SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 1278 
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Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
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Article XIII, Section 3 of the Constitution provides that 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. 
All over the world, the hard-earned dollars of our Overseas Filipino Workers 
(OFWs) playa vital role in pump-priming out economy to levels that have allowed us to 
achieve growth as a nation. In a statement made sometime in September, 2012, the 
National Economic and Development Authority (NEDA) recognized that OFW 
remittances are important because these promote inclusive growth in our economy. 
This is because OFW remittances trickle down directly to households. 
The proposed measure seeks to support the OFW sector by providing credit 
facilities to OFWs. These credit facilities may be availed of prior to an OFW's departure 
from the Philippines. Any OFW who has a valid contract, as certified by the POEA, may 
avail of a loan in an amount not exceeding One Hundred Thousand Pesos 
(Php100,OOO.OO) from the OWWA to defray the living expenses of his/her family during 
the first few months of his/her absence as weH as to answer for other expenses that 
may be incurred during the pre-employment stages. 
Considering its beneficial implication and the impact of OFW income to the 
economy, the immediate passage of this measure is earnestly sought. 
Senator 


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SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
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First Regular Session 
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AUG 13 P 3 :11 
SENATE 
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1278 
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S. No. 
Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
ESTABLISHING A CREDIT ASSISTANCE PROGRAM 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 
Workers Credit Assistance Act of 2013". 
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SEC. 2. 
Declaration of Policy.· It is the policy of the State to protect the 
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interest of overseas workers by providing them access to credit facilities to aid with 
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expenses that may be incurred prior to their departure from the Philippines. 
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SEC. 3. 
Loans . • An overseas contra9t worker with a valid contract from an 
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employment agency duly accredited by the Philippine Overseas Employment 
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Administration (POEA) may avail of a loan in an amount not exceeding One Hundred 
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Thousand 
Pesos (Php100,OOO.OO) from the Overseas Workers and Welfare 
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Administration (OWWA) either to defray the living expenses of his/her family during the 
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first months of his/her absence, or to answer for recruitment expenses such as, but not 
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limited to, placement fees, documentation costs, and airfare: Provided, That any of the 
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members of his/her family not otherwise disqualified by law shall participate in the loan 
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as co-borrower and shall execute the necessary documentation therefor: Provided, 
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further, That the loan shall be granted and released by the OWWA only upon 
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·submission· of ·thefollowing documents, duly certified in writing by the recruitment 
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agency or direct hirer as to authenticity, and properly certifiedlverified by the POEA: 
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(a) Employment contract; 
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(b) Plane ticket; and 
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(c) Proof of opening of bank account, in accordance with Section 4 of this Act. 
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The loan shall be entered into by and between the overseas workers and 
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OWWA, with the next-of-kin as the guarantor. The loan shall be covered with loan 
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redemption insurance from the Government Service Insurance System (G818), the 
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premium of which shall be paid by the applicant overseas worker. 
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SEC. 4. 
Establishment of Bank Account. - Overseas workers availing of 
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the loan mentioned in the preceding section shall establish a bank account with any 
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banking institution duly authorized to do business in the Philippines, in the his/her name 
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and/or in the name of the member of his/her immediate family designated as co-
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borrower to the loan. Said bank account shall serve as the destination account to which 
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the proceeds of the loan shall be released and credited, as the destination account for 
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monthly remittances of salaries and wages earned'abroad, and the source account from 
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which payments of the loan shall be made. The overseas worker-borrower shall remit 
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his earnings abroad only through the said bank account. 
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SEC. 5. 
Payment of Loan - The loan shall be paid in twelve (12) equal 
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monthly installments at a preferred interest rate not to exceed six percent (6%) per 
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annum. Payment shall be made through the bank account to be established under the 
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immediately preceding section and for this purpose the overseas worker-borrower shall 
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execute the necessary authority for the bank to withhold the monthly loan amortizations 
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from remittances deposited therein. 
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SEC. 6. 
Sanctions - Failure to pay the loan, violation of the terms thereof, 
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and/or violation of any of the obligations imposed herein shall be a ground to bar the 
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defaulting overseas worker-borrower from future overseas employment. 
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SEC. 7. 
Implementing Rules and RegUlations. - The OWWA shall issue 
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rules and regulations for the effective implementation of this Act. 
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SEC. 8. 
Appropriations. - The amount needed to implement the provisions 
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of this Act shall be appropriated out of the Overseas Welfare Fund. 
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SEC. 9. 
Separability Clause - If any proVision or part hereof is held invalid 
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or unconstitutional, the remaining provisions or parts not otherwise affected shall remain 
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valid and subsisting. 
,.,. 
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SEC. 10. 
Repealing Clause. -
All laws, executive orders, decrees, 
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instructions, rules and regulations, or parts thereof contrary to or inconsistent with any 
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provision of this Act are hereby amended, repealed, or modified accordingly. 
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SEC. 11. 
Effectivity. - This Act shall take effect fifteen (15) days after its 
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publication in the Official Gazette or in at least two (2) newspapers of general 
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circulation. 
Approved, 
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