Republic of the Philippines
HOUSE OF REPRESENTATIVES

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL No.4397

Introduced by Representative Rex Gatchalian

AN ACT
PROVIDING FOR PROTECTION OF THE REMITTANCES OF OVERSEAS
FILIPINO WORKERS

EXPLANATORY NOTE

Our Overseas Filipino Workers (OFW) are called as our modern-day heroes
because they contribute to the economic growth of our country through their
remittances and most importantly, their personal sacrifice to give their family
a comfortable life despite fighting homesickness.!

The recent data from the Philippine Statistics Authority (PSA) shows that the
number of OFWs who worked abroad was estimated at 2.3 million.? Data
released by the central bank showed personal remittances — the sum of net
compensation of employees, personal transfers, and capital transfers between
households — grew 4.4% to $3.06 billion in June of 2022 from $2.94 billion in
the same month last year.?

* DOLE, OFW: Ang Bagong Bayani. See https://car.dole.gov.ph/news/ofw-ang-bagong-
bayani/#:~:text=Our%200verseas%20Filipino%20Workers%20(OFW, comfortableX20life%20despiteX20fightin
g%20homesickness.

? DOLE, OFW: Ang Bagong Bayani. See https://car.dole.gov.ph/news/ofw-ang-bagong-
bayani/#:~:text=OurX200verseas%20Filipino%20Workers%20(OFW,comfortable%20life%20despite%20fightin
9%20homesickness.

* Lawrence Agcaoili, OFW Remittances up 4.4% to 6-month high in June. See
‘nttps://wrww-philstar.com/business/2022/08/16/2202859/ofw-remittances-44-6-month-high-june.


Unfortunately, despite their sacrifices that contributed a lot to our national
economy, the OFWs are still facing economic struggles due to lack of
Protection under our laws. There are usurious interest rates and exorbitant
fees charged by financial institutions that deplete the value of their
remittances, lack of education and training on financial literacy for OFWs and
their families, and lack of source of livelihood even after their overseas
employment.

This bill aims to address these concerns by (1) Providing discounts for services
rendered by financial institutions to OFWs in sending their money to their
immediate family members, and (2) providing financial education programs
for OFWs and their families.

HON. REX GATCHALIAN
Representative
1 District, Valenzuela City


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Republic of the Philippines
HOUSE OF REPRESENTATIVES

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL No. 4397

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Introduced by Representative Rex Gatchalian

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AN ACT
PROVIDING FOR PROTECTION OF THE REMITTANCES OF OVERSEAS
FILIPINO WORKERS

Be it enacted by the Senate and the House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Overseas
Filipino Workers (OF Ws) Remittance Protection Act”.

SEC. 2. Declaration of Policy. - The Constitution affirms that labor is
the primary social economic force and mandates the State to protect the

rights of the workers and Promote their welfare.

Recognizing the significant contribution of OFWs to the national
economy through their foreign exchange remittances, the State shall adopt
measures to protect the hard-earned money they remit home against
usurious interest rates and exorbitant fees charged by financial institutions
that deplete the value of their remittances and provide them and their
families adequate education and training on financial literacy, such as
financial planning and management of finances or savings, to help ensure a

Source of livelihood even after their overseas employment.
SEC. 3. Definition of Terms. — As used in this Act:

a. Overseas Filipino Worker (OFW) refers to a person who is to be
engaged, is engaged or has been engaged in a remunerated activity


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in a state of which the Person is not a citizen or on board a vessel
navigating the foreign seas other than a government ship used for
military or non-commercial purposes or on an installation located
offshore or on the high seas; to be used interchangeably with
migrant worker.

b. Remittance refers to the foreign exchange earnings sent home by
OFWs or their employers or agents through formal channels.

c. Remittance Fee refers to the service fee or charge imposed by bank
and non-bank financial intermediaries for sending money of OFWs
through formal channels.

SEC. 4. Applicability of this Act. - The provisions of this Act shall be
applicable to all OFW remittances, whether voluntary or mandated by law,
orders, issuances, or rules and regulations.

SEC. 5. Discount on Remittance Fees and Tax Deduction Granted to
Establishments. - Bank and non-bank financial intermediaries may impose
fees for service rendered in sending money of OFWs to their immediate family
members, subject to a fifty percent (50%) discount.

Bank and non-bank financial intermediaries Providing discounts on
remittance fees may claim discounts granted as tax deduction based on the
Cost of services rendered to OFWs. The discounts granted should be treated
as an ordinary and necessary expense deductible from the gross income of
the intermediary falling under the category of itemized deductions: Provided,
That the total deduction from gross income of establishments Providing
discounts on remittance fees shall not exceed Twenty-four thousand pesos
(P24,000) per OFW every taxable year: Provided, Further, that the Secretary
of Finance shall, upon the recommendation of the Commissioner of Internal

Revenue, issue the revenue regulation for the purpose.

SEC. 6. Requirement of Posting of the Peso Equivalent of the Currency to
be Exchanged. ~ All bank and non-bank financial intermediaries offering


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remittance services to OFWs shall be required to Post in a conspicuous place
within the establishment's premises the Philippine peso equivalent rate of the
foreign currencies being transacted, The Philippine peso equivalent of the
amount as remitted will be the same amount that will be received by the
beneficiary of the remittance.

SEC. 7. Prohibition from Raising Remittance Fees, ~ All banks and non-
bank financial intermediaries offering remittance services to OFWs are
prohibited from raising their current remittance fees without prior
consultation with the Department of Finance (DOF), Bangko Sentral ng
Pilipinas (BSP), and the Philippine Overseas Employment Administration
(POEA).

SEC. 8. Other Prohibited Acts. -The following acts are also prohibited:

(@) Misappropriation or conversion, to the prejudice of the OFW or
beneficiary, of foreign exchange remittances received in trust, or on
commission, or for administration, or under any other obligation
involving the duty to make delivery of, or to return the same, or by
denying having received such foreign exchange remittance;

(b) Taking of foreign exchange remittances without the consent of the
OFW or beneficiary;

(c) Imposition of remittance fees in excess of those prescribed under
Section 5 of this Act;

(4) Failure to post in a conspicuous place of the establishment the
Philippine Peso rate of the foreign currency being transacted; and

(e) Failure to conduct consultation with the DOF, BSP, and the POEA
before raising remittance fees.

SEC. 9. Penalties. -
(a) Any person who is found guilty of any of the acts prescribed in Section
8(a) hereof shall be punished by:


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(ii)

(iii)

(iv)

(v)

Imprisonment of four (4) years, two (2) months and one (1) day
fo eight (8) years if the amount of the remittance is over Twelve
thousand pesos (Php 12,000.00) but does not exceed Twenty-
two thousand pesos (Php 22,000.00);

Imprisonment of six (6) years to eight (8) years, adding one (1)
year for each additional Ten thousand pesos (Php 10,000,00)
but not exceeding twenty (20) years if the amount of the
remittance is more than Twenty-two thousand pesos (Php
22,000.00);

Imprisonment of two (2) years, four (4) months and one (1) day
to four (4) years and two (2) months if the amount of the
remittance is over Six thousand pesos (Php 6,000.00) but does
not exceed Twelve thousand pesos (Php 12,000.00);
Imprisonment of four (4) months and one (1) day to two (2) years
and four (4) months, if the amount of the remittance is over Two
thousand pesos (Php 2,000.00) but does not exceed Six
thousand pesos (Php 6,000.00);

Imprisonment of two (2) months and one (1) day to six (6)
months, if the amount of the remittance does not exceed Two
thousand pesos (Php 2,000.00);

(>) Any person who is found guilty of any of the acts prescribed in Section
8(b) hereof shall be punished by:

(

(ii)

(iii)

Imprisonment of six (6) years and one (1) day to ten (10) years
if the amount of the remittance is over Twelve thousand pesos
(Php 12,000.00) but does not exceed Twenty-two thousand
Pesos (Php 22,000.00);

Imprisonment of ten (10) years and one (1) day to twelve (12)
years, adding one (1) year for each additional Ten thousand
Pesos (Php 10,000,00) but not exceeding twenty (20) years if the
amount of the remittance exceeds Twenty-two thousand pesos
(Php 22,000.00);

Imprisonment of two (2) years, four (4) months and one (1) day

to six (6) years, if the amount of the remittance is over Six


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thousand pesos (Php 6,000.00) but does not exceed Twelve
thousand pesos (Php 12,000.00);

(iv) Imprisonment of six (6) months and one (1) day to four (4) years,
ifthe amount of the remittance is over Two thousand Pesos (Php
2,000.00) but does not exceed Six thousand Pesos (Php
6,000.00);

(©) Any person who is found guilty of violating Section 8 (0), (d), and (e)
of this Act shall be punished by an imprisonment of six (6) months
and one (1) day to six (6) years and one (1) day and a fine of Fifty
thousand pesos (Php 50,000.00) but not exceeding Seven hundred
fifty thousand pesos (Php 750,000.00).

Aside from the criminal liability provided in the preceding paragraphs,
institutions governed and supervised by the BSP found to have violated the
Provisions of Section 8 of this Act shall be subjected to the necessary fines,
penalties, and sanctions as Provided under the Republic Act No. 7653, or the
“New Central Bank Act”, Republic Act No. 8791 , or the “General Banking Law
of 2000”, and other pertinent banking regulations.

In case the violation is committed by a corporation or partnership, the
Kability shall be imposed on the president, managing direction or partner,
general manager, or other responsible officers of the corporation or
partnership.

SEC. 10. Mandatory Financial Education for OFWs and their Families. —
The DOF, together with the BSP, POEA, and other agencies, shall ensure that
@ mandatory financial education program will be provided to OFWs and their
families.

The program shall include instruction on financial management,
budgeting, investment options and similar topics, which shall educate the

OFWs and their families in the handling of their earnings and remittances.


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SEC. 11. Liability under the Revised Penal Code and Other Laws, -
Prosecution under this Act shall be without Prejudice to any liability for
Violation of any provision of the Revised Penal Code or other laws.

SEC. 12. Implementing Agency. - The DOF Shall, in consultation with the
BPS, POEA, Overseas Workers Welfare Administration, Department of Foreign
Affairs, Bankers Association of the Philippines, Association of Bank
Remittance Officers, Inc., Philippine Association of Foreign Exchange Dealers,
Money Changers and Remittance Agents, Inc., representatives from the
placement or recruitment industry, non-government organizations advocating
the rights and welfare of OFWs, and other stakeholders, issue the necessary
tules and regulations for the effective implementation of this Act, within
ninety (90) days after the approval of this Act,

SEC. 13. Repealing Clause. - All laws, decree, orders, rules and
regulations, and other issuances, or part thereof, inconsistent with this Act
are hereby repealed or modified accordingly.

SEC. 14. Separability Clause. ~ If any provision or part of this Act is
declared invalid or unconstitutional, the remaining parts or provisions not
affected shall remain in full force and effect.

SEC. 15. Effectivity. - This Act shall take effect fifteen (15) days after its
Promulgation in the Official Gazette or in a newspaper of general circulation,

Approved,