By Juanito Concepcion
Is the government really serious in making its reintegration program for returning overseas Filipinos or overseas Filipino workers (OFWs) successful in terms of helping the largest possible number of returnees become productive segments of Philippine society back home?
It appears so. Just look at the different OFW reintegration programs being run by about half a dozen government agencies, including the Overseas Workers Welfare Administration (OWWA) and the National Reintegration Center for OFWs, both under the Department of Labor and Employment, Department of Social Welfare and Development (DWSD), Commission on Filipinos Overseas (CFO) and the Presidential Adviser on Overseas Filipino Workers (OFW) Concerns, or Vice President Jejomar Binay.
Among the different reintegration programs, the P2 billion National Reintegration Program Fund (NRPF) is the biggest and most high- profile. Launched by President Benigno Aquino on June 2011, the flagship reintegration program provides returning OFWs with a livelihood loan of between P200,000 to P2 million to set up their own business. With low-interest livelihood loans, OFWs should really find it tempting to stay in the country for good with their loved ones.
Great! What great joy! Getting capital to put up your own business, hopefully earning a good income and being with your loved ones! Who among OFWs won’t like this kind of program?
If this NRPF program is really fantastic, why aren’t many OFWs in Hong Kong, Saudi Arabia, Canada, Libya and other parts of this planet talking about this, or even other government-run reintegration programs? After being at work abroad away from loved ones for five years or more, there must be tens or even hundreds of thousands of OFWs who are raring to get back home for good, especially if they are able to put up alternative income sources back home with help of the NRPF. But why are they apparently snubbing or ignoring the NRPF?
The culprit lies in fundamental flaws that plagues the NRPF from the very start. Its guidelines clearly show that it caters mainly to OFWs whose immediate family members are already operating businesses in the Philippines. But the vast majority of OFWs, who do not have existing businesses back home and who are aspiring to become entrepreneurs for the first time, are virtually screened out from this lending program. A cursory look at the NRPF guidelines will clearly show that aspiring or first-time entrepreneurs among returning OFWs are not welcome to the government’s flagship reintegration program.
Another major setback for returning OFWs, who wish to avail of livelihood loans under the NRPF, is the Land Bank of the Philippines (LBP), a government bank which is the sole provider of loans under the NRPF. While the NRPF is supposed to be a special lending program specifically for returning OFWs, LBP treats interested OFW borrowers just like ordinary commercial borrowers whose loan applications are subjected to very tight screening. This means OFW borrowers need to have existing profitable businesses in the Philippines and collateral to secure sought-after loans before the LBP will accept their loan applications.
But the key questions are these: How many OFWs already have existing profitable businesses back home? Wasn’t this program set up to encourage OFWs to return home for good as they will be assisted to set up an alternative source of income back home? How will this objective be achieved if the vast majority of OFWs are screened out from this lending program?
From a banking standpoint, returning OFWs with no existing profitable businesses and without any collateral to secure sought-after loans are considered “very risky borrowers”. If start-up businesses of first-time entrepreneurs fail, the LBP will end up with bad loans, or loans which may no longer be collected if a returning OFW doesn’t have any means to repay the livelihood loan. Clearly, the LBP wants to protect its interests that’s why it is unwilling to give “special treatment” to OFW borrowers.
But what about the government’s goal of promoting reintegrating into society OFWs who wish to rejoin their families? They need to be assisted in establishing a steady income source back home – before they consider returning to their families.
It is clear that changes need to be made to the NRPF guidelines if the government wishes this program to make a big difference to OFWs. For this program to become successful, it has to find ways to reach out and be able to assist a lot more OFWs than what it has helped so far.
In the three years since its launch by President Aquino in June 2011, it has only assisted 876 OFWs, representing an average of only 292 OFWs every year. Labor and Employment Secretary Rosalinda Baldoz cited this figure in July this year in a story carried by the state-owned Philippine Information Agency. [http://news.pia.gov.ph/index.php?article=231406524983]
Considering that there are about 10 million overseas Filipinos today, including those who have assumed the citizenship of their host countries but who may still return for good in the Philippines, it is crystal clear that the number of OFWs who have benefited so far from the government’s flagship reintegration program is very tiny. With the vast majority of OFWs rendered ineligible to apply for loans under the NRPF guidelines, it appears unlikely that the number of beneficiaries will increase significantly this year or over the next few years.
So, is there anything that can be done to the NRPF that will enable the government to give a fresh push to and expand the number of beneficiaries of its OFW reintegration program?
Yes. But some creativity and political will are necessary.
For instance, the NRPF administrators need to review and loosen their guidelines if they wish to see more loan applicants. If ways and means can be found to accommodate OFWs without existing businesses, there will likely be a surge in the number of loan applicants, and the NRPF will certainly have a lot more beneficiaries than what it has generated in the past three years.
To boost the chance of success of start-up businesses that first-time entrepreneurs are putting up, NRPF administrators should employ mentors who will help loan applicants at the start and succeeding stages of their newly-established businesses. These business mentors can come from the government or private institutions, like non-governmental organisations. Putting up a new business is easy, but making it profitable and sustainable are very challenging, thus underscoring the vital need for mentoring. If mentors are deployed, failures of start-up businesses can be minimised if not avoided, the returning OFWs are empowered to run sustainable businesses and loans repaid by borrowers. This will certainly be a win-win solution, while bolstering the government’s reintegration program.
If the LBP cannot be persuaded to treat OFW borrowers with more leniency, more loan providers need to be brought in, especially those more sensitive to the peculiar needs of overseas Filipinos. They can either be other government banks, such as the Development Bank of the Philippines, or private financial institutions that will comply with revised NRPF guidelines.
The NRPF administrators need to exercise political will to initiate and adopt key changes to the program if they wish to make it more successful than what it has accomplished so far – which isn’t much to crow about really.
And how about the reintegration projects now being run separately by different government agencies?
In some instances, like fighting a war, there is merit in numbers. But the situation now of different agencies running disparate OFW reintegration projects is simply inefficient and ineffective from a management standpoint. Duplication of manpower and other resources is a big waste. Achieving the desired results will also be difficult to achieve. For instance, the OFW reintegration unit of the DWSD can only do so much with its meagre manpower and other resources. The same thing is true with OWWA. In the past 20 years, the benefits offered by OWWA to its paying members have hardly changed, and this explains the disinterest of most OFWs, including this writer, in this agency’s services.
If the different OFW reintegration resources are consolidated and housed under one roof, under a newly-created agency, the pooled resources can be made to move towards a single, harmonized direction, thus achieving more effective results. It doesn’t take rocket science to recognize the merits of this strategy. A new agency, tasked solely and exclusively with looking after reintegration needs of returning OFWs, can serve as a very powerful and effective tool and vehicle to achieve the government’s noble objective of encouraging scores of overseas Filipinos to return home as productive members of society.
Returning OFWs have so much to offer and provide in terms of technology transfer, innovation, good governance and sound corporate practices learned from long years of work in different parts of the world. Those now at work in countries with highly-developed economies, like Hong Kong, Japan, Singapore, the United States, Germany and France, can certainly make significant contributions to the country’s economy and society if livelihood assistance under the flagship NRPF can be improved and strengthened.
Numerous studies have shown that micro-size enterprises in the world’s leading economies, including the US, Japan, China and Hong Kong, collectively comprise major contributors to economic growth. The Philippines should use this time-tested strategy which the world’s major economic powers continue to use, i.e. encourage the establishment of more micro and small enterprises, and support them on a sustained basis to make them flourish and profitable.
The government has an excellent opportunity to create a huge number of new micro and small enterprises from the ranks of OFWs, many of whom are just awaiting the opportune time to come home to their loved ones if they are effectively assisted in bolstering their financial security well into the future.
A fresh and incisive review of the government’s overall OFW reintegration program needs to be conducted.
And the most ideal time is NOW, not later.