Overseas Filipinos ‘hopeful’ ahead of opening of bank that pledges lower remittance charges

President Rodrigo R. Duterte, center left, Land Bank of the Philippines president Alex V. Buenaventura, center right, and from left, labor secretary Silvestre H. Bello III, foreign affairs secretary Alan Peter Cayetano, executive secretary Salvador Medialdea, OFBank president Renato Eje and finance secretary Carlos Dominguez unveil the marker for the Overseas Filipino Bank inauguration on January 28, 2018. (Land Bank of the Philippines)
Updated 20 March 2018
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Overseas Filipinos ‘hopeful’ ahead of opening of bank that pledges lower remittance charges

DUBAI: Marifhe is a nurse at a hospital in Jeddah – she has been for 24 years – while her husband, Noel, has been employed in Saudi Arabia’s retail industry for three decades.
The couple managed to raise and send their three children back home through college during their long stay in the kingdom, regularly remitting money through banks or money exchanges for their children’s tuition and other expenses.
“It has always been like that since we started working in Saudi Arabia. We always go to Al-Balad [where the exchanges and banks are located] to send money home. It would have been better if there was a system that made it easier for us; and the remittance charges were lower so we could send more to our relatives,” Marifhe told Arab News.
The couple has lost track of the time they have spent patiently waiting in long queues just to send money back home or how much they have spent in remittance charges - money they could have saved or put towards their family.
But Marifhe says she is hopeful, like the other millions of Filipinos working and living abroad, that the recent roll-out of the Overseas Filipino Bank (OFBank) will ease her money concerns and also help plan for her financial future.
OFBank, which was launched on Jan. 18, is actually a revamped version of state-owned Philippine Postal Savings Bank, but with its business model dedicated to provide financial products and services tailored to the requirements of over 10 million overseas Filipino workers (OFWs), a good number of them working in the Middle East.
The bank’s establishment was also the outcome of a campaign commitment made by President Rodrigo R. Duterte, whose candidacy during the 2016 elections received overwhelming support from overseas Filipino voters.
It is a good strategy for OFBank to focus on OFWs: personal remittances from overseas Filipinos reached $31.3 billion in 2017, 5.3 percent higher than the $29.7 billion a year earlier, with major remittance sources such as the US, UAE, Saudi Arabia, Singapore, Japan, Qatar and Kuwait. Cash remittances coursed through banks meanwhile reached $28.1 billion, or up 4.3 percent from year-ago levels of $26.9 billion.
The money that OFWs send home provides a major backbone for the Philippine economy, which last year accounted for about 10 percent of the country’s gross national product and has been the traditional fuel for household spending power even during leaner economic periods.
Filipinos send a vast proportion of their incomes home, leaving themselves with barely enough to meet their daily living costs.
“I would like to see how the bank [OFBank] would make remittance costs cheaper, as well as give me more trust in the [Philippine] banking system. I have not much trust in Philippine banks,” Marifhe said.
OFBank – to be run by the government’s Land Bank of the Philippines – will have in its portfolio 15 banking products and services especially suited for OFWs including peso savings, time deposits, checking accounts, loan products, remittance services, payments services as well as investment products such as Unit Investment Trust Funds.
OFBank also plans to offer a non-collateral loan package for Filipinos planning to return to the Philippines to start their own businesses or build their homes, at affordable interest spreads.
“We have developed these products to tailor fit the banking needs of overseas Filipinos,” Alex Buenaventura, the chairman of OFBank, said during the bank’s launch. “OFBank is the only bank in the Philippines with loans, saving and investment products for OFWs.”
But Marifhe, and other expatriate Filipinos in Saudi Arabia, will have to wait for OFBank to have a presence in the Kingdom as the lender plans to have its first representative office located in Dubai, and the second one in Bahrain.
The Philippine government is also looking at the possibility of deploying the digital financial services offered by China’s Alibaba Group for remittances to be processed through OFBank.
Ant Financial’s low-cost mobile payment technology – which helped boost financial inclusion in China – could also be used in the Philippines and help reduce the cost of remittances.
And that is definitely good news for Marifhe who, despite being an OFW for over two decades, still has no plans to go back home in the Philippines and retire.
“I will not earn in the Philippines what I currently earn here [in Jeddah], so while my services are still needed by the hospital I will stay. But I also want to secure myself financially so I hope OFBank can help me with that,” she said.


Saudis cut, Russians hiked output ahead of pact: IEA

Updated 6 min 4 sec ago
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Saudis cut, Russians hiked output ahead of pact: IEA

  • OPEC members along with allies including Russia agreed in early December to trim production by 1.2 mbd from Jan. 1

PARIS: Saudi Arabia demonstrated its resolve to lift oil prices by slashing output ahead of the entry into force of new pact limiting production while Russia boosted output to a record level, the International Energy Agency said Friday.
World oil markets have been on a rollercoaster ride in recent months, with OPEC and its partners including Russia, often called OPEC+, agreeing to cut back production again from January in order to reverse a slump in oil prices on abundant production and worries about slower global growth.
In its latest monthly report, the Paris-based International Energy Agency said the Saudis took the lead by cutting output in December as prices tumbled by more than a third in just two months.
“Recently, leading producers have restated their commitment to cut output and data show that words were transformed into actions,” said the IEA.
“While Saudi Arabia is determined to protect its price aspirations by delivering substantial production cuts, there is less clarity with regard to its Russian partner,” it added.
But the cut was mostly due to the Saudis, with data indicating several OPEC members increased production last month.
The IEA said data show that Russia increased crude oil production in December “to a new record near 11.5 mbd (million barrels per day) and it is unclear when it will cut and by how much.”
OPEC members along with allies including Russia agreed in early December to trim production by 1.2 mbd from Jan. 1, in a bid to eliminate a production glut and shore up prices.
Just months earlier, they had relaxed production caps as prices shot higher on market worries about the impact of US sanctions on Iran, but Washington eventually granted waivers allowing several countries to continue to import Iranian oil.
Meanwhile, US production rose considerably more than expected last year, adding further to supplies, while concerns about demand emerged as the US-China trade spat deepened in the second half of last year.
The IEA said the US increased output by 2.1 mbd last year, the “highest ever” annual growth ever recorded.
The boom of shale oil production in the US this decade has redrawn the map of global energy politics as the nation no longer depends as heavily on imports and has even resumed exports.
The IEA said “the US, already the biggest liquids supplier, will reinforce its leadership as the world’s number one crude producer” in 2019.
“By the middle of the year, US crude output will probably be more than the capacity of either Saudi Arabia or Russia.”
The IEA left its estimate for global oil growth in 2019 unchanged at an increase of 1.4 mbd, saying “the impact of higher oil prices in 2018 is fading, which will help offset lower economic growth.”
It said there were signs that the rebalancing of the oil market will be gradual.