial assets and operational capabilities of government financial institutions like the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP), Overseas Workers Welfare Administration (OWWA), and the Philippine Postal Corp. (PPC), and the Philippine Postal Corp. (PPC), together with its subsidiary Philippine Postal Savings Bank (PPSB), as lead entities towards the creation of a financial institution for overseas Filipinos that is less expensive and more focused in its direction and services.

Binay said the OFW Bank project was deferred due to intervening events and the global recession.

Landbank and DBP decided to launch their respective remittance business projects/programs.

“Also, OWWA did not infuse the P1- billion seed money that was approved by the Cabinet. The proposed partners, likewise, concluded that PPSB had neither the capital nor the information-communications technology to make the project possible,” Binay said.