How the Overseas Filipino Bank works

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Metro Manila (CNN Philippines, October 24) — The government promises faster and cheaper services for millions of overseas Filipinos sending money home.

This is through the Overseas Filipino Bank (OFB), created by President Rodrigo Duterte through an executive order. It opens in January 2018.

The OFB will be a subsidiary of the Land Bank of the Philippines, a government-owned and controlled corporation.

Families of overseas Filipinos can withdraw remittances from Land Bank's 423 branches and automated teller machines (ATMs) across the country and do other transactions as well, Land Bank President and CEO Alex Buenaventura told CNN Philippines on Tuesday.

"Pwede na ho sila maski hatinggabi pumunta sa ATM machine para kunin yung padala (They can go to ATMs even at night to withdraw money)," Buenaventura said.

He said those who have an existing Land Bank account do not have to open another account with the OFB.

There will only be one OFB in the country at Liwasang Bonifacio in Manila.

Meanwhile, Filipinos abroad can send money home using their smartphone.

"Ang atin hong ipopromote ay paggamit ng smartphone 'dun po sa abroad. Papasok po sila sa website ng either Western Union o Xoom and then magpapadala sila through that, credit to account sa Land Bank. So dapat merong account dito ang mga beneficiary," Buenaventura explained.

[Translation: "We promote the use of smartphones abroad. They will go to the website of either Western Union or Xoom and send money to a Land Bank account. So, the beneficiaries must have an account here."]

"Mas mabilis at mas murang magpadala ng pera sa kanilang mga kamag-anak dito sa Pilipinas (Sending money will be faster and cheaper)," he added.

Overseas Filipinos will be charged $5 per $100 sent, he said. This is almost the same as the rates of private remittance companies.

But Labor Secretary Silvestre Bello III on Monday said the OFB can even offer free service for overseas Filipinos. The government also eyes low interest rates for loan packages, possibly at 2.5 percent per year.

The OFB will have representative offices in various consular offices in the world. The first to open will be in Dubai in January 2018.

"Meron hong mga tao doon ang OFB not to do any transaction but to market sa mga overseas Filipinos doon," he said.

[Translation: "The OFB will have representatives there not to do bank transactions but to market our products with the overseas Filipinos there."]

These are deposit/remittance products, loans, investments, and savings program.

Overseas Filipinos can also buy shares in the OFB.

"Ang ating OFWs pwedeng bumili ng preferred shares, a kind of stock ownership. Ang maganda diyan ay malaki ang kita niyan," Buenaventura said.

[Translation: "OFWs can buy preferred shares, a kind of stock ownership. They will earn more."]

 

There are 10.2 million Filipinos worldwide as of 2013, according to the latest estimate of the Commission on Filipinos Overseas. Most of them are working or living in the U.S., Saudi Arabia, and the United Arab Emirates.

Cash remittances from Filipinos abroad continued to rise, reaching $18.6 billion in the first eight months of 2017, data from the Bangko Sentral ng Pilipinas show.

Executive Order 44 paved the way for the Land Bank to acquire Philippine Postal Savings Bank and convert it into the OFB.

Read more: Duterte creates special bank for overseas Filipinos