THIRTEENTH CON 
OF THE PHILIPPIN 
First Regular Session 
ESS OF THE R 
S E N A T E  
S. NO. 
Introduced by Senator Juan M. Flavier 
EXPLANATORY NOTE 
This bill was previously filed by my esteemed colleague Sen. Juan Ponce 
Enrile during the 1 lth 
Congress. Considering the social relevance of the bill 
and the impact it would have on the lives of our people 1 sought his 
permission to re-file it again, to which he graciously agreed to. 
The State recognizes the significant contributions of overseas Filipinos to the 
national economy through the foreign exchange remittances they generate. 
Thus, R.A. 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$lOOO.OO 
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 continuos 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 If 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 continuos assistance to our 
overseas Filipino workers by re-enforcing their purchasing power. Since not 
all returning QFWs 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 m t r o  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. 
1 
IER 


THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E  
S .  NO. 
Introduced by senator Juan M. Flavier 
AN ACT 
GRANTING ADDITIONAL BENEFITS TO OVERSEAS FILIPINO 
WORKERS (OFWs) AND THEIR FAMILIES THROUGH VALUE ADDED 
LEADING STORE OUTLETS NATIONWIDE, AND FOR OTHER 
PURPOSES 
TAX (VAT)- FREE PURCHASES OF CONSUMER GOODS IN ALL 
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, and in line with the declaration of the 
year 2000 as the "Year of Overseas Filipino Workers". 
SEC. 2. 
Definition of Terms. 
- 
As used in this Act, the 
following terms shall be defined as follows: 
(a.) 
Overseas Filipino worker (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; 
Consumer goods 
- 
include processed foods, medicines 
and health care services; and 
Leading store outlets 
- 
establishments 
engaged 
in 
retail trade nationwide that shall qualify according to0 standards 
provided under the implementing rules and regulations to be 
promulgated by the concerned agencies under Sec. 9. 
3. 
Special Benefit for Overseas Filipino Workers (OFWs). 
In addition to the benefits and privileges provided for in R.A. 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 bs 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 of Lead'ng 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 
tot he 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 made in united States dollars and other 
acceptable foreign currencies or their equivalent in peso; and 
Purchases may be either locally made and/or imported goods. 
3. 
SEC. 8. 
Prohibited Act. 
- 
Any business establishment 
wich refuses to accept the coupon presented by an OFW or his 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 (P50,OOO.OO) and cancellation of their business permits, or 
both. 
SEC. 9. 
Implementing Rules and Regulaitons. - 
The 
Department of Labor (DOLE), in coordination with the Department of Finance 
(DOF), 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. I O .  
Periodic Report to Congress. - 
In order to in for 
the Phillipine 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 


establishments catering to OFWs and the number of those who availed of the 
benefits and privileges provided therein. 
SEC. I d .  
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 force and 
effect. 
SEC. 13. 
Effectivity. - 
This Act shall take effect fifteen (15) 
days following its publication in two (2) national newspapers of general 
circulation. 
Approved,