THE CONVERSION of the state-run Philippine Postal Savings Bank (Postbank) to a bank specialized for overseas Filipinos is currently awaiting the President’s approval, the Finance department said.
Finance Secretary Carlos G. Dominguez III said they have submitted to the Office of the President a draft executive order that will enable the Land Bank of the Philippines (Landbank) to operate Postbank.
“We need an executive order to execute the transfer of the bank from its current shareholders to the Landbank,” he told reporters last week.
“Ahead of schedule, we were expecting to submit that sometime in October, but we were able to submit it first week of September,” Mr. Dominguez told reporters last week.
He added that the Bangko Sentral ng Pilipinas’ Monetary Board has also approved the transaction “in principle.”
Landbank will be operating the said overseas lender through a zero-value acquisition of Postbank and will be its remittance marketing arm.
Mr. Dominguez also noted that they want to change the name of the Overseas Filipino Workers’ (OFW) Bank” to Overseas Filipinos’ Bank.
“We are proposing that the name be changed to Overseas Filipinos’ Bank so that…it’s more inclusive.”
This is because the government wants to have all Filipinos residing overseas to be eligible for the bank’s services, not just those who are working, the official explained.
“We just had the discussion with [Labor Secretary Silvestre H. Bello III], and we discussed about the remittance program which is certainly going to be one of the features,” he said,
The bank will also offer a loan program for returning OFWs who seek to start businesses or acquire and build real estate.
“Loans for house repair, for educating the beneficiaries here, direct remittance to schools, those are the programs we have discussed with him and he seems to be very happy about the services we would be providing,” added Mr. Dominguez.
On top of that, the bank would encourage overseas Filipinos to place their funds in the capital markets.
“We also want to use this overseas Filipinos bank to mobilize the savings into investing in the capital markets, cause many overseas Filipinos are not familiar with investing in the different products that are available totally,” the Finance chief said.
The bank, a campaign promise of President Rodrigo R. Duterte, is expected to be rolled out next year. It will have two pilot headquarters — the first one in Dubai, which will start operating by January next year, and the second one in Bahrain, targeted to be established by April. It will also be using existing Landbank branches overseas to service OFWs’ banking requirements, Landbank president and CEO Alex V. Buenaventura said earlier. The bank’s establishment was targeted for this month, but was pushed back due to processing delays.
After the pilot testing phase, which may take about a year, the OFW bank will also be rolled out in countries that are home to many overseas Filipinos such as the United States, Japan, Middle East, and Hong Kong.
The bank will also be publicly listed, having an authorized capital of P3 billion and a subscribed capital of P2 billion, of which P1 billion is paid-up by the Landbank. Another P1 billion will be open for subscription by OFWs. — Elijah Joseph C. Tubayan