President Duterte has green lighted the acquisition of the century-old Philippine Postal Savings Bank (PPSB) by the Land Bank of the Philippines (LandBank) and its subsequent conversion into an overseas Filipino worker bank (OFB).
Under Executive Order (EO) 44, the President approved the transfer of shares of the PPSB to the LandBank. The acquisition is completed upon clearance from the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission, the Philippine Deposit Insurance Corp. and the Philippine Competition Commission.
The Philippine Postal Corp, the mother agency of the PPSB, and the Bureau of Treasury were instructed “to transfer all their respective shares in PPSB to LandBank at zero value”. “Relative thereto, the PPSB shall cause the expeditious transfer of all assets, liabilities, records, systems and other appurtenant items to LandBank,” EO 44 said.
On the other hand, the LandBank was directed to fund the necessary capital as the PPSB converts into an OFB.
The President explained there is a need to provide overseas Filipino workers (OFWs) with priority support for their growing financial needs as part of the administration’s effort to achieve a sound macroeconomic policy as stipulated under the Philippine Development Plan 2017-2022.
Duterte said the government values the contributions of OFWs to the currency’s foreign-exchange income, currency stability, employment and overall economic growth. “[There] is a need to establish a policy bank dedicated to provide financial products and services tailored to the requirements of overseas Filipinos, and focused on delivering quality and efficient foreign-remittance services,” the President said.
The LankBank is mandated to implement a reorganization plan for the OFB, and may cause the detail or secondment of LandBank employees. Upon creation, the affairs and business of the OFB, along with its assets and properties, will be handled by a board of directors composed of nine members.
The board of directors is comprised of the LandBank president as chairman; a LandBank-appointed OFB president as vice chairman; four LandBank-appointed directors as members; one member representing the Department of Labor and Employment (DOLE); one member representing the Overseas Workers Welfare Administration (OWWA); and one member representing overseas Filipinos.
The members representing the DOLE, OWWA and OFWs are to be handpicked by the Chief Executive.
On the other hand, the PPSB is instructed to return the remaining fund for the Project Dagdag Regular Income Via Entrepreneurship (DRIVE). “Prior to the actual transfer of shares, the PPSB is hereby directed to return to the National Treasury the balance amounting to P249.23 million from the previously released P500 million to fund the Project DRIVE,” EO 44 said.
The PPSB was created in 1906 as a government thrift bank “created with a special mission to encourage savings and provide access to financial credit to the ‘unbanked’ areas of the country”. It was shut down in 1976 due to competition with private banks, but was reopened in 1994 pursuant to the provisions of Republic Act 7354, or the charter of the Philippine Postal Corp.
The total assets of the PPSB stood at P12.09 billion in 2016, according to the BSP.