Angara: Providing low-interest loans for retrenched OFWs is part of OWWA’s mandate

Posted on: Thu, 06/25/2020 - 12:15 By: admin
Angara: Providing low-interest loans for retrenched OFWs is part of OWWA’s mandate

To help the overseas Filipino workers (OFW) who were repatriated after losing their jobs abroad, Senator Sonny Angara reminded the Overseas Workers Welfare Administration (OWWA) to fulfill its mandate of providing them with low-interest loans, which they can use to setting up their lives again here in the country.

As the sponsor of Republic Act 10801 or the Overseas Workers Welfare Administration Act, which was enacted on May 10, 2016, Angara noted that Section 35(c) of the law states that the OWWA “shall provide low-interest loans to member OFWs. It shall have the authority to hire experts in finance and banking to assist in implementing the said loan programs.”

As of June 7, 2020, close to 56,000 OFWs have returned to the Philippines as reported in the Department of Health’s 41st COVID-19 situationer report.

President Duterte said the number of repatriated Filipinos could reach 100,000 or higher in the coming months “due to the continuing impact of the pandemic.”

“Most if not all of these repatriated OFWs no longer have jobs to return to or will find it very difficult to find new jobs under the current circumstances. The world has been hit by the COVID-19 pandemic and a lot of companies here and abroad have either closed shop or resorted to retrenchment,” Angara said.

“We have to find ways to help the repatriated OFWs in finding alternative sources of livelihood because their families depend on them. With the low-interest loans from OWWA, the displaced OFWs could be provided with capital to start their own small businesses here,” he added.

But because of the extreme challenges being faced by the OWWA at this time in repatriating and assisting the displaced OFWs, Angara said he understood how it would be difficult for the agency to implement this provision now.

During the hearing of the Senate Committee on Labor, Employment and Human Resources Development today, Angara sought an update on the implementation of this provision of the OWWA Charter, considering the plight of the retrenched OFWs whose futures are now uncertain because of the pandemic.

OWWA Administrator Hans Leo Cacdac noted that the agency has tied up with the Landbank of the Philippines to provide a loan window for OFWs.

Cacdac said there were around 1,500 OFWs who were able to avail of loans from Landbank amounting to around P1 billion.

On average, the borrowers were able to secure around P300,000 to P500,000 each and in some cases, Cacdac said the OFWs were able to get as much as P2 million from Landbank.

Cacdac said the collection rate for these loans have been relatively good at 85% and for some cases where the borrowers were in default, the OWWA served as the guarantor and was able to shell out an estimated P40 million to cover for the payments.

The interest rate for the loans from Landbank is around 7.5% per annum, which Angara said was at par with commercial rates and not in the spirit of RA 10801 wherein the OFWs shall be provided with “low-interest loans.”

Cacdac said OWWA has raised the issue of reducing the interest rate with Landbank in their previous discussions and “hopefully we can pick up the talks again.”

He said there were also scheduled discussions with other partner banks for the provision of these loan windows for OFWs but these did not materialize because of the pandemic.

“I hope in better circumstances we can pursue that because the law provides that the OWWA shall provide low-interest loans to member OFWs. So talagang may mandato sa batas na low-interest yung loan. And I think that can be availed of by many of our returning OFWs,” Angara said.

“Iba pa yung sa Landbank, e lakihan pa natin sana kung kaya ng pondo ng OWWA. I realize maraming challenges at present and I trust that the Administrator and Labor Secretary Silvestre Bello will pursue that kung kaya na,” he added.