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“Development Finance and Migrant Workers Remittances”
GILDA E. PICOPresident and CEO
Land Bank of the Philippines
ADFIAP CEO PanelOctober 29, 2009Dusit Thani Manila
Impact of remittances to the global economy
Remittances have played a central role in the economies of many labor-sending countries
Global remittances in 2008 amounted to US$305 B With US$16.4 B, Philippines ranked 4th in terms of amount of remittances
1 India US$ 452 China US$ 343 Mexico US$ 264 Philippines US$ 165 Poland US$ 11
Top 5 Countries in Inward Remittances(In billion)
Source: World Bank
Remittances to the Philippines
OFs, through their inward remittances, contribute significantly to growth and development and help boost the economic structure According to BSP estimates, OF remittances will reach US$16.9 B this year
In July alone, remittances from overseas Filipinos coursed through banks reached US$1.5 B
Remittances to the Philippines
Sustained demand for Filipino manpower and talent abroad is expected to drive the remittance flows to the PhilippinesOFs’ remittances now account for about 10% of Philippine GDP
Fuel domestic consumption in the overall economyHelp the country improve its balance of payments
Consumption patterns among families and beneficiaries of OFs have gone beyond spending for the basic necessitiesThey can now afford durable goods
Significant portion of the new homes built and vehicle sales in the Philippines are financed by inward remittances Inward remittances build up the country’s international reserves and help stabilize our exchange rate
Remittances to the Philippines
Remittances can better contribute to the economy and to the development of our country if put into more productive use OFs must be encouraged to become savers, investors and entrepreneurs
Help create jobs and livelihood for more people Multiplier effect on tax generationCreation of greater value in the economy
Major challenges for financial institutions
1. To make remittance services more accessible and less costly
2. To have programs that would help OFs and their families take on the roles of savers, investors and entrepreneurs
Harnessing remittances for development
LANDBANK deals with both challenges head on, as we seek to constantly improve and expand our banking services for OFs
Offers wide array of services that respond to their needs: Pre-departureStay in their host countriesUpon their return to the Philippines
Pre-Departure Orientation Seminars (PDOS)In partnership with the OWWAHelps educate the participants about optimizing their earnings; Financial literacyInspire OFs to venture into their own businesses
Workers Education ProgramIn partnership with the POEAPromote the protection and education of OFsGeared at ensuring that OFs are well-prepared prior to their departure and are educated on the banking services available to them
Harnessing remittances for development
The balance on deposits form part of the funds we lend to micro, small and medium enterprises in the countryside
Deposits are used for lending to support the proponents of productive endeavors or development projects OFs indirectly help turn into reality the many initiatives that develop our country
Special deposit accounts for overseas Filipinos and their beneficiaries Requirements Peso ATM USD Savings
AccountInitial Deposit P 100 $ 10Maintaining Balance P 100 $ 10
Initial deposit and maintaining balance for regular Peso ATM account is PhP500 Initial deposit and maintaining balance for regular USD savings account is US$100
Harnessing remittances for development
Offered Long Term Negotiable Certificates of Deposit which yielded higher returnsLANDBANK’s aim: Give our OFs and their beneficiaries greater access to banking products and services at the most reasonable cost
Most extensive network of branches in the PhilippinesPresent in 80 provinces 342 branches and field units LANDBANK ATMs reached 821
4th widest network of ATMs in the country
Harnessing remittances for development
LANDBANK OFW Cash Card Electronic debit card Linked to Smart-enabled mobile phonesSafeConvenientFast Affordable
Opening Deposit None
Maintaining Balance None
Aggregate Credits per month
Php100,000
Documentation Enrollment Form, 1 valid ID, ID picture
Card Validity Period Maximum of 2 years/Renewal fee of Php120
ATM Limit per day Php30,000.00
Cash Transactions May be done through nearly 8,800 Expressnet, Bancnet and Megalink ATMs nationwide
Dormancy Period Inactive for 6 months/Renewal fee of P120
Mobile Banking Balance inquiry, phone to phone transfer, etc.
Harnessing remittances for development
Inward Remittance SystemEnsures faster, safer and more efficient remittance delivery A web-based remittance facility
Direct Wiresi-Wiresi-Padala i-Sweldo
www.lbpeasypadala.com www.landbank.com
Harnessing remittances for development
Expanding and strengthening tieups with remittance companies
OFs may avail of affordable remittance services through 80 LANDBANK partners
Strategically located worldwide
Harnessing remittances for development
Products and services to OFs and their families achieve their financial goals
Investment ProductsGovernment securitiesRetail Treasury BondsTime deposits
Trust ProductsPersonal living trustUnit Investment Trust Fund (UITF)
Livelihood loans Working capital, fixed assets acquisition and trade financing purposes In support of projects related to agriculture, manufacturing, trading and merchandising, and services
Thank you.