Philippines wants bank for working Filipinos in Saudi Arabia

Finance Minister made this announcement despite the shaky diplomatic relationship between Qatar and Saudi Arabia including other gulf countries.

Picture for representation
Picture for representation Reuters

Philippines president Rodrigo Duterte has expressed his intention to have a Philippines-run bank in Saudi Arabia to cater to Overseas Filipino Workers (OFWs) in the royal country. Finance Minister, Carlos Dominguez, made this announcement saying that the target for this project will start at the end of the third quarter this year.

Dominguez made this announcement despite the shaky diplomatic relationship between Qatar and Saudi Arabi including other gulf countries.

The minister said that the Philippine-owned Postal Savings Bank will be set up as the OFW bank in Riyadh, Saudi Arabia and will coordinate with Landbank of the Philippines (LBP), another state-owned bank of the Philippines , to facilitate Saudi-based Filipinos' remittances.

He also belittled the diplomatic challenges faced by Qatar and Saudi saying these gulf countries will eventually settle their differences.Moreover, the minister also expressed confidence that the situation in the Middle East will not delay the implementation of the OFW bank and besides the US government is helping in the reconciliation of these countries.

Aside from Saudi, Baharain and Egypt severed their diplomatic ties with Qatar on suspicion that the country, which is as one the wealthiest countries in the Middle East, is funding terrorist groups.

The proposal of the OFW bank was a commitment made by Duterte before winning the presidential elections in May 2016. Of all the candidates, Duterte got the highest votes among overseas working Filipinos, than any other candidate.

Dominquez said the bank will be listed publicly and will have an initial capital of P 3 billion and 30% will be owned by OFWs. The bank will also provide financial and investment education services to OFWs once it will start operations.

Philippnes is one of the world's leading supplier of manpower because of their language and culture adaptability. 40% of the world's overseas Filipino workers are working in Saudi Arabia.

However, to set up the bank, authorities will need an approval by the Philippine's major government bank regulating agencies such as Government Commission for Government Owned and Controlled Corporationss, Philippine Competitive Commission, Bangko Sentral ng Pilipinas and the Securities and Exchange Commission before it will be fully operational.

After Saudi Arabia, Philippines will also consider putting up a similar bank in Bahrain.