Philippines urges banks to boost OFW bank savings

Attractive financial instruments needed to achieve this.

The Philippine government urges its cash flush banks to create more financial instruments that encourage Overseas Filipino Workers (OFWs) to save in banks. Policy makers have always said that remittances from OFWs must be channeled toward capital-forming activities and not just spent.

Overseas remittances by OFWs account for over 10% of the Philippines’ GDP. Some US$23.8 billion were remitted home by OFWs in 2012 fueling local consumption. This also contributed to the Philippines’ phenomenal 6.6% GDP growth in 2012

Socioeconomic Planning Secretary Arsenio Balisacan said financial instruments that are attractive for small savers would be a good start. Balisacan noted that much of these potential OFW savings can be channeled into the banking sector if financial instruments are quite attractive for OFWs.

The government noted that only 41 out of 100,000 Filipinos have bank deposit accounts. This total is far below the government's 2016 target of 750 out of 100,000.