THE Department of Finance (DOF) has sought assistance from the International Finance Corp. (IFC) in line with the setting up of a digital banking system for the Overseas Filipino Bank (OFB) to keep it updated with technological advancements and prepare it for partial privatization.
During a recent meeting with World Bank and IFC officials, Finance Secretary Carlos G. Dominguez III said he wants the OFB to start with a clean slate and leapfrog to digital banking to make it more effective and responsive in catering to the financial needs of overseas Filipino workers (OFWs).
Given that the OFB has not yet invested heavily in legacy systems that are now fast becoming outdated, the finance chief said the bank can “leapfrog” to new technologies to enable it to operate as a digital bank.
“It’s tabula rasa. No legacy mistakes here. But we don’t have the people and the system. So we’re looking at your expertise to assist here,” Dominguez told the World Bank delegation led by Victoria Kwakwa, the regional vice president for East Asia and Pacific of the institution.
Also at the meeting was Nena Stoiljkovic, the IFC’s vice president for Asia and Pacific, along with other IFC and World Bank officials.
“We’d love to take a look at that,” Stoiljkovic said, while also pointing out that the IFC is undertaking similar types of interventions in other countries.
The OFB is among the campaign promises of President Duterte to OFWs in 2016 that the DOF had helped fulfill earlier this year. The DOF has expanded the bank’s coverage to include all overseas-based Filipinos to make it more inclusive.
A digital banking system for the OFB could later lead to less state interference, with the Land Bank of the Philippines (LandBank), which has made the OFB a subsidiary, controlling less than 50 percent of it in the future, according to Dominguez.
“We just need funds for all these, and we’re looking for assistance in this leapfrogging operation. This will allow us to partially privatize it in the future. Even bring down the share of LandBank to below 50 percent. These are things we’re looking at,” he added.
Earlier, Dominguez said the OFB could be the ideal vehicle for the Philippines to leapfrog to the digital economy.
Instead of setting up physical branches around the world, the OFB could just rely on digital technology applications to serve as many overseas-based Filipinos as possible. Dominguez added that the OFB could be transformed into a virtual bank where bank tellers and managers would be replaced by information technology experts who have the knowledge to manage large amounts of data and operate the OFB using cutting-edge technologies.
Ten million OFWs could be the initial beneficiaries of this technological leapfrog that would radically transform the way Filipinos buy, receive and sell and distribute goods and services, he explained.
The finance chief further pointed out that a key feature of the OFB will be its provision of remittance service for OFWs and a loan program for Filipinos planning to return to the Philippines to start businesses or build houses. The OFB was inaugurated at the Postbank Center in Manila by President Duterte on January 17, 2018.