JEDDAH, 30 April — A bank of OFWs, for OFWs, by OFWs.
That's the vision founders of OFW Net Foundation and OFW International Holdings shared to invited guests and community leaders in Jeddah who attended its first meeting in Harry Ramsden Restaurant on Thursday night.
The OFW Bank, when in operation in 2006, will be "fully owned and patronized by OFWs themselves... it is envisioned to be the 'sweetest fruit and nectar' of the sweat, and sacrifices of Filipinos who ventured to work outside of their mother country because of economic hardships."
With some seven million overseas Filipinos (documented and undocumented), and considering the amount of money they are sending back to the Philippines annually, so the thinking goes, the OFW Bank will also serve as "economic and political empowerment of Overseas Filipinos worldwide." The Holdings is eyeing just one percent of the total annual remittance of OFWs as potential equity for the bank.
Jimmy Leonida, one of the founders, explained that the idea to put up an OFW Bank was hatched after overseas Filipinos, who got acquainted with each other through the Internet, formed the OFW Net Foundation. In December 2001, the group met in Manila for the first time, and then decided to establish the OFW International Holdings as a corporation to handle the business interests of the Foundation. The core group consists of Filipinos from the United States, Singapore, Australia, the Netherlands, and other countries.
As the possibility of an OFW Bank loomed in the horizon, it was greeted with both excitement and skepticism. Those who welcome the news point out that the project may bridge the gap between the government's reintegration programs and returning migrant workers. Most of the time, OFWs find that the reintegration program is insufficient and could not meet their needs. By investing in the bank, it is hoped, returning workers can avail of many of its services including loans, micro-financing programs and even educational loans for their dependents.
Skeptics point to various initiatives in the past that either flopped prior to take-off, or those that were nipped in the bud due to in-fighting or discord among its founders — mainly due to mismanagement of funds that resulted in heavy losses.
Hurdles
The concept of an OFW Bank, while viable and attractive, had stirred up various concerns. One of the issues raised by a legal mind present during the meeting was licensing. A bank owned by OFWs (with an existing huge market and prospective investors) might not be granted a license to operate considering its potential to dominate the market. Jimmy Leonida said that the Manila founders are aware of the situation. He added that, at present, there is a moratorium on bank licensing imposed by the Bangko Sentral ng Pilipinas (BSP); however, it has been lifted in favor of micro-financing banks. "Micro-financing banks, Leonida revealed, only requires a capitalization of 5 million pesos. This amount can be easily raised. The foundation, he said, has in its coffers (held in escrow by Manila founders), two million pesos ready to be tapped."
Juxtaposed with the money issue, as a guest pointed out, is the legal ownership of the two million pesos the investors have initially contributed. Leonida said that while the initial five incorporators of the Holdings legally own the amount, they have filed a memorandum of understanding with the Philippine Securities and Exchange Commission disclosing that the monies received belong to various investors, and this document fully indicates the names of investors and the amount they contributed.
Grand ambition
A prospective investor thought that the project is "very ambitious." He said, "The founders will be well off if they concentrate on a specific project first (which requires minimal capital, but with high yields) then diversify later."
Leonida answered that the founders are actually concentrating on smaller projects. Although the ultimate goal is establishing an OFW Bank, the founders are looking into other businesses that they hope can jumpstart the project. One of these is the remittance service business. The Holdings hopes to hatch a partnership with a leading Saudi Arabian bank with its remittance service operations. The Holdings hopes to start engaging in this business by July.
The other smaller project the founders are looking into are, travel and tours, apartelles, hotels, and condotels, e-commerce and telemarketing, cooperatives and corporatives, franchising, and many other products and services that involves OFWs.
Another concern voiced out by an accountant is management, accountability, and control of funds. He said that there had been various attempts by other organizations in the past with similar purposes but they failed because of lack of control and transparency. "The concept is good, but there must be very stringent controls. There must be clear-cut policies in the powers of those who will manage the investment. There must be stern policies to minimize or check possibility of abuse."
"Corporate policies, levels of authority and management controls, are being developed in Manila, subject to approval by the worldwide founders," says Leonida. He added that foremost among the concerns eyeballed by the founders was to ensure "checks and balances" are in place before they go any further.
Leonida also declared that the US founders have invited investment bankers to join their ranks. Next week, the US founders will present the business plan of the Holdings to a selected audience of investment bankers in San Francisco.
United we stand
Electronic dispatches sent to the author show that OFWs in as far as Kuwait are embracing the idea. A group of eight OFWs in Kuwait has started to pool their resources to put initial investment of $1,000 each. In Jeddah, there are already close to 94 investors, 20 in Riyadh, and three in Alkhobar.
The political empowerment of OFWs, which the Foundation and the Holdings hope to package with this project, includes absentee balloting and the dual citizenship law. The Manila and USA founders have been lobbying the Philippine Congress for this.
In the exchanges among OFWs in the Internet, some had also raised apprehension of a fledgling OFW Bank being eaten up alive, considering the dog-eat-dog competition that had seen even big banks such as PCI Bank and Far East Bank being swallowed by their rivals.
But there are also many who believe that overseas Filipinos already have the numbers and the capital, which, put together could give those already established a run for their money.
To that, Vice Consul Angelo Amonoy, who keynoted the meeting, had nothing but words of encouragement. "Nothing happens unless it is dreamed of," he said.
The founders
The original five incorporators of the OFW International Holdings Inc. are: lawyer Victor Yu (Philippines), Eduardo del Rosario (Guam), Jimmy Leonida (Jeddah), Jun de Leon (San Francisco), and Maximo Bringula (Alkhobar).
Officers of the OFW Net Foundation and OFW International Holdings, include, Eduardo Jabla (former OFW who worked in Jeddah), chairman; Eduardo del Rosario, vice chairman; Dr. Rachelle Garcia, managing director; Victor Yu, corporate secretary and treasurer; Norman Gacula, CPA, internal auditor; Ma. Theresa Arcilla and Catherine Ledesma, PROs.
Interested parties are advised to contact the following individuals for more information about the project. Jimmy Leonida at 684-2425, 05 433 4957 (mobile); Rolly Amaranto at 660 2077 extension 6500; and John Asperilla at 698-8181 extension 161.
The Philippine address of the Foundation and the Holdings is Suite 100, Ground Floor, National Tobacco Administration (NTA) Bldg., Scout Reyes corner Panay Avenue, 1103 Quezon City, Philippines, with telephone number 416-9024 and fax number 416-9023. Those who wish to visit the websites may want to browse http://www.ofwnet.org (Foundation) and http://www.ofwbank.info (OFW Bank).
