The Development Bank of the Philippines (DBP) has created a savings facility for the nearly nine million Filipinos abroad, giving these cash-rich migrant workers an opportunity to double their money in nine years.
The country’s fifth-largest bank in terms of assets wants to increase its loanable funds to help finance infrastructure projects.
The government has vowed to invest heavily in building new bridges, roads, port facilities and schoolrooms next year to create jobs and business opportunities and shield the domestic economy from the global financial crisis fallout.
With the Deposito ng Bayaning Pilipino, we hope to imbibe the importance of saving and investing among our OFWs, David said in a statement. The facility, he added, was also in response to President Arroyo’s call for increased and more meaningful assistance to Filipino migrant workers.David said the facility was launched during the President’s recent visit to Qatar.
Latest data from the Bangko Sentral ng Pilipinas show money sent home by overseas-based Filipinos increased 15.5 percent to $13.7 billion in the 10 months to October.
The OFW money, which continue to flow at more than $1 billion each month for more than two years now, helps boost consumer spending. The Philippines is the third-biggest recipient of migrant workers’ remittances in the world. The money accounts for about a tenth of the country’s gross domestic product. OFWs usually invest in real estate. Remittances also help send family members to schools, buy cars and cell phones.
The Bangko Sentral expects growth in remittances to slow down next year given as employers cut payrolls in recession-hit countries, including the US, home to millions of Filipino migrant workers.
In absolute terms, Bangko Sentral said total remittances next year are expected to remain strong and continue to be an underlying source of strength for the economy.
The central bank attributed the strong remittance growth this year to sustained demand for highly skilled, better-paid Filipino professional workers, combined with the wider access by overseas Filipinos and their beneficiaries to expanded remittance-transfer facilities. Official data show the number of Filipinos deployed abroad from January to October this year rose by 25.5 percent to more than 1.1 million from 888,339 a year earlier.
There could be a slowdown in the rate of deployment as a result of global financial strains, according to the central bank. This could be moderated by employment opportunities in host-countries such as Canada, other Middle- Eastern countries and, more recently, South Australia, which have sounded off the need for more manpower to address skills shortage.
Called the Deposito ng Bayaning Pilipino, the facility requires a minimum deposit of P50,000 and offers an interest yield of 8.5 percent a year.
DBP president and chief executive Reynaldo David said the bank will invest the money from overseas Filipino workers (OFWs) to development initiatives involving infrastructure projects of the government.
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