Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasan Hills, Quezon City

FIFTEENTH CONGRESS

First Regular Session .

HOUSE BILLNo. __989

Introduced by Honorable AUGUSTO BOBOY SYJUCO

The increasing rate of globalization in the twenty-first century brought about by
revolutionary technological advances has witnessed the transformation of relationships
among countries and peoples. Physical distance between nations has been significantly
reduced, and people have acquired greater access to goods, services, capital, and
information. These conditions have allowed an increasing number of people to live and
work in countries other than their own.

The creation of an Overseas Filipino Workers Bank (OFW Bank) is h
proposed to promote and advance the financial welfare of our Overseas Fi
Workers’ (OFWs). As the State recognizes the OFWs as the major force in the labor
front today, it shall likewise provide the proper venue to address their financial needs,
among others.

It has become apparent that the movement not only of goods and basic services
to our people should be safeguarded by the State, but more so of its people. As the
patterns of migrant labor continue to become more complex and amalgamated,
globalization and borderless economies will further blur geographical boundaries and
facilitate the movement of labor between countries.

As hundreds of thousands of Filipino men and women work with sweat and blood
in foreign lands to assure a better life for their families back home, the creation of an
OFW Bank will be a gift to our modern-day heroes. It will finally give them the venue to
enhance their investment potentials while addressing their various financial needs and
concerns.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

“a

ge

AUGUSTO BOBOY SYJUCO
2™ District, Province of lloilo


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasan Hills, Quezon City

FIFTEENTH CONGRESS

First Regular Session

HOUSE BILL NO. 980

Introduced by Honorable AUGUSTO BOBOY SYJUCO

AN ACT
CREATING THE OVERSEAS FILIPINO WORKERS BANK, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES.

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

SECTION 1. Creation. — There is hereby created a bank to be known as the
Overseas Filipino Workers Bank, which shall be commonly called the OFW Bank and
hereinafter called the “Bank.”

SECTION 2. Terms of Existence. ~ The legal existence of the Bank shall be for a
period of fifty years counting from the date of approval hereof.

SECTION 3. Supervisory and Regulatory Powers of the Bangko Sentral ng
Pilipinas. - The Bank shall be subject to such rules and regulations as the Bangko
Sentral ng Pilipinas may from time to time promulgate.

The Philippine Deposits Insurance Corporation (PDIC) shall cover all deposits of
the Bank.

SECTION 4. Principal Place of Businesses, Branches and Remittance Centers.
= The Bank's principal domicile and place of business shall be in Metro Manila.
Branches or agencies may be established in the provinces and cities as well as abroad
to effectively and efficiently address the banking needs of the overseas workers, their
families, and the banking public in general.

Likewise, it shall also establish branches in strategic locations all over the
country, to service the remittance requirements of the migrant workers.


SECTION 5. Purposes. — The purposes in establishing an OFW Bank are:

1. To encourage OFWs to remit their foreign earnings through the banking
system;

2. To assist the OFWS in providing efficient service in the remittances of their
earnings from their foreign work stations to their beneficiaries in the
Philippines; :

3. To encourage savings among the OFWS and their families and at the same
time extend credit facilities to them;

4. To enable the country derive the maximum benefits from the foreign income
of OFWs;

5. To promote and provide OFWs a well-organized and professionalized system
of banking in order to secure and protect their earnings abroad.

SECTION 6. Powers and Functions. - The Bank shall be a corporate body and

shall have the following powers in general:

1. To grant loans and other financial assistance particularly to OFWs and
their family members for the development of small-scale and medium-
scale commercial enterprises;

2. To grant loans and other financial assistance to OFWs applying or re-
applying for overseas employment to defray the payment of placement
fees and other expenses thereof;

3 To receive deposits and accept property, real or personal, as collateral or
security;

4 To acquire and own real and personal property and to sell, mortgage or
otherwise dispose of the same;

5 To prescribe, repeal and alter its own by-laws, to determine its operating
policies, and to issue such rules and regulations as may be necessary to
achieve the main purpose for the creation of the Bank;

6. To adopt, alter and use a corporate seal; to sue and be sued, make
contracts, to exercise the general powers of a corporation as provided in
Batas Pambansa Big. 68, otherwise known as the Corporation Code of the
Philippines, and the powers of the bank of its category under the General
Banking Law. Likewise, the Bank can borrow money from both local and
foreign sources. Such loans shall be subject to approval by the President
of the Philippines and shall be fully guaranteed by the Government of the
Philippines; -

7. Upon recommendation of the Board of Investments, to hold, own,
purchase, acquire, sell or otherwise invest or reinvest in stocks, bonds or
other securities capable of giving the Bank a reasonably assured income
sufficient to support its financing activities and gives its private
stockholders a fair return on their holdings; Provided, however, That
pending the organization of the Board of Investments, the Bank may
exercise the powers herein provided without the recommendation of the
Board of Investments: Provided, further, That in case of dissolution of the
OFW Bank all unsold public lands transferred to it which may be allocated


to the Government of the Philippines in the course of liquidation of the
business of the Bank shall revert to the National Treasury; and

8. To provide, free of charge, investment counseling and technical services
to OFWs and their families. For this purpose, the OFW Bank may contract
the services of private consultants.

SECTION 7. Issuance of Bonds. - The OFW Bank shall, upon recommendation__.
by the Board of Trustees and approval of the Monetary Board of the Central Bank, issue
bonds, debentures and other evidences of indebtedness at such terms, rates and
conditions as the Bank may determine up to an aggregate amount not exceeding, at
any one time, five times its unimpaired capital and surplus. Such bonds and other
obligations shall be secured by the assets of the Bank and shall be fully tax exempt both
as principal and income. Said income shall be paid to the bondholder every six (6)
months from the date of issue. These bonds ahd other obligations shall be fully
negotiable and unconditionally guaranteed by the Government of the Republic of the
Philippines and shall be redeemable at the option of the Bank at or prior to maturity,
which in no case shall exceed twenty-five years. These negotiable instruments of
indebtedness shall be mortgageable in accordance with established banking
procedures and practices to government institutions not to holders of such bonds to
make use of them in investments in productive enterprises. They shall also be accepted
as payments for reparation equipment and materials. They shall also be accepted as‘
payments for reparation equipment and materials.

The Board of Trustees shall have the power to prescribe rules and regulations for
the registration of the bonds issued by the Bank at the request of the holders thereof.

SECTION 8. Special Guaranty Fund. - In the event that the Bank shall be
unable to pay the bonds, debentures, and other obligations issued by it, a fixed the
amount thereof shall be paid from a special guaranty fund to be set up by the
Government, to guarantee the obligation of the OFW Bank, and established in
accordance with this Section, and thereupon, to the extent of the amounts so paid, the
Government of the Republic of the Philippines shall succeed to all the rights pf the
holders of such bonds, debentures or other obligations: Provided, however, That for the
next four years after the establishment of the Bank, the payment to the special guaranty
fund should not exceed One Billion Pesos (P100,000,000,000.00) per year, after which
period, the Government shall pay into the guaranty fund the sum of Five Hundred
Million Pesos (P500,000,000.00) each year until the cumulative total of such guaranty
fund is no less than twenty percent (20%) of the outstanding net obligation of the OFW
Bank at the end of any single calendar year.

The guaranty fund shall be administered by the Central Bank of the Philippines in
the manner most consistent with its charter. For the purpose of such fund, there shall be
appropriated annually the sum of One Hundred Million Pesos (P100, 000,000.00) in the
National Treasury

SECTION 9. Receiving Payments and Time Deposits. - The Bank, under. the
supervision of the Monetary Board and subject to the provisions of the General Banking
Act, shall receive savings and time deposits from OFWs and their families, and for this
purpose, establish, and maintain branches and offices in such areas where facilities for
such a service do not exist or cannot be adequately provided by other deposit
institutions. The Monetary Board shall supervise and authorize the Bank to receive
savings and time deposits from the public in areas where facilities for such a service do
not exist or cannot be adequately provided by other deposit institutions.

SECTION 10. Capital. - The authorized capital stock of the Bank shall be One
Billion Five Hundred Million Pesos (P1, 500,000,000.00). This amount shall be divided


into ten million shares (10,000) at One Hundred Fifty Pesos (P150.00) par value per

* share; Provided, the amount of One Billion Pesos (P1, 000,000,000.00) representing
one billion five million shares shall be subscribed and fully paid by the government.
Provided, further, that the remaining amount of Five Hundred Million Pesos
(500,000,000.00) capital shall be made available for subscription to the OFWs and their
beneficiaries.

SECTION 11. Board of Directors. - A Board of directors, consisting of a
Chairman, shall govern the Bank and nine (9) members, four (4) of which, including the
Chairman, shall be appointed by the President of the Republic of the Philippines and the
remaining five (5) shall be elected by the stockholders at each annual meeting.

The Board of Directors shall exercise such powers, which shall be so granted to
them by the stockholders in accordance with the applicable laws and government
regulations. The Board of Directors shall adopt such rules to effectively carry out the
objectives and purposes of this Act. However, only natural-born Filipino citizens may be
qualified to become director of the Board.

SECTION 12. Officers of the Bank. - The affairs of the Bank shall be managed
by a President, an Executive Vice President who shall be appointed by the President of
the Republic of the Philippines. Similarly, a set of officers shall be appointed by the
Board of Directors, Provided, they qualify under the existing rules and regulations of the
Bangko Sentral ng Pilipinas and other applicable laws.

The specific duties and responsibilities of each officer shall be so defined in the
By-Laws. Only natural-born Filipino citizens may be qualified to be officers of the Bank.

SECTION 13. By-Laws. — The board of directors shall adopt the By-laws, which
shall govern the functional and administrative operation of the Bank within thirty (30)
days from the approval of this Act.

SECTION 14. Separability Clause. - If any provision, or part of this Act or the
application thereof to any person, association or circumstances is held invalid, the other
pertinent provision or part of this Act and their application to such person, association or
circumstances shall not be affected thereby.

SECTION 15. Repealing Clause. — All other laws, decrees, executive orders,
proclamations, rules and regulation or parts thereof inconsistent with any of the
provisions of this Act are hereby repealed, amended or modified accordingly.

___ SECTION 16. Effectivity. ~ This Act shall take effect within fifteen (15) days from
its publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved,