What You Need to Know about OFW Bank and How It Can Help Every OFW

Sometime in 2006, then President Gloria Macapagal-Arroyo conceptualized an OFW Bank, which wass intended solely for Overseas Filipino Workers aka “Bagong Bayani.” Unfortunately, it was never materialized.

Fast forward to 2017 and as part of his campaign promises, President Rodrigo Duterte “OK’s” the establishment of OFW Bank, which aims to cater to the remittance and other banking needs of Filipino migrant workers from around the world.

What exactly is OFW Bank? How is this bank different from traditional banks like BDO and BPI? How can it help OFWs?

Read on to find out.

First, there must be a law. 

Apparently, an Executive Order is not enough to create OFW Bank. A law must be passed by Congress for the creation of the said bank through the acquisition of Philippine Postal Savings Bank or Postal Bank.

Note: As of this writing, an Executive Order was already drafted for the execution of sale of Postal Bank to Landbank and is waiting for the president’s signature. Likewise, the Bangko Sentral ng Pilipinas (BSP) has approved this sale in principle. 

Once the law is created, the government must infuse P3 billion to make the OFW Bank operational, broken down into subscribed capital of P2 billion and P1 billion for the subscription of OFWs, thereby making you a part-owner of the bank.

What can OFWs get and expect from OFW Bank? 

  • You get to save on remittance fees. Transferring money is not for free. Even banks charge a certain amount, depending on where you coursed the money transfer. Worse, you get to pay for high remittance charges just to send money back home. The aim of OFW bank is to allow Filipino migrant workers to send remittance with little to no fees, thereby helping you save a little extra for the rainy days.
  • Become a part-owner of the bank. P1 billion is intended for OFW subscription. This means the ownership of the bank is open to 4.8 million migrant workers at P1,000 per share. That is something you want to work hard for as part of your investment.
  • Loans have lower interest rates compared to banks. Did you know that an average OFW pays 5.2 percent every month for loans? That’s too high, considering the other expenses you have to pay for. The good news is that OFW Bank aims to lower the rates to make borrowing money more affordable for you. While the bank is not yet in effect, Balikbayad is still here to offer affordable loan for you.
  • Two words: OFW ID. The OFW ID is not just a simple identification card. Once the OFW is operational, you can use the ID as a debit card and an ATM card, which makes it easier when it comes to remittances. You can read more about OFW ID here.

It may still be a long process to go and until a law has been passed by the Congress and signed by the President, let’s hope that this plan will materialize.

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