THE Bangko Sentral ng Pilipinas (BSP) said private banks have adequately served the requirements of overseas Filipino workers (OFWs), downplaying the need to establish an OFW bank.
BSP Governor Amando M. Tetangco Jr. said private banks offer a host of loan, deposit and other banking services especially geared toward OFW needs.
He cited private bank’s initiatives, such as the Overseas Kababayan Services of China Banking Corp. (China Bank); Global Filipino by Philippine National Bank (PNB); and the Asenso Kababayan of BDO Unibank Inc.
He said joint efforts between the Land Bank of the Philippines and the Development Bank of the Philippines led to an OFW reintegration-loan program.
He said the financial welfare of OFWs through their reintegration into Philippine society is already the thrust of several programs offered by government banks.
Also, the Overseas Workers Welfare Administration (OWWA) and the Department of Labor and Employment (DOLE) provide livelihood loans, ranging from P300,000 to a maximum of P2 million, to OFWs engaged in or who will engage in local productive endeavors.
The reintegration-loan program makes loans available without need for collateral, for viable projects with confirmed market order.
A total of P2 billion has been allocated for the program, of which only P500 million to P700 million has been availed of as of August 21, 2013.
In a letter to House Committee on Banks and Financial Intermediaries Chairman Rep. Nelson Collantes, Tetangco said the creation of an OFW government bank—with its attendant cost of P2-billion initial capital in House Bill (HB) 1491 and P100 million in HB 2942—will raise fiscal implications that may warrant further evaluation, such as the sources of appropriation for its capitalization.
“The creation of a new bank would be inconsistent with the present thrust of the BSP to consolidate the Philippine banking industry,” he said.
The BSP said a new bank should be anchored on a solid feasibility assessment in order to strike a balance between the developmental objective of the House bills and the preservation of the stability of the Philippine banking system.
“To this end, the creation of a Philippine OFW bank appears to be unnecessary,” Tetangco added.
Instead, the BSP proposed that the limited government resources be used to educate OFWs to maximize the usage of existing financial services offered by government and private entities.
He also sought proponents of the bills to explore rationalization of documentary requirements for existing government-financing programs for OFWs as these could be potential hurdles to their access.