Leading United Arab Emirates (UAE.) telecommunications operator Etisalat is jointly developing a mobile international transfer service with Smart Communications Inc., headed by Napoleon L. Nazareno, President and CEO.
Etisalat offers both fixed and mobile phone services to over 4.5 million subscribers, with a penetration rate of almost 100 percent in the UAE.
It offers advanced mobile services including 3G, MMS, Push To Talk and BlackBerry and is deploying Next Generation Network facilities to offer its fixed line services. Internet and broadband penetration rate in the Emirates has grown to around 51 percent.
Recently, Smart and Etisalat signed their partnership at the GITEX Technology Week, an international technology trade exhibition held in Dubai.
The Etisalat service, to be offered first in the UAE, will use Smart Services Hub, a global financial and telecom model based on the Smart Money electronic wallet through which telcos and banks offer mobile phone-based remittances.
July 03, 2007 Updated 12:15:59 (Mla time) Volt Contreras Inquirer
SINCE 2004, A EUROPEAN SHIPPING company has been hiring only Filipino crewmen for its tanker fleet, entrusting all its nine ships and their precious load to these "natural seafarers."
By 2009, Hellespont Corp. will have acquired 14 more vessels—still to be manned by "innovative, unflappable, lighthearted, and videoke-loving Filipinos."
There is actually only one "foreigner" on board a Hellespont ship these days—a Greek captain hired before 2004.
But the Inquirer learned from a grinning source that an alleged plot to turn him into a Pinoy was well underway, hopefully through the hearty meals served by the Filipino cook on board.
"Seafarers from other Asian countries are still catching up with the skills of Filipinos, their command of English, their problem-solving capability, the ease with which they adapt to new technologies," said Isabella von Bulow, a communications consultant for the shipping firm.
Bulow, a German based in London, was in MakatiCity last week for a meeting with the firm's exclusive manning agency, Manila Shipmanagement & Manning Inc. (MSMI).
As she had observed on deck or learned through various sea stories reaching her office, "Filipinos seem to be natural seafarers. They will still be smiling despite long months (off-shore)."
For sure, they may be homesick "but it hardly shows," she noted in an interview at the MSMI office.
No borders
It must be their "background" as a people, she said, the Philippines being a scattering of islands, its internal sea lanes serving as vast highways rather than guarded borders, good for honing a mariner's instincts.
"Mixed colonial influences" have long purged Filipinos of xenophobia, enabling them to make friends easily with foreigners or find their bearings abroad, Bulow further surmised.
Their combined Asian and Hispanic cultures have somehow turned them into the "most lighthearted" workers in the shipping industry, she added.
Hellespont ships have also had countless incidents where the Filipino crew, from the captain down, have displayed "ingenuity" in dealing with, say, technical glitches compounded by lack of spare parts, she said.
From the company's viewpoint, Bulow said, "it really makes sense to just have one nationality onboard. The teamwork is better."
An average of 25 Filipinos mans each of the nine Hellespont ships currently in operation, according to MSMI president and general manager Susie Detera. They haul mostly liquid cargo, like crude oil and chemicals. An intercontinental delivery from the Middle East to the Americas, for example, takes a month to 35 days.
The manning agency has been in partnership with Hellespont since 1988, but their all-Filipino hiring policy began in 2004.
Since 1988, the partnership has employed about 1,200 Filipino seamen.
A typical seaman's contract runs for six months but can be extended to a year, Detera explained.
Singing at sea
"To minimize boredom," Hellespont crewmen are provided onboard videoke and "video library" of Filipino and Hollywood movies, she said.
They mark holidays such as Christmas, New Year or Easter, or celebrate someone's birthday by holding parties on the boat, where it's no longer surprising to have "adobo" side by side with "roast lamb" on the menu.
Detera observed that, compared to 10 to 15 years ago, today's Filipino seamen are now "more conscious" about their conduct especially while on shore leave.
Instead of heading to the nearest bars and possibly wasting their earnings, for instance, they tend to spend their R&R more at Internet cafés, writing e-mails or chatting online with loved ones in the Philippines, she said.
Bulow said the company plans to continue recruiting Filipinos—and only Filipinos—as it expands its fleet to 23 vessels by 2009.
On its corporate website, Hellespont recognizes the Philippines as the "largest seafaring nation in the world." The 250,000 Filipinos now working on all types of ships have made "a hugely important impact on shipping and—by extension—world trade."
"The professional development of our Filipino seafaring colleagues is a continuous process and receives our full commitment. Their continued loyalty and dedication are our most valuable assets. And their safety and well-being our most sacred obligation," the company declared.
THE Supreme Court has given the Overseas Workers’ Welfare Administration (Owwa) the green light to proceed with the implementation of its new organizational structure as approved by its board of trustees on January 9, 2004.
In a 23-page decision written by Associate Justice Minita Chico-Na-zario, the Court’s Third Division set aside the rulings of the regional trial court of Pasay City and the Court of Appeals, which granted the petition for the issuance of a writ of preliminary injunction restraining OWWA from enforcing Board Resolution 001 titled, “Approving the Structure Of the Overseas Workers Welfare Administration (OWWA).”
Branch 117 of the Pasay RTC, in an order issued on September 30, 2004, gave credence to the petition of a group of employees asserting that OWWA’s reorganization was null and void as it was done without the required legislative enactment pursuant to Republic Act 6656. That law ensures the protection of the security of tenure of civil service officers and employees in the implementation of government reorganization.
The Pasay court noted that the assailed board resolution was not merely a formalization of the organizational structure and staffing pattern of the OWWA, but a disruption of the existing organization which displaces a number of regular employees, including consultants, casual and contractual employees.
On September 20, 2005, the appellate court affirmed the writ of preliminary injunction issued by the lower court, prompting OWWA, through administrator Mariano Roque, to elevate the case before the Supreme Court and seek the reversal of the lower court and CA decisions.
In its petition, OWWA told the High Court there is no more basis for the lower court to issue a writ of preliminary injunction since the reorganization has already been implemented.
The agency, through the Office of the Solicitor General (OSG), also insisted that the reorganization does not require an amendatory law, contrary to the claim of respondent employees, since OWWA has no previous organization structure.
The OSG also denied the employees’ claim that the reorganization will consequently result in the displacement of permanent employees who will be reassigned to OWWA’s regional offices.
It also maintained that the complaining employees have no legal standing to obtain a writ of preliminary injunction, considering that they were not displaced or are in danger of being dismissed due to the reorganization.
In granting OWWA’s petition to lift the preliminary injunction, the High Tribunal said the Pasay court committed grave abuse of discretion amounting to lack of jurisdiction in issuing the writ of preliminary injunction.
The lower court did not maintain the status quo when it issued the injunction but effectively restored the situation prior to the status quo, said the Supreme Court.
THE Overseas Workers’ Welfare Administration (Owwa) has done away with subpar operational practices and atrocious policy stances that in the past led to losses in the hundreds of millions of pesos a year, according to industry sources.
The first to go was the fund’s self-imposed five-year placement cap that a four-man team of technocrats made sure was thrown away for good.
The placement cap prohibited the fund from investing its money in financial instruments with maturities of over five years, even though longer-dated ones may offer returns far more attractive.
That policy caused Owwa’s investment earnings from its investment management account (IMA) to fall sharply in recent years, according to sources who refused to quantify it.
The Owwa’s IMA is estimated at some P40
0 million at the moment, the bulk of it in the form of bonds issued by the Land Bank of the Philippines.
The IMA is separate from its capital fund, of about P50 million, and the so-called seafarers’ welfare fund that total another P100 million.
Before the technocratic team gave its recommendations, the IMA placements had been falling for many years, resulting in parallel declines in interest earnings.
These losses, too, have not been quantified, although estimates of a 1-percent drop in average rates reduce the fund’s IMA earnings by about P9 million to P10 million a year, according to sources.
It was learned that Owwa administrator MarianitoRoque and his board of trustees feared committing millions of pesos worth of funds in a six- or 10-year issues in a market that could prove illiquid.
Roque was told the secondary market for Treasury bonds in the bond exchange is currently very active, with daily turnovers exceeding P10 billion and placements being terminated and sold quickly at minimal cost.
To further optimize earnings, the Owwa was encouraged to shift paying Land Bank and the Development Bank of the Philippines trustee fees based on IMA earnings rather than on IMA market value.
The value of Owwa’s investment management account was seen to continue rising in the medium term, even though local interest rates have been falling ever since —thus, the near certainty that its investments earnings will fall.
A proposal for Owwa to invest in privately-issued promissory notes or PNs, those funds in excess of reserve funds, was shot down.
Government rules mandate government-owned or controlled corporations to invest their idle funds only in medium- and long-term government securities, special short-term GS and/or fixed-term depositors with the Bureau of the Treasury.
OVERSEAS Filipino Workers, or OFWs, will continue to evolve, their numbers growing outside the traditional markets like the US, Middle East, Europe and Asia, as more Filipinos go abroad in search of economic opportunities.
As traditional destinations lose their allure, and as employers pay less, OFWs will look for other markets to sell their skills.
Patricia Z. Riingen, Western Union Financial Services (HK) Ltd. vice president for the Philippines, has noted the emerging trend over the last five years. She said more OFWs have been eyeing the PacificIslands, like the Marianas, Palau and Saipan.
The real emerging market for OFWs, however, will likely be the Commonwealth of Independent States, or CIS, and Africa, Riingen said. The CIS and Africa remain largely untapped by Filipinos looking for better pay. There are OFWs in Nigeria who have been kidnapped for ransom by gunmen, but the numbers remain sketchy.
While money, the US dollar in particular, remains the strongest motivation for millions of Filipinos to leave their comfort zones in the Philippines and risk the uncertainties of working in a foreign land, it is their resiliency and their willingness to go that is keeping the Philippine labor market quite active.
An estimated 8 million Filipinos, or 8 percent of the population, are working abroad, and sending remittances back home to send their children to school and buy real estate, stimulating consumer spending and buoying the peso against the dollar.
Money remitted by OFWs in April rose to P1.2 billion, or 32.6-percent higher from a year earlier, according to latest data released by the BangkoSentralngPilipinas. The numbers follow a 26-percent gain in March.
OFWs sent back home a total of $4.7 billion in the first four months, up 26.1 percent from a year earlier.
There were also 343,397 Filipinos who left for abroad in search of greener pastures during the first four months of the year, according to the central bank statement.
The funds coming from OFWs have also kept inflation at bay.
All this is good for the economy, uplifting the lives of Filipinos who are left behind, said Riingen, formerly an executive director at the Asian Development Bank before joining one of the world’s largest remittance companies.
The downside, Riingen noted, is the brain drain and the social and psychological problems, like depression, which afflict those left behind by the OFW.
STATE-owned Development Bank of the Philippines (DBP) has set up a P1-billion livelihood facility to benefit overseas Filipino workers (OFWs) in partnership with Smart Communications Inc.
DBP president and chief executive officer Reynaldo David said the livelihood program, "DBP-Smart OFW I-net Negosyo—Negosyo Mo, TayaKo," will provide reintegration and entrepreneurship opportunities for OFWs via bank financing of Smart's mini-Internet café package, the Smart Bro Computer Station.
"Through the program, OFWs will be able to invest their hard-earned money in a potentially lucrative business that will prepare them for their eventual retirement. Their beneficiaries back home will also become more self-sufficient with the additional income from the business, aside from the monthly remittance," he added.
The "DBP-Smart OFW I-net Negosyo— NegosyoMo, TayaKo" has been premarketed in the first week of May in Dubai, and a number of OFWs have already signed up for the program.
Danilo Mojica, Smart head for Wireless Consumer Division, said the Smart Bro Computer Station package is very affordable for start-up entrepreneurs.
"OFWs and their beneficiaries can start their own one-PC mini-Internet rental shop. A bonus is an e-loading business, which we have conveniently bundled with this livelihood package. Beneficiaries will also be able to use the Internet to keep in touch with their loved ones abroad more often. We have subsidized the rate to encourage our OFWs to become entrepreneurs. Eventually, they can increase the number of PCs, if they wish to expand the business," said Mojica.
The Smart Bro Computer Station package includes one brand-new top-of-the-line desktop computer with a one-year limited warranty on the hardware, licensed Microsoft Operating System, one-year unlimited Smart Bro wireless broadband Internet connection, streamers and flyers to promote the Internet rental service, and a cellular phone bundled with a retailer SIM with initial e-load value of P500 for e-loading business.
The livelihood program is payable in 12 easy monthly installments which will be paid by the OFW himself from wherever he is worldwide through the DBP EC Remit program.
The amount already includes the subscription to Smart Bro, affordable interest rates, and mortgage redemption insurance. Monthly payments may be coursed through DBP partner remittance and exchange companies.
To qualify, an OFW must have at least one year of guaranteed work contract or a work visa that is valid for the next 12-month period. Other documents needed include POEA registration document and/or OWWA membership ID; photocopy of valid passport; and photocopy of valid work visa. The forms and documents should be submitted to the Negosyo coordinators or DBP overseas marketing representatives in the country where they are working.
To apply for the loan package, OFWs may visit the DBPRemittanceCenter at the DBP head office in MakatiCity, or the bank's subsidiaries and tie-ups abroad.
Smart has been providing wireless broadband Internet access nationwide through its subsidiary, Smart Broadband Inc. (SBI). As of end-March 2007, Smart Bro subscribers number more than 163,000.
Early this year, Smart and DBP entered into a strategic partnership that will push for the use of mobile commerce in delivering financial services for small and medium enterprises, migrant workers, microfinance institutions and other sectors.
Under the partnership, DBP will use Smart's mobile commerce platform, the Smart Services Hub, in developing new remittance and financial services and products. The Smart Services Hub is Smart's global financial and telecommunications services hub model based on its award-winning Smart Money electronic financial services platform.
Aside from mobile commerce applications for development financing, services for text-based remittances, mobile banking, payroll account management, mobile payments, e-wallet cards and text-based services are also in the works.
THE Philippine National Bank has taken the opposite view to the prediction of the BangkoSentralngPilipinas that the flow of remittances from overseas Filipino workers would soon slow down.
PNB president Omar Byron Mier said they have prepared for an increase of more than 16 percent this year. The bank, which used to dominate the worker remittance business, expects to pull in between $2.6 billion and $2.8 billion this year. “Our remittance business is doing well again.”
Lending remains the PNB’s main income generator but the remittance business now lorded over by the Metropolitan Bank and Trust Co. and the Bank of the Philippine Islands, is a close second, according to Mier.
The government expects worker remittances to reach $14 billion this year or about 10 percent more than the $12.7 billion last year.
In the first quarter alone, remittances already grew by 24 percent to $3.5 billion, the result of better and more numerous service providers luring OFWs with very competitive service charges.
Mier said PNB’s share of $2.4 billion in remittances last year was 19 percent of aggregate remittance reported by the BSP. That expansion was aided in part by two new wholly owned remittance subsidiaries in Austria and Spain in addition to the opening of two more bank branches in Hong Kong.
In April, PNB also opened two subsidiary branches in Paris, France, and in Barcelona, Spain, that brought the total number of PNB overseas offices to 106.
Mier said this was the largest global network of branches and offices among local banks. This network is apart from remittance tie-ups that PNB has with such firms as the United Overseas Bank and the Development Bank of Singapore and its alliance with Mizuho Bank of Japan.
NEDA SAYS FAMILIES OF MIGRANT WORKERS ALREADY HIT BY STRONG PESO
By Rommer M. Balaba
Reporter
THE government right now has no intention to tax the incomes derived by Filipinos working abroad, as suggested earlier by a group of economists and business experts, according to a senior official from the National Economic and Development Authority (Neda).
“It is not within the planning horizon to tax the earnings overseas Filipino workers. Our so-called heroes of the economy do not deserve another burden,” Dennis M. Arroyo, Neda director for national planning policy, said in an interview.
Taxing OFW incomes may further diminish the money received by their families, Arroyo explained, with the continued strengthening of the local currency versus the dollar.
“Besides they are already being hit by a strong peso,” he added.
A study from De La Salle University raised the idea of taxing OFW remittances and the proceeds used for propping up the productivity vacuum created by the departure of Filipinos for overseas work.
Written by TeresoTullao, Michael Angelo Cortez and Edward See, the paper said taxing OFW incomes would compensate the country for productivity losses, which is especially true for migrants who attended government-funded state universities and colleges.
Up to 1 million Filipino workers leave each year to join the up to 8.5 million other Filipinos currently in over 180 host countries on either a permanent, temporary or irregular basis. Aggregate remittances sent through formal channels reached $12.6 billion last year and are expected to top a record $13 billion this year. As of March, total remittances are up 24 percent to $3.5 billion.
“OFW money is behind the strong consumption, retail trade and telecommunications, among other productive activities,” Arroyo said.
And in lieu of any policy change on OFW remittances, Arroyo explained the government would rather pursue tax-related administrative reforms and push for the approval of tax bills such as the Simplified Net Income Tax Scheme as well the rationalization of tax incentives.
May 31, 2007 Updated 03:49:32 (Mla time) Doris Dumlao Inquirer
Dutch banking giant ING and Philippine National Bank (PNB) have teamed up to create within this year a mutual fund for overseas Filipino workers (OFWs) with a size of up to $500 million.
The two banks recently signed a memorandum of agreement to contribute $15 million each in seed money to the mutual fund, to be called the ING International Filipino Mutual Fund, top bank officials said.
In an interview Wednesday, ING Bank Philippine country manager Manuel Salak said the mutual fund would be set up and registered in Ireland and would be marketed across Europe and Asia.
“Our target fund size is $200-$500 million,” Salak said.
A mutual fund is an investment entity that pools funds of unit holders for investment 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 -- such as equities and debt papers denominated in peso, dollars or any other currency -- influences the unit prices.
PNB president Omar Byron Mier said at the bank's annual meeting of stockholders on Tuesday that PNB had agreed to tap its overseas network to distribute the mutual fund.
Mier said the mutual fund would be “the first investment product of its kind that would allow overseas Filipinos to invest in.”
PNB treasurer Ramon Lim said the minimum participation in the planned mutual fund would be $100 million, and would likely be launched first in Hong Kong and then rolled over to other markets, subject to compliance with regulatory requirements.
He said the mutual fund would likely find a robust market in the Middle East, which has a large population of OFWs.
He said the $30 million seed money to be contributed by PNB and ING would be covered by a five-year lock-up period.
OFW remittances coursed through PNB, which has the largest overseas network among local banks, reached $2.4 billion in 2006, accounting for 19 percent of the total market.
To expand its OFW remittances business, PNB has established two wholly owned subsidiaries -- one in Austria and another in Spain -- and opened two more banking units in Hong Kong.
Last April, PNB opened two additional subsidiary branches in Paris and Barcelona, bringing the total number of its overseas offices to 106.
Water will always seek its own level no matter how many dams you erect to contain or control its free float.
This also holds true in looking for a scapegoat, such as the practice of government officials to escape blame for their poor performance.
Such exactly happened in the case of the current strong peso.
You can even blame the overseas Filipino workers (OFWs) for making the floating peso, in the words of Socio-economic Planning Secretary RomuloNeri, “uncomfortably strong,” but that’s the way it is in a “free economy” controlled by the International Monetary Fund (IMF).
The OFWs, erstwhile called the new heroes of the Philippines for saving it from economic ruin, appear to be Neri’s new villains because the $24 billion that they regularly remit to their families back home is getting uncomfortable in his eyes.
The apple of his eyes may probably be the export sector, which Neri now calls as the battered sector to defend it from the strong peso President Arroyo portrays.
What can be more battered than the OFW sector whose members, men and women, are literally and physically battered, abused, raped and threatened by proposals from the religious sector and the Bureau of Internal Revenue that want the remittances of laborers taxed?
Neri of the export sector
Neri, who comes from the export sector being a former executive of the Yulo-owned sugar companies and being an ex-employee of oil exporter Mobil Oil, had this curt reply to a newspaper reporter’s query on the sad plight of the OFWs and their families:
“Well, they are not being taxed anyway, so that’s their consolation.”
He seems to be unaware of the proposal of the BIR and of either De La Salle or Ateneo de Manila to tax the overseas incomes of Filipinos abroad, conveniently setting aside the clamor that religious schools and churches must likewise be taxed.
To add insult to OFWs’ wounded pride, their remittances, according to Neri, “are getting higher anyway.” This was in reply to the same question of whether these overseas workers are also adversely affected by the “strong” peso.
“Remittances are increasing because there’s an upgrade in the quality of jobs,” he said, then appealed for understanding in the case of the commodity exporters: “We have to help our exporters in terms of upgrading quality and better credit terms.”
That looks like a one-sided love affair in favor of Neri’s sector.
Uncomfortable peso
No, Mr. Neri, the remittances are increasing not because of the quality of their jobs but because of their strong determination to continue sending their foreign exchange to loved ones despite the uncomfortable peso and despite the lack of jobs available to them in the Philippines.
This public official should know that budgeting is a task that is almost an impossible job to accomplish when there’s no money coming from local employment. He knows that by heart, being a former budget secretary.
The commodity export market needs peso-dollar protection from the government and their friends in the government, but protecting them at the expense of the labor export sector called the OFW is, to say the least, a rude example of how some people approach human dignity.
Arrest the peso or arrest them
What Neri should do, together with his National Economic and Development Authority (Neda), BangkoSentralngPilipinas (BSP) and the assigned Cabinet cluster committees is to arrest the foreign currency and stock market manipulators—arrest meaning putting them in jail.
They need no market corrections, sideways or otherwise. Correctional can also be the more appropriate terms for these recidivists.
The export sector is saying that because of the strong peso, its peso earnings are getting smaller.
Well, the same is true with the incomes of the OFWs but they are not asking BangkoSentral and Neda to extend them preferential rates like the ones being suggested for the export sector.
Everybody must suffer from the uncomfortably strong peso if that is what the market dictates. Let the peso rise or fall because that is the law of gravity, also known as the law of supply and demand.
“In the long run, [a strong peso] will have an impact on export growth, especially for those with local content,” Neri said.
“That’s unless we do it the way the Japanese did it: Keep on upgrading products so that even if they have to increase prices, their products are still marketable. We have to help our exporters in terms of upgrading quality and better credit terms.”
Five years ago, Neri, then only 52, was appointed socioeconomic planning secretary.
He said that although Mrs. Arroyo had backed his reform proposals, he worried they could still be hijacked by politically well-connected groups.
The BangkoSentralngPilipinas (BSP) expects overseas Filipino workers (OFWs) to remit $ 14.74 billion this year.
The previous forecast was $ 14 billion. The BSP is currently reviewing its overall external account projections.
BSP Deputy Governor Diwa C. Guinigundo said when the BSP revised the balance of payments (BOP) projection higher to $ 2 billion from $ 1.6 billion, the expected remittances were also changed.
Of the $ 14.74 billion, about $ 700 million will pass through the non-bank channels. Guinigundo said non-banks’ share of OFW fund transfers is declining from $ 1.2 billion in 2006.
Banks’ wider network, improved financial services to OFWs and their beneficiaries continue to encourage migrant workers to remit their hard-earned foreign exchange via the formal channels.
Guinigundo said earlier that the banking sector’s share of total remitted funds from OFWs is advancing faster than anticipated. From $ 3 billion in 2005, the amount of transactions lost to banks is expected to come down lower than 0 million this year.
The BSP include OFWs’ non-bank remittances in its accounting of the BOP under personal and transfer accounts. The approximate number is that 10-15 percent of these fund transfers go through the informal channels.
For the first two months OFWs sent home $ 2.184 billion.
The BSP has been encouraging OFWs to remit through banks, which is cheaper and safer than door-to-door or other informal channels.
The BSP also intensified efforts to reduce the cost of remitting funds, which is a positive development for the banking system. The central bank recently issued a circular requiring banks and non-bank financial institutions to post the charges for their remittance services and products, including classification of costs.
BSP said this is to "promote the efficient delivery of competitively-priced remittance services by banks and other remittance service providers."
The disclosure requirement also provides OFWs and their beneficiary a more informed decision in bank selection.
There are eight million OFWs remitting an average of $ 10 billion a year. To improve remittance flows, the BSP will continue to focus on five principles, namely: enhancing transparency and promoting competition in the remittance market to lower remittance charges; improving the country’s payments and settlement systems to facilitate faster, safer and more efficient transfer of funds to beneficiaries; improving access to financial services; encouraging OFWs and their families to increase savings and investments; and promoting advocacy programs to cultivate financial literacy among OFWs and their families.
Right now, the BSP said several commercial banks already offer OFW-specialized investment products and services related to insurance, pension and real estate. These remittances have boosted the supply of foreign exchange helping stabilize the exchange rate, and have provided valuable support to output growth, particularly through strong personal consumption expenditures," BSP said.
About 46 percent OFW dollars are remitted from the United States, compared with 12 percent from Asia and 15 percent from the Middle East.
So why not tap overseas Filipino workers (OFW) as a viable investment source?
That’s the proposal of Sen. Edgardo Angara, chairman of the Senate Committee on Banks and Financial Institutions, who points out that the $12 billion to $14 billion annual remittances of OFWs through formal sources alone is much bigger than direct foreign investments, and therefore should be a rich source of funds for various entrepreneurial activities here at home.
OFWs send money home to their families so they can have food on the table, send their children to school and put a roof over their heads. The highly skilled and the professionals who get considerably bigger pay than the domestic helpers or factory workers are able to save more. Thus, the national government need not look far for money to put up more SMEs especially in the countryside even as it continues to search for more foreign investments. With globalization, the Filipino diaspora is not likely to decrease, but to expand even more in the coming years.
The key is educating the OFWs so they know where to invest their savings. And remittances by OFWs can be a viable investment source if they can be adequately informed about various investment choices and become financially literate.
Indeed, if OFWs can be assisted in finding investment outlets for their hard-earned money, as what the BangkoSentralngPilipinas has started to do, then perhaps the economy will grow even more than it does at present.
The senator’s proposal is for the POEA to include crash courses in investing money and financial literacy in predeparture briefings for OFWs, so they can make better investment choices with their earnings abroad. If government agencies can make the OFWs familiar with investment opportunities and their rates of return, then the OFWs can put their excess funds in sound investment schemes.
The possibilities are endless: OFWs can go into agribusiness, or undertake contract growing for various agri-integrators. They can lease land for sugar and corn production. They can buy government bonds that offer higher yields than money deposited in savings accounts. Already, OFW money has gone into trucking and transport, small-scale garments production, food processing, and feed mill operations, apart, of course, from the ubiquitous sari-sari stores.
The proposal, of course, is not new. A few NGOs already assist returning OFWs make better use of their savings. But if government agencies can team up with the private sector and civil society to properly educate OFWs on key investment opportunities as well as the risks and returns, then they can have a menu of investment options that will allow them to secure a better future for themselves and their families.
