OFW loans in the Philippines


President Noynoy Aquino recently announced that he is instructing the Overseas Workers Welfare Administration (OWWA) to set aside P1 billion (US$23.5 million) as “reintegration fund” from which returning Overseas Filipino Workers (OFWs) can borrow money.

The goal is definitely noble but it is our hope that the loans program be managed efficiently so that it won’t be a losing venture for the government.  Some OFWs do need financial support upon their return and providing access to business capital is a big help towards convincing them to stay permanently.

However, proper administration of the loan program is a must, lest the government wants to again waste taxpayer’s money. At a time when budget cuts are prevalent, the government cannot afford to make this program contribute further to the ballooning deficit of the country.

Why do we have this concern? Because several times in the past, the government has proven itself to be not a good administrator of loans.

Pre-departure loans for OFWs

For instance, during Pres. Gloria Macapagal-Arroyo’s term, the OWWA had a pre-departure loans program for OFWs leaving the Philippines. More than P100 million was allocated to this program and in 2008, around P70 million was already released. However, only P21 million were collected — a mere 30% payment rate. OWWA decided to discontinue the program because OFWs were not repaying their loans.

‘Study Now, Pay Later’ Program

OFWs are not the only ones defaulting on their government-issued loans. A UNESCO report on Student Loans in the Philippines shows that 97% of students who took out loans in the 1990s via the “Study Now, Pay Later” program have not paid their loans. The culprit for the dismal 3% repayment rate, the UNESCO cites, is government inefficiency in loan collections. In fact as of 2009, more than P180 million worth of student loans remain unpaid and uncollected.

Proposal for Loan Administration

Our suggestion, therefore, is that this program be administered by a private entity, preferably a financial institution. Pres. Aquino said the Landbank of the Philippines and the Development Bank of the Philippines (DBP) will implement the program. That’s a good start.

We suggest that funding simply comes from OWWA — apparently they are cash-abundant with P10.2 billion in total assets — and this money is simply transferred to Landbank and DBP for program administration, with interest income perhaps remitted every year. The OWWA and other OFW-related agencies such as the POEA, DFA, and embassies SHOULD NOT have a hand in the screening and approval of applicants. Neither should they be involved in the disbursement of funds. At the most, they can merely act as marketing channels to promote the program.

We believe that Landbank and DBP should be solely tasked to handle OFW loans and should be expected to manage them the way they manage regular business or personal loans. Through this, the program can be run by experts familiar with loans processing and collections. Direct involvement of agencies who do not know about loans administration will simply lead to the failure of this promising program, as in the cases of the pre-departure and “Study Now, Pay Later” loans in the past.

Source: GMANews.tv; Commission on Higher Education (CHED); UNESCO


44 thoughts on “OFW loans in the Philippines”

  1. Mga OFW. Gusto nyo ba mag loan? Money loan ba hanap nnyo? apply kayo rito sa personal loan. Visit loansolution.ph for more information

  2. whoah This Blog Is Great I Like Studying Your Posts. Stay Up The Good Work! You Recognize, ManyIndividuals Are Searching Round For This Information, You Can Help Them Greatly. adaptu

  3. jose alexander b. ibanez

    nag apply ako ng balik pinas program ng owwa ng seminar na ako isang araw tapos tatawagan na lang daw para malaman kung kailan ang training para makuha ung worth 10k na items for balik pinas but until now 2 mos. na walang reply ang owwa i think nakurakot na nila kc may attendance na pumirma kami afterr the seminar…. nagkasakit ako sa abroad kaya i try to get some help to owwa ….. pero useless …. corrorup talaga ang governo natin sayang lang binabayad ko sa owwa na almost 500 pesos every baba ko ng barko…..

  4. I mentioned in my Rebbeca Van Dyck post, I headed over on the new Facebook campus to photograph CSO (Chief Security Officer) Joe

  5. hi po ako c dionisio m bueno isang ofw kasalukuyang nagtatrabaho d2 s qatar nais ko sanang umuwi n ng pinas t dun nlng ako magnegosyo ngunit kapus po s finacial nais ko sanang magloan o mangutang s owwa ano po ang mga requerments n dapat kong gawin sn po ako y inyong matulongan salamat po

  6. Nenette Bermudes

    Dear Sir/Madam,

    Hi to all OWWA,POEA,DOLE and Government officer’s,that handle this Balik manggagawa loan,i just want to know,as an OFW since 1989 until now 2013,if,i can avail this Balik manggagawa OFW loan in How?
    Sir/Madam, i just want to know the Requirements to submit,
    how long it takes to process,i just planning next year to for good,to start a small business like fish pond and farming,i had a pond and farm but not enough capital to start on it,
    It’s a great privilege for me, if you can help me, about my capital to start a new life in our mother land,The Philippines.waiting for your reply.Thanks!
    Respectfully Your’s,
    Nenette Bermudes

  7. disqus_hs0te59o9R

    hi ako po si soliel, may i ask po kung pwede akong mag loan kasi po nag apply po ako for saudi then may visa na po ako hinihintay na lang ang contract., ang sa akin lang naman po ayokong umalis ng bansa ng walang iiwan sa aking pamilya., kahit sana maliit na halaga lang at madaling hulugan.,,thanks

    1. Reynaldo Buraga

      Here in Balikbayad we do not require collateral. The release of loan approve is 100% without any deduction. One day to process and next is the disbursal. Please check our website http://www.balikbayad.ph for more information. Thanks!

  8. I have a daughter working at Emirates Airlnes. Just want to know how we can apply personal loan at BDO. she’s coming home by Aug. for her 2weeks vacation..what are the requirements? .

  9. good day, i am capt. cesar, a seaman, gusto ko sanang magloan para makapagpatuloy ako magtanim ng 50,000 na mahogany tree sa sarili kong lupa, at makapagstart ng virgin coconut oil production or processing. Magkano ba kaya ang allowed loanable amount kung ang monthly salary ay 310,000.00 pesos.
    Matatapos po ako sa contract ko sa june 08, 2012.

  10. hi!! I”m ofw based in cyprus.puwede bang magloan?ang anak ko?22yrs old. na cya at complete requirement.di kasi cya na-aprove sa land bank”

  11. hi ako poh c emery n may aswa poh n nsa taiwan ngaun…7months p lng poh at gipit poh tlga kmi nais poh sana naming mag loan s ofw para pang negosyo ko d2 s pinas….pero dko poh alam kung paano….dhil s maliit nyang naipapadla at d poh tlga sapat kya naisip poh nmin mag loan….tnx

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