FOURTEENTH CONGRESS OF THE REPUBLIC } 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
S.B.NO. 
I254 
Introduced by Senator Francis N. Pangilinan 
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EXPLANATORYNOTE 
The emigration of Filipinos to foreign countries is a phenomenon that has been going on for the 
last three to four decades. Today, the exodus of Filipinos continues. Everyday, thousands leave the country 
to seek better employment opportunities abroad. As the mass departure of Filipinos has been said to 
gradually deplete the labor resource of the country, this phenomenon is however, doing the country more 
good than bad for the following reasons. First, Overseas Filipinos (OFs) have raised the competence of the 
Filipino worker as they sought and preferred by foreign employers because of their skills and efficiency. 
Secondly, being gainfully employed, OFs are a significant economic force in the country, taking into 
account the foreign exchange remittances that keep the economy alive. 
Overseas Filipinos, regarded as the country's "new heroes", have to endure being separated from 
their families to eam dollars abroad. An estimated eight billion dollars every year is remitted to their families 
and the OFs greatly contribute to the country's economy through remittances. The government recognizes 
the contribution of the OFs in the country's development, hence is seeking ways on how the OFs can 
productively invest in business opportunities in the country. By providing avenues for their economic 
development, government is working toward reintegrating the OFs into Philippine society. The government 
also acknowledges the desire of the OFs' to come back home to their families and invest in economic 
activities in the country. 
This bill seeks to implement policies for the reintegration of the OFs into Philippine society by 
providing opportunities for them to save, invest and engage in business enterprises. It seeks to look after 
the economic interests of the OFs by providing investment protection policies. Likewise, the bill seeks to 
provide incentives and benefits to OFs by granting fiscal incentives in certain areas of investment. 
In view of the foregoing considerations, the immediate approval of this bill is therefore urgently 
recommended. 
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FOURTEENTH CONGRESS OF THE REPUBLIC } 
7 JUL18 ii9:lo 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
S.B. NO. 
1254 
introduced by Senator Francis N. Pangilinan 
AN ACT 
PROMOTING THE ESTABLISHMENT OF BUSINESS ENTERPRISES BY OVERSEAS FILIPINOS (OFs), 
PROVIDING INCENTIVES AND BENEFITS THEREOF, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled: 
SECTION 1. Title. - This Act shall be known as the "Overseas Filipinos Investment Bill". 
SEC. 2. Declaration of Poky. - It is the policy of the State to promote the establishment of 
business enterprises by Oveseas Filipinos (OFs) worldwide and provide incentives and benefits to those 
who invest and engage in such enterprises. This policy is an acknowledgement of the significant 
contribution of Overseas Filipinos to the national economy through the foreign currency remittances, which 
has kept the economy of the country stable. The OFs endure the sacrifice of being separated from their 
families and from their country principally to finds better employment opportunities to provide for the needs 
of their families. The government recognizes the OF's dedication to their families and their desire to look 
after the wellbeing of their loved ones. The government's efforts in providing ways on how the OFs can 
invest and engage in business activities in the country is a commitment to OF's , to give back the gains 
that they have brought to the country through the foreign currency remittances. The government is working 
toward the reintegration of the OFs into Philippine society by encouraging them to invest and establish their 
business enterprises in the country. 
SEC. 3. Definition of Terms. - As used in this Act, the following terms shall mean: 
(a) 
Overseas Filipino (OF or OFs) refers to a person who is to be engaged, is engaged or has 
been engaged in a remunerated activity in a state of which he or she is not a legal resident or is a legal 
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resident but still a Filipino citizen and holder of a Philippine passport. 


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OF lnvesfor (OF/) is an individual or a group of OFls, who saves andlor invests remunerations from 
work or activity outside the country under the guidelines set forth in this Act. Filipinos who are still Filipino 
citizens, holders of Philippine passport and are based abroad or anywhere in the world that brings in capital 
to the Philippines to be used in setting up businesses shall also be considered OF Investors. An OF1 may 
save andlor invest in his name or through a business entity or enterprises in which he or she is the single 
proprietor, partner, or stockholder. A group of OFls may save andlor invest collectively through a business 
entity formed by a partnership, cooperative or corporation; and shall be identified as OF Group Investor. A 
business entity, majority owned by OFls, shall be considered an OF Group Investor. 
SEC. 4. Regisfration of OFs and Certification As OF Investor. - (a) Individuals shall be recognized 
as OFs when they are so registered with the Philippine Overseas Employment Administration (POEA) 
andlor Overseas Workers’ Welfare Administration (OWWA) and/or the Department of Foreign Affairs 
(DFA). 
(b) 
POEA andlor OWWA andlor DFA shall issue upon request by an individual a certification 
that helshe is an OF. Government as well as private institutions shall honor this certification and accord the 
holder of this certification the benefits and privileges as stipulated herein. 
(c) 
The Office of the Treasurer of each city or municipality shall register the OF1 or the OF 
Group Investors’ business enterprise and issue a certification to enable the business enterprise to avail of 
the benefits available under this Act. Any such application shall be processed within fifteen (15) days upon 
submission of complete documents. Otherwise, the business enterprise shall be deemed registered. 
SEC. 5. Savings and lnvesfment Facilities for OF Investors. - (a) Both government and private 
financial institutions shall provide savings facilities in attracting, generating and pooling funds, in either peso 
or US dollar currencies, for the OFI, and provide them risk-free investment opportunities with preferential 
rates, to encourage OFls to save and prepare for their eventual re-integration in the country. 
(b) 
The Overseas Workers’ Investment Fund Board, under R.A. No. 71 11 (An Act Establishing 
The Overseas Workers’ Investment Fund to Provide Incentives To Overseas Workers, Reduce The Foreign 
Debt Burden, and For Other Purposes), equivalent to the provision of savings facilities as stated above, 
shall pursue investments by OFls and grant benefits and privileges related to RA No. 71 11. 
(c) 
Within six (6) months afler this Act takes effect, the Department of Finance (DOF), through 
Land Bank of the Philippines (LBP) and Development Bank of the Philippines, shall be able to offer to the 
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OFs short and long-term OFI Bonds in small denominations with guaranteed interest rate of ten (IO) 
percent per annum or the prevailing market rate at the time of issuance whichever is higher. 
(d) 
The government shall set aside at least ten[lO) percent of the total equity for the OFls and 
their families for new or existing businesses or enterprises requiring franchise or authority to operate by the 
government. These business enterprises include utility companies, airport and seaport terminals, mining 
and oil exploration and production businesses. 
SEC. 6. Credit Facilities for OF lnvesfors. - (a) OFls shall also enjoy preferential benefits and 
privileges in availing funds (similar concept as provided and stated in Republic Act No. 9178 Section 9) 
from government financial institutions. The Land Bank of the Philippines (LBP), Development Bank of the 
Philippines (DBM), the Small Business Guarantee and Finance Corporation (SBGCF), and the People’s 
Credit and Finance Corporation (PCFC) shall set-up a special credit window that will serice the financing 
needs of the business enterprises of OFls, certified under this Act, consistent with the Bangko Sentral ng 
Pilipinas (BSP) policies, rules and regulations. 
(b) 
The Social Security System (SSS) shall likewise set-up a special credit window that will 
serve the financing needs of their respective members, who are also OFls, who wish to establish a 
business enterprise. 
(c) 
The concerned financial institutions are encouraged to extend the funds to accredited 
private financial institutions including community-based organizations such as credit, cooperatives, non- 
government organizations (NGOs) and people’s organizations, which will in turn, directly provide credit 
support to the business enterprises of OFls. 
(d) 
All loans from any source granted to business enterprises of OFls under this Act shall be 
considered as part of alternative compliance to Presidential Decree No. 717, otherwise known as the Agri- 
Agra Law, or to Republic Act No. 6977, known as the Magna Carta for Small and Medium Enterprises, as 
amended. For purposes of compliance with Presidential Decree No. 717 and Republic Act No. 6977, as 
amended, loans granted to business enterprises of OFls under this Act shall be computed at twice the 
amount of the face value of the loans. 
(e) 
Any existing law to the contrary notwithstanding, interest, commission and discounts 
derived from the loans by the LBP, DBP, PCFC and SBGFC granted to business enterprises of OFls as 
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well as loans extended by the SSS to their respective OF1 member-employees under the Act shall be 
exempt from gross receipt tax (GRT). 
(0 
To minimize the risks on the part of the OFls, the SBGFC and the Quedan and Rural 
Credit Guarantee Corporation (QUEDANCOR) under the Department of Agriculture, in case of agribusiness 
activities, shall set up a special guarantee window to provide the necessary credit guarantee to OFls under 
their respective guarantee programs. 
(9) 
The LBP, DBP, PCFC, SBGCF, SSS, and QUEDANCOR shall annually report to the 
appropriate Committees of both Houses of Congress on the status of the implementation of this provision 
(h) 
The BSP shall formulate the rules for the implementation of this Section and shall likewise 
establish incentive programs to encourage and improve credit delivery to the business enterprises of OFls. 
SEC. 7. Fiscal Incenfives for O f  Investors. - All registered OFls shall be granted the following 
incentives according to their preferred areas of investment. These include but are not limited to the 
following: 
(a) 
Income Tax Exemptions. - Consistent with and similar to RA No. 9178, all business 
enterprises of OF investors shall be exempt from income arising from the operations of 
the enterprise for up to a period of ten (IO) years regardless of the amount of capital that 
they are bringing in to the Philippines. 
Similar to the stipulation in the Omnibus Investments Code of 1987 for foreign 
investments, the business enterprise of an OF Group Investor shall be given tax and duty 
exemptions on imported capital equipment and accompanying spare parts, provided that 
the importation of machinery, equipment and accompanying spare parts shall comply with 
the following conditions: 
(i) 
(b) 
They are not manufactured domestically in sufficient quantity, or comparable 
quality, and at reasonable prices; 
They are reasonably needed and will be used exclusively by the OFls in their 
registered activity, unless prior approval of the Board is secured for the part-time 
utilization of said equipment in a non-registered activity to maximize usage thereof 
or the proportionate taxes and duties are paid on specific equipment and 
machinery being permanently used for non-registered activities; 
(ii) 
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(c) 
Tax credit for Taxes and Duties on Raw Materials. - Every registered business enterprise 
of an OF1 shall enjoy tax credit equivalent to the national internal revenue taxes and 
customs duties paid on the supplies, raw materials and semi-manufactured products due 
in the manufacture, processing or production of its products and forming part thereof; 
SEC. 8. Assistance of Local Government Units to OF Investors. - (a) Local Government Units shall 
provide an environment favorable to the conduct of business enterprises by OFls. 
(b) 
Similar to the provision of RA. 9178, the Local Government Units (LGUS) are encouraged 
to reduce the amount of local taxes, fees and charges imposed. The are likewise encouraged to exempt 
the business enterprises of OF Investors from local taxes, fees and charges, up to a period of ten (IO) 
years. 
(c) 
A one stop-shop for all the business permits and licensing requirements of OF1 enterprises 
shall be implemented in every municipality and city in the country. 
SEC. 9. Technology Transfer, Producfion and Management Jraining and Marketing Assistance fo 
OF Investors. - (a) A Development Fund for Business Enterprises of OF Investors shall be established with 
an endowment from OWWA which it shall likewise administer. 
(b) 
The Department of Trade and Industry (DTI), the Department of Science and Technology 
(DOST), the University of the Philippines Institute for Small Scale Industries (UP-ISSI), Cooperative 
Development Authority (CDA), Technical and Livelihood Research Center (TLRC) and accredited NGOs 
may avail part of the said endowment for technology transfer, production and management training and 
marketing assistance to OFls. 
(c) 
The DTI, in coordination with the private sector and non-government organizations 
(NGOs), shall explore the possibilities of linking or matching-up the business enterprises of OFls with small, 
medium and large enterprises, and likewise establish incentives therefore. 
(d) 
The DTI, in behalf of the DOST, UP-ISSI, CDA, TESDA, TLRC and accredited NGOs shall 
be required to furnish the appropriate Committees of both Houses of Congress a yearly report on the 
development and accomplishments of their projects and programs in relation to technology transfer, 
production and management training and marketing assistance extended to business enterprises of OFls. 
(e) 
The DTI, TESDA, TLRC shall provide researchltechnicallmanagement training assistance 
to OFls. 
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(f) 
The DTI, TESDA, TLRC and other government agencies and NGOs shall also establish a 
team of business consultants that will provide coaching, consulting, monitoring and operations auditing 
services to OFls to ensure the success of the business projects or enterprises. 
(9) 
The Department of Labor and Employment shall create a re-integration and monitoring 
center that shall (a) Develop livelihood programs and projects for returning OFs in coordination with the 
private sector; (b) Coordinate with appropriate private and government agencies the promotion, 
development, replacement and the full utilization of the potentials of OFs; (c) Institute a computer-based 
information system containing a list of skilled OFs, in cooperation with other government agencies, which 
shall be accessible to all local recruitment agencies and employers, both public and private; and (d) Provide 
a periodic study and assessment of job and livelihood opportunities for returning OFs. 
SEC. 10. Miscellaneous Provisions. - (a) Exemption from the Coverage of the Minimum Wage 
Law. - The business enterprises of OFls shall be exempt from the coverage of the Minimum Wage Law, 
provided that all employees covered under the Act shall be entitled to the same benefits given to any 
regular employees such as social security and healthcare benefits. 
(b) 
Trade and lnvestmenf Promotion. -The date gathered from business registration shall be 
made accessible to and shall be utilized by private sector organizations and non-government organizations 
for purposes of business matching, trade and investment promotion. 
(c) 
lnformafion Dissemination. -The Philippine lnformation Agency (PIA), in coordination with 
the Department of Labor and Employment (DOLE), the Department of the Interior and Local Government 
(DILG), the Department of Trade and Industry (DIT), and the Department of Foreign Affairs (DFA) through 
their embassies and consulates abroad, shall ensure that information on the benefits of the Act is properly 
disseminated to the general public, particularly to its intended beneficiaries, the OFs and their families both 
based in the Philippines and abroad. 
SEC. 11. Penalty and Adminisfrative Sanctions. - (a) Any person who shall willfully violate any 
provision of the Act shall, upon conviction, be punished with a fine of not less than Twenty-five Thousand 
Pesos (P25,OOO.OO) but not more than Fifty Thousand Pesos (P50,OOO.OO) and suffer imprisonment of not 
less than six (6) months but not more than two (2) years. 
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(b) 
In case of non-compliance with the provisions of Section 9 of the Act, the BSP shall 
impose administrative sanctions and other penalties on the concerned government financial institutions, 
including a fine of not less than Five Hundred Thousand Pesos (P500,OOO.OO). 
SEC. 12. Annual Report. - The DILG, DTI, and ESP shall submit an annual report to the 
Congress on the status of the implementation of the Act. 
SEC. 13. lmplemenfing Rules and Regulations. - The Secretary of the Department of Trade and 
Industry, in consultation with the Secretaries of the DILG, DOF, and the BSP Governor, shall formulate the 
necessary rules and regulations to implement the provisions of the Act within ninety (90) days after its 
approval. The rules and regulations issued pursuant to this section shall take effect fifteen (15) days after 
its publication in a newspaper of general circulation. 
SEC. 14. Separabilify Clause. - If any provision or part hereof, is held invalid or unconstitutional, 
the remainder of the law or the provision not otherwise affected shall remain valid and subsisting. 
SEC. 15. Repealing Clause. - Existing laws, presidential decrees, executive orders, proclamation 
or administrative regulations that are inconsistent with the provisions of the Act are hereby amended, 
modified, superseded or repealed accordingly. 
SEC. 16. €ffectivify. -The Act shall take effect fifteen (15) days after its publication in the Official 
Gazette or in at least two (2) newspaper of general circulation. 
Approved, 
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