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Senate President Manuel Villar Jr. said it is unfortunate that
government decided to suspend its loan program for departing
overseas Filipino workers amid ongoing investigations on
multimillion dollars worth of anomalous transactions in government.
“If government can bend the rules so it
can spend billions of pesos for questionable deals, then why has it
suddenly become so strict with P5,000 loans of OFWs?,” he asked.
With some 3,000 OFWs leaving the country
every day, the Overseas Workers Welfare Administration (OWWA)
collects P1 billion a year, “yet despite its assets surging from
P2.2 billion in 1995 to P8.6 billion to 2005, OWWA spent only 3
percent of its fund balance on services,” Villar said.
“While OWWA’s mandate includes ensuring
capital build-up and fund viability, it must guarantee that its
delivery of welfare services and benefits is not sacrificed, nor
should be it at the expense of accountability,” Villar said.
Villar filed a resolution in the Senate
urging the Senate Committee on Labor, Employment and Human Resources
Development to conduct an inquiry into the OWWA’s suspension of
its pre-departure loan (PDL) program.
Villar said the PDL program “is a mandate of
the law,” being a provision of the Migrant Workers and Overseas
Filipinos Act of 1995.
This law created the P100-million Migrant
Workers Loan Guarantee Fund, from which a departing OFW can borrow
from P5,000 up to P40,000, payable in one year at 7.5-percent
interest.
The loan is expected to be spent for an OFWs’s
fare, placement fees, clothing and pocket money.
“This is some sort of cash advance, to protect
the OFW from loan sharks, or prevent him from pawning the family
carabao, so his family has something to tide them over with until
the first remittance arrives,” Villar said.
Citing a low repayment rate of 29 percent, OWWA
froze all PDLs in June 2006, but Villar said a recent report showed
a higher repayment rate of 65 percent which could still be improved
if the OWWA can impose a better collection system.
“Besides, the P100-million fund is insured
from defaults, so OWWA is not entirely left holding an empty bag,”
he said.
Villar said the OWWA can also absorb “past due
accounts” as it got a “windfall” from the peso depreciation
when it continued using a P56 to $1 exchange rate for the mandatory
$25 “membership fee” that each departing OFW has to pay to OWWA,
even when the peso had improved to P51 to a dollar last year.
In filing Proposed Resolution No. 392, Villar
said transparency in the management of the OWWA Fund derived from
the hard-won earnings of OFWs is significant in coming up with
legislation to ensure effective delivery of welfare services and
benefits to OFWs.
“The larger context is that OFWs remitted,
just through banking channels alone, $14.45 billion last year, or 13
percent over 2006’s $12.8 billion, accounting for 10 percent of
the GDP, and fueling the biggest GDP in 31 years of 7.3 percent,”
he said.
“If only for this, we should retain the PDL
program, to show our appreciation to them. If we [can] grant
incentives to electronic exports, then why not to the ‘human
kind’? They are not high-risk lenders. Better that [the
government] help them, than let 5-6 lenders prey on them, “he
said.
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