MANILA - The Overseas Workers Welfare Administration (OWWA) on Wednesday said the 7.5 interest rate charged against loans given to overseas Filipino workers (OFWs) is "under review" as the coronavirus pandemic continues to displace thousands of them.
Some 1,500 OFWs have borrowed loans with a combined amount of P1 billion, OWWA administrator Hans Cacdac said in a Senate hybrid hearing that discussed the plight of migrant workers during the coronavirus disease 2019 (COVID-19) crisis.
"We would pursue the lowering of interest rates... Under review na din po ito with the Landbank," he said after senators pointed out that government agencies' interest rates are similar to those offered in commercial banks.
The OWWA allows OFWs to borrow between P100,000 and P2 million, but the average borrowing ranges from P300,000 to P500,000, payable in 5 years, Cacdac said.
Collection efficiency is at 85 percent because borrowers are required to place collaterals, he said.
Senate Committee on Finance chair Sonny Angara urged OWWA to provide loans with lower interest rates for retrenched OFWs.
"Most, if not all, of these repatriated OFWs no longer have jobs to return to or will find it very difficult to find new jobs under the current circumstances," he said.
"With low-interest loans from OWWA, the displaced OFWs could be provided with capital to start their own small businesses here," he added.
As of June 7, nearly 56,000 OFWs have been repatriated as the world continues to battle the pandemic.
The Department of Labor and Employment said some 400,000 OFWs are expected to lose their jobs due to the crisis.