Failures in gov’t lending project for OFW groups cited


QUEZON CITY – THE bankruptcy of roughly 200 government-funded livelihood groups of overseas Filipino workers and their families reveals major errors in a project that an OFW leader and a government report said was used solely for the 2004 elections.

“Their promise to us is that there will be an OFW Groceria loan, followed by OFW Botica, and thirdly, that each member will have a loan of P200,000. However, these did not reach us [except for the grocery] loan, which we even had difficulties [operating],” Lutgarda Zapanta, a leader of an OFW group, said.

Zapanta was referring to the micro-lending project for OFWs –called OFW Groceria– that is hobbled by the inability of beneficiaries like her to pay back the grocery products for re-sale loaned to them by government.

She received in October a notice from OWWA asking her, as president of her group OFW BZ Chapter, to pay a 22-month past due loan of P45,834.80.

The problem: she and other leaders of groups she organized and which tapped the lending program don’t have the resources to cough out the money –a total quarter of a million pesos (US$7,000)– they owe government.

“Chairman, pano na ito? Two years na, wala na ang grocery. Wala na’ng pera. Anong gagawin natin?” Zapanta cited her and the leaders’ worries. [How would we go about this, Madam chairman? Two years have passed and the grocery’s folded up, the money’s gone. What should we do?]

A recent report by Overseas Workers’ Welfare Administration, which now handles the two-year project, pointed to the 2004 election atmosphere as the source of debacle for Zapanta and the leaders.

A number of OFW families and dependents deliberately organized themselves just to avail of the project because it is election-time especially at the National Capital Region, the report dated June 30, 2006, noted.

It added that borrowers had a “shallow appreciation on [sic] the real objectives of the project, as they view [sic] the project primarily as an economic activity.”

“There was no clear orientation or direction of the project,” the report said.

Zapanta’s predicament comes at a time when another poll event is just around the corner while government is rehashing a shuttered micro-lending scheme.


ACCORDING to the OWWA report, the OFW Groceria Project disbursed loans to 543 groceries amounting to P27,158,342.85 as of June 30, 2005 last year.

The report cited the project’s “very satisfactory performance” with batting average of 92.35 percent or 352 out of the 387 established OFW Groceria still considered “operational”.

According to the OWWA, the OFW Groceria Project is a non-collateral, interest-free loan window of P50,000-worth of merchandise goods for OFW organizations.

The report noted that 35 percent or 205 of the total 587 OFW Grocerias declared bankruptcy.

OFW Groceria Project spokesperson Reynaldo Tayag told the OFW Journalism Consortium the problems could be traced to the labor department’s National Capital Region office.

Tayag said it was the Department of Labor and Employment that started the project using P3 million from the Presidential Social Fund.

Tayag pinned the blame on the organizers within this phase but who were also transferred along with the relegation of the project management under the OWWA.

The project became part of the OWWA’s reintegration program and was announced in March 2004, three months before Gloria Arroyo was catapulted into presidency.

Tayag said he later removed the DOLE-NCR organizers from the project management roster and replaced them with “more qualified community development officers.”

“Napabayaan din nang napabayaan yung project, [The project was neglected.] The problem is they [DOLE organizers] did not monitor in the first place. Habhab yung ginawa nila e,” Tayag said.

“Habhab” is a Tagalog word that means eating with the lips than using the teeth.

Tayag said filing legal cases against errant borrowers is an option but they decided to just write the leaders.

“Some have complied but others are really hard up to pay the loan,” Tayag added.

As much as possible, Tayag said, OWWA “would not want to use” legal means to force the groups to pay.

“Konsensyahin mo na lang. Wala namang nakukulong sa utang e [We’ll just prick their conscience since nobody’s jailed out of indebtedness],” he said of the letter they sent to people like Zapanta.

But Tayag said other groups are taking the legal route. Some have been writing to Malacañang, as Zapanta and her groups did, asking the President to condone their debt.

Plea market

THE stamp “officially received” by the Office of the President is still legible in Zapanta’s Sept. 29, 2005 letter asking Arroyo to convert the Groceroa loan into a “dole out”.

Written in Tagalog, the letter shown to the Consortium asked President Arroyo to give Zapanta’s group the permission to add the money for the grocery’s expansion.

“That’s why I did not worry for my members anymore because I have pleaded in my letter that whatever program that has been handed down to us be continued and, whether the project was successful or not, to instead leave them to us,” Zapanta said.

It was also her way, she said, of reminding the President of the OFW groups’ contribution to her poll victory.

In a way, our members were influenced on who to vote in the presidential race because they were promised to benefit from the project, Zapanta claims.

“Every group has about 25 members and I have organized twelve of them. How much votes could one get from [each group]?” she cited.

However, only seven of the dozen groups that Zapanta said she organized received the grocery on September 21, 2004 or four months after Arroyo was already declared President.

“Before the grocery was handed down, they contacted OFW chairmen because they know who are the persons who handle people. So I was used, all of us chairmen, to organize the OFWs,” Zapanta said.

However, she said she hasn’t received a reply from President Arroyo’s office.

To recoup losses from the high-priced products being sold in urban poor communities like hers, Zapanta said they either lowered the prices thereby shaving off profit margins for the sake of sales or used the products for their personal consumption.

Dole out

THE OWWA report cited the “dole-out” mentality of OFWs killed the “greater aim” of the grocery loan project, especially when the mentality was nurtured during the election campaign period.

Hence, the project’s collection rate has been declining since September last year of 65.74 percent for 387 grocerias to 53 percent on 543 groceries as of June 30, 2006.

The report blamed the remoteness of the areas where borrowers lived as the cause of the low-repayment levels.

But Tayag said repayment would not have been a problem even by groups in these areas had the OFWs followed the loan agreement.

Tayag explained that under DOLE’s guidelines, OFW groups like Zapanta’s should have opened a bank account from which the payments should have been coursed through.

The agreement stipulated the borrowers could deposit payments to a bank account named for the group. Likewise, it said the group shouldn’t withdraw money from the account until total deposits hit P50,000 and upon advise of the DOLE.

Each group was also required to submit copies of the bankbook and bank statements as well as a monthly status report to the DOLE.

Except for the group’s bank account, Zapanta claims she followed the agreement’s reportorial requirement.

However, Zapanta said even if they were “trying to pay, they [DOLE] would not get hold of our money.”

“They told us to open bank books (bank accounts) under our own names,” Zapanta said.

Tayag said that that was a folly the project encountered, citing it wasn’t only Zapanta’s group that named bank accounts after the chairman and without the participation of the DOLE representative.

Hence, Tayag said collecting payments wasn’t a walk in the park.

“We have been receiving payments but some have really no hope of paying. Other groups have members and leaders [who] are now nowhere to be found,” he added.

Using OWWA’s figures, Tayag would be referring to some P10.25 million spent to buy the grocery products –some from retailer SM, considered lost or irrecoverable.


ZAPANTA, a single mother of a baby girl, can only ask that government cut them some slack.

She admitted dipping her hands on her group’s Groceria funds deposited in her name but only because her daughter was hospitalized and she needed the money.

“The only instruction to us was to keep on depositing. In my case, I deposit at my bank. But the account is under my name and if I’m in a tight situation, of course I might withdraw the money. That’s how it [was],” Zapanta said.

She explained that during her daughter’s hospitalization, she “borrowed” from the business’s fund.

But while her daughter has recovered, she said she hasn’t been able to pay back the money she “borrowed”.

However, the agreement she signed for the OFW Groceria Project cited that “In case of unauthorized deviations or alterations in the implementation of the approved project proposal, the organization will be obliged to return the whole amount without need of prior demand from DOLE-NCR.”

Zapanta’s predicament and the precarious collection rate of the OFW Groceria project comes at a time of a new lending scheme via Executive Order 558 that President Arroyo signed on August 10, 2006.

A revised order, EO 558-A, authorizes the Department of Social Welfare and Development (DSWD) to provide direct lending in poor provinces and municipalities.

The business sector has warned that the order may lead to heightened risk of loans being treated as dole out to borrowers who will have little motivation to pay.

In a statement, the Makati Business Club said that government direct lending by past administrations prior to that of ousted President Joseph Estrada had failed to address poverty and had led to non-payment of loans by borrowers and, eventually, government losses.

Senator Pia Cayetano even dubbed the scheme a “political dole out”.

“The credit scheme is in danger of being politicized, especially with the coming elections in 2007, because priority will likely be given to close allies and followers of local politicians who wield power over the field personnel of DSWD,” Senator Cayetano was quoted in a statement.

For Zapanta and OFWs like her, this could only be dejavu.

OFW Journalism Consortium