Government-owned Land Bank of the Philippines (Landbank) as of end-March this year has approved a total P2.68 billion worth of loans for Overseas Filipinos, formerly known as Overseas Filipino Workers (OFWs).

In a statement Monday, May 20, Landbank said the P2.68 billion loans were granted to 1,504 OFW borrowers under the bank’s Overseas Filipino Workers Reintegration Program (OFW-RP) jointly implemented with the Overseas Workers Welfare Administration (OWWA).

Landbank President and CEO Lynette V. Ortiz said the program allows returning OFWs access to financing to pursue business opportunities in the Philippines “as an alternative to overseas employment.”

“We recognize the significant contributions of our OFWs to the economy, and through this program, we are providing them access to affordable financing and essential support services,” she said.

She added that Landbank “hopes to turn their hard-earned savings abroad into thriving businesses here in the Philippines for their families and beneficiaries.”

Under the OFW-RP, eligible OFWs may avail of loans for working capital or acquisition of fixed assets at a minimum amount of P100,000 and up to P2 million for a single proprietor borrower, and P5 million for a group of OFW borrowers, with a fixed interest rate of 7.5 percent per annum.

The bank said that short-term loans under the program are payable up to one year, while the tenor for term loans will be based on cash flow but not to exceed seven years, inclusive of a maximum of two years grace period on the principal.

The program also offers funding for a wide range of viable business ventures, including franchises, agricultural and non-agricultural production and marketing endeavors, construction projects, rental services, trading businesses, and transportation services, among others.

“Aside from providing access to credit, Landbank has also been supporting OFWs by facilitating the efficient delivery of financial support under the social amelioration programs of the Department of Labor and Employment (DOLE),” said the bank.

As of end-March this year, the Bangko Sentral ng Pilipinas (BSP) reported that Overseas Filipinos remitted $8.219 billion via the formal banking system, known as cash remittances. This was 2.7 percent higher compared to the previous year of $8 billion.

Cash remittances from the US, Saudi Arabia, United Arab Emirates (UAE), and Singapore contributed mainly to the increase in remittances in the first quarter this year.

In the first quarter, the US has a 41.2 percent share of total remittances. The US normally appears as the top country source of remittances because of a common practice of remittance centers to course remittances through correspondent banks based in the US.

After the US, Singapore has 7.2 percent share of fund transfers, followed by Saudi Arabia with 5.9 percent and Japan with five percent.

For 2024, the BSP expects cash remittances to grow by three percent year-on-year. Last year, cash remittances totaled $33.491 billion, up 2.9 percent from 2022’s $32.539 billion.