We all know that there are millions of Filipino workers abroad sending money to their families back home. The remittance industry and heck, this company, would probably cease to exist without them.
And now, the Philippine government is poised to make its own foray into the waters.
Last 28 September, President Rodrigo Duterte signed Executive Order (EO) 44, paving the way for the Land Bank of the Philippines to acquire the Philippine Postal Savings Bank (PPSB). This is effectively a preliminary move for the the PPSB’s conversion into the Overseas Filipino Bank (OFB).
“There is a need to establish a policy bank dedicated to provide financial products and services tailored to the requirements of overseas Filipinos, and focused on delivering quality and efficient foreign remittance services,” so says an excerpt from EO 44.
The OFB concept was initially made public back in December 2016, when Finance Secretary Carlos Dominguez III announced that the government was going to open a bank that would not only serve the needs of OFW’s, but would also be partly owned by them. Originally, it was set to open in September of this year, but this has been postponed to January 2018.
Here’s what we know about the OFB and its functions so far:
- It will be a subsidiary of the Land Bank of the Philippines, a government-owned and controlled corporation;
- The OFB will have representative offices in various consular offices in the world, with Dubai’s scheduled to be the first to open in January 2018;
- Services will include deposits and remittances, loans, investments, and savings programs;
- Remitters can send money to a Land Bank account through Western Union or Xoom using their smart phones;
- There will be a remittance fee of USD5 per every USD100 sent, although the government is allegedly considering which services they can offer for free, along with low interest rates for loan packages;
- Land Bank clients can use their existing accounts instead of opening a new one with OFB;
- There will only be one OFB branch in the country, and it will be located at Liwasang Bonifacio in Manila;
- OFW’s can buy preferred OFB shares as an investment and as a form of ownership.
While the operational objectives set for the OFB do sound very promising, whether it will live up to them or go the way of highly anticipated yet poorly executed OFW policies remains to be seen. The OFB’s goals might seem straightforward, but they would require quite a bit of restructuring, a set of well-defined operating guidelines, and of course, some deft diplomacy. That’s a tall order right there.
I would wager, however, that private remittance companies will still continue to prosper so long as they continue to remain competitive (Ahem, AU$7 flat rate FOR ALL TRANSACTIONS *nudge*nudge*) and service their customers well. The best-case scenario for both the OFB and privately-owned money transfer operators is perhaps for both of them to adequately provide the vast and vibrant OFW market with more options that cater to their diverse remittance needs.