A bank for Overseas Filipino Workers will soon be built after President Rodrigo Duterte issued an executive order approving the acquisition of government-owned Philippine Postal Savings Bank or Postbank by the Land Bank of the Philippines.
In his Executive Order No. 44, released Monday, Duterte said the current Philippine Postal Savings Bank will be converted into the Overseas Filipino Bank, which aims “to efficiently deliver micro-finance and micro-insurance products and services for overseas Filipinos.”
“Overseas-based Filipinos, who contribute to the country’s foreign exchange income, currency stability, employment, and overall economic growth through their remittances, should be given provision of priority support for their growing financial needs,” the executive order read.
Subject to the clearance of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Philippine Deposit Insurance Corp., and the Philippine Competition Commission, the Postbank acquisition will be made via transfer of shares of the Philippine Postal Corp., the parent company of PPSB, and the Bureau of Treasury, which will then turn over their respective shareholdings in Postbank to Land Bank at zero value.
LandBank, meanwhile, is directed to infuse the necessary capital to the OFW bank “to strengthen the capital base of OFB and enable the same to attain its primary agenda of servicing the various financial and banking needs of overseas Filipinos.”
LandBank will implement a reorganizational plan, which “may cause the detail or assignment of LBP employees to the OFB as may be necessary,” with officers of the Postbank who might be affected by the acquisition to be offered an early retirement incentive plan, EO 44 added.
In December 2016, Finance Secretary Carlos Dominguez announced that the government-owned LandBank, the country’s fourth largest commercial bank, will open a separate subsidiary that will cater to OFWs.
The proposal to absorb the operations of Postbank came after an oversight body on government corporations abandoned a plan by the previous administration to merge LandBank with another state-run lender, the Development Bank of the Philippines.