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Home Opinion Analysis Financial inclusion for OFWs and their families

Financial inclusion for OFWs and their families

 

TOOTS OPLE

LAST Thursday, the Blas F. Ople Policy Center and the Association of Bank Remittance Officers, Inc. (ABROI) convened the CSO-Private Sector Consultations on the Global Compact on Migration at the DBP Building in Makati City. The two-day conference enabled various stakeholders of the overseas employment sector to discuss and analyze various facets of Philippine migration and the lessons that we can share with the world.

We decided to hold the consultations in close partnership with the International Organization on Migration (IOM) through international migration expert Ricardo Casco, a good friend and a former POEA official. ABROI president George Inocencio, currently first vice-president at the Development Bank of the Philippines, delivered a presentation, entitled, “Addressing the issue of de-risking through financial inclusion.”


De-risking refers to financial institutions exiting relationships with and closing accounts of clients considered to be “high-risk”. As of October 2017, 50 different foreign banks in 17 countries have closed down 157 accounts of Philippine banking institutions and remittance companies. Mr. Inocencio explained that this is a legitimate call of the banking institutions considering the huge penalties involved for even a single transaction involving violations of the Anti-Money Laundering Act. Nevertheless, such actions result in unfavorable terms for OFWs who face higher remittance fees and lower currency exchange rates.

One major challenge lies in empowering our OFWs, particularly those working in foreign households, factories, and plantations worldwide, to open foreign bank accounts given the stringent requirements involved. Our migrant domestic workers, for example, would find it difficult to maintain the required level of monthly deposits to keep their accounts in the countries they work in viable and sustainable. De-risking closes traditional remittance channels that many OFWs have found to be friendly and accommodating, with Filipinos manning the counters. If they are unable to open foreign bank accounts, the other alternative would be the long outdated “padala” system, tapping friends to hand-carry remittances to members of the family. This opens the window to theft and accidental losses, and in the process, having lesser friends to trust.

After listening to the presentation on de-risking, the OFWs, recruitment industry leaders, and civil society representatives all agreed that the financial inclusion of OFWs should be encouraged and facilitated not just by our own government but also by labor-destination countries and foreign employers. After all, the right to decent work and gainful employment also come with the right to be financially safe and secure. Unfortunately, as long as there is no external pressure for foreign banks to welcome to its doorsteps the millions of international migrants in dire need of financial services, these banks have really no incentive to cater to migrant workers.

This is why it is important that the government through the Department of Foreign Affairs assume the great responsibility of serving as the voice of millions of migrant workers. We know the history of labor migration. We understand the pressures that come to bear on a migrant worker and his or her family. We can articulate the sentiments of generations of migrant workers, once the United Nations General Assembly convene next year to discuss the Global Compact on Migration.

Through this Global Compact, a new framework to promote safe and orderly migration will guide the United Nations and its member states, including the Philippines. Financial inclusion of our OFWs is a right that we all must fight for, not just in the august halls of the UN, but also here at home. Every OFW family should be encouraged to open a bank account, to commit to savings plan, and undergo financial literacy programs. I am glad that the Overseas Workers’ Welfare Administration (OWWA) is now preparing to take the lead in making financial inclusion of our OFWs a reality.

Through this column, I would like to thank all those who participated in the CSO-Private Sector Consultations on the Global Compact on Migration, with a special shout-out to our wonderful resource persons, distinguished sponsors and of course, to the IOM and ABROI.

 

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