President Rodrigo Duterte, in keeping with his promise, has signed Executive Order 44 establishing an Overseas Filipino Bank (OFW Bank).
Executive Order 44 converts the Philippine Postal Savings Bank (PPSB) into an OFW Bank. It mandates the Landbank of the Philippines (Landbank) to acquire the PPSB and its shares.
Likewise, EO 44 transfers the shares of the Philippine Postal Corporation and Bureau of Treasury in the former PPSB to Landbank.
“Overseas-based Filipinos—who contribute to the country’s foreign exchange income, currency stability, employment and overall 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 delivery quality and efficient foreign remittance services,” EO 44 read.
Last week, the World Bank predicted that the remittance flows in the Philippines will hit $33 billion by the end of 2017.
“The PPSB—a subsidiary of the Philippine Postal Corporation which has the primary purpose of developing the rural financial sector—is strategically equipped to provide the needed financial and remittance services to Filipinos overseas and their families,” EO 44 added.
EO 44 also mandates the Landbank to infuse the necessary capital to the OFW Bank and implement a reorganization plan for the bank.
The OFW Bank will be managed by the Board of Directors consisting of nine members that includes the Landbank President as chairman, Landbank-designated OFW Bank president as vice chairperson, four Landbank-designated directors or officers as members, and members representing the Department of Labor and Employment, Overseas Workers Welfare Administration, private sector and OFWs.
PPSB officers and employees who will retire or may be separated from the service will be granted incentives on top of their retirement or separation benefits.