Republic of the Philippines
HOUSE OF REPRESENTATIVES

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Quezon City, Metro Manila \ TIME:_!S8am
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EIGHTEENTH CONGRESS Vas fet >»

Second Regular Session INDEX:

House Bill No, 7619

Introduced by Representative Stella Luz A. Quimbo

EXPLANATORY NOTE,

Section 18, Article II of the 1987 Constitution provides that the State shall protect the
rights of workers and promote their welfare, while Section 19, Article XII of the 1987
Constitution mandates the State to prohibit combinations in restraint of trade and unfair
competition.

When employers in the private sector choose to which bank they will deposit their
employees’ wages, there is an unintended consequence on competition, and on employee
welfare. In such case, employees’ own choices are stifled, as they are forced to open accounts in
their employers’ chosen banks in order to receive their hard-earned money. In effect, certain
banks gain an undue competitive advantage and secure more clients than others, simply because
a singular entity — that is, the employer — handpicked them.

Employees ought to be granted the freedom to choose which banks they will conduct
financial transactions with, including collecting their compensation. In deciding which bank to
open an account with, factors such as the attractiveness of financial products, interest rates, and
the geographical location of such banks are taken into consideration. As banks would compete to
attract consumers, they would be incentivized to offer better goods and services.

However, this choice is bypassed when employers make this decision for all their
‘employees, to the detriment of the employees and of the economy. In such cases, employees in
the private sector are constrained to open and maintain accounts in banks designated by their
employers and to which their compensation will be deposited, despite potentially less favorable
terms or poorer services. Not infrequently, the location of a designated bank is far from the place
of residence of the employee, such that the employee is deprived of the convenience of
withdrawing money from nearer banks, or else must maintain several bank accounts, which
imply unnecessary additional costs. Further, unlike a few years ago, inter-banking activity has
dramatically become easier because of online banking.

This measure proposes to grant employees in the private sector the right to designate their
bank of choice, to which their wages or compensation can be deposited and conveniently
withdrawn, in the interest of promoting market competition and employee welfare.



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

STELLA L¥Z &. QUIMBO, PhD
Representative
Second District, Marikina City


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

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 7619

Introduced by Representative Stella Luz A. Quimbo

AN ACT GRANTING EMPLOYEES IN THE PRIVATE SECTOR THE RIGHT TO
DESIGNATE THE BANK ACCOUNT TO WHICH THEIR WAGES OR COMPENSATION
MAY BE DEPOSITED AND AMENDING THE LABOR CODE OF THE PHILIPPINES FOR
THAT PURPOSE,

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

SECTION 1. Short Title. ~ This Act shall be known as the “Bank Account Portability for
Workers Act.”

SECTION 2. Amendment to the Labor Code of the Philippines. — A second sentence
shall be added to the first paragraph of Article 102, Chapter III, Title I, Book Three, of
Presidential Decree No.442 as amended and renumbered, otherwise known as the Labor Code of
the Philippines, so that the entire first paragraph shall read as follows:

“ART. 102. Forms of Payment. - No employer shall pay the wages of an
employee by means of promissory notes, vouchers, coupons, tokens, tickets,
chits, or any object other than legal tender, even when expressly requested by
the employee. THE EMPLOYEES SHALL HAVE THE RIGHT TO
DESIGNATE THE BANK ACCOUNT TO WHICH THEIR WAGES
SHALL BE DEPOSITED.”

SECTION 3. Implementing Rules. - The Department of Labor and Employment shall,
within ninety (90) days from the effectivity of this Act, promulgate such rules and regulations as
may be necessary for the effective implementation of this Act.

SECTION 4, Repealing Clause, - All laws, decrees, executive orders, rules and
regulations or parts thereof, which are inconsistent with this Act, are hereby repealed, amended
or modified accordingly


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24 SECTION 5. Effectivity. - This Act shall take effect fifteen (15) days following its
25 publication in the Official Gazette or in two (2) newspapers of general circulation.