While it is well known that the reason the Philippines escaped a recession is due in part to the huge remittances from the country’s overseas Filipino workers, there is a lingering fear that these OFWs, save for those with financial savvy or with the benefit of financial education, face an uncertain future when they reach retirement age.
Many of our OFWs, it must be noted, do not have access to a financial-literacy program that should come from the government or any advocacy group. Without that, the OFWs are bound to continue with their wasteful spending ways that do not take into consideration their future well-being.
Stories abound about OFW families facing bleak prospects once their principal end the workers’ stint abroad. Having failed to save for their future because of their wasteful ways, these OFW families become mendicants in their own neighborhood. And with nary an income, they are reduced to dwelling on “what ifs.” Which is a pity considering that they once were branded as modern-day heroes and saviors of the economy. What kind of life awaits them when they have not learned the rudiments of saving for their future, or simply of saving part of their income? This is a challenge the administration should seriously consider—to show its gratitude, to say the least, to those who saved the country from economic ruin.
OFW remittances, now averaging $1.5 billion a month, boost the country’s flagging dollar reserves on account of its mounting trade deficit. Without this hefty contribution from the overseas workers, the government could have come under the same money woes that characterized the last years of the Marcos government. At the time, the country, having lost its financial credibility, had to buy the dollars from the informal market and had these flown to Hong Kong where the letter of credits for the imports were then sourced. Thus was born the so-called Binondo Central Bank manned by then-trade minister Roberto Ongpin who has, of late, reinvented himself as a heavy hitter in the stock market.
It is incumbent upon the government to ensure that the OFWs get to know about the investment instruments they can invest their money in, while the going is still good. It is equally important for the government to see to it that these OFWs get the kind of investment advice that should serve them in their twilight years, when the need for a nest egg becomes much more pronounced. While there are financial-literacy programs that some government agencies come up with or breast-beat about, the fact is the investment bug has not caught on as can be evidenced by the increasing number of OFW families at their wits’ end trying to make ends meet.
This lack of concern from the government on the need to provide financial literacy for the 10 million-plus OFWs could be traced to the number of failed finances of many OFW families. How come there has been no visible effort from the government to make sure these OFWs distinguish, for instance, the difference between “need” and “want?” It is simply mind-boggling for the government not to reach out to the OFWs on this score. OFW families should have basic financial-literacy programs in place, such that they get to know that sometimes what they “want” (which could be a higher-priced car) could actually be taken care of by knowing what they “need,” which is that they need just a vehicle, no matter how lowly or cheap it may look.
Sad to say, the government appears to have failed in this because its concerns were only focused on the dollars that these workers remit. It is time, therefore, for the government to stop the lip service and address in earnest our OFWs concerns, foremost of which is to help them to have a grasp of financial instruments. This should no longer be a difficult task, considering that many overseas workers’ families have now become all too familiar with the subprime meltdown, the trillions in dollars and euros that the United States and the European zone pumped into their respective banking institutions and prospects of another Big Depression.
Perhaps, it is time, too, for the government to save the OFWs from the likes of the Legacy scam where high-interest rates proffered on hapless victims made them form a beeline to the bank, not knowing that the banking group has failed the test on solvency, liquidity and capital ratios. It is sad to note here that many of the victims who fell prey to the scam were overseas workers. A friend told me that an OFW from Canada was hysterical after the news of the Legacy group’s closure brought her P2.5-million savings to just the maximum limit of bank insurance, plus the frayed nerves that went with the hassle of talking to government regulators.
Written by Lito U. Gagni / Market Files