The Overseas Filipinos Remittances for Development: Building a Future Back Home (OFs-RED) Project

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The Overseas Filipinos Remittances for Development: Building a Future Back Home (OFs-RED) Project

MANILA, Philippines, April 5, 2011 -- The United Nations Development Program (UNDP) and the Government of the Philippines today launched a US$250,000 major project wholly funded by Western Union to harness the power of remittances from migrant workers to drive sustainable economic development in the Philippines and other developing countries. The Overseas Filipinos Remittances for Development: Building a Future Back Home (OFs-RED) Project aims to launch a pilot program to pool funds from migrant workers and channel them into projects that lead to economic development and community-based enterprises in the workers' home communities. The two-year project is made possible by a US$250,000 grant from Western Union's philanthropic arm, the Western Union Foundation. A similar project with equal funding will be extended to Morocco with a view to creating a model that could be replicated across the globe. Renaud Meyer, UNDP Country Director in the Philippines, said: "The Western Union funded OFs-RED project will contribute to speeding up efforts in the Philippines to achieve the Millennium Development Goals, in particular the target to halve poverty by 2015, by supporting the creation of an enabling environment for overseas Filipinos and their families to use remittances for development." The project will test a mechanism to facilitate and direct overseas remittances towards savings and investment in livelihood improvement and entrepreneurship for the poor and vulnerable, and ultimately create jobs and reduce poverty. The Philippines is the world's fourth-largest recipient of overseas remittances after India, China, and Mexico, with US$18.76 billion sent home in 2010, or about 14% of GDP, Mr. Meyer said. Luella d'Angelo, President of the Western Union Foundation, said: "At Western Union, we believe that leaving home to work should be a choice, and not a necessity borne of lack of options. We share the dream that some day, people in the Philippines and in developing countries everywhere will have the choice to stay with their families, that jobs and opportunities at home will provide a choice, and that going overseas will be but one way to make a better life. That is why we are so wholeheartedly committed to the OFs-RED project." "Our commitment towards this project commenced in 2008 when Western Union funded an Economic Intelligence Unit (EIU) report to test the interest of pooling remittance. The report found there is willingness to offer and use pooled or collective remittances to fund development, but there was no efficient mechanism to do so. "In 2009 Western Union facilitated a dialogue with multiple stakeholders from many disciplines and with their input we created a macro plan. Discussions ensued in 2009 and we are delighted that what commenced as an idea was tested in a dialogue and now we are turning the idea into action collaboratively with development and government experts," she said. The project will be collaboratively led by UNDP, the Philippines government's National Economic and Development Authority, the Commission on Filipinos Overseas, local government units and Western Union. Upon development of a model, a pilot involving the city of Taguig and the province of Ilocos Norte will be tested. Secretary Imelda Nicolas, Chair of the Commission on Filipinos Overseas, said: "The objective of harnessing remittances for development is the next frontier for development banking. "On behalf of the OFWs, we congratulate Western Union's leadership and hope that the banking and financial sectors will create the same enabling and creative environment as they did in microfinance," she said. She challenged finance-sector leaders to take up the challenge of working with overseas Filipinos and their families, all levels of government and civil society in creating a new model for development. Rolando G. Tugpalan, Deputy Director-General of the Philippines' National Economic and Development Authority, echoed the need for all stakeholders to work closely together. He said: "Consistent with the Philippine Development Plan 2011-2016, the OFs-RED Project 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." "We are encouraged by Western Union's commitment and hope there would be many other corporations that would follow their example," he said. These contributions represent a portion of a US$1.1 million grant from the Western Union Foundation to support the efforts of three United Nations agencies to advance the Millennium Development Goals -- a set of eight internationally-agreed goals designed to reduce poverty, hunger, disease, and maternal and child deaths by 2015.