Korean bank to offer debit cards for Filipinos in Korea

The Korean Exchange Bank (KEB) will launch this month a debit card catering to the needs of overseas Filipino workers (OFWs) in Korea.

Last April, the Philippines and Korea signed a memorandum of agreement (MOA) providing for the strict regulation and direct supervision of the placement of Filipinos to Korea as contract workers. The accord allows for only 6,000 contract Filipino workers annually.

The reason for the MOA is that of the 45,000 OFWs in Korea, almost half or 20,000 have been classified as illegal.

The two governments decided to initiate the accord to put a stop to the illegal practice even as the Korean government had offered amnesty to the illegals.

"We want to be involved in the briefing of Filipino workers," KEB Manila general manager Seung Kwon Kim said. "We also could offer banking products for their convenience."

Debit cards can be used by the OFWs to send money to their families in the Philippines, and they can withdraw cash. It could also be used like credit cards, or it could be used as payment for taking bus or train rides.

"Filipinos and other expatriates working in Korea have a tendency to keep their money in their places of residence which is dangerous," said Kim, adding that the next challenge for the Korean bank is how to reach the thousands of OFWs working in various locations in Korea.

The bank has 320 branches all over Korea but that may not be enough.

OFWs normally work five to six days a week and they may not have immediate access to banks and their branches. Some are forced to just keep their money in their bags.

"What we are thinking is to go to their work place, or residents, or areas where they congregate," the KEB Manila general manager said.

OFWs can send money to their relatives in the Philippines through the remittance or money transfer services of KEB. In fact, Kim claims that money transfer can be achieved in one hour through its electronic system.

Even with only one branch in the Philippines, KEB would be able to reach the families of OFWs anywhere in the Philippines without forging any kind of alliance with local Philippine banks.

OFWs merely have to indicate the banks their families utilize in the Philippines, and KEB would transmit electronically the money transfer to these banks. In the first five months of 2004, remittances declined marginally by 0.4 percent to $3.3 billion over year-ago level.

Last year, money transfers reached a record P7.6 billion.

Nonetheless, government stands pat on its projection of an increase of OFW remittances at six percent. Higher deployment of Filipino workers and higher average income is anticipated given the increasingly more skillful and more professional profile (e.g., caretakers/caregivers, nurses, information technology workers, office managers, clerks) of OFWs. For the first five months of 2004 alone, total deployment went up by 11.3 percent year-on-year, the highest since 1999.

Increased fund transfers from Hong Kong, Italy and the United States is seen to soften the impact of the recent decline in remittances from the traditional labor host countries such as Japan, Saudi Arabia, and the United Kingdom. The US, United Arab Emirates, Saudi Arabia, Italy, Hong Kong and Japan remained the major sources of OFW remittances.