With the highly-anticipated OFW bank, it is natural for our kabayans to get impatient with such a promising initiative by the Duterte administration and Land Bank of the Philippines. The bank was originally planned to be established in September 2017, however, the process took time since there are several offices where the proposal has to go through. The OFW Bank is expected to be operationalized with the processing of documents come end of 2017.
OFW Bank Timeline
|August 22, 2017||GCG approval of purchase agreement between state-run lender and Post Bank|
|August-December 2017||-President Rodrigo Duterte reviews the new measure and will issue an executive order for the establishment of the OFW bank
-Monetary board reviews the proposal
|January 2018||Pilot test of OFW service center will run in Dubai (proposed to be housed in the consular office)|
|April 2018||Second OFW service center will open in Bahrain|
|2019||Rollout in “priority countries” with high concentration of OFWs such as: US, Japan, Middle East, and Hongkong|
Land Bank President, Alex Buenaventura, has provided these target dates for the OFW Bank saying that the pilot testing and product development is the longest process that’s why the rollout will take about a year after the pilot testing.
What the OFW Bank Promises
The main goal of the bank is to relieve our OFWs of high remittance fees and loan interests. Buenaventura says that the bank will be much cheaper than all of its competitors in the market. Dubai’s average rate per transaction is 12 BHD which is approximately Php1621.00. Buenaventura says they are planning to make it 10 BHD or Php1350.00 so OFWs would shift to the OFW Bank.
There will also be no bank branches, but instead, service centers in different countries to cater to the banking needs and requirements of OFWs.
Land Bank’s Strategies
Once everything is set in place, the Land Bank will infuse 1 billion pesos to the OFW Bank to make it operational. Land Bank also plans to make the acquired Postal Bank its marketing remittance arm or subsidiary to serve our kabayans.
Land Bank currently has a 5% share in the remittance market, come 2022 Buenaventura says that LB aims to acquire 25% remittance share. Currently, BDO is the biggest player in the remittance market with 40% of share. Land Bank plans to make this possible by making good of their promise to have the cheapest rate among all their competitors.
It’s only a matter of time before the completion of the processing stage of the OFW Bank, so our kabayans can be assured that the bank will be of service to them next year.