BSP eases lending process for OFWs

The Bangko Sentral ng Pilipinas (BSP) has eased the guidelines on the granting of consumer loans to overseas Filipino workers to facilitate the access of OFWs to bank credit.

BSP Deputy Governor Francisco Dakila Jr. said the Monetary Board issued Resolution 1729 approving the amendment to the policy on peso consumer loans to OFWs, non-immigrants and embassy officials and its employees.

This is in line with the central bank’s financial inclusion and empowerment agenda.

With the changes, banks can now grant consumer loans to OFWs without prior BSP approval.

The revised guidelines likewise liberalized the rules limiting the grant of peso consumer loans to certain types of visa holders.

In particular, peso consumer loans, except residential real estate and housing loans, may also be extended to all eligible foreign nationals with valid visa issued by relevant Philippine authorities.

Likewise, embassy officials and employees based in the Philippines are allowed to avail any type of peso consumer loans.

“In this respect, the BSP expects the lending bank to adhere to sound credit underwriting practices and to institute appropriate measures to mitigate credit and other risks involved in granting peso consumer loans to OFWs and eligible foreign nationals,” Dakila said.

The new guidelines promote greater access to bank financing for these borrowers, while expanding and broadening market segment for banks.

OFWs are considered as heroes as the money they send to their families in the Philippines usually fuel personal consumption, helping sustain a steady economic growth. Remittances usually account for 10 percent of gross domestic product (GDP).

Latest data showed personal remittances composed of cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders increased by 3.6 percent from January to September to $24.64 billion from $23.71 billion in the same period last year.