ING Bank to market mutual funds to OFWs

Manila Times
Tuesday, March 14, 2006

ING Bank to market mutual fund to OFWs
By Maricel E. Burgonio, Reporter

ING Bank has secured Bangko Sentral ng Pilipinas approval in principle for the Netherlands-based lender’s plan to market a mutual fund among overseas Filipino workers employed in Europe, a central bank official said.

BSP Deputy Governor Nestor Espenilla Jr. said ING Bank applied for the establishment of the International Filipino Fund, which aims to generate up to $200 million.

The fund, which will be offered to Filipino residents abroad, will be used to invest in Philippine businesses.

“ING is sponsoring International Filipino Fund, in which overseas workers can mobilize their resources through investment in mutual fund. They can buy shares in mutual fund and the fund can be invested in Philippine business,” Espenilla told reporters.

The BSP official said ING plans to create the fund in Ireland, as Filipino residents in Europe will be the main market.

A mutual fund allows small investors to make money out of the stock, debt and other financial markets without their having to pick which individual stocks and bonds or IOUs to place their bets on, leaving this decision to the fund’s professional managers.

In a related development, the BSP’s policy-making Monetary Board has allowed rural banks to offer foreign currency deposit units (FCDU) to service the OFW market.

Espenilla said the BSP will allow a rural bank to set up an FCDU provided it has P20 million in unimpaired capital and is well capitalized with a 3 percent Camels rating. The Camels rating is the international benchmark for banks, ranking them according to their capital adequacy, asset quality, management quality, earnings performance and liquidity.

Espenilla said more than 200 rural banks are considered well capitalized and may be qualified to offer foreign currency accounts.

He said the bulk of overseas workers and their beneficiaries can be found in the provinces. In its latest report, the BSP said OFW remittances coursed through commercial banks grew by 10.7 percent to reach $962 million at end-December. This brought total remittances for 2005 to $10.7 billion, 25 percent higher than the 2004 inflows.