Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

9 Hem

Nineteenth Congress
First Regular Session

HOUSE BILL'No. 4860

Introduced by Representative Khymer Adan T. Olaso

EXPLANATORY NOTE

This bill seeks to establish a provident fund for overseas Filipino workers
(OFWs).

Section 18, Article II of the 1987 Constitution provides:

“The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their
welfare.”

Further, Section 3, Article XIII of the 1987 Constitution provides that the
State shall afford full protection to our overseas Filipino workers (OFWs), to
wit:

“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."

This provident fund is a savings scheme consisting of contributions from
the OF Ws which serves as a loan facility and provider of supplementary welfare
to the OF Ws.

This bill aims to help OF Ws to save for retirement and to grow their hard-
earned money. A board of trustees will serve as the primary manager of the


provident fund who shall be in charge of accounting, investing, loaning out of
these funds as well as the distribution of dividends and benefits to member-
beneficiaries.

Membership in the provident fund is voluntary. The OFWs may
contribute a minimum of two hundred pesos monthly up to a maximum amount
to be determined by the board.

This proposed bill will provide the OFWs with more options to save and
grow their money, and show them how much the government values their hard
work and sacrifice when they leave the country and their loved ones just to earn
more for their future and those of their families.

0»

IHYMER ADAN T. OLASO


eV aunaswne

©

10

15

16

Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

Nineteenth Congress
First Regular Session

HOUSE BIL-NO. 4860

Introduced by Representative Khymer Adan T. Olaso

AN ACT
ESTABLISHING A PROVIDENT FUND FOR 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 (OFWs) Provident Fund Act.”

SEC. 2. Declaration of Policy. — It is the policy of the State to promote
the interest and welfare of OFWs and their families. For this purpose, it is
necessary to establish a provident fund for OFWs to encourage savings and
investments and provide alternative sources of loan financing and facilities for
their other productive undertakings.

SEC. 3. Overseas Filipino Workers Provident Fund. — There is hereby

established a provident fund for OFWs which shall serve as a long-term


1

12

13

14

15

16

7

18

19

20

21

investment fund. It shall also serve as a credit and loan facility and provide

other welfare benefits to its members.

All money collected for the provident fund shall be deposited and

maintained in any authorized government servicing bank and the disbursement

of which is subject to existing accounting, budgeting and auditing laws, rules

and regulations.

SEC. 4. Board of Trustees. - The provident fund shall be managed by

the Board of Trustees, hereinafter referred to as the Board. The Board is

composed of the following:

(a)
(b)
(c)
(d)
(e)
(
(OWWA);
(g)
(h)

Secretary of Migrant Workers, as chairperson;

Administrator of the OF W Provident Fund, as vice-chairperson;
Secretary of Labor and Employment;

Secretary of Finance;

Secretary of Foreign Affairs;

Administrator from the Overseas Workers Welfare Administration

One representative of the OF Ws; and

One representative from the overseas employment and recruitment

agencies or manning agencies; as members.

‘The representative of the OFWs and the representative of the employment

and recruitment agencies shall be appointed by the President, upon the


10

a

12

16

7

18

19

20

2a

22

recommendation of the Board. They are entitled to allowances to be determined
by the Board.

SEC. 5. Powers and Functions of the Board. — The Board shall exercise
the following powers and functions:

(a) Direct the efficient and effective management of the provident
fund;

(b) Promulgate, implement and enforce the rules and regulations
governing the use, operation, and investment of the provident fund;

(c) Identify and secure other legal, valid and authorized sources of
funds to provide better credit facility and welfare benefits for the members;

(d) Establish and implement a system to efficiently collect and
facilitate the OF Ws contribution to the provident fund;

(e) Determine the type, use and amounts of loans that may be granted
and prescribe the applicable repayment schedule and interest rates;

(f) Determine the benefits due to members of the provident fund;

(g) Establish the eligibility requirements for membership, claimants
and grantees of the provident fund;

(h) Approve membership, loans to employees after considering the
poverty threshold limit, benefits, and expenditures from the provident fund;

(i) Designate or appoint officers and staff of standing committees for
the provident fund from among the regular personnel of the agency, and

prescribe their duties, and responsibilities; and


10

u

12

13

14

15

16

7

19

20

2a

22

(j) Perform such other functions as may be necessary to carry out the
objectives and purposes of this Act.

SEC. 6. Administrator. — There shall be an administrator who shall serve
as the chief executive officer of the provident fund office attached to the
OWWA. The administrator shall manage the day-to-day affairs of the provident
fund office and shall be responsible for carrying out the policies and programs
prescribed by the Board pursuant to this Act. The administrator shali be
appointed by the President of the Philippines upon recommendation of the
Board. The administrator shall have the rank, qualifications, and compensation
of a bureau director.

SEC. 7. Voluntary Membership. — Membership in the provident fund
shall be voluntary on the part of the OFWs.

SEC. 8. Member Contributions. — The OFWs may contribute a
minimum of Two hundred pesos (P200.00) monthly up to a maximum amount
to be determined by the Board.

SEC. 9. Returns and Benefits. — The return of the OF W’s contribution,
and the interest, depending on the amount of the contribution, and the period of
the OFW investment to the provident fund, shall be determined by the Board.
However, OF Ws shall be allowed to withdraw all the contributions and interests
in the event of the following:

(a) Retirement;

(b) Disability;


13

14

15

16

wv

18

20

2

22

(c) Reaching the age of sixty (60);

(d) | Withdrawal of membership; or

(e) Death.

In case of death, the legal heirs as determined by law shall be allowed to
claim the contributions and interests of the member. Aside from the returns of
the contributions stated above, additional benefits such as maternity, death,
loans, and other benefits as determined by the Board may be granted to the
members.

SEC. 10. Funding Sources. — The provident fund shall be sourced from
the following:

(a) Contributions of the members;

(b) Initial counterpart contributions of the government as support for
the reasonable operating requirements in the administration and operation of the
provident fund such as the part-time assignment of existing personnel and the
use of necessary agency facilities and equipment; and

(c) Such other fund sources as may be provided by laws, and those
which the Board may thereafter identify as legal, valid and authorized funding
sources.

SEC. 11. Enforcement Agency. — The OWWA attached to the
Department of Migrant Workers shall enforce the provisions of this Act.

SEC. 12. Implementing Rules and Regulations. — Within six (6)

months from the effectivity of this Act, the Secretary of Migrant Workers shall


issue the necessary rules and regulations for the effective implementation of this

Act.

SEC. 13. Effectivity. ~ This Act shall take effect fifteen (15) days after

its publication in the Official Gazette or in a newspaper of general circulation.

Approved,