Bank monitoring shows lot of OFW remittance enter Mindanao economy

DAVAO CITY – Monitoring done by Mindanao’s largest banking network showed a huge jump in remittance earnings from overseas Filipinos to their families and relatives, indicating that the same amount has also been plowed to the local economy, easing the apprehension of a deep backlash of a rampaging global recession.

But Alex B. Buenaventura, president of the One Network Bank, said that the 52 percent jump in remittance in only the third quarter, amounting to P100.635 milllion, was only a little percentage of the entire amount that was actually sent to both the bank, non-bank and undocumented channels.

“It shows that a lot of money went in despite the global crisis, and we would expect the amount to enter the economy, whether it is in the form of consumption or expenditure,” he said.

ONB’s remittance payout carries a fraction of the clients of the other remitting companies, eleven of them having a tie-up with ONB to serve their clients that can not be reached and which the ONB could penetrate.

ONB is one of the country’s largest rural bank with the widest banking network in Mindanao, most of them located in rural areas.

ONB has remittance tie-up with Uniteller, RCBD (Rizal Commercial Banking Corp.) Tele, BDO, Moneygram, Philippine National Bank, Epci Xoom, I-Remit, Development Bank of the Philippines, Asia United Bank, Security Bank and Trust Co. and G-Cash.

ONB gets a fixed amount transaction fee from these remittance outlets for handling out their payout to clients, especially those in the countryside.

ONB payout reached P96.359 million in the second quarter this year, indicating an increase of four percent by the third quarter. But the third quarter figure was a 54 percent jump compared to the 3rd quarter figure last year, which posted P66.194 million.

Buenaventura said that their figure was “only a little fraction of the combined payout done by these remittance companies. We could not even be two or five percent, of the combined transactions of these 11 remittance outlets”.

He said the bigger transactions may be carried by the non-bank remittance outlets, “these pawnshops and remitting outlets, probably because of the perception that these outlets require less documents as required by banks”.

Four more banks have finalized their tie-up agreement with ONB, which has started installing the system software to start the formal operation. These are the Bank of Philippine Islands, LBC Bank, MetroBank and Perhillion, the remittance arm of Philippine Business Bank.

Although the remittances were not the lone indicator of prosperity, Buenaventura said that combined with the double-digit upward performance of their deposit and loans of the ONB would actually show that “Mindanao is not in crisis”.

Its deposit volume has jumped 21 percent higher to P6.5 billion as of the end of the third quarter, and loan volume also reached P6 billion, a six percent increase from the same period last year. Its total assets was currently placed at P9.3 billion, an increase of 18 percent from last year.

The ONB has 75 branches in Mindanao, making it the rural bank with the widest banking network in the island, with five more branches awaiting final approval from the Central Bank. It has absorb also the Rural Bank of New Corella, with final consolidation operation in April next year. The absorbed bank located in New Corella, Davao del Norte, has a total asset of P25 million.