The demand for business loans from Filipinos who have returned home after fulfilling their work contracts overseas is on the rise.
It has been observed that the number of overseas Filipino workers (OFWs) returning home has been increasing, partly because of economic and political problems in some labor markets abroad.
According to the Land Bank of the Philippines, outstanding loans extended to returning OFWs who have put up their own businesses amounted to P272.8 million as of the end of July.
These loans benefited 425 returning OFWs and supported businesses that were estimated to have created 1,648 jobs.
Land Bank is extending business loans to OFWs under the national government’s “OFW Reintegration Program.”
The new program aims to support income opportunities of Filipinos coming back to the Philippines after working abroad.
Land Bank expects to extend more of these loans amid expectation of a rise in demand among returning OFWs in the next few years.
The state-owned bank said most of the loans extended so far were used by the former OFWs as capital for businesses related to rice trading, hog raising, poultry and general merchandise.
“We are optimistic that by becoming entrepreneurs, they [returning OFWs] will not only ensure their socioeconomic stability but also help boost the country’s economy,” Land Bank President Gilda Pico said in a statement.
Meantime, the Bank of the Philippine Islands, which provides remittance facilitation on top of regular banking services, said growth in remittances to the Philippines could plateau over the next few years.
“Remittances may not drop and may remain strong, but the growth rate may eventually plateau as a consequence of the global economic problems,” BPI president Aurelio Montinola III said.
Montinola said some OFWs, particularly those working in countries suffering from economic or political problems, may be encouraged to go back to the Philippines.
He cited the ongoing economic problems in the eurozone, some member-countries of which are suffering from double-digit unemployment rates.
Political tensions in some countries in the Middle East, if prolonged, could also prompt some OFWs to return to the Philippines.
The eurozone and the Middle East are two of the biggest labor markets for OFWs.
Montinola said that amid this backdrop, it is important for the Philippines to have available income opportunities for returning OFWs.
The Philippines, which received about $20 billion in remittances last year, is the fourth-biggest recipient of money coming from migrant workers, next to China, India and Mexico.
Remittances to the Philippines are likely to grow by 5 percent this year based on projections by the central bank.