OFW BANK Related Exchange of Ideas By Email

In my desire to be transparent to our kababayang OFWs, I have posted below some excerpts of the email exchanges between some of us here in reference to the setting up of an OFW BANK, with the indulgence of our kababayans who sent them.

From Andy P. of New Zealand:

“Ako po ay nalulugod at humahanga sa inyong adhikain na makapaglunsad ng isang banko na makakatulong sa ating mga kababayang Pilipino.  Nabasa ko po ang inyong website at nakita ko ang determinasyon ninyo na maisulong ang ideya ng OFW Bank.  Tama po kayo na marami na ang nagtangka pero wala pang nagtagumpay na makapagtayo ng isang matatawag na OFW Bank.   Hindi po ‘yun maaaring dahilan na dapat kayong umatras sa laban dahil lahat ng sumuong sa laban na ‘yan ay natatalo laman.   Dapat din po nating suriin ang mga kadahilanan kung bakit hindi sila nagtagumpay at kung ano ang kanilang motibasyon sa pagtatayo ng banko.  Sa kadahilanang marami ang kokontra o kaya e negatibo ang pananaw, doon mo makikita at makikilala na marami pa rin sa ating mga Pilipino ang hindi bukas sa mga ganyang ideya.  Maaring sa kadahilanan na maaaring likas o kaya ay hinubog ng panahon sa pagka-sadlak sa pamamahalang bulok at puno ng korupsyon.  Hindi natin maaalis sa kanila ‘yun.   Subalit ako’y natutuwa sa kadahilanang maraming mga Pilipino ang nagbigay ng komento sa inyong website at sa gmanews.tv ang bukas sa ideyang eto.  At ako ay kaisa ninyo sa adhikaing ito at handa po akong tumulong sa abot ng aking makakaya.   Isa din eto sa aking pinangarap na makapag-ambag sa ikakasulong ng pamilyang Pilipino.

Ako ay lubos na natuwa ng mabasa ko ang inyong ideya para sa isang “Foreign Retirees in the Philippines” type of business sa kadahilanang ganitong konsepto din ang

Binay Wants Plans for 'OFW Bank' revived - GMA News

Again, with the indulgence of www.gmanews.tv may I post herein in toto the said news article and pilipino's initial reaction and reservations, as follows:

Binay wants plans for 'OFW Bank' revived

12/22/2010 | 02:59 PM

To bring down the cost of sending money to the Philippines, Vice President Jejomar Binay said Wednesday he is pushing for the creation of an “OFW Bank."

Binay — also the Presidential Adviser on OFWs’ Concerns — wrote to President Benigno Aquino III pushing for the proposed bank as an “alternative yet viable" remittance institution here and abroad.

“The bank will provide fair competition towards the reduction or lowering of remittance or transaction costs and provide a productive outlet for our overseas Filipinos’ savings as bank investors and shareholders," he said in the letter posted on the Office of the Vice President’s website.

Binay said the move was in response to OFWs’ (overseas Filipino workers) clamor for an OFW Bank, as financial intermediaries and money brokers are presently charging exorbitant fees for money transfers.

Government financial institutions will initially fund and underwrite the bank, according to the Vice President said.

Eventually, investors and stockholders will own and control the OFW Bank, Binay said.

Money sent home by OFWs rose to $15.46 billion in the first 10 months of the year, up 7.9 percent from $14.23 billion in the same period last year, central bank data showed.

A chunk of the remittances came from the US, Canada, Saudi Arabia, Japan, UK, United Arab Emirates, Singapore, Italy, Germany, and Norway.

The idea for an OFW Bank was raised in 2006 as a way of consolidating the financial assets and operational capabilities of government institutions, like Land Bank of the Philippines, Development Bank of the Philippines, Overseas Workers Welfare Administration, and Philippine Postal Corp.

The project was supposed to create a financial institution for OFWs, one that is inexpensive and more focused toward its OFW-oriented direction and services. Because of the global recession, it was shelved.

Instead, LandBank and DBP launched separate remittance programs for the lucrative OFW market estimated by the Philippine Overseas Employment Administration between eight million and 11.5 million land- and sea-based employees. — JE/VS, GMANews.TV

THE INITIAL REACTIONS AND APPREHENSIONS 

The clamor for an OFW Bank is now gaining grounds though each proposal differ in their approaches but the common general idea really is to help the OFWs, in fact there is this discussion site about this OFW Bank in http://ofwbankincubator.blogsp... and it might just be worth your while to drop by that site and check out the ideas being espoused there, and pitch in your ideas there too.

I support the Vice President's move along this line and I appreciate him for writing the President about this clamor for an OFW Bank that will be sensitive to the needs of the OFWs.

But I have reservations though about government hands directly involved in

How To Make The OFWs An Economic Powerhouse?

With economic power comes respect. How can we make our OFWs an economic powerhouse? Are we already content that the OFW money sent home has become part of the financial statistics often bannered on news headlines? Can we do more than being a statistical number?

There is a pending Senate Bill aimed at establishing an OFW Bank by collecting money through compulsory contributions from the OFWs through OWWA and use that money to buy and salvage the old, badly managed and losing Postal Bank that has bad assets and bad loans and other questionable liabilities based on the way I understand their 2009 financial report. 

And because it is through OWWA and a Senate Bill which becomes a Republic Act, then that implies that their proposed version of an OFW Bank will just be another government controlled and operated corporation run by government-appointed business managers who were not really known for efficient and profitable management of any government corporation! Tapos idadamay pa ang pera ng OFWs para pang-solve sa problema ng Postal Bank na owned, operated and managed ng government appointees din tapos pag nabili na ng OFWs government appointees din ulit ang magpapatakbo?

I don't subscribe to that idea. The senator may have the best intentions but I don't see the light there for the OFWs, masusunog lang ang pera nila. At ang delikado pa niyan, baka gawing bagsakan pa yan ng housing loans applications from low-cost housing na inaabunuhan ng developer ang pang-monthly amortization for the first year just to get off the 1-year buyback requirement and then no more payments for the succeeding years because di naman talaga pala totoong mga paying buyers yun in the first place, so the bank will be saddled with a huge non-performing loans just like what crippled the NHA program, the SSS/GSIS housing program and even PagIbig Fund housing program before.

And these non-performing loans and assets were sold palugi through the SPAV Law where these bad assets were sold at around 70% discount through SPAV. Ang nakinabang dito ay ang SPAV companies that were mostly owned by foreigners like Lehman Brothers noon, etc...nakinabang because after buying them at 70% discount they sell them back to the Filipinos at present market values!

Why buy an old bank with heavy liabilities (mostly non-performing) when in fact the OFWs can even put up an OFW Commercial Bank very easily in as far as

Minimum Capital Requirements & Stockholdings Structure For An OFW Commercial Bank

In relation to our collective efforts to set up an OFW BANK, please check the following guidelines set by the Bangko Sentral ng Pilipinas (BSP) on establishing of new banks and its branches, there are certain minimum requirements that must be met. Listed below are the minimum requirements in summary form, these are copied from the BSP official website (www.bsp.gov.ph).

1. REQUIRED MINIMUM CAPITAL 
    TYPE OF BANK                                                             REQUIRED CAPITAL (In Pesos)

    a. UNIVERSAL BANKS                                                                                4.95 Billion
    b. COMMERCIAL BANKS                                                                              2.4 Billion
    c. THRIFT BANKS
        - With Head Office w/in Metro Manila                                                      325 Million
        - With Head Office outside Metro Manila                                                    52 Million
    d. RURAL BANKS
        - Within Metro Manila                                                                               26 Million
        - Within the cities of Cebu and Davao                                                       13 Million
        - Within 1st, 2nd & 3rd class cities and 1st class municipalities                  6.5 Million
        - Within 4th, 5th & 6th class cities & 2nd, 3rd, 4th class municipalities      3.9 Million
        - Within 5th & 6th class municipalities                                                     2.6 Million

The OFW Bank that we envision is a Full Commercial Bank which minimum required capitalization is 2.4 Billion Pesos.

2. MINIMUM STOCK SUBSCRIPTION REQUIREMENTS  
At least 25% of the total authorized capital stock shall be subscribed by the subscribers or owners of the proposed bank, and at least 25% of the subscribed stocks shall be paid up, provided that in no case shall the paid-up capital be less than the minimum required capital stated above. 

In our case the total amount of paid-up capital should not be less than P2.4B it being a full commercial bank. The P2.4B is just the minimum, we can increase that whenever we see it fit and attuned to the needs of the market.

This amount does not include yet all the other necessary capital expenses to cover the cost of putting up our Head Office and necessary branches including the office furnitures & equipments, office supplies, communication platform,

How Can We Put Up The P3B Fund For An OFW Bank?

In the previous post, we have already laid down the following facts:

THIS DREAM IS NOT A WALK IN THE PARK

Previously, we said that setting up an OFW Bank from start to finish is not as simple as opening your own savings account because it involves a long and circuitous process that requires our strong commitment to that vision, and much hard work and staying power if we are to see it happen in our lifetime or in a year or two, at best. 

COLLECTIVELY, THE P3-B CASH CAPITAL IS NOT HARD TO RAISE 

We have also established the fact that if we are to put up an OFW BANK as a commercial bank, we need to put up at least P3Billion (P2.4B minimum paid up cash capital + at least P600M for the operating and capital expenses based on rough estimates). Current statistics even show that as of 2009 alone, there are in fact 1.479M documented OFWs already, and that number increasing at around 14-15% per year. So if we are to extrapolate for the current year (2010), the documented OFW would number around 1.686M Filipinos and multiply that by P2,300 that's P3.88 Billion for an initial capitalization - in cash - an enormous amount that the other big guys in business cannot produce just easily as the OFWs collectively.

SMALL BANK IS NOT THE WAY TO GO

Others may say that why don't we start with just a THRIFT BANK, SAVINGS BANK or RURAL BANK muna at least pag nalugi maliit lang. Saka na lang mag Commercial Bank license pag napalaki na ito at baka mas marami na ang mas gustong makilahok. That's a wrong mentality, at least in our context. Some might argue with that. But that's like planning how not to fail, rather than planning to win!

Suggestions On How To Setup The OFW BANK

Setting up an OFW Bank from start to finish is not just like opening your own savings account, opening a new bank is a long process that requires your strong commitment, hard work, patience and tenacity because there are many concerns to put your mind and heart on. It may not be an easy task but we can do it, more so if a great number of OFWs are committed to this dream. And once we have succeeded, the economic and financial benefits are endless.

THE P2.4B HURDLE

The first thing that we need to consider is do we really have that much money to put up an OFW Bank? The bank that we envision here is not just a rural bank which requires only around P30M cash capital to put up, but what we are looking at here is a commercial bank like BDO Private Bank, Bank of Commerce, Chinatrust, Citibank NA Phils., EastWest Bank, Asia United Bank, Robinsons Bank and many others.

The minimum capital requirement for this type of banking license is P2.4B in cash, on top of the required cash outlay for the capital assets like the main office and its branches, the office equipments and furniture, computers and licensed software, etc. and the necessary operating capital to cover salaries and wages, utilities, advertising, etc. Let’s just say we need another P600M for those things depending on the number of strategic branches that we plan to put up. If that’s the case, the total cash requirement will be P3B (P2.4B required by BSP + P600M for capex & opex - capital expenses and operating expenses). See the related article about the minimum capital requirements for banks.

IT'S ACTUALLY A P3B HURDLE...WHAT?!

Please don't get discouraged, just read on please. I understand how you feel. It might help if you can just get a sip of drinking water and make 5 deep sighs and you will be alright. And keep reading, it's not your time to quit.

I can imagine some folks wrenching already about the P3B amount, and I can almost already hear people reacting like “Naku ang laki pala” or “Naku mabigat pala” or the worst is “Naku ang hirap pala niyan”. These are the most common reactions of people, or I should say common initial reactions, to qualify that statement. Probably that was your reaction too when somebody invited you to work abroad, especially when the workload was being described to you, plus the thought of being alone and away from your family for years. Malamang sabi mo rin noon “Naku ang hirap pala!”. Oo mahirap talaga. But please read on. Don’t just give up yet, intro pa lang po ito mga mahal kong Kababayan. Read on….

But what made you decide to work overseas? What made you overcome the hardships? It’s not the financial hardships at home. What really made you decide to become an OFW is the dream for a better life and financial freedom! You are after of the rewards and financial returns in working overseas. Same with the OFW BANK. Once it is up and operating and raking in profits, you will just be waiting for your financial dividends being the co-owner of that big bank, while you are out there leisurely cultivating your orchid farm in the province or maybe checking with your forwarder if your orchids for export to Australia are shipped on time.

HOW DO WE RAISE THE P2.4B...or P3B

How do we overcome the first hurdle of P2.4B cash capital? Because we cannot get a commercial banking license without that minimum amount. That P2.4B is a whooping big amount and your old small house back home may not have enough room to contain that money, ganun po kalaki yung perang yan. How much more if it’s in P100 bills mas lalong di napo magkasya sa dating bahay nyo.

The P2.4B is big but when you adjust your perspective, that amount becomes small - very small. Let me help you see it the way I see it. Would you believe that the P2.4B amount can be raised in a month?  “Owwws?!”  “Hmmm…Yabang!” I can almost hear some of those comments.  But are you ready for a surprise?

That P2.4B is no hurdle at all because we can raise the Fund in a month in just like a flick of a finger! If all OFWs who now number around 1.3M, whether poorly paid or well paid, well off or not, will invest just P1,850 to this Fund this January then we will have P2.405B already! You do not need to be a nurse or doctor or engineer working overseas to become co-owner of this Bank!

Strong Reactions On The P1-billion Loan Program For Returning OFWs

That news article on www.gmanews.tv that appeared on December 6, 2010 entitled "Aquino Sets Up P1-Billion Loan Program For Returning OFWs" as posted in this site in toto from http://www.gmanews.tv/story/207642/aquino-sets-up-p1-billion-loan-program-for-returning-ofws draw mixed reactions from gmanews.tv's online readers, me included.

And again, with my courtesies to the GMA Network and with their indulgence, may I quote herein some of those varied reactions as follows, arranged chronologically from the earliest to the latest, just be patient to scroll down because this is kind of long. I intended not to indicate the virtual name of the person who made these comments to avoid imputing any unnecessary bias:  

>>> patawa naman yang 15,000 pesos na loan. ano magagawa nyan?? 

>>> Anak ng Magsasaka, anu mangyayari dun sa 15,000 anung negosyo pwede dun, Haayysss,,, Stay na lang kami sa abroad at least sigurado kinabukasan ng family nmin...

>>> Ginoong pinoy ung pinapadala ko po dyan sa pilipinas 20k mahigit per month eh kinukulang pa rin poh... tapos gusto nyo pong hikayatin ung mga ofw na magstay dyan sa pilipinas sa halagang 15,000.... tsk tsk..di kaya mamatay sa gutom ung pamilya namin dyan?...Nakakatawa naman si Dimzon... 15,000 for ofw....it's really an incentive for them to stay.....hay naku!!!

>>> Where is the good mind of Carmelita Dimzon. Remember if not of OFW you will not be sitted in your office, receiving your monthly salary. If you are reasonably with sound mind, you should think twice to tell us of P15,000.00 loan. Ano ang magawa ng perang iyan.

>>> pwede na dyan an 1 kariton na fishball sa P15,00.00 na yan. kung ibang business papasukan ng P15k na yan, bka kulang pa yan pambayad sa mga documents + kikilan pa ng mga gov't officials...kawawa nman mga BAYAING OFW....hahaha

>>> mabuti pa an mga TONGRESSMAN, walang ginawa kundi mangurakot sa pera ng BAYAN... dinagdagan pa uli an kanilang FEEDS (PORK BARREL).

>>> Loan? 15000 pesos for a small business??? Kariton ng fishball magkano na, say 7000, puhunan mo magkano na lang. Bayad ka may tubo pa. Paki-explain naman...

>>> 15k? please. this 1B is bound to disappear in thin air if used this way.

>>> AY BARYA LA-ANG!!!??? Mr. President, thank you sa proposal mo na 1B pesos loan...pero parang napakaliit naman yan para sa mga OFWs... Lahat kami kung may pagkakataon makaavail ng loan ay gusto namin...Medyo mahiya naman kayo.. Ang ina ankat namin na $ para sa Pinas ay umaabot sa $ 21B kada taon ( 913B Pesos). Di ba parang barya lang yan? kahit sana mga 20% lang dyan allotted for loan sa OFWs total babayaran naman yan...Ano sa palagay nyo sa OFWs pulobi? Binibigyan nyo million million na pork barrel ang mga "Tongressman" kami na mga nagapakahirap sa abroad barya la-ang? Ano ba yan? Ano pang model OFW ang kailangan nyo, Lahat kami dito ay model..dapat ay bigyan pantay-pantay!!! Di namin kailangan ang pakulo na yan...Kailangan comprehensive benefits para makaahon ang mga OFW....Alam namin na ang nasa government takot na mawala ang OFWs sa abroad, para kahit palpak ang pamamalakad ng government meron pa rin "milking cows" na pagkukunan... KUNG MAGAPPLY NG LOAN LAHAT ANG MGA 1.3M NA OFWs...it means 1.0B divided by 1.3M...EQUALS 770 PESOS EACH...HAHAHA  HOY PNOY, THINK BIG!!! ... NAKAKAHIYA ANG PROGRAMA MO SA MGA OFW!!!

>>> here we go again, another costly trial and error program and it is going to cost 1 billion pesos. when will this government ever learn on what should be really done. the government should look into improving the condition of those who are in the philippines. they should look into why filipinos are leaving the country to work outside. the value of the peso is appreciating but does the citizens of the country benefit from this - the answer is NO. as a matter a fact prices of commodities are just becoming higher and higher. basically citizens both in and out of the country are not benefiting from this. who is the beneficiary from this, the government and the businesses. the government should stop making all of this temporary solutions (such as giving this 1 billion pesos for the ofw) and come up with a much more long term solution so that ofw's will be encouraged to go home and live in the philippines. let us be more realistic, what is 15,000 pesos going to start with? whereas there are people who have even invested millions of pesos in business that later did not succeed because large businesses eat up their market. the government does not have programs that protect small entrepreneurs, as they say "the small fish will just be eaten up by the bigger fish".

>>> This is a risky business, before going any further, launch a massive training campaign for returning OFW's. Kahit wala pa itong program na ito marami ng OFW ang nag attempt to venture into business but end up in a failure. So eventually bumalik sa abroad si kawawang OFW to start all over again. sympre para maka hiram dyan sa program na yan kailangan ng collateral. I dont agree with this. Kung ako sa inyo open up opportunities for OFW's like franchising, UV express services, poultry and livestock and lots more. I monitor yung start up while teaching them to to become successful entrepreneurs. Pls keep in mind that OFW's are employee oriented and not business oriented. Kung business oriented yang mga yan dapat hindi na cla nag abroad.

>>> 1 billion!! BARYA!!!.. ibubulsa pa ng iba yan.

>>> lumang tugtugin na ang mga pautang na yan. ang makinabang na naman ang mga may kakilala sa owwa.

>>> Surely, this is another strategy by the concerned government organization such as OWWA/DOLE to justify any upcoming force contribution. I have been an OFW (OCW) for several years already since 1982. Let's be on guard for this new tactic especially this Administration which is questionable on its operation.

>>> hello!!! you think P15.000.00 is enough to put up a business? put your self to our position we want to go back to our own country to spent time to our family but since there is no good job in our country and if ever there is the salary is not enough for normal life. your in the government think of your proposal......

>>> Mr President don't just wait that investors will come to the Philippines and invest. The Gov't and LGU should invest more on infrastructures to create job and business opportunities; education and skills development to give opportunities for all Filipinos to get a descent job; and improved peace and order. Mr President planned beyond your 6 yr term. Think long term. You are just protecting your approval rating if that's the way you think. Now, i begin to doubt with your plans... here and there what I hear from you are short term plans - OFW LOANS, CCT. Are you kidding us Filipinos? Reach out to Visayas and Mindanao, just to remind you that they part of the Philippines. I hope this comment will have your attention.

>>> ... ha??? 15,000 pesos for an individual loan! saan iyang makakarating? anong klaseng negosyo ang pwede mong isabak sa puhunan na iyan - pagproprocess mo pa lang ng loan ay ubos na ang 15k na iyan! pagluwas mo pa lang sa Manila bawas na kaagad ang 15k!!! ... hey pnoy, be realistic naman!!!

>>> This article shows how out of touch Noynoy is with reality. The amount of 15k is too small for any business. A returning OFW already has more than that measly amount to star a business. 500k for a cooperative is unworkable since OFWs coming home are individuals looking for business ventures on their own. But what can you expect from Noynoy who has never held on to a job. Who has never been independent nor has left his mother's house. Most likely has never thought about paying any household bills since he was born as these were taken cared of by his mother. In short walang alam si Noynoy sa buhay.

>>> Ano 15K pag individual at 500K pag cooperative? Paglakad mo lang ng papeles mo ubos na iyang 15K. Huwag na kayong magpautang kung ganyan rin lang ang tingin nyo sa mga tao. Mga nasa posisyon sa govt. ang uutang nyan at gagamiten ang pangalan ng OFW, sino ngayon ang makikinabang? Puro pakitang tao talaga ang mga lider natin, mga hipokrito. Magsilbi kayo ng totoo hindi yung may lihim kayong plano. Never talagang aasenso ang Pinas sa ganitong kalakaran. Never in a million lifetime.

>>> If OFWs will unite their money to create businesses, that's far better than asking for loans. This happens in Taiwan, Korea, Japan, or China because they have foresights but never in PHL. Also their leaders will never offer loans like this 15K, they knew what's realistic & what's not. This loan program will only become a scheme to satisfy those who has an evil plan. Then why make programs like this when it's clear it will not really serve the OFWs? This clearly shows the kind of leaders we have so let's stop being proud of ourselves when comparing with others.

Creative Business Ideas And Reactions Generated By The GMA News About The P1-billion Loan Program For OFWs

That said news article entitled "Aquino Sets Up P1-Billion Loan Program For Returning OFWs" on www.gmanews.tv that appeared on December 6, 2010  as posted in this site in toto also encouraged and generated some creative ideas and encouraging comments from some of gmanews online readers including myself. And the idea of putting up an OFW BANK was raised by one patriotic OFW and it gained momentum. Even this OFW BANK Incubator site is one of the positive results of the collective creative juices of several individuals who initially participated in that online sharing of ideas.

With my courtesies to the GMA Network, I beg for their indulgence again as I quote herein some of those creative reactions as follows, arranged chronologically from the earliest to the latest, and I intend not to indicate the virtual name of the person who made the negative comments to avoid imputing any unnecessary bias. Should some of these pseudonyms appear, it will be because it was there as part of their comments. Here they are: 

>>> The P15,000 is indeed funny. But OFWs can still make money out of it, let me illustrate it here, and this is from experience: A foreclosed single firewall house in Camella Homes that has a floor area of 40 square meters, with wooden partitions and doors and windows totally cannibalized is available for "hulugan" at BFS (Bahay Financial) at only P450,000. Check at http://www.bfs.com.ph/ If you don't trust Bahay Financial then you can check from Pag-Ibig Fund, SSS, GSIS, NHA or from the banks for any foreclosed units. Choose the dilapidated ones dahil talagang bagsak presyo, at pwede pang tawaran.

The first one that I got from BFS at P450,000 was actually P750,000 in their price list, namahalan ako so I went to the site again and took pictures of the house and showed them to the manager of BFS to complain that the P750T is too much for that garbage...and then offered to buy it at P300T in cash, sila naman ang tumawad hanggang P450T lang daw, so I took it.

To make that house decent and highly saleable you need to spend around P150,000 for the repairs and repainting. Once done, it will easily sell at P950,000 (that's a bargain). That means for a total of P600T investment you will make 58% or P350,000 more from that money. That P600T seed money can be raised by 40 OFWs borrowing P15,000 each from that P1B fund.

If the annual interest rate for that loan is say 8% per year, then you still get 50% return na wala naman talagang puhunan in the first place because you got it from the loan and what you paid for it is also a derivative of that loan. Once the refurbished house is sold, pay the loan in full (principal & interest) then borrow again, don't just revolve it. Do it twice in a year and you earn 100% at least of what you borrowed. It doesn't matter if it's small, it is just a numbers game.

>>> Ginoong Pilipino maraming salamat po sa encouragements nyo dito. So far your comments were the most practical and do-able....only if the general overseas filipino workers open their minds to business and leave/forsake their simple mindedness and unite for progress we will see a new Philippines....why can't we not? i have observed koreans in the '90s and the reasons why they have Hyundai's, Samsung's and LG's because back then they formed the then KFSB - korean federation of small businesses....which gave birth to now giant korean companies that competes teeth to teeth with japanese giants like Sony, mitsubishi, toyota's. I remember well how my amazement to learn when one old korean man told me how he sacrificed sending his money back to his country whilst working in 'the Philippines' (road construction project in mindanao) and investing part of it in small businesses that now forms the Hyundai group of companies....the koreans love their families but certainly expressing love for their country the most by contributing to its progress through hardship and investment. With your idea Ginoong filipino....i resolved not to buy anymore 32" plasma tv's, ipod's, bling-bling that turns my money to waste...but start using my brain to let my hard earned money to work for me and my family...



>>> Thanks for the compliments sir Aurelio Petrache, finally I found somebody who has the same wavelength as mine.

>>> How was the model OFW chosen? What were the basis? Lahat ng OFW ay dapat maging model...

>>> I totally agree with you. If your going to look at the list of past winners mostly are professionals who are earning big money And the story goes from rags to riches. Can they just give the award to less fortunate OFW's like the waiters, carpenters and cleaners. Theses guys have done their share of bring dollars to our country its time for the government to appreciate their efforts. I'm sure they have their own story of success from their humble beginnings.

>>> Good comment. Maybe it will be more beneficial and encouraging if our OFWs can take time to nominate those other OFWs whom they think also deserve to be cited for such honors, or even self-nominate.
How would anybody notice the good that others have achieved pag walang nagbigay ng info about such person.

>>> Mr_John_Jones. Tol, I'm totally with you with your views and opinions. Sampu ng mga kapatid nating OFW's. This program of the government is nothing but an insult added to injury to all the OFW's worldwide. Bakit pa kami mangungutang dyan? Eh barya at kakapiranggot lang iyan. At kung anu-anu pang requirements ang hihingiin niyo sa amin. Eh dito sa abroad ang daling mangutang at di hamak na malaki ang mauutang at mababa pa ang interes. Mr. PNOY and your GANG of advisers please stop this non-sense. Enough is enough. Address the real problems of the OFW's. Do I need to elaborate one by one? It's a known fact what,why,how we are suffering as an OFW. WAKE UP PNOY. Live up to your promise and the dreams of your parents for our beloved INANG BAYAN.

>>> you have a good point, but don't get discouraged, if I were you I will be the first one to avail from that P1B and make money out of it. Remember, not everyone knows how to make money out of the little that he has. So take advantage of it while it's there. Who knows that might be increased when they see that the fund utilization and the demand is high, much more if repayment rate is also high. These are good indicators that the program is effective to its targeted beneficiaries/borrowers.

>>> here we go again, another costly trial and error program and it is going to cost 1 billion pesos. when will this government ever learn on what should be really done. the government should look into improving the condition of those who are in the philippines. they should look into why filipinos are leaving the country to work outside. the value of the peso is appreciating but does the citizens of the country benefit from this - the answer is NO. as a matter a fact prices of commodities are just becoming higher and higher. basically citizens both in and out of the country are not benefiting from this. who is the beneficiary from this, the government and the businesses.

the government should stop making all of this temporary solutions (such as giving this 1 billion pesos for the ofw) and come up with a much more long term solution so that ofw's will be encouraged to go home and live in the philippines. let us be more realistic, what is 15,000 pesos going to start with? whereas there are people who have even invested millions of pesos in business that later did not succeed because large businesses eat up their market. the government does not have programs that protect small entrepreneurs, as they say "the small fish will just be eaten up by the bigger fish".

>>> the keyword in business is "competition", you need to be creative and be competitive in your chosen market or field. It doesn't matter if you are just a small fish, only those small fish who appear as a good meal to those big fish gets eaten alive! what I mean here is if Henry Sy's SM Mall is the big fish to you, don't become a sari-sari store beside the mall, but rather come up with very saleable products and become one of the suppliers to that one small outlet inside SM Mall that sells wares that carries similar product lines. That way the small fish never gets eaten, tendency is that small fish becomes big over time and becomes one of the tenants of SM. we Filipinos are survivors and we should start believing and behaving like so.

>>> This is true! and I DO AGREE!

>>> This is a good innovation and will be very helpful when put to good use, more so if the borrower-OFW knows how to make money out of it. But I have another suggestion for our OFW's: Why don't they group themselves as an association or cooperative and invest their money collectively into short-term but highly profitable ventures of some reputable companies, say in real estate.

You see this is what I do, and they can either copy it or invest in it. All it takes is P1.5M to build a townhouse (lot and permits included) which can easily sell at P1.95M under Bank or Pag-Ibig Financing which has become very affordable these days. BDO offers 7.75% rate per year. It's very easy to find a Buyer who is willing to start paying the 10% downpayment while the house is being constructed, agawan pa yan because this market segment is under-served.

Construction time takes around 4 months plus 1-2 months processing and delivery to the bank or Pag-Ibig. That means that the P1.5M will be spent over 4 months for the house construction, permits, etc. Assuming there are 20 OFWs who can agree to contribute to that Fund, it will only take P18,750 each per month or P75,000 total in 4 months from each and the house is done. Then you need another 1-2 months to process the buyer's housing loan with the bank or Pag-Ibig until the Letter of Guarantee and release of buyer's loans proceeds to the Seller.

That means that in 6 month's time their P75,000 seed money will earn another P22,500 that's around 30% gross earnings or P18,000 or 24% net income after taxes & fees. If it's a cooperative then they get to enjoy some tax exemptions. If they do it twice in a year their money can grow at a minimum of 40% to 50%, no wonder why real estate is the best investment. No time deposit rate or treasury bills or government notes or bonds can beat that, not even the stock market.

And this is not a make-believe tale because I am doing it for many years. Even if your house takes another 6 months to sell it won't hurt you because you will still make at least 24% more of your seed money. A big number of our people needs decent homes that are affordable and that's what we offer them. We make money by helping others fulfill their dreams. Our OFWs can do it too. That's the best way for them to get rich and gain financial freedom. The other choice is to doubt that this is a hoax and it's impossible...and then wonder how Senator Villar become a multi-billionaire (in pesos). Camella Homes (his low-cost housing business) did it for him.

>>> Your suggestion is good but I think it is not buy-able to general OFWs. No one can trust to anybody nowadays, esp. that we are abroad. That is why OFWs are very dependent to our government initiatives, because the government supposedly has the power to protect the interest of OFWs. OWWA supposed to be the one to implement these but how can we trust them. Every centavos that pass through them dissolved to their pockets... There must be a legislated body from our government to implement this, like establishing of OFW BANK thereby OFWs are the stock holders...

>>> That's understandable, but some have to start somewhere. The OFW bank is a very brilliant shot. But then again it has to be managed well so that the OFWs won't be at the losing end again. The key is good stewardship.

>>> This is a risky business, before going any further, launch a massive training campaign for returning OFW's. Kahit wala pa itong program na ito marami ng OFW ang nag attempt to venture into business but end up in a failure. So eventually bumalik sa abroad si kawawang OFW to start all over again. sympre para maka hiram dyan sa program na yan kailangan ng collateral. I dont agree with this. Kung ako sa inyo open up opportunities for OFW's like franchising, UV express services, poultry and livestock and lots more. I monitor yung start up while teaching them to to become successful entrepreneurs. Pls keep in mind that OFW's are employee oriented and not business oriented. Kung business oriented yang mga yan dapat hindi na cla nag abroad.

>>> Mr. President if you truly want to help OFWs please let your executive power to formulate and establish a OFW Bank where OFWs can be Stock holders...

>>> I like this comment mr john jones, a very brilliant one! That OFW bank can even be exempted by the Central Bank from putting upfront the required minimum capital to put up a bank, or if they can't be exempted they can be subsidized by the government then the OFW can buy shares of stocks ng subsidized OFW bank kahit paunti-unti until it becomes wholly owned by OFWs and government is out of the picture.Have it managed by professionals napakaganda. Banking is a very good business - you put up a branch, receive deposits and guarantee them to earn some 1.2% per annum but put these deposits in the money market the next day and earn at least 0.6% to 3% in a day! Do it 360 days in a year and that's a lot of money.

No wonder why most of the tall buildings along Ayala Avenue are owned by these banks! The answer is very easy - they guarantee 6.5% interest per year for 5-year time deposits but they don't tell you that they earned at least 300% every year from those deposits! Hehehe. This one is really really a brilliant idea. Bro. Eddie Villanueva advocated for it also. I hope your idea gets the ears of the President. Why not try to pitch it in at www.president.gov.ph, who knows?

The GMA News Online Article That Started It All

With the indulgence of www.gmanews.tv and the entire GMA Network which article inspired the herein ideas and discussions about putting up an OFW BANK, may I herein post the said article here in OFW BANK INCUBATOR which is a direct offshoot of the long and encouraging online exchange of comments and ideas in that news article by GMA News.

I have no intention to infringe on the copyright and ownership of www.gmanews.tv on this news material, my only purpose here is to relay the same information to those who visit this page. And should my attention be called upon to defer from doing such as maybe demanded by the copyright owners of the said news article, I will immediately delete the same and offer the necessary public apology here.

Here now is the said article that inspired varied reactions on the news subject, herein quoted directly and in toto from www.gmanews.tv (http://www.gmanews.tv/story/207642/aquino-sets-up-p1-billion-loan-program-for-returning-ofws) You will also find my comments below:

Home > Business > Top Stories

Aquino sets up P1-billion loan program for returning OFWs

JAM SISANTE, GMANews.TV

12/06/2010 | 03:02 PM

To help create business and employment opportunities for returning Overseas Filipino Workers (OFWs), the Aquino administration will allot P1 billion to fund a loan assistance program for them.

President Benigno Aquino III ordered the Overseas Workers Welfare Administration (OWWA) to allocate a P1-billion “reintegration fund" from which OFWs may borrow to finance the start up of their own businesses.

“Gagamitin po natin ang pondong ito bilang isang epektibong loan program na may magaan na interes (We will use this fund as an effective loan program with a low interest rate)," Aquino said in a speech at the 2010 Model OFW Family of the Year Awards at Hotel Sofitel in Manila.

President Aquino confers with Vice President Binay during the 2010 Model OFW Family of the Year Awards rites in Manila on Monday. Ryan Lim

The Land Bank of the Philippines and Development Bank of the Philippines will implement the program and hold financial literacy and money management seminars for returning OFWs, Aquino said.

Even as he praised the contribution of OFWs to the country's growth — January-September OFW remittances totaled $13.78 billion — Aquino said the priority of his administration is to create job opportunities in the Philippines so that Filipinos need not leave the country to earn decent wages.

“Una pa rin po sa ating listahan ang paglikha ng disenteng trabaho at oportunidad dito sa sarili nating bayan (Still on top of our list is the creation of decent jobs and opportunities here in our own country)," said the president.

The P1-billion reintegration fund, to be sourced from OWWA’s capital fund, will be utilized starting next year, OWWA Administrator Carmelita Dimzon said.

P500,000 maximum loan for OFW groups

She said the OWWA board of trustees will meet “immediately" to brainstorm the program’s mechanics, the outcome of which will determine how many families may benefit from it.

For now, OFWs can borrow as much as P500,000 but that amount is available only to OFW groups or cooperatives, she said.

Dimzon said the ceiling for individual loans may increase in response to an OFW’s request for higher amounts.

In some cases, an individual venturing into micro-entrepreneurship may borrow up to