PRRD OKs creation of OFW bank

  • Landbank to buy Post Bank and convert it into an OFW bank
  • Plan may take up to 11 months and may require up to P3 billion to materialize

Another campaign pledge made by President Rodrigo R. Duterte to overseas Filipino workers (OFWs) will soon be fulfilled; this time on the establishment of a government-owned bank that will cater solely to the millions of migrant Filipino workers, top cabinet officials have disclosed.

Department of Labor and Employment (DOLE) Secretary Silvestre Bello III told a national newspaper last month that President Duterte has given his green light for the creation of an OFW bank, which, according to the Labor chief, would cater to remittances and other banking needs of Filipino workers abroad.

Bello explained that the OFW-oriented bank would be owned partly by the migrant Filipino workers themselves through shares of stocks, and that they would have their own credit facilities.

Separately, Department of Finance (DOF) Secretary Carlos G. Dominguez III disclosed to reporters on the sidelines of a recent budget hearing in the Senate that state-run lender Land Bank of the Philippines is in the process of absorbing thrift-lender Philippine Postal Savings Bank (Post Bank) to convert it into a bank dedicated to the “underserved” OFW market.

The Finance chief said it would take up to 11 months to exercise due diligence and valuate Post Bank as well as secure permission for the buyout from the Bangko Sentral ng Pilipinas to be able to finally set up the OFW bank.

When asked if Post Bank would need capital infusion for its new function, Dominguez answered in the affirmative, although he said the amount of new funds needed has yet to be determined.

“We have to beef up the bank. It’s like giving your child some money, but it’s still yourself,” he said.

Earlier, Bello and Philippine Postal Corp. assistant postmaster general for marketing Luis Carlos reckoned the plan would require the government to infuse about P2 million to P3 million in fresh capital to Post Bank.

According to Dominguez, who, as the Finance chief also serves as the head of Duterte Administration’s economic team, Post Bank would operate as a wholly-owned subsidiary of Land Bank after a successful buyout.

Dominguez explained that Land Bank is the only government bank that can acquire Post Bank as the former is a “universal bank which reaches out to different markets”, unlike another state-owned Development Bank of the Philippines.

The government initially included Post Bank among the many state-owned assets it wants sold for privatization to shore up revenues and help bankroll its ambitious infrastructure program — a thrust under the Duterte administration which Dominguez said is one of the keys to promote inclusive growth and further bring down poverty rates in the country to 15% or lower by the time the President’s term expires in 2022.

In recognizing both the plight and economic contributions of the country’s modern-day heroes, President Duterte vowed during the campaign period to make OFW concerns his top labor priority during his term.

An OFW-dedicated bank was one of his promises to migrant Filipino workers back then; the others being a one-stop shop that caters to all their documentary needs — which has since been fulfilled — and a separate government agency for OFWs.

He reiterated his promise to set up an OFW bank during his three-day state visit to Japan in October.

“I’m thinking really seriously now na magkaroon kayo ng sariling bangko ninyo…Maybe iyong postal bank ng gobyerno,” Duterte told members of the Filipino community in Tokyo shortly after his arrival there.