, 
FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 1010 
) 
) 
) 
Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
The State recognizes the significant contributions of overseas Filipinos to the 
national economy through the foreign exchange remittances they generate. Thus, RA 
6768, otherwise known as the "Balikbayan Program" was enacted into law on 
November 3, 1989. It provides benefits and privileges to returning Filipino citizens living 
or working abroad and their families through a tax-free purchase privilege in the amount 
of One Thousand US dollars (US$ 1,000.00) at the Philippine duty-free shops within 
forty-eight (48) hours from the time of their arrival. The program not only increases 
inflow of dollars and boosts our tourism industry but also encourages our overseas 
workers and those permanently residing abroad to come and visit the country. However, 
the President recently announced government's plan to rationalize the operation of duty-
free shops. Thus, goads sold in the shops will be confined to traditional merchandise 
such as alcoholic beverages, cigarettes and chocolate bars. As a result, government's 
continuous commitment to serve and honor these unsung heroes will be greatly 
hampered as they could no longer buy basic goods and commodities. 
As the government acknowledges the value and sacrifices made by overseas 
Filipino workers, it is just proper and appropriate to grant additional benefits to our 
country's economic agents through the enactment of legislative measure that shall 
guarantee direct benefit for them and their families. This shall likewise raise public 
consciousness on their indispensable contributions to our economy since it entails the 
partiCipation of all leading stores and'malls engaged in retail trade nationwide. 
, 
Section 18, Article II of the Constitution provides: "The labor as a primary social 
economic force. It shall protect the rights of workers and promote their welfare." Thus, 
considering the rising cost of living nowadays due to peso devaluation and the 
economic crisis, there is an urgent need . to enact a legislative measure to provide 
continues assistance to our overseas Filipino workers by re-enforcing their purchasing 
power. Since not all returning OFWs avail of the duty-free shopping privilege as they 
intend to spend their hard-earned money on the education, home improvements and 
basic needs of the family, they should be given an option to buy these goods at 
affordable prices at various leading stores nationwide. Unlike in a duty-free shop where 
they are only given forty-eight (48) hours within which to avail of this privilege, this bill 
provides that they may make their' purchases within two (2) weeks from their arrival. 
They can therefore avail of this even if they go directly to their respective home 
provinces several days after arrival from abroad. Hence, providing them a special 
privilege of VAT-free purchase of their household necessities in leading store outlets in 
Metro manila and in the provinces will greatly enhance their welfare. 
This bill, therefore, seeks to grant additional benefits to our overseas workers 
and their families by allowing them a maximum two thousand US dollars (US$2,000.00) 


purchase of VAT-free consumer goods from leading stores engage in retail trade not 
only in Metro Manila but also in their home provinces within two (2) weeks from their 
date of arrival. A coupon-type booklet shall be issued to returning overseas Filipino 
workers whose names appear in the master list furnished by the Overseas Employment 
Administration (POEA) by a representative of the Bureau of Internal Revenue inside the 
international airport. The coupon serves as proof of claiming their VAT-free purchases 
of goods. Participating store outlets are given incentives through tax credits from the 
coupons collected from overseas Filipino workers (OFWs) and their families. 
In view of the foregoing early passage of this bill is urgently requested. o 
MAN~:" 
M. LAPID 
Senator 
t1t-iJ 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No.1010 
) 
) 
) 
Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
GRANTING ADDITIONAL BENEFITS TO OVERSEAS FILIPINO WORKERS 
(OFWs) AND THEIR FAMILIES THROUGH VALUE ADDED TAX. (VAT)-
FREE PURCHASES OF CONSUMER GOODS IN ALL LEADING STORE 
OUTLETS NATIONWIDE, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. 
Declaration of Policy. - It is hereby declared the policy of 
the State to affirm labor as a primary social economic force. Thus, it shall protect the 
rights of workers and promote their welfare. 
Towards this end, the State shall grant special benefits to returning Overseas 
Filipino Workers (OFWs) and their. families by allowing them to purchase VAT-free 
household necessities and other consumer items in leading stores all over the country, 
as a gesture of 'gratitude for their indispensable contribution to the country's economy. 
SEC. 2. 
Definition of Terms. - As used in this Act, the following terms shall 
be defined as follows: 
(a.) 
Overseas Filipino wor~er (OFW) or migrant worker - a person who is 
engaged or has been engaged in a remunerated activity in a state of which he or she is 
not a legal resident; 
(b) 
Family - the spouse and children of OFW or relatives up to the second 
degree of consanguinity, if unmarried, who are permanently residing in the Philippines; 
(c) 
Consumer goods - include processed foods, medicines and health care 
services; and 
(d) 
Leading store outlets - establishments engaged in retail trade nationwide 
that shall qualify according to standards provided under the implementing rules and 
regulations to be promulgated by the concerned agencies under Sec. 9 of this Act. 
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SEC. 3. 
Special Benefit for Overseas Filipino Workers (OFWs). - In 
addition to the benefits and privilege~ provided for in RA 6768, otherwise known as the 
"Balikbayan Program", the returning documented OFWs and their families shall be 
granted a VAT-free maximum purchase in the amount of Two Thousand United States 
dollars (US$2000.00) and other acceptable foreign currencies or their equivalent in 
peso in all leading store outlets nationwide upon presentation of a coupon as provided 
herein, and subject to the limitations contained in Section 6 hereof . 
. 
SEC. 4 
Issuance of Coupon-Type Booklets to OFWs. - Upon arrival from 
abroad, an OFW shall be issued a coupon-type booklet by a representative of the 
Bureau of Internal Revenue (BIR) which office shall be posted inside the arrival area of 
the international airport upon presentation of the passport, and upon verification by the 
officer from the master list of migrant workers furnished by the inter-agency committee 
created by virtue of R.A. 8042, otherwise known as "migrant Workers and Overseas 
Filipino Act of 1995". The amount of the coupon issued shall not be more than the 
amount prescribed in this Act. 
SEC. 5. 
Participation Qf Leading Store Outlets. -
All leading stores 
engaged in retail trade nationwide shall be mandated to accept coupons presented by 
OFWs or their families whenever they make purchases of household commodities and 
other consumer goods which shall serve as evidence in claiming VAT-exempt 
purchases. 
SEC. 6. 
Incentives to Participating Outlets. -
Coupons collected by 
business outlets surrendered by OFWs and their families for their VAT-free purchases 
shall serve as basis for claiming tax 'credit by the store outlet concerned. 
SEC. 7. 
Limitations on VAT-free Purchases at all Leading Store 
Outlets. - The VAT-free purchase privilege shall be subject to the following limitations: 
I. 
It shall be availed exclusive11 by a returning documented OFW and/or the 
members of his family within two (2) weeks from the date of arrival; 
2. 
Purchases shall be m'ade in united States dollars and other acceptable 
foreign currencies or their equivalent in peso; and 
3. 
Purchases may be either locally made and/or imported goods. 
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• 
SEC. 8. 
Prohibited Act. - Any business establishment which refuses to 
accept the coupon presented by anOFW or his/her family to claim VAT-free purchases 
as provided for by this Act shall be punished by imprisonment of six (6) months to one 
(1) year or a fine of not exceeding Fifty Thousand Pesos (Php 50,000.00) and 
cancellation of their business permits, or both. 
SEC. 9. 
Implementing Rules and Regulations. -
The Department of 
Labor (DOLE), in coordination with the Department of Finance (OOF), Overseas 
Workers Welfare Administration (OWWA) and Philippine Overseas Employment 
Administration (POEA) shall promulgate necessary rules and regulations for the 
effective implementation of this Act. . 
SEC. 10. 
Periodic Report to Congress. - In order to in for the Philippine 
Congress on the implementation on the provisions of this Act, the Department of Labor 
and Employment and the Bureau of Internal Revenue shall submit a semi-annual report 
of the number of business establistiments catering to OFWs and the number of those 
who availed of the benefits and privileges provided therein. 
SEC. 11. 
Repealing Clause. - All provisions of laws, decrees, executive 
orders, rules and regulations, inconsistent herewith are hereby repealed, modified or 
amended accordingly. 
SEC. 12. 
Separability Clause. - If any part or provision of this Act shall be 
held to be unconstitutional or invalid, the other provisions hereof which are not affected 
thereby shall continue to be in full fo~ce and effect. 
SEC. 13. 
Effectivity.· This Act shall take effect fifteen (15) days following its 
publication in two (2) newspapers of general circulation. 
Approved, 
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