Overseas Filipinos ‘hopeful’ ahead of opening of bank that pledges lower remittance charges

DUBAI: Marifhe is a nurse at a hospital in Jeddah – she has been for 24 years – while her husband, Noel, has been employed in Saudi Arabia’s retail industry for three decades.
The couple managed to raise and send their three children back home through college during their long stay in the kingdom, regularly remitting money through banks or money exchanges for their children’s tuition and other expenses.
“It has always been like that since we started working in Saudi Arabia. We always go to Al-Balad [where the exchanges and banks are located] to send money home. It would have been better if there was a system that made it easier for us; and the remittance charges were lower so we could send more to our relatives,” Marifhe told Arab News.
The couple has lost track of the time they have spent patiently waiting in long queues just to send money back home or how much they have spent in remittance charges - money they could have saved or put towards their family.
But Marifhe says she is hopeful, like the other millions of Filipinos working and living abroad, that the recent roll-out of the Overseas Filipino Bank (OFBank) will ease her money concerns and also help plan for her financial future.
OFBank, which was launched on Jan. 18, is actually a revamped version of state-owned Philippine Postal Savings Bank, but with its business model dedicated to provide financial products and services tailored to the requirements of over 10 million overseas Filipino workers (OFWs), a good number of them working in the Middle East.
The bank’s establishment was also the outcome of a campaign commitment made by President Rodrigo R. Duterte, whose candidacy during the 2016 elections received overwhelming support from overseas Filipino voters.
It is a good strategy for OFBank to focus on OFWs: personal remittances from overseas Filipinos reached $31.3 billion in 2017, 5.3 percent higher than the $29.7 billion a year earlier, with major remittance sources such as the US, UAE, Saudi Arabia, Singapore, Japan, Qatar and Kuwait. Cash remittances coursed through banks meanwhile reached $28.1 billion, or up 4.3 percent from year-ago levels of $26.9 billion.
The money that OFWs send home provides a major backbone for the Philippine economy, which last year accounted for about 10 percent of the country’s gross national product and has been the traditional fuel for household spending power even during leaner economic periods.
Filipinos send a vast proportion of their incomes home, leaving themselves with barely enough to meet their daily living costs.
“I would like to see how the bank [OFBank] would make remittance costs cheaper, as well as give me more trust in the [Philippine] banking system. I have not much trust in Philippine banks,” Marifhe said.
OFBank – to be run by the government’s Land Bank of the Philippines – will have in its portfolio 15 banking products and services especially suited for OFWs including peso savings, time deposits, checking accounts, loan products, remittance services, payments services as well as investment products such as Unit Investment Trust Funds.
OFBank also plans to offer a non-collateral loan package for Filipinos planning to return to the Philippines to start their own businesses or build their homes, at affordable interest spreads.
“We have developed these products to tailor fit the banking needs of overseas Filipinos,” Alex Buenaventura, the chairman of OFBank, said during the bank’s launch. “OFBank is the only bank in the Philippines with loans, saving and investment products for OFWs.”
But Marifhe, and other expatriate Filipinos in Saudi Arabia, will have to wait for OFBank to have a presence in the Kingdom as the lender plans to have its first representative office located in Dubai, and the second one in Bahrain.
The Philippine government is also looking at the possibility of deploying the digital financial services offered by China’s Alibaba Group for remittances to be processed through OFBank.
Ant Financial’s low-cost mobile payment technology – which helped boost financial inclusion in China – could also be used in the Philippines and help reduce the cost of remittances.
And that is definitely good news for Marifhe who, despite being an OFW for over two decades, still has no plans to go back home in the Philippines and retire.
“I will not earn in the Philippines what I currently earn here [in Jeddah], so while my services are still needed by the hospital I will stay. But I also want to secure myself financially so I hope OFBank can help me with that,” she said.