The National Economic Development Authority (NEDA), an agency of the government of the Philippines responsible for development and planning, is reportedly urging microfinance institutions (MFIs) in the country to tap into remittances from overseas Filipino workers as a source of funding. NEDA reportedly suggested that MFIs should partner with overseas Filipino communities to access investments, which might include deposits or bonds, that might be cheaper than wholesale loans from banks or other financial institutions.
According to a 2009 report from the United Nations Development Programme (UNDP), overseas remittance funds in the Philippines have not historically “translated into savings and investment and have mostly gone into consumer spending.” In 2011, approximately USD 17.1 billion in remittances were transferred from overseas Filipinos into the country.
By Brian LeBlanc
About the National Economic Development Authority (NEDA)
Established in 1973, the National Economic Development Authority (NEDA) of the Philippines is a government-run agency responsible for economic development and planning. It is composed of two separate entities: the NEDA Board, which is composed of members of parliament and is responsible for the majority of the agency’s policy decisions, and the NEDA Secretariat, which provides technical support to the NEDA Board.
About the United Nations Development Programme (UNDP)
The mission of the United Nations Development Program (UNDP) is to provide developing countries with knowledge, experience and resources in line with the United Nations’ Millennium Development Goals (MDGs), a set of eight goals intended to be achieved by 2015. UNDP operates in partnership with national governments in 166 countries as of 2011. Each country’s office of UNDP contributes to the organization’s annual Human Development Report, which is intended to provide a benchmark for development. UNDP estimates an institutional budget of USD 857 million for 2012-2013.
About the Millennium Development Goals (MDG)
Established at the Millennium Summit in 2000, the deadline for completion of these goals is 2015. They are as follows: (1) halve poverty and hunger, (2) achieve universal primary education, (3) promote gender equality and empower women, (4) reduce child mortality rate, (5) improve maternal health, (6) combat HIV/AIDS, malaria and other diseases, (7) ensure environmental sustainability and (8) encourage global partnership.
Sources and Additional Information:
PhilStar article, “Microfinance institutions told to tap OFW remittances,” http://www.philstar.com/cebu-business/2013/02/28/914147/microfinance-institutions-told-tap-ofw-remittances
United Nations Development Programme report, “OFW/ Diaspora Remittance for Development (OFW-RED): Building a Future Back Home,” http://www.undp.org.ph/?link=summary_project&projectid=41
MicroCapital story, February 6, 2013, “Senate Passes Bill Expanding Types of Foreign Entities that Can Invest Capital in Rural Banks in the Philippines,” https://www.microcapital.org/microcapital-brief-senate-passes-bill-expanding-types-of-foreign-entities-that-can-invest-capital-in-rural-banks-in-the-philippines/
MicroCapital story, November 14, 2012, “European Microfinance Platform Remittances Action Group, GIZ, PHB Development Release Handbook: ‘Financial Literacy for Remittances and Diaspora Investments,’” https://www.microcapital.org/special-report-european-microfinance-platform-remittances-action-group-giz-phb-development-release-handbook-financial-literacy-for-remittances-and-diaspora-investments/
MicroCapital story, June 7, 2011, “Financing Facility for Remittances (FFR) of the UN’s International Fund for Agricultural Development Announces Launch of Diaspora Investment in Agriculture Initiative,” https://www.microcapital.org/microcapital-brief-financing-facility-for-remittances-ffr-of-the-un%E2%80%99s-international-fund-for-agricultural-development-announces-launch-of-diaspora-investment-in-agriculture-initiative/
MicroCapital story, April 9, 2010, “International Migrants Remittances Observatory (IMRO) Establishes Microfinance Investment Vehicle, World Diaspora Fund (WDF),” https://www.microcapital.org/microcapital-brief-international-migrants-remittances-observatory-imro-establishes-microfinance-investment-vehicle-world-diaspora-fund-wdf/
MicroCapital story, December 16, 2008, “Philippines Government Creates Microfinance Initiative to Assist Large Numbers of Financial Crisis Affected Overseas Filipino Workers,” https://www.microcapital.org/microcapital-story-philippines-government-creates-microfinance-initiatives-to-assist-large-numbers-of-financial-crisis-affected-overseas-filipino-workers/
MicroUniverse Profile: United Nations Development Programme (UNDP) https://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=United+Nations+Development+Program+%28UNDP%29
MicroUniverse Profile: Millennium Development Goals (MDG) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Millennium+Development+Goals+%28MDGs%29
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