Beyond the Balikbayan Box: Financial Planning for OFWs

Beyond the Balikbayan Box: Financial Planning for OFWs
As much as they contribute to the nation’s economy, why are many Overseas Filipino workers
(OFWs) the most financially lacking?
World Bank data shows OFWs remitted $22.9-billion in 2013. That’s 9.8 percent of the gross
domestic product, one of the indicators used to gauge the fiscal health of a country.
So despite being able to afford to send $22.9-billion, why then are a majority of OFWs still broke
when their contracts are done? Why are our bagong bayani not financially secure once they
There seems to be two main reasons: 1) misplaced priorities, and 2) zero or poor financial
Like any other breadwinner, a departing OFW has dreams and aspirations for themselves and
their loved ones. Once employed, OFWs shoulder all their dependents’ living expenses, home
improvements, lifestyle upgrades, education and small-scale business ventures. When they
return home they live lavishly and feel obligated to entertain hordes – each expecting a
homecoming bash, shopping splurge, or handout of cash or pasalubong.
They resort to financial pampering out of emotional guilt from a prolonged absence.
But a typical OFW career only lasts 15 to 20 years. The short contentment from a padala or
pasalubong won’t be enough – for themselves and their loved ones. OFWs need to prepare for
a future long after their deployment is over. A plan needs to be in place beyond the balikbayan
Many OFWs believe they are well-covered by RA 10022 requiring insurance for agency-hired
OFWs, as well as the benefits they receive from the Overseas Workers’ Welfare Association
(OWWA). However, these insurances will not be enough to sustain a family beyond one to two
years. Additionally, they are only effective if an OFW remains to be a member of OWWA or
while still under contract. Failure to renew membership means they are unprotected.
So before deployment, an OFW needs to invest in their protection needs first. Loved ones
depend on them for their day to day survival. Should something unfortunate happen to the OFW
while away, imagine the economic loss and emotional devastation to the family left behind?
Among the best ways to prepare is to understand and put into practice the principles of basic
financial planning. Filipinos in general are not taught about the rudiments of properly managing
In as little as five simple steps, financial planning can become the practical discipline towards a
financially rewarding future, regardless if one works abroad or not:
1. Set your financial goals. Understand why you are sacrificing to be away from your family.
2. Know your financial position, and carefully assess your needs.
3. Secure your needs and discipline yourself and your family in maintaining a lifestyle that
will ensure excess funds for your goals and dreams.
4. Match your goals with your financial vehicles.
5. Review and evaluate your financial roadmap regularly, and adjust when needed.
Apart from giving financial advice, good insurance companies also organize outreach programs
that educate OFWs regarding smart money management, investment opportunities, and
insurance products while they’re away. They also provide integration programs to educate the
families, so that the ones left behind become better managers of the remittances.
An OFW’s concept of smart financial planning is setting up a small business, like opening a sarisari store or the purchasing a rental vehicle. Studies have shown that the money generated
from these ventures still won’t be enough. They tend to be risky, and need economies of scale
to survive downtimes. Despite having set up these ventures, regrettably, the main source of
income for the OFW family is still the income from abroad.
Through sound financial planning, making the decision to come home may be easier to make.
After all, isn’t it every OFW’s dream to come home as soon as possible, and for good?
Want to learn more? Usap tayo.
Rex Mendoza is Senior Advisor to the Group CEO of AIA Group, the pan-Asian insurance
holding consortium that includes Philam Life. Mr. Mendoza is a Philam Lifer at heart. Having
served the company for more than 20 years, he has made financial literacy a personal
advocacy. Please e-mail your questions or comments to [email protected]
About Philam Life
The Philippine American Life and General Insurance Company (Philam Life) is the country’s premier life insurance
company. Established on June 21, 1947, Philam Life offers an extensive line of products in the industry that provides
solutions to various financial needs including life protection, health insurance, savings, education, retirement,
investment, group and credit life insurance.
Philam Life is a member of AIA Group Limited, the largest independent publicly listed pan-Asian life insurance group.
About AIA
AIA Group Limited and its subsidiaries (collectively “AIA” or the “Group”) comprise the largest independent publicly
listed pan-Asian life insurance group. It has operations in 17 markets in Asia-Pacific – wholly-owned branches and
subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia,
Taiwan, Vietnam, New Zealand, Macau, Brunei, a 97 per cent subsidiary in Sri Lanka, a 26 per cent joint venture in
India and a representative office in Myanmar.
The business that is now AIA was first established in Shanghai over 90 years ago. It is a market leader in the AsiaPacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its
markets. It had total assets of US$159 billion as of 31 May 2014.
AIA meets the long-term savings and protection needs of individuals by offering a range of products and services
including life insurance, accident and health insurance and savings plans. The Group also provides employee
benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and
employees across Asia-Pacific, AIA serves the holders of more than 28 million individual policies and over 16 million
participating members of group insurance schemes.
AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code
“1299” with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: “AAGIY”).
Media Contact:
Pamela Yap Magallon
Corporate Public Relations Officer
Philam Life
Tel no. +63(2) 521 6300 loc. 2658
Mobile no. +63(905) 2768130
Email: [email protected]
Millet D. Liberato
Media Relations Director
Tel no. +63(2) 856 7888 loc.701
Mobile no. +63(939) 9041226
Email: [email protected]
Gene Paulo H. Bautista
Media Relations Manager
Tel no. +63(2) 856 7888 loc. 128
Mobile no. +63(998) 9761418
Email: [email protected]