Friday, November 23, 2007 Editorials: Tapping OFW remittances
THE United Nations International Fund for Agricultural Development, in its most recent report, revealed that the Philippines is “fourth biggest receiver of money from migrant workers in 2006.”
Overseas Filipino workers (OFWs) had remitted $14.6 billion.
This placed our overseas workers as the biggest contributor to the nation’s economy, allowing the value of the peso to rise.
The amount that our OFWs are sending monthly to the country constitutes some ten percent of the Philippines gross national product.
In fact, overseas dollar remittances of our workers helped buoy the peso.
Treasury bonds
In an effort to make full use of OFW dollar earnings, government and the Bangko Sentral ng Pilipinas (BSP) have agreed to “offer pioneering retail treasury bonds…worth at least $500 million starting early in 2008.”
The initial amount of offering, it seems, is merely to determine the reaction of overseas workers to the opportunity to invest in the republic’s future.
If the market will come out favorable, an additional issue may be made of “another $500 million should OFWs show more appetite for these bonds. Or it could be as much as a $1 billion offering right away depending on market reception.”
To avoid the offering going against investment policies of the OFWs host countries, the transaction would be in the Philippines, not in their place of work.
OFW money
The plan is to target OFW money that is “already in the banking system’s foreign currency deposit unit.”
This, though, needs careful study.
It is important that the government avoids investment risks that would affect the faith and trust of the overseas workers in our country.
While it may be feasible for the government to raise $1 billion a year from the pioneering bond, “based on the assumption that the OFWs could set aside 10 percent of their earnings,” still it would depend on BSP’s credibility.
Assurance
Truth to tell, there is soundness in the proposal.
However, assurance from the government and the BSP that it will not jeopardize the OFWs future and their families is needed.
