OFWs now required to undergo financial literacy seminar
Overseas Filipino Workers (OFWs) who are set to leave the country and work overseas should undergo a financial education seminar, according to the Bangko Sentral ng Pilipinas (BSP).
The seminar is known as Pinansiyal na Talino at Kaalaman (PiTaKa) and aims to equip OFWs with financial management skills and practical knowledge on wise use of funds. PiTaKa is launched with joint efforts of the BSP, Overseas Workers Welfare Administration (OWWA) and the BDO Foundation.
In 2018, there are about 2.3 million OFWs according to the Philippine Statistics Authority (PSA)
The PiTaKa sessions will be part of the PDOS or Pre-Departure Orientation Seminar and the PAOS or Post-Arrival Orientation Seminar as a requirement to OFWs.
The BSP reports that only 35 percent of OFW households have savings. PiTaKa was launched to further help Filipinos abroad save, pay off their debts and enjoy the benefits of financial freedom.
UAE debt row
A lot of OFWs especially in the United Arab Emirates (UAE) are experiencing debt woes due to mismanagement of funds and bad financial decisions. It is undeniable that “utang” becomes a kabayan’s way of life to address emergencies.
According to a report by Gulf News, debt is one of the top five issues that haunt Filipinos in the UAE. The Department of Foreign Affairs (DFA) has issued warnings against improper use of credit cards and applications for multiple loans.
In 2017, 15 out of 205 Filipinos are incarcerated in Ajman and Dubai due to bounced checks and non-payment of personal loans, according to then Labor Attaché Ofelia Domingo.
In 2018, a Filipina in Abu Dhabi who owed Dh190,000 or Php2,700,000 and has remained stuck in UAE jobless with travel ban was helped by UAE’s human rights authorities.
This year, one of the 20 prisoners in Sharjah who was given amnesty as part of the Year of Tolerance initiative, was a Filipino jailed for owing Dh52,000 or approximately Php741,000. The program paid his debts and flew him back to the Philippines after getting imprisoned for 13 months.
Reasons for debt woes
One of the primary reasons why OFWs leave the country is due to high hopes of pursuing a brighter future and better financial conditions. The irony is that many of these overseas go workers go back home broke and worse, suffering from unpaid loans and credit card debts. Undergoing a financial literacy seminar could greatly help in making OFWs understand the importance of saving, investing and financial planning. However, it also helps to know a few reasons why many of our fellow Filipinos accidentally fall into debt traps:
1. Borrowing for luxury
Being in a foreign land opens the chance for Filipinos to have access to luxuries they couldn’t afford when they were still in the Philippines. Branded clothes, shoes, watches, and even gadgets are just within their reach.
Some people resort to retail therapy - a habit that might lead to unpaid debts
What costs around Php100,000 worth of device in the Philippines is only about Dh7,000 in the UAE – a value that seems too inexpensive yet already overwhelming when converted to Philippine money.
2. Impractical dining
Again, everyone wants to experience that opportunity to have a taste of the good life. Some Filipinos would dine in fine dining restaurants without thinking about the cost. While it sounds alright to reward yourselves once in a while, impractical dining can be a debt trap when done regularly until credit card spending limits are maxed out.
A meal from a restaurant is five times more expensive than a meal cooked at home
3. Owning idle assets
Idle assets decrease their value over time and would not provide additional income. Many OFWs commit the mistake of buying passive investments like electronic gadgets, clothing, and furniture. Financial education aims to divert the focus of OFWs by letting them consider stocks, mutual funds, small businesses and other forms of profitable investments.
4. Losing control of finances
Some OFWs serve as an unlimited source of funding for their friends and family back home. Some relatives borrow money and would not return due to the notion that their lender is abroad and would not need the payment anyway. Financially literate OFWs would have a better grasp of their finances because they know how to plan, allocate, spend and generate funds.
Financial education is essential to anyone who wants to get control of their money and achieve their goals. Profession, age, or status aren’t crucial in dreaming for a better life. What matters is you have a goal to pursue, and you are financially literate and skilled to realize it.
Financial education can help you plan and realize your dreams
GoBear is one with the government and its stakeholders in pushing for financial literacy education as a means of improving lives. Our #OsoUmasenso campaign aims to encourage Filipinos to shift their views and explore ways to invest, save and earn more. We have written contents that could help our readers understand complex financial concepts so they could benefit from all available financial tools in the market.