To bring down the cost of sending money to the Philippines, Vice President Jejomar Binay said Wednesday he is pushing for the creation of an “OFW Bank."
Binay — also the Presidential Adviser on OFWs’ Concerns — wrote to President Benigno Aquino III pushing for the proposed bank as an “alternative yet viable" remittance institution here and abroad.
“The bank will provide fair competition towards the reduction or lowering of remittance or transaction costs and provide a productive outlet for our overseas Filipinos’ savings as bank investors and shareholders," he said in the letter posted on the Office of the Vice President’s website.
Binay said the move was in response to OFWs’ (overseas Filipino workers) clamor for an OFW Bank, as financial intermediaries and money brokers are presently charging exorbitant fees for money transfers.
Government financial institutions will initially fund and underwrite the bank, according to the Vice President said.
Eventually, investors and stockholders will own and control the OFW Bank, Binay said.
Money sent home by OFWs rose to $15.46 billion in the first 10 months of the year, up 7.9 percent from $14.23 billion in the same period last year, central bank data showed.
A chunk of the remittances came from the US, Canada, Saudi Arabia, Japan, UK, United Arab Emirates, Singapore, Italy, Germany, and Norway.
The idea for an OFW Bank was raised in 2006 as a way of consolidating the financial assets and operational capabilities of government institutions, like Land Bank of the Philippines, Development Bank of the Philippines, Overseas Workers Welfare Administration, and Philippine Postal Corp.
The project was supposed to create a financial institution for OFWs, one that is inexpensive and more focused toward its OFW-oriented direction and services. Because of the global recession, it was shelved.
Instead, LandBank and DBP launched separate remittance programs for the lucrative OFW market estimated by the Philippine Overseas Employment Administration between eight million and 11.5 million land- and sea-based employees.