ALKHOBAR, 29 Sept. — The proposed OFW Bank will only see its success if the Philippine government steps in and that it should become the official depository of government funds.
Romy Cahucom, president of the OFW Investors Society (Ofwins) which is based in Riyadh, warned that in order for the OFW Bank to succeed and survive it must be tied with a government bank, like the Land Bank of the Philippines, and that it ensures 100 percent patronage of OFWs, otherwise it will be like any other small bank that will fold up in just a few years.
Cahucom was the resource person on the second edition of the Kapehan sa Park Hotel held last Friday through the invitation of Assistant Labor Attaché Jalilo dela Torre and Supervising Welfare Officer Sotero Tornea.
The Ofwins president told the Filipino community leaders in the Eastern Region that establishing an OFW bank "might be a worthy and legitimate cause just like the Absentee Voting Bill wherein the OFWs contribute" to support the movement.
However, Cahucom said, it is not a sound investment for OFWs.
"In putting up a bank, the three basic elements like the protection of principal, adequate return, and study must be present" Cahucom said, in order to convince overseas Filipinos to invest their money in this bank.
With more than 40 banks now existing in the Philippines, all of whom are facing tremendous pressure to merge with each other just to survive, an OFW bank would not stay long if it stands on its own, he said.
Participants in the forum recalled that even the top-ranking PCI Bank of the Lopez Family, as well as the Far East Banking and Trust Co. were absorbed by other banks as a result of the East Asian financial crisis that started in 1997.
PCIBank was eaten up by Equitable Bank, with substantial help from the Social Security System (SSS). Far East Bank was swallowed by Bank of the Philippine Islands (BPI). Because of those mergers, Metro Bank had to buy out Solidbank and another local bank to regain its lead.
During Friday’s forum, Cahucom made clear that he was not out to destroy the enthusiasm of those who are in the forefront of the campaign to put up an OFW bank. But he said one has to be realistic because going into the investment world is no picnic.
"It is false to assume that the overseas workers and their families will all patronize the OFW Bank especially if it cannot give more interests to their savings. Of course, you will invest your money to a bank offering high interest rates," Cahucom said.
Ofwins is also planning to expand its organization in the Eastern Region. Cahucom encouraged the community leaders to form an investment literacy group as recommended by Labor Attaché dela Torre.
He said that there are not much OFWs and organizations who are knowledgeable on savings and investment, which is why many OFWs who have plunged into business without the proper training and knowledge on investment have ended up holding an empty bag.
In most cases, OFWs fall victims of scams and schemes promising high profits on their investments like the pyramid type and multi-level marketing, he said.
The workers blindly assumes that when they go into business it will be the road to their financial prosperity. OFWs just grab the opportunity without conducting any proper investigation to the type of business he is investing with, he added.
Most OFWs venture on transportation business like buying taxicab and jeepneys when they go home for good. Others tried Internet café business or restaurants, as well as swine raising or poultry businesses.
But there are many cases in which the same OFWs went back abroad after two or three years because their businesses closed due to the driving forces of competition.
Cahucom instead suggested that OFWs just invest in treasury bills, treasury bonds, time deposits and legitimate mutual funds where they are assured of safe and high return of investments.
