Saving four OFWs on death row is priority of new DFA exec
Jan 31, 2006
Updated 07:18pm (Mla time)
Inquirer
SAVING four Filipino workers sentenced to death overseas is now the primary concern of the newly-appointed Foreign Affairs undersecretary for Migrant Workers Affairs.
“There are only two avenues left for the Philippine government to save them. One is by making representations for the grant of executive clemency and the other is to offer blood money to the victim’s families to completely exonerate them (OFWs),” Esteban Conejos Jr. said in his first media briefing at the Department of Foreign Affairs on Tuesday.
Conejos said that of the four OFWs, three are women who have been convicted of killing their employers in
The male OFW was meted the death penalty in
Meanwhile, Cornejo said the DFA has recently hired two Kuwaiti lawyers, who are experts in the appellate level, to represent OFW Marilou Ranario who has been sentenced to death by hanging for killing her Kuwaiti employer last year.
Aside from these cases, Conejos said his office would be focusing on assisting 32 other OFWs in different countries who are facing offenses punishable by death.
Friday, March 31, 2006
Saving four OFWs on death row is priority of new DFA exec
Remittance costs eat up 5% of OFW incomes -- BSP
Remittance costs eat up 5% of OFW incomes — BSP
By Des Ferriols
The Philippine Star 02/03/2006
Sending money to their families cost overseas Filipino workers (OFWs) between 1.31 and 4.4 percent of their income, equivalent to a total of about $154.5 million to $519 million that are paid to banks out of the projected $11.8 billion worth of remittances this year.
According to an estimate made by the Bangko Sentral ng Pilipinas (BSP), the cost of sending money is even higher if OFWs send their earnings through non-bank channels such as door-to-door delivery services which cost up to almost five percent of their income.
BSP Deputy Governor Diwa Guinigundo said yesterday that remittance fees vary depending on whether the remittance is coming through banks or money transfer agents and whether the money is being directly credited to the account of beneficiaries, other local banks or door-to-door delivery.
According to Guinigundo, the cost is also affected by the origin and destination of the remittance as well as the mode of payment, whether in pesos or in US dollars.
"Based on information we have gathered, the cheapest remittance fee would involve direct deposit of remittance in pesos to an account maintained with the remitting bank," Guinigundo said.
The most expensive, on the other hand, is the door-to-door delivery of foreign exchange remittance. Additional fee is also charged for delivery made outside Metro Manila.
Guinigundo said a study made by the BSP indicated that bank remittance fees range between 1.31 percent and 4.4 percent of the amount of remittances.
He said these fees include the transfer cost as well as the cost of foreign exchange conversion.
"That’s why promoting competition among the different service providers would help bring down the remittance fees," Guinigundo said. "We’re also working to remove barriers that tend to increase remittance charges and to improve payment and settlement systems to make it more efficient to lower remittance costs."
The BSP official added there is also a serious need to educate OFWs and their families in channeling part of their remittances to savings and other micro-enterprises.
In time, Guinigundo said OFWs invariably return to the country and saving up part of their income would help them reintegrate to the economy.
More on OFW Power
More on ofw power
BIZLINKS By Rey Gamboa
The Philippine Star 02/03/2006
Our recent column (Harnessing the OFW Power, 30 January 2006) quickly elicited quite a number of comments from readers, many of them accessing the electronic version of The Philippine Star item via the Internet from as far as the
We’ve compiled some of the more interesting reactions for today’s column. They paint an interesting picture of how our overseas Filipino workers feel about their years working abroad. This first one is from Cianamen Palmero who is now employed in
"I just read your column (Harnessing the OFW Power, 30 January 2006) and I do agree with the idea. I’ve been here in the
"My long term goal is really to invest in marketable securities and real estate. I’m quiet fortunate ‘cause I have the financial freedom and the ample knowledge to hopefully engage in such things unlike most of our kababayans here abroad.
"Most of us here really want to invest in any form of business but some just don’t know where to start, what to do, or simply just don’t have the business acumen to really succeed in their would-be chosen business.
"OFWs are willing to invest so long as they know their money would be safe and (the) returns sufficient. Whoever will handle such program must have integrity, compassion and vision. Integrity, because we all know how we perceive our politicians to be; compassion, for the hard-earned money that these OFW’s worked hard for; and finally, the vision to really understand what this program is all about and where is it leading to. And of course let us not forget the significant role of information dissemination in such kind of program.
"Anyway, hope I could read more of these kinds of programs and hopefully too, it won’t remain an idea written in a piece of paper.
Invest in the economy |
This one is from Carina Dizon from the
"I read your column about investing in the
"I would like to invest and help our economy, but our government was not clear on how the overseas worker could get involved and (how they could) invest their hard earned money. The government should guarantee the investment the same way it guaranteed the international investors, because overseas workers want a guaranteed return of their hard earned money.
"How I wish the Philippine government introduced to the Filipino people especially overseas worker the steps on how to invest in simple layman terms. For a start, the government should educate the overseas worker prior to leaving the country (on) the following:
"1. A guarantee that the money invested would not go to the hand of blue collar criminals.
"2. Steps on how to invest, what, whom, where, how much the minimum/maximum interest required and where to purchase it while… abroad, likewise, the terms or conditions in clear language.
"3. Continued dissemination of investment information or options, and where and how to get them.
"4. Information on who is managing the investment and where the money is (going to be) invested. The investments for (companies like) NAIA-3, UCPB, and Napocor should be managed by people / private companies with… sterling records.
"Probably President Arroyo should harness her talented economic managers to work on this and implement it as soon as possible, so that the overseas worker would not spend all their hard earned money on daily consumptions. The government should educate the overseas worker, their families on how to invest.
Relentless financial literacy campaign |
Tony Ranque from the
"I believe we need to do massive and relentless financial literacy campaigns for OFWs and families first so that they will understand and appreciate what is being proposed (in the column Harnessing the OFW Power, 30 January 2006).
"OFWs should then be encouraged to form small savings and investment groups where they may jointly educate themselves on financial matters.
"Incidentally, I heard that BSP (Bangko Sentral ng Pilipinas) will undertake a series of advocacy campaigns on financial literacy programs for OFWs and their beneficiaries in various regions of the country starting February."
ERCOF is a non-profit organization whose avowed vision is for an economically, politically and spiritually empowered
Should you wish to share any insights, write me at Link Edge, 4th Floor,
Only GMA can exempt OFWs from paying $5 Naia security fee
Business Mirror
February 3, 2006
UNLESS President Arroyo signs an executive order, all overseas Filipino workers (OFWs) would pay the $5 "security charges" that the
The Naia is raising P1.3 billion a year, or about P7 billion in five years, to finance a comprehensive effort to make the Naia a veritable fortress equipped with all kinds of detectors, listening devices, hand-held "wands," x-ray portals and vans that could detect if nearby vehicles or suspected cars contain explosive devices.
This van is similar to the ones that the Federal Bureau of Investigation (FBI) deployed in
Called a "backscatter" van, the vehicle is equipped with a threat image projection (TIP) equipment showing which vehicles within range contain bombs or explosive charges, and each car would cost about $5 million or P27.5 million each.
On the other hand, the x-ray portals that would be deployed at the airport's entrance would also be able to detect any metallic object or suspicious items in a person's possession that carriers could show so as to avoid body frisking or "patdown" inspection, according to an official of the premier airport who is privy to the three public hearings conducted among airport and airline officials.
The most contentious issue that the Manila International Airport Authority (Miaa) has to deal with is whether it has the political will to charge $5 as well to domestic travelers, expected at about three million passengers a year. "The International Civil Aviation Organization (ICAO) has allowed all ICAO member-countries to levy the security fee and its edict does not exempt anyone from paying, including the OFW or domestic passengers," said a Miaa official who requested anonymity. R. Mercene
BTr to craft new debt tool for OFWs
Business Mirror
Feb 6, 2006
BTr to craft new debt tool for OFWs
THE Bangko Sentral ng Pilipinas has endorsed the issuance of a new debt instrument envisioned to benefit millions of overseas Filipino workers (OFWs) and their families while helping deepen the domestic capital market as well.
Officials said the new instrument, details of which are still to be fleshed out by the national treasurer, will definitely not embody an earlier proposal by foreign bankers to securitize the huge remittances of OFWs.
In an interview, BSP chief Amando Tetangco Jr. said the new proposal has received a favorable reception from the national government although details of the transaction have yet to be hammered out.
"We have already endorsed the idea to the national government and the Bureau of Treasury is considering the proposal," Tetangco said on Friday.
According to him, it is up to the BTr, now headed by former Citibanker Omar Cruz, to transform the idea into a full-scale debt instrument that will particularly benefit OFWs, while also making available more investment opportunities for long-term investors in the country.
He stressed the debt instrument would not involve the securitization of OFW remittances that some foreign banks, would have Philippine authorities endorsed and adopted. J. Vallecera
Pinoys held in OFW's death in Brunei
Business Mirror
Feb 6, 2006
Pinoys held in OFW's death in
ROYAL Brunei police picked up for questioning five Filipinos and one Bruneian Thursday last week in connection with the death of Filipino national Jovita Zapanta, whose body was found in a secluded public area on January 28 in the Brunei capital, Bandar Seri Begawan.
The Department of Foreign Affairs (DFA) said the Philippine embassy in Brunei Darussalam is extending full assistance to the Filipinos arrested for "criminal conspiracy to commit murder."
Ambassador to Brunei Virginia Benavidez told DFA Undersecretary for Migrant Workers Affairs Esteban Conejos that based on the initial police report, Zapanta died in another place and "circumstantial evidence" collected showed she was murdered elsewhere. Her body was found wrapped in plastic and fabric.
Bruneian pathologists said that Zapanta died either on January 26 or 27. "The embassy is working for the early resolution of the case [and] to facilitate the shipment of Ms. Zapanta's remains to the
She said the incident was reported to the embassy on January 27 by Zapanta's daughter. Benavidez said "embassy officials then immediately searched for Ms. Zapanta's residence and relatives in Brunei Darussalam. Three of Ms. Zapanta's housemates were eventually contacted, and were accompanied to the police for further investigation." E. Torres
Citibank to go into remittance business
Citibank to go into remittance business
By Ted P. Torres
The Philippine Star 02/09/2006
After taking a significant chunk of the credit card market, Citibank NA is now trying its hand on the money transfer or remittances business for Filipinos residing or working in the
Launched last year, the US-based financial institution will use its money cards or automatic teller machine (ATM) card to cater to the relatives of some 2.7 million Filipinos residing in the
Citibank has tapped its subsidiary – Citibank West (
Citibank West has over 900 branches US-wide although only 50 branches, mainly in
"We want to make all our 900 branches US-wide open to Filipinos," Calixto Garcia-Velez, Citibank
Garcia-Velez claims the cost of each transaction is only $8 which could be remitted by relatives in the
If the Philippine transaction is done in Citibank-based ATMs, there are no other fees. Interbank fees, however, apply for ATMs with other banks but within the MegaLink or BancNet networks.
Another distribution channel locally is Citibank Savings Bank, a product of the acquisition of Citibank of the then Insular Savings Bank. The thrift bank presently has 15 fully-operational branches, with another 21 branches expected to be fully online soon.
Garcia-Velez said that they are also offering various services and products for Filipinos in the
OWWA, Microsoft bridge digital divide among overseas workers
i.t. matters
feb 10, 2006
OWWA, Microsoft bridge digital divide among overseas workers
Alfonso Mirabueno, 45, never thought that at his age, he would be at the Overseas Workers Welfare Administration’s (OWWA) training center for a month now tapping at the computer.
After 16 years of working abroad, he has enrolled in OWWA’s "Tulay: An Unlimited Potential Program for Overseas Filipino," an information technology (IT) training module where overseas workers take computer lessons on internet skills and basic applications in between jobs.
Tulay is an IT training program funded by a grant from software giant Microsoft
"I need basic knowledge of computers for [the] documentation [work] in my next office, which is an offshore rig off the
Mr. Mirabueno is one of the almost 19,000 overseas workers and their beneficiaries targeted in eight of Tulay’s training centers and three planned sites this year, OWWA administrator Marianito D. Roque told BusinessWorld.
"The free training gives [overseas workers] and their families improved level of communication other than SMS [short messaging system] or phone calls. By teaching them how use computers they will have a cheaper and longer communication alternative, imagine three SMS’s is almost equal to an hour of online chat and they can even see each other [through the webcam]," he added.
The overseas workers and their families also receive training for computer applications like Microsoft Word, Microsoft Excel for simple accounting and budgeting and Web skills, including Web design through a training module accredited by the Technical Education and Skills Development Authority (TESDA). Those who finish the program are given a TESDA training certificate.
Tulay’s initial phase involved the opening of training centers at the
In 2004, three more centers were set up in Hong Kong,
"The project envisions that [overseas workers] will have a better peace of mind and thus promote and maximize their productivity at the job sites with the assurance that they have direct contact and can monitor family activities on a day-to-day basis," Mr. Roque said during the launch of Tulay’s third phase.
New training sites in
Antonio Javier, Jr., Microsoft’s managing director, told Business-World that Tulay is part of the firm’s commitment to "bridge the digital divide for under-served sectors of society [by] providing real solutions unique challenges that face [overseas workers]."
He added that additional training sites would be set up soon in the Middle East and
"We hope by the end of five years there would be a network for [overseas workers]."
Boholana OFW returns home safely
Feb 8, 2006
Boholana OFW returns home safely
By RIC V. OBEDENCIO
Boholana Overseas Filipino Worker (OFW) Maria Roxanie Luangco came home safely after an ordeal.
In an interview, Luangco said she worked as a domestic helper (DH) while experiencing a “nightmare” in
But for the family of Basilia Boncales of Trinidad town it seemed unfortunate that her daughter Estelita Avenido Boncales, who worked as DH was reportedly missing in
The fate of Margeliza Remoroza of La Victoria, Carmen town, who worked in
The family of Boncales expressed worry and asked agencies concerned to help them. The families of Boncales and Remoroza recently had approached OWWAD for help.
OWWAD said that the as of this writing no update from Overseas Workers’ Welfare Administration (OWWA) on the whereabouts of Boncales.
At the same time, OWWAD is awaiting word from Philippine the embassy in
PAL flights to Riyadh can stay if Dubai route is added
Business Mirror
Feb 13, 2006
PAL flights to Riyadh can stay if Dubai route is added
BY Lenie Lectura
Reporter
PHILIPPINE Airlines (PAL) said it would call off plans to suspend flights to
In a letter to Transportation Secretary Leandro Mendoza, PAL president Jaime Bautista proposed that the country's air negotiating panel negotiate for the flag carrier to operate a Manila-Dubai-KSA (
Specifically, PAL wants to pick up passengers in
"We believe that a small window of opportunity exists to save PAL's RP-KSA flights, if we are able to secure the necessary rights to operate via United Arab of Emirates (UAE) routing, with commercial traffic rights between KSA and
PAL already had intensive discussions with Saudi Arabian Airlines last week on this matter and related issues, and thus, it said, the next necessary step would be inter-action at the government level.
"We therefore urgently appeal to the government, through the DOTC and the RP Air Panel, to assist us in pursuing this opportunity with KSA authorities in the next few weeks, as it is perhaps the last chance to save our flag carrier's direct air links to the OFWs in the KSA," said Bautista.
PAL is set to suspend flights to
Six national carriers of Gulf countries operate 43 flights weekly between
In addition, five East Asian carriers serve the Gulf market from the
Saudi Airlines flies nine times a week to the
"The impeding suspension of PAL's Manila-Riyadh flights is a sad and sobering event that has been forced on us by a most untenable situation: a massive oversupply in RP-Middle East airline capacity exploited by subsidized Arab Gulf carriers to distort and eventually eliminate competition from airline business enterprises like PAL," said Bautista.
PAL attributed its $10 million or about P545 million yearly losses to the grant of nearly 800,000 seats to Gulf Air carriers since 2002.
Goodbye dollars, hello euros
this story was taken from www.inq7money.net
Goodbye dollars, hello euros
Posted: 6:52 AM Feb. 26, 2006
Doris C. Dumlao`
Inquirer
(Published on page B2 of the February 26, 2006 issue of the Philippine Daily Inquirer)
PABLO Yambot, a yuppie in his early 30s, has long wanted to convert a portion of his savings in euros or in financial instruments denominated in
This systems manager for global business services at Procter & Gamble Asia Pte. Ltd. isn't really an active portfolio investor but he's well-read, well-travelled, fairly attuned to global financial trends and has excess cash outside of his household's cookie jar. His interest was kindled upon noticing that the US dollar has been weakening against major global currencies while the euro has held its ground.
Yambot's mindset reflects what many central banks across the globe are now doing—shifting some of their foreign reserves to euros. And there's an increasing supply of high-yielding securities in this currency as many emerging markets, including the
In the past, it wouldn't have been easy for a domestic retail investor like Yambot to find a euro-denominated financial instrument that would earn more than what's offered by foreign currency deposit units or dollar accounts. For instance, the Philippine government sold 500 million euro bonds early this year (as part of a $2.1-billion fresh global bond foray) and Yambot would have eagerly bought some if he had the chance.
The Ayalas' Bank of the Philippine Islands now makes it possible for resident investors to participate in a fund that invests in those euro-denominated securities. Its ALFM Euro Bond Fund, created in March last year but offered to the public only recently, is the
"The euro has come of age," says Romeo Bernardo, chair of the ALFM Euro Bond.
European Union's Ambassador to the Philippines Jan De Kok who graced the new fund's launch says the euro, introduced in 1999 only as a paper currency, has gone past birth pains to emerge as a major global currency.
"This fund is yet another confirmation that the euro has arrived in the
Euro banknotes and coins have been in circulation since January 2002 and are now a part of daily life for over 300 million Europeans living in the eurozone, being the single currency used by 12 European Union countries:
"It's an alternative for investors to allow them to spread their risk and therefore reduce their losses and increase their gains with another international currency, the euro," De Kok notes with pride.
"The economic fundamentals in the eurozone have gotten better and better and that shall underpin the strength of the euro, allowing investors to make larger profits while having to take less risks," he says.
A mutual fund is an investment entity that pools shareholder or unitholder funds and invests them in various securities. The units or shares are redeemable by the fund on demand by the investor. The value of the underlying assets of the fund influences the current price of units.
In the case of the ALFM Euro, about 98 percent is currently invested in Philippine euro-denominated sovereign bonds but the mutual fund plans to shift a portion to other Asian sovereign debt issues.
Dojo Sison, president of BPI Asset Management Inc., says the stable interest rate regime in the euro-zone, as opposed to the monetary tightening cycle in the
The mutual fund is benchmarked against one-year German Treasury bills and has likewise overperformed it so far this year. From year to date, ALFM Euro has posted an annualized return of 9.17 percent versus the 2.72 percent from the comparative German treasury. For the past 30 days, it has yielded 3.53 percent versus the 2.47 percent German benchmark.
The ALFM Euro aims for steady income with returns and inflows derived out of investments in primarily foreign currency-denominated instruments and securities issued by local and foreign entities, with its base currency in euros.
Minimum investment in the new mutual fund is 1,000 euros while minimum additional investment is 200 euros. It is distributed by BPI Capital Corp., BPI Securities Corp. and BPI Investment Management Inc. This year, ALFM Euro is targeted to grow its size by about 20 percent, leveraging on BPI's leadership in the country's growing mutual fund business.
BPI officials say the mutual fund will also target European expats in the
5 OFWs wounded in Saudi shootout; Saudi forces kill terrorist suspects after siege
5 OFWs wounded in Saudi shootout
Five Filipino overseas workers were wounded after unidentified armed men shot at their service van in a suburb in
ABS-CBN Middle East Bureau chief Dindo Amparo identified two of the victims as Rodel Canlas Miranda and Jimmy Mayo Pastor. The two were rushed to the National Guard Hospital in
Embassy officials have yet to identify the three remaining victims who were rushed to another hopsital.
The victims were on board a service van together with other OFWs at 6 a.m. when they were hit by a volley of gunfire from an unidentified armed group.
Reports said the incident may have been a part of a shoot out between Saudi military and rebel troops in the affluent al-Hamra district of east
Al Qaeda suicide bombers attacked the world's largest oil processing plant in Abqaiq on Friday, in the first direct strike on a Saudi energy target since al Qaeda launched attacks aimed at toppling the US-allied monarchy in 2003. With a report from Reuters
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http://www.abs-cbnnews.com/storypage.aspx?StoryId=31230
Saudi forces kill terrorist suspects after siege
A shootout erupted at dawn after security forces besieged suspects in a villa in east
An official statement said five men were killed and one other suspected militant was arrested elsewhere in the capital.
"Early this morning security forces stormed a building in east
The shootout took place days after al Qaeda suicide bombers tried to storm the Abqaiq oil facility in the first direct strike on a Saudi energy target since the militant group launched attacks aimed at toppling the US-allied monarchy in 2003. The kingdom is the world's biggest oil exporter.
The men were hiding in a villa in a newly-developed residential district near the al-Hamra area where several Western housing compounds are located, security sources said.
Security sources said police had tracked down the militants after pursuing two vehicles that appeared on the surveillance video of the Abqaiq facility shortly before it was attacked.
One source said the men were also traced through Internet monitoring. An Internet statement issued at the weekend said al Qaeda was behind the Abqaiq attack.
Qaeda weakened
The Saudi wing of Osama bin Laden's network has been weakened by a government crackdown in which its leaders have either been killed or arrested.
Witnesses in
"Around the time of dawn prayers, we heard the sound of shots and saw the sky light up. Then a short time later there were heavy explosions," journalist Odwan al-Ahmar, who lives in the area, told Reuters. The clashes trapped about two dozen worshippers in a mosque, he said.
The shoot-out ended after two hours with the deaths of all of the men inside the building, the security sources said.
The Abqaiq strike was the first major attack by militants opposed to the Saudi monarchy since suicide bombers tried to storm the Interior Ministry in
Authorities say two of the bombers were on a list of top wanted al Qaeda-linked Islamic militants issued last year. Al Qaeda had previously identified them in an Internet statement posted on Saturday and vowed more attacks.
An Interior Ministry statement said the suicide bombers in Abqaiq had used two tonnes (4,400 lb) of explosives in their foiled attack, which caused a huge explosion at the gate of the facility.
Security analyst Faris bin Houzam said only four of the 36 suspects on a most wanted list remained at large in
The men killed on Monday have not yet been identified.
"This is not a new generation," he said, referring to the latest incidents. "It's clear that these are people the security forces have been tracking over the past two years." Reuters
Wednesday, March 29, 2006
Increasing savings rate by OFWs noted
Manila Bulletin
December 1, 2005
Increasing savings rate by OFWs noted
The rising growth rates in financial services (15.6 percent) in the third quarter, as compared to the 9 percent a year ago is an indication of an increasing savings rate by families of overseas Filipino workers (OFWs).
"It seems that families of OFWs are not splurging on the sums remitted, as seen in the steady rates for consumption," said Socioeconomic Planning Secretary Augusto Santos.
The implied savings may augur well for the growth in consumption and investment in 2006, said
"The ratio of non-performing loans to total portfolio in the banking sector has been declining, which is 9.4 percent as of August 2005 compared to 13.9 percent in the same period last year," he said.
The demand-side of the economy continues to be consumption-led.
Personal consumption expanded 4.8 percent, buoyed by the strong dollar inflows from abroad.
Growth in remittances from foreign-based workers offset the impact of oil prices. As of September 2005, remittances reached US$7.9 billion.
"They are at all-time high, and projected to hit $10.3 billion for the whole year. The amount does not include money sent outside the banking system," he said.
On the other hand, public consumption declined as government tightened its rein on fiscal expenditures.
Capital formation slumped 2.9 percent as businesses held back on investments on account of the political discord, which peaked during the third quarter and the rising prices of oil.(EHL)
11 Jailed Filipino Truck Drivers Get Clemency
Arab News
The
Thursday, 1, December, 2005 (29, Shawwal, 1426)
11 Jailed Filipino Truck Drivers Get Clemency
Alexander E. Asuncion, Arab News
The drivers were sentenced to three years in prison last year after a Shariah court found them guilty of smuggling liquor into the Kingdom from the eastern borders.
But the embassy said it was able to negotiate for a reduced sentence and all 11 drivers are to depart for the
No details were given about their case.
Attache Tomas Lauzon of the ANS identified the 11 lucky drivers as Reynaldo Almonte, Roberto Bendejo, Jessie de Castro, Mausito Orgo, Rolando Pagaduan, Zaldy Raemon, Sandy Raemon, Pio Vela, Renato Villanueva, Alexander Urbano, and Eduardo Medrazo.
All convicts worked with one company in the Eastern Region as trailer/truck drivers.
Attache Ahmed Bajunaid, also from ANS, negotiated for their release, according to Lauzon.
Air tickets to
Lauzon said that he and Bajunaid will be traveling back to Alkhobar next week to personally oversee and resolve pending police cases.
Spenders to Entrepreneurs
Spenders to Entrepreneurs
By Miriam Grace A. Go
Newsbreak Assistant Managing Editor
FOR MOST of Michael Vidamo’s youth--12 years to be exact—his father Ismael was working as a trailer driver in various countries in the
Now 33 and married, Michael remembers all this with a tinge of regret. The house is still there, but the jeepney and the farm in Dasmariñas,
Left behind to raise his own family, Michael eventually worked as a stainglass technician in
Michael and his father were among the many overseas Filipino workers (OFWs), now numbering about 8 million, whose hard-earned dollars failed to secure for them stable livelihood when they returned home. During their stints overseas, there were no known efforts by the government, private sector, or civil society groups here to train OFWs in managing their finances or starting small businesses that could sustain them when they could no longer work abroad. If there were such programs, these were not carried out in earnest and did not reach many OFWs.
The
But efforts to help them invest their monies wisely back home are just beginning—a bit late for a country that is the recipient of the third largest amount of remittances worldwide.
Enter NGOs
“The realization [to do this] kept building up in the last 10 years,” said Ildefonso Bagasao, president of the Economic Resource Center for Overseas Filipinos (Ercof) Philippines Inc. Ercof is a non-profit organization that assists mainly OFWs from Europe in planning their finances, specifically to start rural-based enterprises, get health insurance for their families, and legal counseling when buying real property.
Only in the last three years have concrete steps been taken to channel OFW remittances to long-term investments. And the efforts are coming mostly from non-government organizations (NGOs), rural banks, and cooperatives.
Bagasao explained that “civil society groups are the ones working at the grassroots, so they are the ones who see the gap” between what the OFWs contribute to the economy and how this could be enhanced and sustained.
Specifically, OFWs are encouraged to go beyond saving in local banks and buying their own houses and lots, but to start small businesses to support their families and develop the economies of their communities as well. This way, their remittances are used to ease poverty in their hometowns. After all, two-thirds of all OFWs come from the countryside.
In December 2004, the ADB published a study, “Enhancing the Efficiency of Overseas Filipino Workers’ Remittances.” From the data gathered, it appears that about 75 percent of what OFWs remit are spent by families on necessities (such as food, rent, and health-related expenses) and on so-called safe investments, such as life insurance, education, and savings in banks.
A fourth of their remittances are spent by families on unproductive items, such as lending to relatives and friends; throwing parties during birthdays, fiestas, and other occasions; and shopping and dining out. In an article in the magazine CFO Asia last August, Jose Sio of SM Prime, developer of the SM chain of malls, estimated that half of SM’s 1.5 million daily buyers are relatives of OFWs.
Strong Dependence
“Akala ng mga kamag-anak, napipitas lang sa puno ang pera (Relatives think that the OFWs are just picking money off trees). They don’t seem to appreciate how difficult it is for the OFWs to earn those dollars,” said Andres Panganiban, an international banker for many years before he put up the New Rural Bank of San Leonardo (NRBSL) in Nueva Ecija. His bank is a pioneer in giving realistic investment options to OFWs.
“They [OFW families] have developed a strong dependency on the remittances that even if they have enough for their basic needs, they still ask additional money from their relatives working abroad,” Panganiban added.
Estrella Dizon Añonuevo, executive director of Atikha-Kooperatiba Balikabayani, confirms this unfortunate fact, going by her experience with OFW families in communities in Laguna, Batangas, and Quezon—all in Southern Tagalog, the region with the biggest OFW population next to Metro Manila.
“In 70 percent of the cases, when a family member gets employed abroad, all other household members who used to work just stop working and depend on the OFW. Then they use up the remittances on consumption. They don’t have a long-term plan [for the remittances],” she said.
Bagasao, who was also the lead consultant for the ADB study, said that the ADB statistics on OFW savings and investments in businesses should not mislead. The study shows that “68 percent of the beneficiaries are able to save, and 87 percent of them keep their savings in a bank.” The figures also show that 19.6 percent of remittances have been used or are intended for investment in business.
But, he told NEWSBREAK, most of the savings accounts are “like payroll accounts so it’s easier for the OFWs to send money, but the money is immediately withdrawn and only the required minimum deposit is left.”
Thinking that their families would be less dependent on them if there were small businesses to tend, OFWs eagerly send home the capital for businesses that their relatives suggest but fail to sustain later, according to NGO workers interviewed by NEWSBREAK.
Most of the time what they suggest are enterprises or services that neighborhoods are already saturated with, like sari-sari stores and tricycles or passenger vans; enterprises that they don’t have the skills to manage properly, like small poultry farms; or those with promises of big, quick returns, such as fraudulent pyramid marketing schemes.
“A lot of times, the OFW would send money to buy a tricycle. When she comes home, what is left of it is a bicycle. She sends money to start a piggery. When the town fiesta comes, the family wants to celebrate in a grand way, so they slaughter the pigs and have lechon,” Panganiban said.
There are no formal studies on this phenomenon, but Bagasao said there are “hundreds of anecdotes” about failed businesses run by OFW relatives.
“Whether remittances pass through banking channels or not, they eventually end up in the country of origin with family members, who often have much discretion on how these amounts are spent. Relatives who lack the proper business attitude or appreciation for the hard-earned income often are asked to manage small enterprises, which eventually fail,” the ADB study noted.
Pooled Investments
The strategy that NGOs, rural banks, and cooperatives have adopted is to pool the money of OFWs into feasible enterprises that involve several households without making them compete with each other. The investments can range from P30,000 to P500,000. These groups identify the market for goods to be produced, then train the families of investing OFWs and turn them into suppliers to big buyers.
“You have to make it easy for OFWs to venture into an enterprise,” said Añonuevo. Otherwise, they will remain in this perpetual cycle of financing poorly identified businesses that their untrained families will mismanage.
Atikha-Balikabayani, for example, subscribes to the trade and industry department’s one-town-one-product program. It has made OFW families from San Pablo City in Laguna invest in manufacturing coconut-based products, such as virgin coconut oil, handmade paper, and nata de coco. Its client-community in Mabini, Batangas, is into bamboo craft. It also makes soaps and lotions from natural ingredients, to complement the local tourism industry. The community in Candelaria, Quezon, is preparing to start its organic farming business.
Panganiban said that another key factor for OFW investments to succeed is to entrust their management to financial experts and cooperatives, and to the OFWs themselves when they return home—not with their families who have been spending their remittances on consumer items.
“Put the money where they cannot immediately be withdrawn, like pension funds, or in [pooled] businesses that are managed by cooperatives,” he said.
Panganiban’s NRBSL is about to start helping OFW families in
OFWs can also put their money in rural banks that extend credit to small entrepreneurs, advised Bagasao. “The theoretical computation is that every P100,000 used for micro-finance creates 20 enterprises in one year.”
Unfortunately, the groups that offer these services don’t have enough funds to reach more OFWs, while “the government, which has the funds, doesn’t use them judiciously,” Bagasao said. The government has given a negligible push to this campaign.
Sense of Security
There is no single program from which the agencies serving OFWs get direction to achieve this goal. The labor department only gives pre-departure orientation seminars to overseas workers, where basic information on financial instruments and possible business ventures are among the topics discussed. Some OFWs attest that investment opportunities are not discussed in these government-sponsored seminars.
Panganiban said: “The government should send financial advisers to OFWs to orient them about investment opportunities in specific provinces. The information they will get will make them strive harder to save.”
“Most banks still look at OFWs as dollars, as markets for their products,” Bagasao said, and have yet to offer products and services to help OFWs start small businesses.
So far, Planters Development Bank has a program that introduces migrant workers to franchised businesses. The Land Bank of the
Although “there’s great promise” in the still very young civil society-private sector partnership in turning OFWs into successful entrepreneurs, Bagasao said “it will take some time and a lot of experimenting” to maximize this.
But it’s a challenge—in fact, a requirement—that needs to be addressed immediately. The OFWs, called “bagong bayani” or new heroes, for their dollar remittances that keep the Philippine economy afloat, do not intend to grow old in foreign lands. Give them a sense of security that their years of hard work abroad can pay off here, Panganiban said, “so they can come home for good.”
From latest edition of Newsbreak
World Bank: OFW money shouldn't distract gov't policies
this story was taken from www.inq7money.net
World Bank: OFW money shouldn't distract gov't policies
Posted: 2:15 AM Dec. 03, 2005
Oliver Teves
THE
The
"Over the years, excellent performance of remittances may have contributed to complacency in addressing fiscal deficits and low productivity growth," said the bank's country representative Joachim von Amsberg. "Remittances should not distract the country from its huge potential for domestic investment and growth."
Von Amsberg spoke to a group of journalists and economists about the bank's recent report, "Global Economic Prospects: The Economic Implications of Remittances and Migration," which urged countries not to view overseas employment as a "substitute for economic development in the origin country as ultimately, development depends on sound domestic economic policies."
President Gloria Macapagal-Arroyo's spokesman, Ignacio Bunye, has said the administration acknowledges sacrifices made by Filipinos seeking opportunities abroad but added that the government will continue "to look for ways to keep them home by aiming at a strong economy generating well-paying jobs."
The World Bank report said remittances worldwide have amounted to 232 billion dollars so far this year, of which developing countries like the
Vera Songwe, a World Bank economist, said the remittances were so huge that they were slightly larger than the country's electronics exports, making Filipino workers "the largest export commodity."
Philippine Economic Planning Secretary Augusto Santos said that from January to September, overseas Filipinos sent home 7.9 billion dollars, up 27 percent from the same period last year.
Songwe also expressed concern over the increasing number of skilled workers taking on unskilled work overseas, resulting in a serious brain drain, particularly in the health and education sectors.
She said 1,000 private hospitals have been forced to close for lack of manpower over the past five years, and 6,000 doctors have shifted to nursing, which is in demand overseas. She added that 10,000 teachers have left for jobs abroad since 1988, and 32,000 teachers now work as maids in neighboring countries in
Govt drafting bill to take back OFWs' tax-exempt privilege
Manila Times
Wednesday, December 07, 2005
Govt drafting bill to take back OFWs’ tax-exempt privilege
By Dennis C. Serfino, Reporter
INTENSIFYING efforts to increase its tax revenues, the Philippine government may soon impose taxes on high-income overseas Filipino workers (OFWs), including business executives and entertainers.
This measure is expected to raise additional revenues of between P5 billion and P10 billion each year.
“I don’t think they would mind paying taxes because they used to anyway,” said a government economist, who cited such examples as Broadway performer Lea Salonga and former finance secretary Jose Isidro Camacho, who now works as a managing director for investment bank Credit Suisse First Boston in
To do this, Congress must repeal Republic Act 8424, or the Tax Reform Act of 1997, which provides wide-ranging tax breaks to different groups, including OFWs. Section 23 of the law stipulates that a nonresident Filipino citizen will be taxed only on income derived from sources within the
The government economist, who asked not to be named, said a draft bill is being prepared to repeal R.A. 8424. The measure would specify the threshold amount that would qualify an OFW as a high-income earner.
Remittances from OFWs coursed through banks rose 28 percent year on year to $941 million in September. This brought the nine-month level to $7.9 billion, up 28 percent from the comparable level in 2004.
The Bangko Sentral ng Pilipinas projects this amount to hit $10.3 billion for the full year, a growth of 20 percent from $8.5 billion last year.
Preliminary data from the Philippine Overseas Employment Administration showed that in September, the total number of deployed workers rose year on year by 5.2 percent to 77,830.
The total number of deployed land-based workers grew 5.7 percent to 58,281, while sea-based workers rose 3.7 percent to 19, 549.
Outlook upgrade in first quarter
Meanwhile, financial services firm ING Bank expects international credit-ratings agencies to upgrade their outlook on the
“We’re expecting that the negative outlook will be lifted soon. The first rating action probably would be the upward revision in the rating outlook of Moody’s [Investors Service]. We think that will occur probably January or February,” said Tim Condon, ING Bank’s chief economist and head of research for Asia on the sidelines of a conference of global financial executives in
ING Bank also projects the Philippine economy to grow between 5 percent and 6 percent next year as the oil price shock fades.
Condon said. The peso may average at 53.80 to the dollar this year and move north of that exchange rate in 2006.
Government mulls lifting tax exemption of highly paid overseas Filipinos
Government mulls lifting tax exemption of highly paid overseas Filipinos
By Des Ferriols
The Philippine Star 12/07/2005
The government is floating the idea of lifting the tax exemptions of highly paid overseas Filipino workers (OFWs) to help generate revenues for the national coffers.
OFWs have been exempted from income and other taxes but government economists said the "top bracket" of OFWs working in "power positions" could be asked to waive their exemptions.
When asked, finance officials said the proposal was not being actively pursued at the department level but it could be studied as a possible option over the long term.
The proposed tax on OFW income, however, would still exempt majority of Filipinos working abroad and possibly cover only the top earners.
If pursued, however, taxing high-income OFWs would require an amendment of existing tax legislations and factor in the different bilateral agreements with various countries covering tax reciprocity.
But officials admitted that if discussions were even started, the proposal is likely to generate adverse public reaction unless it was explained properly.
"It would appear like a class tax," said one finance official.
According to another official, however, taxing the highest income earners working abroad should be viewed as a progressive tax policy.
Taxing OFWs has been virtually unthinkable since remittances from workers abroad have been financing the government and generating huge amounts of foreign currency for the country’s international reserves.
"The reason our workers have to go abroad for jobs is because we can not provide them with jobs here," said the source. "That is why they are exempted from taxes. But not all of them should be exempted."
One of the possibilities, according to the source, was to impose a fixed amount that would be paid only by high-income OFWs.
By "high-income, the source said this would refer to the likes of former finance secretary Jose Isidro Camacho or even famed entertainment personalities as singer Leah Salonga.
"We should not be talking about doctors or teachers or engineers who have to go abroad to get jobs," the source said.
OFW remittances have been the backbone of the Philippine economy since the rise in offshore deployment in the 1980s.
The Bangko Sentral ng Pilipinas (BSP) said the country’s dollar surplus is expected to reach $2 billion this year mostly from remittances by Filipinos working abroad.
The BSP said remittances from overseas Filipino workers (OFWs) would grow even stronger than expected, possibly reaching close to $11 billion for the whole year.
The BOP represents the sum total of the country’s transactions with the rest of the world, including debt repayments, borrowings, investments and remittances.