By Genalyn D. Kabiling
A new bank dedicated to provide financial services to overseas Filipino workers is expected to open soon.
This, after President Duterte approved the acquisition of the Philippine Postal Savings Bank Inc. (PPSB) by the Land Bank of the Philippines (LBP) and its conversion into an Overseas Filipino Bank (OFB).
In Executive Order No. 44, the President said the PPSB, geared towards developing the rural financial sector, is strategically equipped to provide financial and remittance services to Filipinos overseas and their families.
“Subject to the necessary approval and/or clearance of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Philippine Deposit Insurance Corporation and the Philippine Competition Commission, the acquisition of PPSB by LBP though transfer of shares and its consequent conversion into an Overseas Filipino Bank (OFB) is hereby approved, in accordance with existing laws, rules and regulations,” the order read.
EO 44 noted that OFWs, who contribute to the country’s economic growth through their remittances, should be “given provision of priority support for their growing financial needs.”
“There is a need to establish a policy bank dedicated to provide financial products and services tailored to the requirements of overseas Filipinos, and focused on delivering quality and efficient foreign remittance services,” the order read.
The Postbank, created in 1906 and revitalized as PPSB in 1994, serves as a government thrift bank that provides financial credit to the rural sector. It is a subsidiary of the Philippine Postal Corporation (PPC).
Setting up OFB
In EO 44, the President directed the PPC and the Bureau of Treasury to transfer their shares in PPSB to Land Bank at zero value. The PPSB has also been directed to transfer all assets, liabilities and other records to LBP which will infuse the necessary capital to OFB to attain its agenda of servicing the financial and banking needs of OFWs.
The same EO authorized the Land Bank to implement a reorganization plan for OFB and cause the detail of its personnel as necessary.
The affairs and business of the OFB will be managed by a board of directors consisting of nine members. The board includes the LBP president as chairperson, LBP designated OFB President as vice chairperson, four directors as members, a member representing the Department of Labor and Employment, a member representing the Overseas Workers Welfare Administration, and a private sector member representing overseas Filipinos.
The members representing DOLE, OWWA, and oversees Filipinos will be appointed by the President.
EO 44 also provided for an early retirement incentive plan for affected Postbank personnel. Funds for the separation pay and other benefits will be sourced from the PPSB or whenever necessary, the funds of the LBP.
Prior to the transfer of shares, the PPSB was directed to return to the National Treasury the balance amounting to P24.23 million from the previously released P500 million to fund the Project Dagdag Regular Income Via Entrepreneurship (DRIVE).
The order, signed last September 28, shall take effect immediately after publication in the Official Gazette or in a newspaper.