Duterte approves creation of bank for overseas Filipinos

MANILA, Philippines — A financial institution dedicated to the needs of overseas Filipino workers will soon be established as President Rodrigo Duterte has approved the acquisition of the Philippine Postal Savings Bank by the Land Bank of the Philippines.

 

The approval is contained in Executive Order No. 44 issued last September 28.

 

The order cited the need to provide the financial needs of overseas-based Filipinos, who contribute to the country's foreign exchange income, currency stability, employment and overall economic growth through their remittances. 

 

"There is a need to establish a policy bank dedicated to provide financial products and services tailored to the requirements of overseas Filipinos and focused on delivering quality and efficient foreign remittance services," Duterte said in the EO.

 

The president announced a plan to convert Postal Bank into a financial institution for Filipino migrant workers last year.

 

READ: Transfer of Postal Bank assets to Landbank now for Palace OK

 

Postal Bank assistant postmaster general for marketing Luis Carlos previously said the government needs to infuse P2 billion to P3 billion to carry out the plan.

 

Duterte said the PPSB, which was established to develop the rural financial sector, is equipped to provide the financial and remittance services to overseas-based Filipinos and their families. 

 

The Land Bank will acquire the PPSB through the transfer of shares and its subsequent conversion into an Overseas Filipino Bank, subject to the approval or clearance of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, the Philippine Deposit Insurance Corp. and the Philippine Competition Commission. 

 

The Philippine Postal Corp., the mother company of the PPSB, and the Bureau of the Treasury were directed to transfer all their shares in PPSB to Land Bank at zero value. 

 

The PPSB was instructed to cause the expeditious transfer of all assets, liabilities, records, systems and other related items to Land Bank.

 

Duterte also ordered Land Bank to infuse capital to the OFB to enable it to provide the financial and banking needs of overseas Filipinos.

 

READ: More OFW households using remittances for investments – survey

 

Land Bank will implement a reorganization plan for the OFB, which will be managed by a nine-person board. 

 

The Land Bank president will serve as the board chairman of the OFB. The OFB President to be appointed by the Land Bank will serve as vice chairperson of the board.

 

Other members of the board are four directors and officers designated by the Land Bank, and representatives of the Labor department, the Overseas Workers Welfare Administration and overseas Filipinos. 

 

The representatives of the labor department, OWWA and the overseas Filipinos will be appointed by the president. 

 

All PPSB officers and employees who will retire or will be separated from the service will be given a retirement incentive in addition to retirement or separation benefits under existing laws. 

 

Before the transfer of shares, the PPSB will return to the Treasury the P249.23 million balance from the P500 million released previously to fund the Project DRIVE, a microfinance program for the families of drivers and conductors of public utility vehicles.