Government to sell stake in OF Bank next year

MANILA, Philippines — The government is partially privatizing the Overseas Filipino Bank (OFB) next year by offering the bank’s shares to Filipinos based locally and abroad, the Department of Finance (DOF) said.

Finance Secretary Carlos Dominguez said the government is set to sell shares of OFB once it has become a profitable enterprise.

 “Basically, what we want to do is make this bank first of all, profitable – it has a niche so we can explore that niche profitably – and offer investment opportunities for OFWs, as well as local Filipinos to buy shares in that bank,” Dominguez said.

The finance chief said the government wants to start this process next year.

However, Dominguez said the agency has yet to determine how much shares of the bank would be floated to the public.

“I don’t know yet, and I think we will offer a variety of investment opportunities, such as preferred shares with a fixed return, or common shares. I’m not really sure yet,” he said.

To make this plan a reality, Dominguez said the government would need to infuse capital and bring in investments for the OFB to transform it into a digital bank and enable it to reach and serve overseas Filipinos better.

“What we want to do with the OF Bank, as I said, it to leapfrog all the other banks and go directly to digital banking, and of course, that requires a lot of preparation and some investment on our part,” he said.

Dominguez said the government also wants to tap an international partner to achieve this vision.

The secretary has so far asked the World Bank and the International Finance Corp.’s assistance for this initiative.

According to Dominguez, the OFB may also partner with the Insurance Commission for the sale of insurance products online.

The Land Bank of the Philippines took over the Postal Savings Bank at zero-value and converted it into the OFB, last January.

The OFB is mandated to become a bank “dedicated to provide financial products and services tailored to the requirement of overseas Filipinos.”

The DOF had said a key feature of the OFB is to provide remittance services to OFWs and a loan program for Filipinos planning to return to the Philippines to help them start businesses or build their homes.