Financial campaign aims to empower OFWs’ kins

Manila , Philippines   â€” Global money transfer industry player Western Union is encouraging overseas Filipinos’ beneficiaries in the Philippines to allocate portion of their received remittances for investment and savings purposes, and not succumb to the season's usual overspending woes.

This developed as it is projected that the period leading to the Christmas holidays is the peak season for Overseas Filipino Worker (OFW) remittances.

In last Friday’s launch of a nationwide financial literacy campaign called "Peso Sense,” stakeholders from the public and private sectors underscored the need for Filipinos to be more economically empowered by leveraging on remittances as a way to create sustainable livelihoods for OFWs’ families.

The program wishes to help remittance beneficiaries on how to spend their money more sensibly and constructively.

“Peso Sense will promote personal and family financial freedom and recognize the "heroic efforts of OFWs" in improving the lives of their families in the short term and their home communities in the long term,” officials said in a press statement.

"The campaign, with modules scalable for all Filipino citizens, but especially OFWs and their families, aims to enhance basic financial acumen among Filipino households," they added.

Figures

In a report from World Bank last year, over 2.5 billion adults globally and 68.5 million in the Philippines were found to have no account at a formal financial institution, according to Patricia Riingen, Western Union senior vice president for East and South Asia.

The Bangko Sentral ng Pilipinas (BSP), meanwhile, reported that remittances from overseas reached close to $21.4 billion last year. This accounted for almost 10 percent of the Philippine economy.

The Philippines currently stands as the third largest remittance money destination in the world, trailing behind India and China.

Despite this leading spot, less than half or 42.5 percent of OFWs' households in the country are allocating the remittances they receive to savings, while most do not apportion a single peso toward investment, according to BSP's 2013 first quarter consumer expectations poll.

"Whether migration [to other countries] is permanent or temporary, we must think on how to capitalize on these remittances for the country's and our people's development," said BSP monetary board member Dr. Felipe Medalla.

Medalla thinks that financially educating the Filipinos could bolster the spread of the nation's middle class segment and eventually minimize the effects of "patronage politics."

Program

The BSP, the Commission on Overseas Filipinos and the United Nations Development Programme Philippines have unanimously committed to give their full support to the nationwide program.

Already, the Western Union Foundation, along with the company's two agents Petnet and eBusiness Services, has pledged a funding of $220,000 for the implementation of the two-year campaign.

Target user profiles for the program include students, young adults who have just started working, business owners, the employed, home-makers and retirees.

Specifically, these users will be exposed to modules that cover three main pillars, namely introduction to financial literacy, planning and freedom, steps to financial freedom planning and commandments of financial freedom.

To ensure that the program will be sustainable, a multi-sector review panel will assess the relevance and effectiveness of the module contents, and will consist of representatives from the government, business, non-government organizations and the academe.

Aside from traditional media, the project also seeks to use alternate channels like the social media, websites and audio-visual presentations to drum up interest from target users.

Inclusive

"Growth becomes inclusive when the poor participate in the growth process and share the benefits. With financial literacy, this participation in the growth process can become a reality as the poor develop their capacity to save and invest," UNDP country director Toshihiro Tanaka.

Tanaka said financial literacy as an essential component of access to inclusive financial services can assist developing inclusive financial markets by empowering the economically challenged citizens to evaluate their options and make sound financial decisions.

Research showed that majority of OFWs remit money to fund regular expenses on food, debts and education, but about two-thirds are not satisfied with how beneficiaries are spending their hard-earned money for lack of financial know-how.

The same study found nine of 10 Filipino remitters agree on a financial literacy campaign.

For its part, the World Bank commends the importance of providing financial knowledge to both remitter and beneficiaries.

Although faced with high 27.9 percent poverty incidence in a report back in April, the Philippines is identified as one of the Next Eleven (N-11) countries with the potential of becoming one of the world’s largest economies in the 21st century. (FREEMAN)