OFW Guide: How To Seek Legal Assistance Through POEA

It’s never easy being an Overseas Filipino Worker. Despite the promise of a better life, there is always a possibility that your dreams of an improved future won’t happen. If you’re not too careful, you might even be a victim of illegal recruitment.

That being said, what is your legal remedy in case you became a victim of illegal recruitment? Can you file a case against the illegal recruiter? If yes, where should you file it? What is the procedure you need to follow to make sure that the illegal recruiter pays for what he did?

Here’s what you need to know about POEA’s Legal Assistance Services:

Coverage of Legal Assistance Services:

Legal Advice – this offers counselling services wherein repatriated workers are informed of rights as well as possible options for redress of grievances.

Conciliation – this gives both the repatriated worker/s and recruitment agency an opportunity to discuss and possibly come up with an amicable settlement. Per POEA, parties must undergo 30-day mandatory conciliation-mediation before a complaint will be filed in the Adjudication Office for the following cases:

  • Administrative complaint involving OFW, licensed manning agency, or employer relating to overseas employment
  • Issues arising from labor and employment

In case parties are unable to settle, the POEA Conciliation Unit will issue a Certificate of Failure to Conciliate.

On the other hand, the following cases are NOT required to undergo mandatory conciliation-mediation proceeding:

  • Cases referred by POLO
  • Cases initiated by the POEA
  • Cases involving acts of misrepresentation to secure license
  • Violations of POEA Rules and Regulations involving serious offenses
  • Offenses penalized with cancellation of license
  • Complaints against agencies with revoked, cancelled, or delisted license
  • Disciplinary actions against land-based workers and seafarers, which are either considered serious offenses or carry the penalty of delisting from the POEA Registry at first offense
  • Other complaints included in the POEA Rules that are not subject to compulsory mediation

Preparation and Filing of Complaints – if the case prospers, the agency, through Legal Assistance Division, may help in the preparation and filing of complaints for illegal recruitment, disciplinary action cases, and other forms of recruitment violations.

Counseling – this is done during preliminary investigation and and hearings of criminal cases for illegal recruitment.

Procedure in Availing POEA’s Legal Assistance Services:

Before you proceed, you need to make an appointment to ensure that the agency will assist you when you arrive. Consequently, this assures the agency that the assistance is extended to OFWs only.

Click this link to make an appointment. Make sure to tick the box that indicates “Legal” under “Assistance” tab for the purpose of such request.

Once you made an appointment, here are the other steps you need to do on the day of your schedule:

  1. Proceed to Legal Assistance Division, 4th floor of the POEA Building.
  2. Get and fill out a Verification Form from the guard-on-duty.
  3. Secure an OFW Information Sheet from the Central Records Division, 6th floor, POEA Building.
  4. Submit the documents, Info Sheet and Verification Form, at Window 3, Licensing Branch, 4th floor of the POEA Main Building. The LB Verifications Officer will verify your status as OFW.
  5. Once your status is verified, submit the verified documents to the Legal Assistance Division or LAD Officer. Wait for your name to be called.
  6. When you’re called, go to the designated Legal Officer for counselling or legal assistance. The Legal Officer will also help you in the preparation or filing of a complaint form.
  7. Submit the duly accomplished complaint form to the Legal Officer. You will also be asked to swear under oath as to the truthfulness of the facts contained in the complaint.
  8. File the complaint at the Conciliation Unit, 2nd floor of the POEA Main Building if proper for conciliation OR Docket and Enforcement Division, 3rd floor of the same building.

For further details, you may contact:

Philippine Overseas Employment Administration
Legal Assistance Division
4th Floor, BFO Building
EDSA corner Ortigas Avenue Mandaluyong City
Telephone Nos.: 721-0619/722-1189
Email: legal-asst@poea.gov.ph

7 Signs You Are A Documented OFW

Illegal recruitment is defined as the act of recruiting individuals, usually for a fee, for local or foreign employment. Unlike regular jobs, individuals are victimized because:

  • There is no job placement effected as opposed to what was advertised by the “recruiter;” or
  • There is an actual job but the worker will be placed in an oppressive or exploitative conditions such as low salary, long work hours, or performing sexual acts.

According to the Department of Justice, in 2016, there are more than 1,500 illegal recruitment cases filed in the agency. Apparently, this does not yet include cases that are either dropped by the complaining or not reported at all.

You don’t want that to happen. This is why it is imperative that you check out these signs to ensure that you are a documented OFW:

Sign No. 1: Valid Passport

Your passport must be issued by the Department of Foreign Affairs only and no one else. Personal appearance is a must and don’t forget to schedule an appointment.

Sign No. 2: Working or Employment Visa or Permit

You cannot work overseas WITHOUT a valid working or employment visa. This signifies that you are permitted to work in a foreign country. This is valid for one or two years, or sometimes longer, depending on your contract.

If the agency gives you a tourist visa despite promising you an employment abroad, then be worried. There is a chance that a different kind of job is waiting for you there.

Sign No. 3: Contract Of Employment

Employment Contract is among the documents you need to submit to be able to process your overseas employment. It contains terms and information pertaining to your employment such as working hours, benefits, and termination.

Take note that the Contract of Employment must be processed by the POEA OR verified and registered on-site by the Philippine Overseas Labor Office or POLO.

READ: Overseas Employment Contract

Sign No. 4: Pre-Departure Orientation Seminar or PDOS Certificate

This is mandatory. All workers, whether first-time or re-hires must undergo Pre-Departure Orientation Seminar prior to leaving the country. This helps you prepare for your life overseas, as well as tips, guidelines, do’s and don’ts when abroad.

Once completed, you will be given a PDOS Certificate, which you need to keep and present when applying for OEC.

Sign No. 5: Overseas Employment Certificate Or OEC

This is another important document you need to secure to legitimize your status as OFW. The OEC serves as your Exit Clearance as well as exempts you from paying travel tax and airport terminal fees.

Normally, your recruitment agency will take care of this, so you don’t have to worry about this.

READ: Overseas Employment Certificate

Sign No. 6: OWWA, PAG-IBIG, and Philhealth Membership

Being an OFW means you are NOT exempt from mandatory government services. In fact, all OFWs are mandated to still be members of various government agencies for your benefit. Unfortunately, you have to pay for this from your own pocket since this is not included in agency fees.

These government agencies offer assistance and various benefits you can maximize to your advantage. They also offer loan facilities that are more affordable compared to banks, so make sure you are a member.

Good news! OWWA offers Rebate Program, which is another reason why you should be a member.

Sign No. 7: Philhealth Medical Insurance

Aside from the membership to various government agencies, OFWs must also have an insurance prior to departure.

The insurance covers various benefits like death, accident, disablement, repatriation, and medical among others. It may seem like an additional expense, but again, you’ll never know what will happen in the future, so it is best to be prepared.

Did you comply with all of these?

8 Reasons For Cancelled Or Delayed Flight

Are you excited to ride an airplane? As an Overseas Filipino Worker, one of the easiest and most convenient way to go to your place of destination is by riding an airplane.

Of course, there will always be unforeseen circumstances that will led to the delay or cancellation of flights. Although this is not the primary aim of transportation companies, sometimes, things could go beyond their control. This could cause issues on your employment since you are supposed to arrive on a specific date – and for visa purposes as well.

That being said, what could be the reasons for delayed or cancelled flight? These are:

Bad Weather

This is the most common reason why flights are delayed or cancelled. Even if the weather is good in Manila, if the weather from where you are going is bad, then there is a possibility that the flight is cancelled as well. The condition of the route and runway are also considered in case of bad weather; hence the delay.

Unfortunately, bad weather is something that is hard to avoid because you’ll never know when a typhoon is coming.

Aircraft Preparation

Thousands of people use a single aircraft every single day. Before you board, cabin crew and aircraft personnel ensure that the plane is clean and in tiptop condition. Refueling and security checks are likewise conducted to avoid aircraft issues while on air.

Strict timeline is being followed to avoid delays. Apparently, unavoidable situations happen; hence the reason why you have to wait.

Airport Congestion

The Control Tower plays a crucial role. They provide information to pilots regarding critical information such as weather updates, runway closures, and even traffic condition in the runway.

Unfortunately and despite the huge amount of space available, traffic, commonly known as airport congestion, is still an issue. When this happens, aircrafts won’t be able to takeoff properly and could cause accidents, which is something everyone wants to avoid.

Mechanical Delay

One of the standard operating procedures to be conducted is checking the aircraft prior to the scheduled flight. This is a must because more than anything else, safety is the top priority.

If they see any issues while testing the plane, the Operations Team will conduct troubleshooting procedures to ensure that the aircraft is safe and viable to fly. This may take some time, but again, safety of not just the passengers but the crew as well is a must.

Waiting For Connecting Passengers And Cargo

Not all flights are direct to a specific destinations. At times, you need to have a connecting flight to arrive in the country where you’ll work. When there are passengers in the connecting flight, you have to wait for them as well.

There’s no issue if the passengers and cargo from the connecting flight did not experience any delay. Otherwise, expect your flight to be delayed as well for hours.

Delay Caused By Cabin Crew

Sadly, this happens. Generally, there is an assigned cabin crew for every flight. But if the crew assigned is coming from another flight that is also running late, then delay might happen – even if it means waiting for them.

Catering Concerns

Believe it or not, this could be a cause of delay. International flights take hours, which is why most aircraft serve food along the way.

Unfortunately, there are instances when the catering arrived late for various reasons like traffic or last-minute preparations. When this happens, departure will be delayed as well.

Security Concerns

This is crucial. Sometimes, there will be last minute cancellations because of unforeseen situations in the country of destination, similar to what happened in Hong Kong last August 2019.

Stringent security clearances is another issue to look into. Some countries require submission of detailed and time-consuming clearance to allow the plane to depart, which explains the delay.

Don’t worry. Regardless of the delay, you can still work overseas and start a better life there. Just make sure that you have all your travel documents with you and don’t forget to bring water, food, and other things that will help you kill time.

Make The Most Out Of TESDA’s Free Online Learning Programs

They say education knows no age. Whether you are 15 or 50, learning never stops. The good thing now is that learning something new is easier and more convenient. All you need is to open your browser, type the course you want to study, and make sure you are online during your scheduled class.

We know what you’re thinking: enrolling in courses mean you have to pay a certain amount for it.

Not with TESDA. In fact, the agency offers learning programs for OFWs that are both online and free.

What is TESDA Online Program?

Also known as TOP, this program is an online educational resource that aims to make learning accessible to millions of FIlipinos through information and communication technologies.

It is created for students, out-of-school youths, unemployed individuals, and even professionals. Surprisingly, more and more OFWs are also taking advantage of this online portal.

The good thing about this facility is that people can learn at their own pace and time at a lesser cost.

What are the courses offered?

As of this writing, the facility offers more than 50 courses from various fields such as:

  • Agriculture
  • Automotive
  • Electronics
  • Healthcare
  • Maritime
  • Tourism-Related such as Housekeeping and Cookery

You can explore various courses according to your own preference by visiting their website.

How To Register To TESDA Online Portal:

  1. Create an account by signing up in the TESDA Online Program. You can access the link here.
  2. Fill out the form. Make sure that the information you put pertains to you. Take note that the fields with asterisk are considered mandatory; hence must be filled out.
  3. Click Create my new account to continue.
  4. Activate your TESDA account by clicking the confirmation link sent to your registered email address. This is a must.
  5. Now, you can enroll in classes.

How To Enroll In TESDA Courses:

  1. Login to the TESDA portal using your registered email address and password.
  2. Choose among the available courses displayed on your screen.
  3. Click the link of the course you want to take.
  4. Another window will open. Choose the module you want to take.
  5. Then, click the “Enrol me in this course” tab located at the left side of the navigation pane.
  6. Click Yes to proceed.

How is the program beneficial to you as OFW?

It is highly recommended that you take advantage of this facility. All you need to do is to complete all the modules to get a Certificate of Completion. This proves that you completed your online course, but take note that this is not equivalent to certification.

To get certified, go to a recognized TESDA Assessment Center for assessment. If you pass, then you will get a National Certification, which you can include in your resume.

If Online Learning Is Not Appealing, Then That’s Fine

TESDA has three free skills training program, especially for returning OFWs. These are:

  • Reintegration, wherein returning OFWs can get free skills training, assessment, and certification as well as job referrals.
  • Training for Work Scholarship Program, which is beneficial for jobs that require highly critical skills like electronics, agri-business, and information technology.
  • Special Training for Employment Program or STEP, which involved community-based training to address and promote specific skills for future employment.

Who says learning and education is only for the rich and with money? Everyone is entitled to this right, so make the most out of it. Happy learning!

Understanding The OWWA Rebate Program

Many OFWs are asking this: what benefits can they get from being a member of OWWA? Why should they pay $25 for a membership that they feel doesn’t help them in whatever way?

The truth is there are many. These benefits include but not limited to:

  • Disability and Disarmament benefit in case of accident or injury while at work
  • Death benefits
  • Education and Training programs such as scholarship, allowance, and training assistance
  • Repatriation Assistance Program to help you come back to the Philippines
  • Reintegration Program, popularly known as OWWA Loan, which helps you open your own business

The good news is there is another benefit that OFWs can enjoy in accordance to the Section 54 of RA 10801 or the OWWA Act of 2016: the OWWA Rebate Program.

What is the OWWA Rebate Program?

This program is granted to OFWs who comply with the following:

  • OWWA member for at least 10 years
  • Made at least five or more contributions
  • Have NOT yet claimed any form of benefit or service from OWWA

OFW beneficiaries may also qualify under the rebate program as long as the deceased OFW member met all the requirements above.

If qualified, then you can get at least P941.00 up to P13,000.00, depending on the number of contributions made.

At present, P1 billion is earmarked by the agency for this program. This aims to help 556,000 OFWs who are also long-term members of the agency. The agency plans to increase the amount up to P2 billion to also give back to modern heroes.

How To Check And Claim If You Are Qualified Under The OWWA Rebate Program

  1. Visit the website by clicking this link.
  2. Fill out the OWWA Rebate Verification Form.
  3. Once filled, click Inquire.
  4. If you are qualified for the rebate, you will see how much you can get.
  5. If you’re satisfied with the amount, then set up an appointment on any OWWA Office near you.
  6. You will receive a text stating your appointment code. DO NOT DELETE this message for reference.
  7. On the scheduled appointment, go to the OWWA Office or Branch and show the appointment code. Don’t forget to bring one valid government-issued ID as well for verification.
  8. Give your bank details to the person-in-charge. This is important because this is where OWWA will deposit the money.

Naturally, the amount you will get is for your personal use like additional capital for your business or deposit in your savings account.

Nonetheless, you may also use the funds for the following purposes:

  • Donate the proceeds to the Tuloy Aral Project or TAP. This foundation is dedicated to helping less fortunate OFW families go back to school.
  • Renew your OWWA membership, especially if you still have an existing employment contract overseas.

Take note that this program is a rebate and not a cash back or refund of all your contributions. Make sure you check on this benefit and make the most out of the amount you will get from here. After all, you deserve it.

For further questions, you may contact OWWA Hotline 1348.

4 Common Issues Encountered By OFWs

What made you decide to work overseas? Surely, there are tons of reasons, but the deciding factor was money. Sadly, what you earn in the Philippines is not enough to sustain your family’s needs. You want to provide a better life and a more secure future for your family, even if it means leaving the country and looking for greener pastures.

Here’s the reality: OFW life is not easy. Even if you earn bigger and in dollars abroad, there is no guarantee that your life will get better, especially when you don’t handle your money wisely.

Aside from that, OFWs are often bombarded with various issues from both in and out of the country. This includes:

Illegal Recruitment

Working overseas can be tempting, thanks to its promise of “a better life.” This is why you are willing to do whatever it takes to make it happen.

Be careful. Despite the government’s campaign against it, illegal recruitment is still rampant these days. Worse, people don’t seem to learn and still fall for the illegal recruiter’s tactics.

Therefore, don’t easily believe the “promises” you see online. Whether or not you are direct hired or you applied through an agency, there is a process you need to follow – no shortcuts.

Little Or Lack Of Savings

Isn’t this ironic? You’re working overseas and getting a salary that is twice or thrice of what you earn in the Philippines and still, you don’t have sufficient savings that will last you for at least three months. Even if you opened a bank account, you cannot commit to saving every month.

Why does this happen? Unfortunately, as your earning increases, your lifestyle increases as well, which is not what should happen. You also constantly give in to your family’s demands and spoil them with luxuries to help cover the feeling of guilt or homelessness since you are miles away. These amounts, when used wisely, could be placed in your savings account or Emergency Fund, which should be your priority.

Friends And Relatives Who Borrow Money

One of the biggest struggles for many OFWs is that they are becoming cash cows. Since you work overseas, people assume that you are earning a lot; hence the reason why they turn to you in case they need cash. They think that life easier for you abroad; thus making you the perfect milking cow.

It’s hard to say no to them, especially to your relatives. Still, don’t give in all the time, Instead of saving more, you end up losing more for the sake of helping. Worse, they won’t even pay up the money they borrowed – the money you worked hard for.

Unpaid Debts

Who doesn’t have one? While having debts seem “normal” these days, this is STILL not an excuse. Unfortunately, many people, OFWs included, are burying in debt due to poor money management skills and lifestyle.

“I can’t help it,” you must say. “I need money for my placement fee.” That’s understandable.

Still, do your best to pay your financial debts since that is your responsibility. Adjust your lifestyle. Instead of buying new rubber shoes for your son even if you just bought a new pair last month, focus more on savings, investment, and minimizing debt.

Don’t worry. It’s not too late to address these issues if you start now. You can also avoid this if you put your eyes on the prize and focus on the real reason why you are working overseas: for your family.

13 Things You Should Know About Time Deposit

Let’s say you have extra P10,000. Where do you plan to use that money?

Shopping for your family back home is a good idea, but if you have to be wiser about your money, you will invest it to make it grow. The question now is where to invest it.

Stock market is a good option because of higher return. On the other hand, the risk of losing your money is higher as well. If you’re more of a conservative investor, then you might consider time deposit.

Time deposit is a type of bank account that allows you to earn fixed interest rate over a specific period of time. Typically, the higher the amount, the higher the interest rate, which also means higher earnings. Unlike your usual savings account, you cannot withdraw the amount anytime, unless you are willing to pay for pre-termination fees.

Is it worth it? How much can you earn in this type of investment? What is the preferred term for time deposit?

Don’t worry. Here are things you need to know before you place your money in time deposit:

It Is Easy To Understand

Time deposit doesn’t require you to read books to know more about how this investment option works. Once you opened an account with your bank of choice, just leave the money there and it will earn interest, which you can enjoy upon maturity date.

You Can Open A Time Deposit Account Easily

Did you know that P1,000 is enough to open a time deposit account? Some may start at P5,000 but the point is you can start with low amount.

However, if you want to earn higher amount, then higher deposit and longer term are required. This could be a good option IF you won’t use your funds yet. Otherwise, shorter term is recommended.

Aside from the amount, you can easily open a time deposit account since the process is similar to savings account. Instead of ATM or passbook, the bank will issue a Time Deposit Certificate under your name. It also specifies the amount, term, interest rate, and maturity date.

Choose Your Lock-In Period

Time deposit account is flexible, thereby addressing your short and medium-term financial goals. In fact, you can choose your account’s maturity period, which is between 30 days and seven years, depending on the bank. Make sure you ask your bank about the loan term to help you decide the right duration according to your needs.

Take note that by lock-in, this means you cannot withdraw the amount at anytime. You have the option to withdraw the amount upon maturity date OR the proceeds of the interest and then opt for roll-over so it will earn more interest.

Additional Deposits Are Not Allowed

This is the thing about time deposit. Once you opened an account, that’s it. You cannot make additional deposits. The only time you can do this is upon maturity.

Higher Interest Rate Than Savings Account

Despite the lock-in, you can earn more in time deposit compared to savings account. Unlike the latter with less than one percent interest rate, time deposit accounts allow you to earn up to five percent. It is also fixed, which means it will remain the same all throughout the term.

Of course, your earnings will depend on the amount of deposit on your account, term, and rate offered by your chosen bank. Ask about this so you will know how much you can earn given a particular amount.

It Is A Safe And Stable Investment Option

Time deposit is ideal for conservative investors who are still unsure where to place their money. There are many investment options available, so if you don’t know yet where to put your hard-earned money sans the risk of losing it, then time deposit is advisable.

Higher Deposit + Longer Term = Higher Earnings

This is the formula if you want to earn more in time deposit. Believe it or not, investing P50K for five years lets you earn more than your P5,000 investment for one month.

If you have extra money to spare and you’re unsure where to use it, then place it in a time deposit. This way, you won’t be able to spend it and reduce the risk of losing your money.

You Can Get Your Interest Earnings

You have three options upon maturity of your time deposit account. You can:

  • Withdraw the interest amount earned and then renew the time deposit account.
  • Withdraw the entire amount including interest earned.
  • Roll-over or renew the time deposit wherein the interest is compounded. This means the new amount reflects the added interest earned, which will now be multiplied to the interest rate.

If you still don’t have plans on where to use the money but want to enjoy the benefits of your investment, then you may opt for the first option.

You Can Use Your TD Account As A Security For Loans

Yes, you read that right. Banks allow you to borrow money and use your TD account as a security of the loan. Loanable value could be 80 to 90 percent of the total placement value of your time deposit, depending on the bank.

If you plan to apply for a loan and you want to use you time deposit as a collateral, then it is advisable that you apply on the bank where you have your TD. This way, processing your loan application will be easier.

Foreign Currency Is Accepted

Just like savings account, you may open a time deposit in foreign currency, which is usually in US Dollars. However, there are few banks like BPI and Metrobank who accept other currencies like British Pound, Japanese Yen, and Chinese Yuan.

The good thing about this is that since you are – most likely – earning in dollars, you can open a time deposit account in foreign currency without worrying about foreign exchange fees and differences in peso-dollar rates.

You Cannot Escape Taxes

Banks won’t require you to pay processing fee when you open a time deposit account. Unfortunately, it cannot escape government-imposed taxes. There will be 20 percent final withholding tax as well as documentary stamp tax of P1.50 for every P200.

If the term is more than five years, then you will be exempt from tax.

Withdrawal Is Not Allowed

This is the limitation of time deposit accounts. If you need quick cash, then terminating your TD is not a good option. Otherwise, you have to pay for penalty or pre-termination fee, which is usually 10 to 50 percent of the interest earned.

Ask your bank about this since some banks convert the time deposit account into regular savings account IF withdrawing money is truly necessary.

It Is Insured By The PDIC

Known as the Philippine Deposit Insurance Company, PDIC insures time deposit accounts up to P500,000. Of course, you wouldn’t want your bank to go bankrupt, but it’s good to know that you are protected.

5 Questions You Need To Ask Yourself Before You Apply For An OFW Loan

Being an Overseas Filipino Worker is not easy. You have to be thousands of kilometers away from your loved ones just to seek greener pastures. You also have to adjust to the new environment and make peace with people with different nationalities while battling with homesickness. Even if you are earning in dollars, you will still be bombarded with messages from back home because money doesn’t seem to be enough.

This is why you resort to OFW Loan to help you get through with the expenses back home. This type of loan caters to OFWs like you, which could help you in many things like starting your own business or covering expenses.

But before you apply, there are certain questions you need to ask yourself, which helps boost your chances of approval.

Why do you need to apply for a loan?

This is the first question you need to ask yourself before you apply for OFW Loan. It is easy to say that you need this and that but if you think deeper, do you really have to apply?

Before submitting your loan application, ask yourself first why you need a loan. Ask yourself the purpose of the loan and how it could help you. If you can’t justify your “need” to get a loan, then don’t apply. You might end up in debt – and you surely don’t want that.

Can you verify your personal information?

Identity verification is important for lenders. This tells them that a certain applicant is a real person and exists.

Don’t worry because lenders only ask basic information such as your name, address, mobile number, and employment details among others. It is strongly advisable that you only put honest and truthful information about yourself. Lenders often conduct background checks to verify the information in your application form, so make sure you can back it up.

How much do you plan to borrow?

Did you know that one of the most common reasons why loan application is rejected is unrealistic loan amount?

Before you click “Submit,” ask yourself how much do you really need – and stick to that. Avoid borrowing the maximum amount, especially when you cannot back up your capacity to pay the loan. Show the lender that this specific amount is what you only need and you’re good with it.

Most lenders have online calculators on their websites. Use that feature to check the breakdown and how much you will pay given this particular loan amount and term.

Can you pay for the loan?

This is another important question you should answer before you apply for the loan. The truth is it’s not enough that you earn big and in dollars. Lenders pay attention to your capacity to pay as well.

Therefore, prove your capacity to pay. Show bank statements and proof of income. If you have existing investments, which we assume you have, then present that as well. In case you have a small business whether overseas or back home, make sure you show that as well.

Do you have unpaid loans?

We understand that there are certain situations in life when you just have to borrow money – whatever it takes. The question now is what is the status of these loans?

If you have unpaid loans that dates back years ago, then there is a possibility that your loan application might be rejected. Lenders are very particular with credit history because it shows not just your capacity to borrow money but also how responsible you are as a borrower.

Don’t worry. Existing or unpaid debts does not automatically mean your application will be rejected. Just make sure that these bills are constantly paid and you’re good to go.

Are you ready to apply for an OFW Loan?

Different Types of Bank Accounts in the Philippines

One of the things you need to prepare before you leave the country is having a bank account. This is crucial since it will make sending money easier and more convenient for you and your family.

That being said, you go to a bank and tell them that you want to open a bank account. Then, you will be asked if you prefer savings or checking account. In your case, savings account is more recommended since it is easier for you to manage.

It doesn’t end there. You also have to choose if you prefer passbook, ATM card, or both. You might even be offered a Time Deposit account for higher interest rate.

The point is for ordinary Filipinos, these different bank accounts may be confusing. You also need to understand the differences to make sure that you will enjoy what each account could offer.

That being said, here are the different types of bank accounts offered in the Philippines:

Savings Account

This is, perhaps, the most popular type of bank account today. It is easy, convenient, and allows you to keep your money for whatever purpose.

That’s not all. Savings account is usually the first type of bank account Filipinos open because of minimal documentary requirements, lower interest rate, and low – or even no – maintaining balance. Banks also offer additional perks for OFW accounts such as zero maintaining balance and transforming the account as a remittance account.

Here’s the thing with savings account: the interest rate is lower compared to other bank products, which is usually pegged at less than one percent.

Banks offer either ATM or passbook or both every time you open a savings account. The good thing about ATM is that you have quick access to your funds anytime, anywhere. It may also be used as a debit card instead of using a credit card. The maintaining balance is low as well, so you don’t have to worry about deductions.

On the other hand, passbook accounts are more difficult to maintain since they have higher maintaining balance. Online banking may also be limited to viewing and receiving money online since banks need your passbook to update the account. Nonetheless, this is a good option for your Emergency Fund since withdrawing money means giving your passbook as well.

Checking Account

Many Filipinos opt not to get a checking account since it is more expensive to maintain. Plus, check payments are less preferred method of payment in most transactions, so getting one may not be recommended.

Still, you may be required to get one IF you plan to apply for a loan of any type and the lender requires post-dated checks as payments. This could come in handy for payment of other expenses like utility bills and your child’s tuition fee.

Evaluate your needs first to check if you can forego getting a checking account.

Foreign Currency Account

Foreign currency deposit account is a type of savings account that allows you to save money in different currency aside from Philippine Peso. In fact, you could open an account in US Dollar, Japanese Yen, Hong Kong Dollar, or Euro, whichever is more applicable to you. Make sure you ask your bank of choice on what currency they accept.

The good thing about having FCDA is the added security in remitting and receiving money to and from abroad.

Check out this post on why you need to have foreign currency account.

Time Deposit Account

If you have extra funds and you still don’t know where to put it without the risk of losing it, then time deposit account could be a good option for you.

Time deposit account means the bank will keep your money for one month to seven years, depending on your choice. During that time, your money earns interest, which is higher than what savings account can give.

You can put minimal amount on this but if you want to earn higher interest, then higher amount is needed.

Which among these accounts do you have?

4 Tips in Managing Multiple Bank Accounts

How many bank accounts do you have? If you only have one, then that’s good. That means you only have to manage one bank account; hence makes your life easier.

For many others, they prefer having multiple accounts so they won’t co-mingle their funds. This way, it is easier to track how much money they have for each particular fund, say Educational Fund or Emergency Fund.

Here’s the thing: having multiple bank accounts could be gruesome and time-consuming to manage. In case you prefer it this way, here are things you need to remember to make managing easier and more convenient for you:

Tip No. 1: Identify The Funds You Only Need

We understand that you need several funds for several goals; hence several bank accounts. But the question is do you really need to set aside a separate fund for EACH?

When it comes to managing multiple bank accounts, it is advisable that you have accounts for funds you only need. Ideally, you need to have a savings account that will cover home and family needs and an Emergency Fund since these two are enough. Having a checking account could be useful as well, especially if you have lenders who prefer checks as mode of payment. Otherwise, this is no longer necessary.

If you have an existing home loan with a bank and you opted for Automatic Debit Arrangement, then you might be required to have a separate bank account where they will debit the monthly amortization. Ask your payment options if you don’t like to open an account.

The bottom line is have accounts for funds you only need.

Tip No. 2: Online Banking Is Key

Technology has its ups and downs. When it comes to managing multiple accounts, make sure you take advantage of it.

One of the things you should take advantage of is the online banking facility. It allows you to check your balance, transfer cash from one account to another, and make payments. You will be able to see every transaction made when you do online banking.

Since you are working overseas, having this facility will make it easier and more convenient for you to see what account needs to be replenished.

Tip No. 3: Choose The Right Bank

Ideally, you’ll go for one bank for convenience. This will make fund transfer easier for you since you can just enrol both accounts.

The question is this: is your bank meeting your needs without charging you with hefty fees?

As a rule, you need to check various banks and evaluate their accounts facility. Since you work overseas, it is advisable to choose banks with overseas branches as well.

Ask about the interest rate earned, minimum maintaining balance, penalty charges, and perks for being an OFW. The government impose taxes, so make sure you look into that as well.

Spreading your accounts in multiple banks allow each account to enjoy different perks. Plus, PDIC imposed a P500,000 maximum coverage per depositor in case the bank goes bankrupt, which may or may not happen. But if the features are so similar that you can’t tell the difference, then stick to one or two banks.

Tip No. 4: Always Deposit Accordingly

Now that you identified which bank/s to go to, make it a habit to deposit money accordingly. Even if you could transfer money online, the idea of multiple accounts is to allow you to budget and prioritize your expenses.

Stick to your goal, deposit money consistently and accordingly, and be committed in making your money grow.