Money Smarts: What OFWs need to do

By Karen Galarpe on November 13, 2009 5:44 PM
Inquirer Blogs

WHILE ON a recent trip to Japan, I heard a story about an OFW driver who nearly wasted away his earnings. He worked in Japan for close to 30 years, and at one point was earning an equivalent of P400,000 a month with overtime pay. He had a wife and child back home in the Philippines and was able to send his child to school. However, he was always out drinking at bars in expensive Tokyo while having several relationships with other women. "Puro good time," they say.

Well the guy wasn’t able to hold on to his job due to his drinking problem. His employer asked him to resign, and he was given an equivalent of P2 million as separation pay.

His Filipino friends could only shake their heads in disbelief at how he wasted away the opportunity to have a well-paying job, and how he was not able to save any money to make his life better. Last they heard, he was back home, bought himself a tricycle which he drives for a living, and is staying with his parents since he could not afford to buy a house of his own.

Filipinos who leave the country to work overseas do so to earn more money in order to help support their families back home. However, not every OFW gets to lay out a stable financial future.

The problem, says Raul D. Dimayuga, senior vice-president and head of the global remittance division of the Bank of the Philippine Islands, is €œinitially a lack of awareness of what to do. For many of [OFWs], it is the first time that they are able to receive a larger amount of money than what they used to and if they are not properly advised, they would tend to use the funds for consumption.

This is why BPI has embarked on providing a financial literacy program to its clients, especially OFWs and their beneficiaries. It has conducted the BPInoy Learning Series caravans in Iloilo, Cavite, Dumaguete, Davao, and most recently, in Cebu, and Cagayan de Oro, among others. The series seeks to show that financial control is possible even away from home. By using interactive modules, participants are taught how to save, invest and make use of available technology to do banking transactions. BPI services and products designed specifically for the global Filipino are also introduced, such as the BPInoy Remittance, BPInoy Savings Account, BPInoy Save-up (build up savings account with free life insurance), BPInoy loan products, and Credit Card.

Dimayuga says these are the basics that an OFW must have to be on the road to financial stability:

1. An account for himself separate from that of his beneficiary. €œThis way he is able to segregate his savings from his transactional account, i.e., funds needed by his beneficiary for day-to-day expenses.

2. A plan for himself in terms of how much to save and set aside as budget for the family expenses which he agrees on with his beneficiary. €œThis way his plans are aligned with that of his family and the road to financial stability becomes a family affair. Ideally, he should be saving between 10 to 20 percent of his monthly income.

3. An investment plan.

€œOverseas Filipinos contribute substantially to our country'€™s growing economy. As a bank, we want to provide financial education to empower our global Filipinos to fulfill their dreams that fueled their decision to go abroad, adds Teresita B. Tan, head of overseas banking and channel services group of BPI.