Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

nouse snino._ 3071

Introduced by HON. ROY V. SENERES

EXPLANATORY NOTE

As one of the major labor-sending countries in the world, the Philippines
ranks high in the list of top receivers of remittances from Overseas Filipino
Workers (OFWs) after China, India and Mexico. OFW remittances represent
13.5% of the country’s Gross Domestic Product (GDP), the largest in proportion
to the domestic economy compared to other countries like China, India and
Mexico. OFW remittances are also credited) for the Philippines’ recent economic
growth resulting to investment status upgraties from credit ratings agencies such
as Fitch and Standard & Poors.

The economic contribution of OFWs has helped reduced poverty incidence
and increased the welfare of their families in the Philippines. These remittances
send children to schools, build decent houses, sustain health, and even create
small and medium businesses. All these lead to the improvement of the socio-
economic status of overseas Filipinos’ familiés and help produce economic growth
and development.

In 2009, despite the global financial crisis, remittances from overseas
Filipinos remained strong. Around US$17.3 billion flowed into the country, which
Qreatly improved the country’s fiscal position. This was the reason why the
Philippines did not experience the full brunt of the global financial crisis. The
remittances kept Philippine financial institutions afloat, which stabilized the local
economy.

The National Statistics Office (NSO) has reported that the total remittance
sent by OFWs during the period April to September 2012 was estimated at 165.6
jon pesos. This amount is higher compared to the previous year’s reported
remittances (156.3 billion pesos). The amount of the total remittances covered
cash sent home (120.1 billion pesos), cash brought home (36.5 billion pesos) and
remittances in kind (9.0 billion pesos). The majority of OFWs sent their
remittance through banks (70.8%). Other cash remittances were sent through
door-to-door (3.7%), agencies or local offices (2.5%), friends or co-workers
(0.4%) or through other means (22.6%).

In the effort to protect and recognize the valuable contribution of OFWs
and to facilitate the inflow of remittances to their families in the Philippines, the
proposed bill seeks to establish a Foreign Remittance Regulatory Commission, an
independent regulatory body under the Office of the President, tasked to adopt,



formulate and implement policies, guidelines and rules regulating the imposition
of fees on fund transfers coursed through banks, private remittance companies
and other remittance agents to avoid instances of charging exorbitant remittance
or service fees and inaccurate exchange rates; providing efficient delivery of
remittance services; enhancing access to formal remittance channels in the
source and destination countries; and improving transparency if remittance
transactions,

In view of the foregoing, the approval of this Gill is earnestly spught

a



Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

3071

HOUSE BILL NO.

Introduced by HON. ROY V. SENERES

AN ACT
ESTABLISHING AN OVERSEAS FILIPINO WORKERS REMITTANCE
REGULATORY COMMISSION AND APPROPRIATING FUNDS THEREFOR

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

SECTION 1. Title. - This Act shall be known as the “Foreign Remittance
Regulatory Commission Act of 2013”.

SEC. 2. Declaration of Policy. - It is the declared policy of the State to
uphold, at all times, the dignity of its citizens whether in country or overseas, in
general, and Filipino migrant workers, in |particular. The State shall afford full
protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all. Towards this
end, it shall be the State’s responsibility to protect Overseas Filipino Workers
(OFWs), recognizing their significant contribution to the national economy
through their foreign exchange remittances,

SEC. 3. Definition of Terms. - For purposes of this Act, the following
terms shall be defined as:

a). “Commission” shall refer to the Foreign Remittance Regulatory
Commission created under this Act;

b). "Overseas Filipino Worker (OFW) or used interchangeably with Migrant

Worker” 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 citizen, or
‘on board a vessel navigating the foreign seas other than a government ship used
for military or non-commercial purposes, ar on an installation located offshore or
on the high seas;

¢), “Overseas Filipinos” are migrant workers, other Filipino nationals and
their dependents abroad;

4). “Documented Overseas Filipino, Workers (OFW) or Migrant Workers”
refer to those:

1), who possess valid passports and visas or permits to stay in the

host country and whose contracts of employment have been processed

by the POEA; or
2). Registered by the Migrant Workers and Other Overseas Filipinos
Resource Center or by the Embassy.
Those who do not fall under the preceding paragraph are considered
undocumented OFWs or Migrant Workers.
). “Undocumented Filipinos” refer to those:
1).who acquired their | passports through fraud or
misrepresentation;
2). who possess expired visas or permits to stay;
3). who have no travel document whatsoever;
4). who have valid but inappropriate visas;
5).who leave the country to work abroad without any.
documentation from the POEA;
6). who initially have papers from the POEA but whose validity
expired.

A). “Remittance” is a transfer of money by an overseas Filipino worker to
his or her home country or simply sending amount from one country to another.
9). “Remittance Fee" is a charge for processing/sending the remittance

from the country of origin to the country of destination and/or charge for

receiving the remittance at the country of destination.



h). “Exchange Rate” rate of conversion from foreign currency to local
currency, e.g. peso-dollar rate.

SEC. 4. Creation of an Overseas Filipino Workers Remittance

Regulatory Commi:

ion. - Pursuant to the preceding section and in order to
attain the objectives and purposes of this Act, an independent commission is
hereby created, to be known as the Foreign Remittance Regulatory Commission,
which shall hereinafter be referred to as the Commission, and shall be organized
after the approval of this Act.

For budgetary purposes, the Commission shall be under the Office of the

President.

(2) Composition. - The Commission shall be composed of a
Chairperson and two (2) Associate Commissioners. The Chairperson
and Commissioners shall be citizens and residents of the
Philippines, at least forty 40 but not more than sixty (60) years of
age, of good moral character and of recognized probity and
Independence. The Chairperson and two (2) Associate
Commissioners shall be of recognized competence in the field of
law, banking, economics or finance, commerce, accounting or
management. They must haye actively practiced their professions
for at least ten (10) years, but must not have been candidates for
any elective national or local office in the immediately preceding
elections, whether regular or special.

(b) Term of Office. - The Chairperson and the Associate Commissioners
shall be appointed by the President of the Philippines. The term of
office of the Chairperson and|the Associate Commissioners shall be
six (6) years without reappointment. In case a vacancy occurs
before the expiration of the term of office, the appointment to such

vacancy shall be only for the unexpired term of the predecessor. In



©)

(a)

(e)

10)

no case shall any Member be appointed or designated in a
temporary or acting capacity.

Prohibition and Disqualifications. - The Chairperson and Associate
Commissioners shall not, during their tenure, hold any other office
‘of employment. They shall strictly avoid conflict of interest in the
‘conduct of their office.

Compensation of Commissioners. - The Chairperson of the
Commission shall hold the rank of and shall have the privileges and
compensation equivalent to that a Department Secretary, while the
‘Associate Commissioners shall each hold the rank of and shall have
the privileges and compensation equivalent to that of a Department
Undersecretary.

Quorum. - All three (3) members of the Commission shall
constitute a quorum and the affirmative vote of two (2) shall be
necessary for the adoption of any rule, ruling, order, resolution,
decision or other acts of the Commission.

‘Staff. ~ The Commission shall appoint an adequate staff which shall
be headed by an Executive Director, fix the compensation in
accordance with the Reyised Compensation and Position
Classification Law and detetmine their status, qualification and
duties. The Executive Director shall be appointed by the President
and shall have relevant experience in any of the fields of law,
economics, banking, commerce, finance or management for at
least ten (10) years. Provided, That the Executive Director shall be
a Career Executive Service Dfficer (CESO). The members of the
technical staff, except those performing purely clerical functions,

shall possess at least a Bachelor's Degree in the following lines of

specialization: economics, Jaw, banking, accounting, finance,

commerce or management.



SEC. 5. Original and Exclusive Jurisdiction, Powers and Functions.
= The Commission, consistent with sound banking practices, shall have original
and exclusive jurisdiction to adopt, formulate and implement policies, guidelines
and rules:

(4). regulating the imposition of fees on fund transfers coursed through
banks, private remittance companies and other remittance agents to avoid
instances of charging exorbitant remittance fees and inaccurate exchange rates;

(2). providing efficient delivery of remittance services;

(3). enhancing access to formal remittance channels in the source and
destination countries; and

(4). improving transparency in remittance transactions.

SEC. 6. Penalty.

Any violation of this Act shall be punished with a fine
of not less than Fifty Thousand Pesos (P50,000.00) or imprisonment of not less
than six (6) months or both at the discretion of the court. If the offense is
committed by a corporation, firm, association, partnership, or other entity, the
penalty shall be imposed upon the guilty officer or officers of such banks,
corporation, firm, association, partnership of entity.

SEC. 7. Appropriations. - The amount necessary to implement the
provisions of this Act shall be included in the annual General Appropriations Act.
However, for the initial budgetary requirements of the Commission, the amount
of Fifty million pesos (P50,000,000.00) is hereby appropriated.

SEC. 8. Repealing Clause. - All laws, decrees, executive orders, rules
and regulations inconsistent herewith, are hereby repealed or modified
accordingly.

SEC. 9. Separability Clause. - If any provision of this Act is held invalid

or declared unconstitutional, the other provisions which are not affected thereby

shall remain valid and subsisting.



SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in two (2) newspapers of general

circulation, whichever comes first.

Approved,