Pinoys in Europe to be lured to save

Tuesday, October 25, 2005 (Sun.Star Manila)

Pinoys in Europe to be lured to save

SOME of the 30,000 Filipinos in Luxembourg, Belgium, Switzerland and the Netherlands will hear for the first time alternatives to where their remittances can impact significantly on their families and communities of origin.

The alternatives will be discussed in forums to be organized by the Economic Resource Center for Overseas Filipinos (Ercof) from November 3 to 13. The forums will be held in cooperation with the Philippine embassies and consulates as well as the Filipino organizations in the four countries and will all have resource persons from the Philippines.

Ercof president Ildefonso Bagasao hopes that Overseas Filipino Workers (OFWs) and their groups in the Netherlands will put part of their savings on micro-finance and local government unit (LGU) bond instruments that rural financial institutions in the Philippines are offering to them.

Bagasao revealed that 11 Filipinos in The Netherlands and five others in Luxembourg have already locked in five-year time deposits to two micro-finance rural banks - Xavier-Punla and Xavier-Tibud in Mindanao - totaling 9,510 euros (or P637,710 if one euro equals P67).

The deposits, made between April 2004 to June 2005, have an annual yield of 8.5 percent interest and are secured by the Philippine Deposit Insurance Corporation (PDIC). The deposits, Bagasao added, may already have resulted "in generating about 120 new micro-enterprises as they become part of the portfolio of the Xavier-Punla and Xavier-Tibud rural banks for these to re-lend to poor but enterprising citizens".

Bagasao said organizations of OFWs can also buy local government unit (LGU) bonds floated by Filipino towns and cities. Some 20 LGU bonds, mostly in rural towns, are in the pipeline, with the minimum for a bond to be floated at P50 million (743.162,90 euros).

Bagasao added that buying these bonds will not only give them higher yields, but will also provide direct benefits to their towns of origin. Ercof is advocating with the LGU units and their financial advisers that there be participatory decision making even at the stage of project identification, so that a big block of overseas Filipinos interested to participate would be in a strong position to determine which projects should be funded.

But the forums will especially emphasize financial literacy and cultivating the culture of savings since the Philippines has one of the lowest savings rate in the Asian region. The same also with entrepreneurship since only a percent of the entire Philippine population have entrepreneurial skills, according to the Department of Trade and Industry (DTI).

"The problem is that overseas Filipinos are all absent from the Philippines, and have little or no control over circumstances concerning the money they remit to families back home. This is where ERCOF helps them make informed decisions," Bagasao added.

Oxfam Netherlands, a Dutch non-government organization that funds projects in less-developed countries, is supporting the conduct of Ercof's forums.

Some 8.1 million Filipinos work and reside in 193 countries, as indicated by government data. Remittances averaging more than US$8 billion annually benefit more than a million Filipino households while these shore up foreign exchange reserves of the country.

Filipino associations overseas, mostly from North America, Australia and Europe, have also donated in the last 14 years some P1.5 billion to fund scholarships, school buildings, medical missions and health-related equipment in needy areas.

Estimates showed there are 15,431 Filipinos in the Netherlands, 14,647 in Switzerland, 12,600 in Belgium, and some 700 in Luxembourg. These Filipinos are service workers, professionals and employees of the United Nations, spouses of European nationals, and also undocumented migrants.

The seeds of the Ercof vision were initially sown in a forum in the Netherlands in 1999, and had evolved into its present mission of harnessing migrants' remittances to develop their towns of origin in the Philippines. (Press release)