Western Union Foundation grants $.25M for redirection of OFW inflows

MANILA, Philippines -  The Western Union Foundation (WUF) has extended a $250,000 (approximately P11 million) grant to the Philippine government and the United Nations Development Program (UNDP) to develop a program that will redirect remittances from overseas Filipinos from consumption to investments.

WUF is the corporate sharing arm of global money transfer giant Western Union.

The program, called the Overseas Filipinos Remittances for Development: Building a Future Back Home (OFs-RED), was designed to convert a portion of remittances into investments for sustainable or development programs on a local level.

WUF president Luella Chavez D’Angelo said they have raised $250,000 each for Morocco and the Philippines to serve as its initial salvo into the remittance-based development efforts.

A total of $1.1 million has been earmarked in collaboration with three UN agencies to reduce poverty, hunger, disease and maternal and child deaths under the Millennium Development Goals (MDGs).

“Western Union transfers much more than money. We at the Western Union Foundation have decided to honor that by committing $250,000 to the UNDP to develop the OFs-RED Project, which will be rolled out over in six stages over two years,” D’Angelo said during the formal launching ceremonies yesterday.

The National Economic and Development Authority (NEDA) will be the implementing arm of the Aquino administration which, in turn, will collaborate with the UNDP to conceive the entire concept and turn the same into reality.

NEDA and the local arm of the UNDP have until the third quarter of 2011 to finalize and pilot test the concept.

Already identified as pilot areas for the first-of-its-kind effort are Ilocos Norte and Taguig City.

NEDA deputy director general Rolando G. Tungpalan explained that the concept in general terms is to get a portion of the remittances from overseas Filipinos and redirect the same to investments. Investments will be placed in job creating and sustainable projects within a given community.

“Consistent with the Philippine Development Plan 2011-2016, the OFs-RED aims to develop policies and field-test models to harness remittances for community-based enterprise development. It encourages multi-stakeholder collaboration to expand livelihood opportunities and create more jobs,” Tungpalan said.

The six phase project will involve: Facilitating governmental support for public policy inclusion of collective remittances; building awareness for the concept; getting people living and working overseas organized to pool funds; giving people at home the skills and capabilities to identify and carry out projects; promotion of the concept and mobilizing funds, including public and private fund matching, and, implementing the pilot areas of Ilocos Norte and Taguig City.

The world’s top recipient economies of remittances in 2010 are India, China, Mexico, the Philippines and France.

Remittances sent to Philippines amounted to $18.8 billion money transfers from overseas Filipinos represents 14 percent of the country’s gross domestic product (GDP).

But studies also indicate that bulk of the money sent to beneficiaries are spent on basic consumption, luxury and savings.