NEDA to banks: Encourage OFWs to save
MANILA, Philippines - The national government is urging banks to come up with more financial instruments that encourage Overseas Filipino Workers (OFWs) to save.
On the sidelines of the Management Association of the Philippines (MAP) economic briefing on Thursday, February 21, Socioeconomic Planning Secretary Arsenio M. Balisacan told reporters that instruments that are attractive for small savers would be a good start.
"What we are trying to put in place are banking instruments that are quite attractive for small savers, especially for OCWs (Overseas Contract Workers). There's so much of those potential savings that can be channeled to the formal sector, to the banking sector, but we need to generate instruments that are quite attractive for them," Balisacan said.
Most Philippine banks already have offices abroad that target the overseas Filipinos, whose main requirement are remittance services, not savings instruments.
Policy makers have said time and again that remittances from Filipinos overseas must be channeled toward capital-forming activities, not just spent.
About US$23.8 billion funds were remitted home by overseas Filipinos, fueling local consumption, which in turn was behind the phenomenal 6.6% GDP growth in 2012.
On Monday, February 18, the National Economic and Development Authority (NEDA) said only 41 out of 100,000 Filipinos have deposit accounts.
The NEDA, which is headed by Balisacan, said the figure is way below the government's 2016 target of 750,000 Filipinos -- or 750 out of 100,000.
According to the agency's socio-economic report (SER), reform in the financial sector has been hastened through the support of cooperatives nationwide. The SER stated that there were 7,565 more cooperatives established in 2011 alone.
Overall, there were 20,792 cooperatives by the end of 2011, with 3 out of 4 being micro cooperatives, or those with an asset size of P3 million and below.
The SER stated that the country’s financial inclusion agenda has been recognized by international institutions. In 2010, the Economic Intelligence Unit (EIU) rated the Philippines as the best in overall regulatory environment for microfinance among 54 countries. - Rappler.com