Finance Secretary Carlos G. Dominguez III (File photo from the Philippine Daily Inquirer)
A draft executive order that will execute the sale of Philippine Postal Savings Bank (Postbank) to Land Bank of the Philippines and convert it into the “Overseas Filipino Bank” is up for President Duterte’s approval, Finance Secretary Carlos G. Dominguez III said.
Dominguez told reporters that the draft EO was already submitted to Malacañang in the first week of September.
The EO will execute the transfer of Postbank from its current shareholders to Landbank, Dominguez explained.
The Finance chief said the sale was approved in principle by the Monetary Board, the Bangko Sentral ng Pilipinas’ highest policymaking body, although it has yet to grant final approval.
Separately, Landbank president Alex V. Buenaventura said in a text message that they will submit to the BSP the acquisition proposal before this month ends.
Dominguez said the plan to change Postbank’s name into Overseas Filipino Bank will make the financial institution more inclusive.
“We just had the discussion with [Labor] Secretary [Silvestre] Bello and we discussed about the remittance program, which is certainly going to be one of the features [of Overseas Filipino Bank]. Also, the loan program for Filipinos abroad who are returning and would like to start businesses or build their homes. Loans for house repair, for educating the beneficiaries here, direct remittance to schools—those are the programs we have discussed with him [Bello] and he seems to be very happy about the service we would be providing,” Dominguez said.
“We also want to use this Overseas Filipino Bank to mobilize the savings into investing in the capital markets, because many overseas Filipinos are not familiar with investing in the different products that are available locally… Insurance products we will sell to Filipinos abroad for themselves or their beneficiaries here, investment products as well,” Dominguez added.
Last month, Buenaventura said Landbank is aiming for a 25-percent share of the remittance business by 2022 as it opens the first branch of Overseas Filipino Bank in Dubai next year.
Buenaventura had said the lender’s board had decided to acquire Postbank at “zero value” as it has valuation of about negative P480 million.
Once the acquisition is approved by President Duterte, Landbank will infuse about P1 billion in fresh capitalization to Postbank and convert it into the Overseas Filipino Bank, Buenaventura had said.
According to Buenaventura, the former Postbank will “just be a remittance marketing subsidiary of Landbank to service overseas Filipino workers (OFWs).”
Overseas Filipino Bank will sell Landbank’s remittance products to OFWs and tap the latter’s existing remittance system, according to Buenaventura.
By January next year, the first Overseas Filipino Bank will be piloted in Dubai, to be housed in the consular office there, Buenaventura had said.
Another branch is being eyed in Bahrain by April next year, but the full operations of both branches will likely be in 2019, according to Buenaventura.
The Landbank chief had said they will provide cheaper remittance rates than those of other players.
From a 5-percent share of the remittance market at present, Landbank targets to corner a fourth by 2022, Buenaventura had said.
At present, BDO Unibank Inc. is the biggest player in the remittance business with a 40-percent market share, followed by Metropolitan Bank and Trust Co., according to Buenaventura. /je