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3 ‘roadblocks’ hinder OFWs’ financial success, renowned advocate says

‘If you have been an OFW for the past 10 years and still have nothing, then there’s something wrong.

ABU DHABI: Most overseas Filipino workers (OFWs) couldn’t hit the road toward financial success because of three “roadblocks” rendering their efforts futile.

This, according to renowned financial literacy advocate, Vince Rapisura who, in an interview with The Filipino Times, also said there is something wrong if an OFW has been away from home for over 10 years and still has not made anything for himself.

“The migration process for economic reasons should only be for a maximum of 10 years,” Rapisura said. “Those who exceed this timeframe are already overstaying.”

Rapisura said “overstaying” OFWs should “take a step back and reflect; remind themselves of the original reason why they went abroad.”

Vince Rapisura
Vince Rapisura

Rapisura, who has been teaching microfinance and social entrepreneurship at the Ateneo de Manila University for the past 13 years, said most OFWs still could not advance well toward financial success despite receiving relatively bigger salaries compared to their counterparts in the Philippines, because of one or a combination of these three “roadblocks:” first, the inability to manage emotions; second, lack of money management know-how; and third, shock and awe on their “newfound wealth.”

Emotional blackmail

emotional blackmail and main pic

“OFWs fall prey to emotional blackmail of some family members back home,” said Rapisura, adding that the OFWs’ inability to manage emotions, especially guilt, when making financial decisions, makes them vulnerable to loved ones resorting to sad stories when asking for money.

To overcome this, Rapisura said, self-mastery is key. “OFWs should have gain confidence and conviction when making financial decisions,” he said, even as he underlined the importance of setting financial goals together with their families.

“Each family member should have roles and responsibilities that contribute to the financial goal, so that the overseas worker can re-integrate and be re-united with them at the soonest possible time,” he said.

No money management knowledge

no money management knowledge

Rapisura said he has observed that since most Filipinos are not accustomed to a culture of savings and investments, they are inclined to prioritize achieving a certain lifestyle to “prove” themselves to family and social networks back home.

“This is evident in social media. OFWs tend to up their lifestyle faster than they increase their income,” he said, a habit reflecting on their lack of knowledge in money management especially saving, investing and handling debt.

To break through this, Rapisura said, OFWs should live below their means, find satisfaction in simple living, and always remind themselves about the true purpose of working abroad.

“Newfound wealth”

newfound wealth

Having been used to a spoon-to-mouth existence back home, Rapisura said a lot of OFWs have this “shock with their newfound wealth.”

“OFW income is from about twice to ten times their salary when they were working in the Philippines. This brings about a lot of change that, if left unchecked, will make them bust,” warned Rapisura.

With the sudden rise of income, OFWs and their families become overly excited and consume in advance the money that they have yet to earn by incurring debt in credit card companies, company loans, or personal loans from banks, he said.

“Apply for a loan only if it will be used for productive purposes. Otherwise, savings should be made,” he advised.

Rapisura pointed out that the interest on loans is an expensive price to pay in order to use the money now instead of saving and waiting for later, delaying one’s gratification.

Now that OFWs have the financial capacity, Rapisura urged that they educate themselves about savings and investments. “They should look far ahead and prepare for their future rather than be tempted with spending their earnings now,” he said.

He added, “Investing will provide them with multiple sources of income that will make them more financially secure in the future. It will also provide a good fall back in case they lose their job overseas.”

Rapisura established Social Enterprise Development Partnerships (SEDPI), a social enterprise that provides financial literacy trainings to low-income OFWs in 15 countries worldwide. Since 2004, SEDPI has trained more than 30,000 individuals and has managed social investments close to PhP325 million.

He has likewise authored books on financial management.

There are about 2.2 million OFWs across the world, according to a report by the Philippine Statistics Authority in May 2017. The Bangko Sentral ng Pilipinas has reported that from January to October 2017, personal remittances of OFWs have reached a whopping $25.7M – a 5.2% growth compared to the previous year.

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