DOF seeks approval for OFW Bank creation

The Department of Finance (DOF) is seeking regulatory approvals for the planned conversion of cash-strapped Philippine Postal Bank into a lender catering to overseas Filipino workers (OFWs).

Finance Secretary Carlos G. Dominguez III said the government wants to complete all the requirements for the transfer of Postal Bank’s assets to another state-owned lender Land Bank of the Philippines by October.

Dominguez also disclosed the government is facing a dilemma with Postal Bank following the negative enterprise valuation given by the Land Bank.

“The valuation made by Land Bank is negative value of R580 million, that’s their valuation of the bank,” Dominguez told reporters, noting Postal Bank has been struggling for several years.

“[This is now] an internal negotiation between two government agencies, so we will settle it among ourselves,” the finance chief said when asked how the finance department will deal with Postal Bank’s negative valuation.

“The valuation is not really important, what’s important is that we establish a bank that is focused on marketing its services to the OFWs to make their banking transactions easier, remittances as well as servicing the loan requirements of the families of OFWs,” Dominguez said.

National Treasurer Rosalia V. de Leon said the government will now seek the approval of the Bangko Sentral ng Pilipinas (BSP) to effectively transfer Postal Bank’s ownership to the Land Bank.

“The next step is really to go to regulators for the approval of the process, and also to the board on the valuation. Following that we are going to approach the Postal Corp. and negotiate on the price,” De Leon said.

Dominguez earlier said the government was considering to use Postal Bank as its vehicle to open a Land Bank subsidiary in Bahrain to cater to the banking needs of OFWs.

A bank dedicated to the needs of OFWs was among the promises of President Duterte to Filipino migrant workers.

The finance chief wanted to establish Land Bank subsidiary, named OFW Bank, by September next year.

The OFW Bank plans to set up a representative office in Saudi Arabia and will have an authorized capital of R3 billion and 30 percent owned by overseas Filipinos.