Manila: President Rodrigo Duterte launched a 112-year-old government-run bank that is now dedicated to the needs of an estimated 10 million overseas Filipino workers and other Filipinos based abroad, officials said
The opening of the Overseas Filipino Bank (OFB) — with a new identity — means delivery of campaign promises to all overseas Filipinos, Duterte said during a ceremony in Manila.
“OFB will offer P300,000 to P350,000 (Dh25,000 to Dh28,333) non-collateral loans to OFWs at six per cent annual interest rate,” said Labour Secretary Silvestre Bello, adding that higher loan packages are available to OFWs and their relatives,
“It will be the biggest bank in the Philippines. It will capture 70 per cent or $18.20 billion (P910 billion or Dh75.3 billion) of the $26 billion (P1.3 trillion or Dh108.3 billion) that OFWs send to their loved ones in the Philippines annually,” Bello boasted, adding, “Other banks cannot replicate OFB because it is a government bank now partly-owned by the OFWs. It will be patronised by the OFWs.”
Enumerating more unique OFB services, Finance Secretary Carlos Dominguez III mentioned “high interest rates for savings of OFWs; mobilisation of OFWs’ savings into investment in the capital markets; efficient foreign remittance services for OFWs, including direct remittances to schools attended by children or relatives of OFWs; and comprehensive loan package for OFWs who are planning to build their homes or start business in the Philippines”.
In Executive Order 44 signed on September 28, 2017, Duterte directed the Philippine Postal Corporation (PPC), owner of the 112-year old Philippine Postal Savings (PPSB), and the Bureau of Treasury to transfer PPSB’s shares to the government-run Land Bank at zero value, and then rename PPSB as Overseas Filipino Bank (OFB).
Before its acquisition by Land Bank, PPSB’s total asset was P9.29 billion (Dh774.166 million) as of June 2017, Central Bank said. Duterte ordered Land Bank to infuse more capital to OFB to cater to the needs of OFWs and other Filipinos based abroad.
Land Bank president and CEO Alex Buenaventura was assigned head of OFB and leader of OFB’s board of nine directors. They include Land Bank-designated OFW president as vice-chairman; four Land Bank-designated directors or officers as members; a representative of the Labour Department; a representative of the Overseas Workers Welfare Administration (OWWA); and another private representative of OFWs.
OFB’s creation was an option after the government abandoned plans in 2016 to merge Land Bank with state-run Development Bank of the Philippines. PPSB was then the smallest of three state-owned banks, ranking 16th among other thrift banks.
Established in 1906, PPSB was closed in 1976, and reopened with the same name in 1994 as charter of the Philippine Postal Corporation. At the time, it began spreading a wide network of micro-finance organisations for rural communities; motorcycle-riding officials who offered loans in remote areas; domestic and international money transfer services assisted by Agilivant LLC- an international provider of credit software solutions; tie-ups with private pawnshops; and corporate areas established within 1,500 Post Offices nationwide.