“Development Finance and Migrant Workers Remittances”

GILDA E. PICOPresident and CEO

Land Bank of the Philippines

ADFIAP CEO PanelOctober 29, 2009Dusit Thani Manila

Impact of remittances to the global economy

Remittances have played a central role in the economies of many labor-sending countries

Global remittances in 2008 amounted to US$305 B With US$16.4 B, Philippines ranked 4th in terms of amount of remittances

1 India US$ 452 China US$ 343 Mexico US$ 264 Philippines US$ 165 Poland US$ 11

Top 5 Countries in Inward Remittances(In billion)

Source: World Bank

Remittances to the Philippines

OFs, through their inward remittances, contribute significantly to growth and development and help boost the economic structure According to BSP estimates, OF remittances will reach US$16.9 B this year

In July alone, remittances from overseas Filipinos coursed through banks reached US$1.5 B

Remittances to the Philippines

Sustained demand for Filipino manpower and talent abroad is expected to drive the remittance flows to the PhilippinesOFs’ remittances now account for about 10% of Philippine GDP

Fuel domestic consumption in the overall economyHelp the country improve its balance of payments

Consumption patterns among families and beneficiaries of OFs have gone beyond spending for the basic necessitiesThey can now afford durable goods

Significant portion of the new homes built and vehicle sales in the Philippines are financed by inward remittances Inward remittances build up the country’s international reserves and help stabilize our exchange rate

Remittances to the Philippines

Remittances can better contribute to the economy and to the development of our country if put into more productive use OFs must be encouraged to become savers, investors and entrepreneurs

Help create jobs and livelihood for more people Multiplier effect on tax generationCreation of greater value in the economy

Major challenges for financial institutions

1. To make remittance services more accessible and less costly

2. To have programs that would help OFs and their families take on the roles of savers, investors and entrepreneurs

Harnessing remittances for development

LANDBANK deals with both challenges head on, as we seek to constantly improve and expand our banking services for OFs

Offers wide array of services that respond to their needs: Pre-departureStay in their host countriesUpon their return to the Philippines

Pre-Departure Orientation Seminars (PDOS)In partnership with the OWWAHelps educate the participants about optimizing their earnings; Financial literacyInspire OFs to venture into their own businesses

Workers Education ProgramIn partnership with the POEAPromote the protection and education of OFsGeared at ensuring that OFs are well-prepared prior to their departure and are educated on the banking services available to them

Harnessing remittances for development

The balance on deposits form part of the funds we lend to micro, small and medium enterprises in the countryside

Deposits are used for lending to support the proponents of productive endeavors or development projects OFs indirectly help turn into reality the many initiatives that develop our country

Special deposit accounts for overseas Filipinos and their beneficiaries Requirements Peso ATM USD Savings

AccountInitial Deposit P 100 $ 10Maintaining Balance P 100 $ 10

Initial deposit and maintaining balance for regular Peso ATM account is PhP500 Initial deposit and maintaining balance for regular USD savings account is US$100

Harnessing remittances for development

Offered Long Term Negotiable Certificates of Deposit which yielded higher returnsLANDBANK’s aim: Give our OFs and their beneficiaries greater access to banking products and services at the most reasonable cost

Most extensive network of branches in the PhilippinesPresent in 80 provinces 342 branches and field units LANDBANK ATMs reached 821

4th widest network of ATMs in the country

Harnessing remittances for development

LANDBANK OFW Cash Card Electronic debit card Linked to Smart-enabled mobile phonesSafeConvenientFast Affordable

Opening Deposit None

Maintaining Balance None

Aggregate Credits per month

Php100,000

Documentation Enrollment Form, 1 valid ID, ID picture

Card Validity Period Maximum of 2 years/Renewal fee of Php120

ATM Limit per day Php30,000.00

Cash Transactions May be done through nearly 8,800 Expressnet, Bancnet and Megalink ATMs nationwide

Dormancy Period Inactive for 6 months/Renewal fee of P120

Mobile Banking Balance inquiry, phone to phone transfer, etc.

Harnessing remittances for development

Inward Remittance SystemEnsures faster, safer and more efficient remittance delivery A web-based remittance facility

Direct Wiresi-Wiresi-Padala i-Sweldo

www.lbpeasypadala.com www.landbank.com

Harnessing remittances for development

Expanding and strengthening tieups with remittance companies

OFs may avail of affordable remittance services through 80 LANDBANK partners

Strategically located worldwide

Harnessing remittances for development

Products and services to OFs and their families achieve their financial goals

Investment ProductsGovernment securitiesRetail Treasury BondsTime deposits

Trust ProductsPersonal living trustUnit Investment Trust Fund (UITF)

Livelihood loans Working capital, fixed assets acquisition and trade financing purposes In support of projects related to agriculture, manufacturing, trading and merchandising, and services

Thank you.