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                                                                                                                                         Refer to:  Ms. Ronadale Zapata



01 June 2006

To further encourage overseas Filipino workers (OFWs) to remit their valued earnings through the local banking system, Vice President Noli ‘Kabayan’ De Castro, also the concurrent presidential adviser on OFWs, recently proposed a practical approach to reward OFWs on their remittances. He proposed the institution of a raffle promotion as an added attraction that would be appreciated by OFWs and their families.

In his letter to Bangko Sentral ng Pilipinas (BSP) Governor Armando Tetangco, Jr., Vice President De Castro acknowledged the measures being undertaken by the BSP in promoting the banking system as the primary remittance instrument among the OFWs. Undoubtedly, the success of BSP's efforts would redound to the benefit of the country.

De Castro’s proposal aims to grant a reward scheme to OFWs, through a raffle system done monthly. The OFW would earn one raffle coupon for every remittance transaction of $100 they would make through formal channels.  At present the average amount of monthly remittance transaction made by OFWs ranges from $300 to $400.

The raffle coupon entails a chance for the OFWs to win as much as Php 100,000 and other prizes for the remittances they coursed through the local banks.  It is possible that the raffle scheme be electronically generated.

Considering the great contribution of the OFW remittances in the attainment of the 5.5 percent gross national product growth of the economy in the first quarter, the Vice President observes that it is only proper to push for ways in easing the burden of the OFWs, particularly in the remittance of their hard-earned income.

One of such ways that has been suggested is for the Bangko Sentral ng Pilipinas (BSP) to coordinate with the local banking system on how to lower and mitigate the banking charges and service fees imposed on remittances by OFWs.

De Castro also suggested to BSP to study the feasibility of providing a “special exchange rate” for OFWs, giving them higher amount of remittance when converted to peso.

The amount of remittance for 2005 alone was $10.7 billion and this helped pushed personal consumption to grow 5.1 percent in the first quarter of 2006.

For this year, the BSP expects money remittances from OFWs to grow by another 10 percent to $11.8 billion and reach a new high of $13 billion next year, as more workers continue to be deployed abroad.

Ref no. VPMEDIA 06-057

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