Finance Secretary Carlos Dominguez III has asked the assistance of the International Finance Corp. (IFC), a sister organization of the World Bank, in helping set up a digital banking system for the Overseas Filipino Bank (OFB) to keep it abreast of the rapid advances in technology and clear the way for its partial privatization in the future.
During a recent meeting with World Bank and IFC officials, Dominguez said he wants the OFB to start with a clean slate and leapfrog to digital banking to make it more effective and responsive in catering to the financial needs of overseas-based Filipinos.
Given that the OFB has not yet invested heavily in legacy systems that are now fast becoming outdated, Dominguez said it can “leapfrog” to new technologies to enable it to operate as a digital bank.
“It’s tabula rasa. No legacy mistakes here. But we don’t have the people and the system. So we’re looking at your expertise to assist here,” Dominguez told the World Bank delegation led by Victoria Kwakwa, the regional vice president for East Asia and Pacific of the institution.
Also at the meeting was Nena Stoiljkovic, the IFC’s vice president for Asia and Pacific, along with other IFC and World Bank officials.
“We’d love to take a look at that,” said Stoiljkovic in response to Dominguez, and said the IFC is undertaking “similar types of interventions in other countries.”
The OFB was one of the campaign promises of President Duterte to overseas Filpino workers (OFWs) in 2016 that the Department of Finance (DOF) under Dominguez had helped fulfill earlier this year. The DOF has expanded the bank’s coverage to include all overseas-based Filipinos to make it more inclusive.
Dominguez said that a digital banking system for the OFB could later lead to less state interference, with the Land Bank of the Philippines, which has made the OFB a subsidiary, controlling less than 5o percent of it in the future.
“We just need funds for all these, and we’re looking for assistance in this leapfrogging operation. This will allow us to partially privatize it in the future. Even bring down the share of LandBank to below 50 percent. These are things we’re looking at,” Dominguez said.
During the meeting, Dominguez also said the economic team is fast-tracking the rollout of the Duterte administration’s flagship infrastructure projects under the “Build, Build, Build” program with the government implementing a “hybrid” Public-Private Partnership (PPP) model to speed up the process.
Dominguez said the start of the expansion of the international airport in Clark, Pampanga is clear proof that the government can implement big-ticket projects faster under a hybrid PPP setup, as opposed to traditional PPP projects that previously took 30 to 50 months to break ground.
Of the 75 flagship projects under the “Build, Build, Build” portfolio, Dominguez said 35 have already passed the approval process.
Earlier, Dominguez said the OFB could be the ideal vehicle for the Philippines to “leapfrog” to the digital economy.
Instead of setting up physical branches across the globe, the OFB could just rely on digital technology applications to serve as many overseas-based Filipinos as possible, Dominguez said.
The OFB, Dominguez said, could be transformed into a virtual bank where bank tellers and managers would be replaced by information technology (IT) experts who have the knowledge to manage large amounts of data and operate the OFB using cutting-edge technologies.
Ten million OFWs could be the initial beneficiaries of this technological leapfrog that would radically transform the way Filipinos buy, receive and sell and distribute goods and services.
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