(Editor's Note: This article is in response to a commentary written by Sam delos Santos entitled ''Noble Mission Statements No Guarantee for Safe Investments,'' published by Arab News on May 1, 2003
JEDDAH, 12 May 2003 -- A number of programs have been launched by the Philippine government that are meant to help provide returning Overseas Filipino Workers livelihood or economic opportunities at home. One of the latest is the OFW Reintegration Program being carried out by the OFWNet Foundation and OFW International Holdings, in partnership with various agencies of the Philippine government.
The difference is that the OFWs, through these private organizations, hope to gradually give flesh to the reintegration program in terms of awareness and actual practice by taking physical action instead of just theorizing.
There are several small steps that the OFWNet has taken so far. One of these was the Middle East Roadshow Presentations to introduce the DOLE/OFWNet/OFW Holdings partnership. OFWNet believes that multi-pronged and complementary efforts from OFWs are more effective than just criticizing defects in any government program and not taking action to either correct or improve the situation, especially on the delivery of services to Filipinos in general and to OFWs in particular. Another step is the forthcoming ''Overseas Filipinos Worldwide Conference and Trade Exhibit'' scheduled on May 23-25 at SM Megamall in Mandaluyong, Metro Manila.
Meanwhile, let me address some of the specific concerns raised in a question and answer format:
Question: Do you have the secondary license to solicit or offer shares of stocks in the primary market?
Answer: We do not have that yet. It does not necessarily mean, however, that what we are doing is illegal (e.g. only members of a private organization get to own stakes with OFW International Holdings).
We do not issue new shares of stocks in the primary market. Even with a secondary license in the Philippines, it can never make the efforts in all parts of the world legal. We adopt an unconventional and non-traditional approach within the bounds of the law as we realize that this vision can never be achieved if approached in a theoretical manner.
Notwithstanding the above, we are currently working on the application for a secondary license with the SEC. OFW Holdings had budgeted the costs of processing of the application as early as August 2002.
Q: What is/are the difference/s between OFW International Holdings and Multitel, MMG, TMG, etc.?
A: We have actual operating units. Funds are in the accounts of the company and not diverted to the personal pockets of the management. Financial statements are available in a timely and accurate manner.
They are made available to stockholders as mandated by law and jurisprudence.
There is an administrative and internal control system especially in disbursing funds. The OFWs/stakeholders themselves are allowed to run for board seats, and the board is not controlled by a few individuals.
Unlike the Multitel, MMG or TMG, we do not have a pyramiding or multi-level structure. We have partnerships with the government complementing its efforts in implementing different programs for the benefit of Overseas Filipino Workers.
There is social component in what we do; we have physical proofs of support and assistance to OFW stakeholders and their families.
Q: How about transparency?
A: The stakeholders get to elect their directors in the board on an annual basis. Financial statements are provided to directors and stakeholders on a periodic basis. Minutes of the board meeting are made available. All stakeholders can visit the office, attend the board meetings as guests and audit the books of the organization, both OFWNet and OFW Holdings. Important decisions and milestones are always reported to the stakeholders through the Internet (e-groups) Organizational structure in the field (per area/country) gives the Area Lead Promoters the inside tract of the background and decisions of the board/management.
Q: Why an OFW Bank?
A: It's the ultimate symbol of economic emancipation for OFWs. It's the center of financial activities. Bank services are the primary needs of the OFWs (remittance, credit, housing, insurance, etc.) while some banks have a prejudicial attitude towards OFWs simply because they are based abroad. Banking is one of the more, if not the most, resilient institution during times of economic downswings. OFWs are the ones sustaining the economy of the Philippines, and therefore, they should be the ones to benefit from their own monies. The OFW market can no longer be ignored, but should in fact be provided with the best products and services which they themselves can benefit from.
Q: What are your present and planned activities?
A: Our currently operating SBUs (small business units) include:
- Remittance (Kuwait-Manila);
- An initial discussion with a prominent Saudi bank, (which at the moment we cannot disclose for obvious reason) to establish and operate a remittance facility for OFWs;.
- Real estate in partnership with Southeast Realty and Development Corp (exclusive marketing arm of Ayala Land Inc.'s Laguna Properties Holdings);
- Insurance in partnership with Pioneer Life Assurance Corp;
- Financing/ lending to stakeholders and their families; and
- Travel and tours.
We are currently preparing research and studies for an OFW Microfinance Bank (to be registered under the OFW International Holdings). Feasibility studies and Central Bank requirements are now being done by a committee headed by one of the directors and former AVP of Equitable-PCIB and several other banker-consultants.
Q: How are you going to provide bank services?
A: In the same manner that other banks, of the same type, are providing their services. But of course, with value added, which is part of our strategy. We don?t have to reinvent the wheel. Logically, what we need to do is to copy best practices and models, and probably make some customization and improvements on those models.
Q: How are you going to compete with other banks?
A: Through extensive and innovative marketing through each strategic business unit (SBU), that is focused on a particular area of expertise or industry. Offer competitive banking products and services to the market with OFWs as the main service beneficiaries noting that the OFWs and their families have a purchasing power of $8 billion annually. We will not compete with banks on the basis of their strengths but rather on their weaknesses by complementing what they lack in providing banking services to OFWs.
Q: Is there a study being made on a future OFW Bank?
A: The Board of Directors has already set up a committee headed by one of our directors, a former executive of Equitable-PCIB with 28 years of banking experience, to prepare the requirements of BSP which include business plans and operating manuals. He is supported by a team of consultants with executive experience in several big banks in the Philippines.
Q: Is the bank just a come-on for people who do not understand banking?
A: No, it's not! Whether one likes it or not, the OFW Bank will be formed soon. Its time has come. OFWs have waited for so long and at present, ours is the group that has the potential of achieving that vision.
Q: Do stockholders have the right to get information and reports from the company?
A: Absolutely! The Corporation Code of the Philippines is being applied by OFW International Holdings Inc., and all the rights of stockholders will be respected and followed, provided that the right of the company to protect its interests and rights will not be jeopardized.
Q: If the investors withdraw their capital, how would the company sustain its operations?
A: As earlier mentioned, our company is not a pyramiding structure. The Trust Fund Doctrine of the Corporation Code of the Philippines makes it illegal to withdraw equity of the stockholders. That can only be done upon liquidation or if the company buys treasury stocks, which requires certain requisites. It is always the right of stockholders to sell or transfer their shares of stocks to another person.
Q: Financial forecasts, risks involved, ways out?
A: Financial forecasts were already being presented to the stakeholders. Risk factors and ways out/exit plan are all part of the application for secondary license, which is currently being processed.
Q: How much would be the return on the personal investments? When could investors expect returns?
A: As a general rule, we do not want to give figures at this time, lest we would be accused of being no different from swindlers and ''scammers.'' Our projections, however, assume a conservative annual average return-on-equity (ROE) of 20 percent for the next five years.
Returns may be given on an annual or semi-annual basis depending on the board?s periodic assessments, provided further that the returns will be based on the dividend policy of 50 percent of retained earnings will be distributed in the form of dividends while the 50 percent will be retained for expansion/capital build-up.
It must be noted that there is a thin line that separates ''plagiarism'' and ''research.'' Thus, the boards as well as the members of both organizations have the duty and responsibility to protect their interests. We cannot simply disclose the legal, commercial and practical strategies that we have adopted in order to realistically approach and achieve our mission.
While debates continue to exist among members on the processes and technicalities to prioritize, there is that common ground that everyone agrees to -- that only through unconventional and non-traditional approaches will our vision be realized.
As to other answers specific to the several issues raised in the news item, it is unfortunate that the writer failed to see these in the presentations. Thus, he had a different perspective as to the purpose of the Middle East Roadshow presentations. It is unfortunate that he was not able to witness the complete presentation. This made him draw an incorrect conclusion, to the point of urging several government agencies and officials -- including President Gloria M. Arroyo -- to withdraw their endorsement of the OFW Reintegration Program, the implementation of which is being spearheaded by the OFWNet Foundation-s leadership.
(Jimmy Leonida is a member of the board of OFW International Holdings and area lead promoter of OFW Net Foundation in Jeddah.)
