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Economic conditions

Landbank of the Philippines Aims to Increase Remittances from OFWs to $1.05 Billion in 2006

Strategic Insights

— 1 min read

State-owned Landbank of the Philippines seeks to increase the volume of inward remittances from overseas Filipino workers (OFWs) to $1.05 billion in 2006, through its new web-based remittance system. This is a 25% increase from the 2005 remittance volume of $824 million. Despite a 28% rise in total remittances in the first nine months of 2005, the bank's remittance volume has only marginally increased, due to stiff competition from other financial institutions. The web-based system aims to lower remittance costs for OFWs and increase the bank's share of money sent home through the banking system.

Key Takeaways:

  • Landbank of the Philippines targets to increase inward remittances from OFWs to $1.05 billion in 2006, through its web-based remittance system.
  • The system is expected to increase remittances by 25% from the 2005 level of $824 million.
  • The introduction of the web-based system was launched on December 13, 2005, at the bank's main office in Manila.
  • The OFW can access the Landbank website to issue instructions to transfer funds to any bank in the Philippines that is a member of the Automated Clearing House (ACH).
  • The recipient can draw the funds in minutes if they have an account with Landbank, or in a few minutes longer if the funds need to be transferred to another bank in the Philippines.
  • Landbank also offers wholesale remittances, domestic payroll, and other internet-based remittance services to OFWs in various countries, including Italy, Japan, Taiwan, Singapore, United Arab Emirates, Kuwait, and the US.
  • The web-based system is expected to cut the bank's operating costs for its remittance service by 40% in 2006.
  • Arnaldo, the Landbank vice-president for global banking, stated that those who will no longer be required under the web-based system will be redeployed to other functions.

Statistics:

  • Total remittances in the first nine months of 2005 increased by 28%.
  • Remittances through Landbank in 2005 rose marginally from $812 million in 2004, despite the 28% increase in total remittances.
  • Landbank's projected $1.05 billion remittance volume for 2006 represents a 25% increase from the 2005 level.
  • The web-based system is expected to cut Landbank's operating costs for its remittance service by 40% in 2006.
  • The bank aims to post a higher net income in 2006 due to the expected cost savings.

Sources:

  • (PNA) 13-12 1834

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