(Opinion) Speaking Out

May 16, 2010 12:15 pm 

MANILA, May 16 — Through its most recent financial learning campaign held at the Bangko Sentral ng Pilipinas (BSP), the central monetary authority has reinforced the improvement of the Overseas Filipino Workers' (OFWs) remittance environment as one of its major advocacies.

At the top of the BSP's initiatives to help OFWs is the promotion of financial learning among them and their families through financial learning campaigns or FLCs.

The FLCs aim to promote a culture of savings among migrant Filipinos and their families and encourage the channeling of these savings into productive investments in financial instruments and business ventures.

These activities, such as the one held at the BSP's assembly hall last April 27, are conducted using lectures and multimedia presentations highlighting topics like the importance and role of remittances in our economy, financial planning, the rewards and risks associated with various financial instruments, and tips to protect remittances and savings.

Through its literacy campaign, the BSP aims to encourage the productive uses of remittances, not only for the personal consumption, but also for savings.

The central monetary authority has also encouraged commercial banks to offer OFWs specialized investment products and services such as insurance, pension and real estate with direct payment schemes to ensure the security and added convenience of beneficiaries.

The BSP has likewise approved the proposals of Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP) to launch their hedging programs and Long-Term Negotiable Certificates of Deposit for OFWs.

Another flagship program for migrant Filipinos emphasized in FLCs is microfinance, which could help channel remittances from rural households to small-scale businesses.

The BSP continues to improve access to financial services, especially in promoting the fast and efficient transfer of funds to OFW beneficiaries in the countryside:

The BSP has granted foreign currency deposit unit (FCDU) license to rural banks/cooperative banks to encourage the flow of foreign exchange into the banking system and provide OFWs with an option to maintain foreign currency deposits (FCD) instead of immediately exchanging their remittance proceeds into pesos through the issuance of Circular No. 522 on March 23, 2006.

The Bank has facilitated the interconnection of major ATM networks to allow for safer and more convenient banking transactions and to reduce service fees for all ATM-related transactions of over 10 million ATM cardholders, including OFWs and their families.

It has approved alternative modes of remittances such as Smart Padala, G-Cash and stored value cards to achieve lower transaction cost and faster delivery time for migrant Filipinos and their beneficiaries.

The Bank's issuance of Circular Nos. 564 on April 3, 2007 and 608 on May 20, 2008 has standardized identification requirements of banks to customers while ensuring compliance with the Anti-Money Laundering Act. The BSP issued Circular No. 657 on June 16, 2009 to further amend Circular No. 564, allowing the use of foreign-issued passports as valid identification of OFWs when conducting financial transactions in the Philippines.

Lastly, the BSP has signed a Memorandum of Agreement (MOA) with participating banks to set up a local clearing house for credit-to-other-banks mode of remittances to eliminate the use of couriers in delivering remittances to beneficiaries reducing charges by as much as 90-96 percent.

The MOA also standardizes and reduces back-end processing fees presently ranging from P100-P550 to just P50 per transaction. (PNA)

LDV/IRB/lgi

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