REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. _ 1965

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN Il

EXPLANATORY NOTE

Overseas Filipino Workers (OFWs) have been infusing a large amount of contribution into
our nation's growth and development. Their remittances, to be specific, have significantly
contributed in keeping the current account deficit manageable and in stabilizing the economy.
In this light, OFWs must be encouraged to remit their earnings from overseas and in turn, the
State should safeguard and oversee the participation of the said workers’ remittances and
savings in investment and other productive undertakings for the benefit of our national
economy.

It is an undisputed fact that most of our OFWs are subject to strenuous and risky working
conditions. Undeniably, they have been the victims of their employer's iniquitous labor
practices. Bereft of opportunities in their mother country, they manage to endure these dismal
plights abroad just to support their families left at home. Therefore, it is essential to devise a
system that can afford these modern day heroes and their families a guaranteed capital to start
off in the event that an unforeseen misfortune afflicts them in the course oftheir work

This bill essentially seeks the creation of the OFWs Pension Fund. It envisions to provide a
mechanism for a more efficient and rationalized management of the OFWs pension fund
through creating a board primarily tasked to administer and promote the OFWs and their
families’ interests. With this bill, a better promotion ofthe welfare of our OFWs will be put
forward.

In view of the foregoing, the immediateapproval of this bill is fervently sought.

2.

Pilipino Party-List

CHAN HT


waeyrausene

1
12
13
4
15

7
18
19
20

22
23
24
25
26
27
28
29
30

REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

1965
House Bill No.

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN Ll

AN ACT
CREATING THE OVERSEAS FILIPINO WORKERS PENSION FUND AND
APPROPRIATING FUNDS THEREFOR

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 Pension Fund Act of 2016".

SEC. 2. Declaration of Policy. - It is the policy of the State to protect and promote
the welfare of Overseas Filipino Workers (OFWs) and to uplift the living standards of the
workers’ families. Pursuant thereto, OFWs shall be encouraged to remit earnings from
overseas and the State shall, in turn, safeguard and oversee the participation of the said
workers’ remittances and savings in investment and other productive undertakings for the
benefit of the national economy.

SEC. 3. Definition of Terms. -

1) "Overseas Filipino Worker" shall refer to a Filipino citizen who is employed or
has been employed outside of the Philippines;

2

"Fund" shall refer to Overseas Filipino Workers Fund;

3

"Board" shall refer to Overseas Filipino Workers Pension Fund Board; and

4) "Beneficiaries" shall refer to the dependent spouse of an Overseas Filipino
Worker, his dependent children, who are the primary beneficiaries. In the absence
of the foregoing, any other person designated by the OFWs

SEC. 4. Overseas Workers Pension Fund. - In accordance with the above-stated
policy, there shall be created an Overseas Filipino Workers Pension fund. All Overseas
Filipino Workers who are duly registered as such with the Philippine Overseas Employment
Administration (POEA) and the Commission on Filipino Overseas (CPO) shall remit five
percent (5%) of their gross monthly income to the Fund for five (5) years

SEC. 5. Overseas Filipino Workers Pension Fund Board. - The fund shall be
administered by the Overseas Filipino Workers Pension Fund Board, hereinafter referred to


1
2
3
4
5
6
7
8
9

10
iw
12
13
14
15
16
7
18
19
20
2a
22
23
24
25
26
27
28
29
30
31
32
33
34.
35
36
37
38
39
40
41
42
43
44
45,
46
47
48
49
50

as the Board. The Board is hereby vested with corporate powers in accordance with existing
laws and shall be composed of the following:

1

The Secretary of Labor and Employment, as Chairman;
2

‘The Secretary of Finance, as Member;
3) The Governor of the Bangko Sentral ng Pilipinas, as Member;

4) The Administrator of the Philippine Overseas Employment Administration
(POEA), as Member, and

5

One (1) representative of the OFWs, as Member, to be appointed by the President
upon the recommendation of the Secretary of Labor and Employment. The
representative shall receive a per diem of One Thousand Pesos (P1,000.00) and
transportation cost for every Board meeting attended.

All ex-officio members of the Board shall receive no additional compensation.

The Board, shall within forty-five (45) days from the appointment of its members,
promulgate such regulations as may be necessary to implement the provisions of this Act.

In addition, the Board shall adopt the by-laws of the fund and set the date, time and
place of regular board meetings. The Board shall establish the eventual organizational
support, hire and oversee highly-competent personnel and/or existing institution to implement
the appropriate operating systems, plans and other provision of this Act.

The Board shall, on a semi-annual basis, report to the President and to Congress the
progress of its tasks and business.

SEC. 6. Powers and Functions of the OFW Pension Fund Board. - The Overseas
Workers Pension Fund Board shall have the following powers and functions:

1) To encourage the greater participation of OFWs in official remittances of pension by
way of:

a. developing a network/consortium of commercial banks to maximize the use of
their resources in serving the pension remittance needs of OFWs;

b. enlisting the support of various government agencies in information and
marketing campaign concerning pension remittance services and other
programs;

. issuing special receipts through accredited financial institutions as evidence of
the government's guarantee for the workers’ foreign exchange pension
remittances; and

d. pooling the peso equivalent of pension remittances of OFWs coursed through
the banking system.


2) To accept and administer pension funds which shall then be guaranteed by the
Republic of the Philippines;

3

To establish and implement a system to ensure that workers shall remit five percent
(5%) of their gross monthly earnings to their host countries;

4

To cause the conduct of periodic surveys about the condition of workers and workers’
pension remittances;

5

To administer other property under its custody; and

6

To adopt, amend or change its by-laws, to adopt, alter or use a seal, to enter into
contracts, to sue and be sued, and to exercise the general powers of a corporation.

SEC. 7. Administration. - They shall manage the day to day affairs of the Fund. He
shall serve as the Chief Executive Officer immediately responsible for carrying out the
programs and policies of the fund. He shall be assisted by a deputy administrator. Both the
administrators shall be appointed by the President of the Philippines.

SEC. 8. Effectivity Date of Coverage. - All OFWs are duly registered as such with
the Philippine Overseas Employees Administration and/or the Commission of Filipino
Overseas as provided in Section 4 hereof shall, for pension purposes, be compulsorily
covered on the first day of his employment in a foreign land

SEC. 9. Effect of Separation from Employment. - When a covered OFW is separated
from employment, his obligation to pay contributions arising from that employment shall
cease at the end of the month of separation. However, he shall be credited with all
contributions paid and shall be entitled to pension benefit provided under this Act, provided
he has paid the minimum number of contributions. Otherwise, his contribution shall be
refunded to him with interest to be determined by the Board.

SEC. 10. Monthly Pension. - The monthly pension of an OFW under this Act shall be
the sum of the following:

a. the average monthly salary credited multiplied by the replacement ratio;

b. one and a half percent (1% %) of the average monthly salary credit for each
credit year of service in excess often (10) years; and

c. the monthly pension shall in no case be less than Five Hundred Pesos
(P500.00) nor paid in aggregate amount of less than sixty (60) times the
monthly pension.

SEC. 11. Dependent's Pension. - The dependent's pension shall be equivalent to ten
percent (10%) of the monthly pension for each dependent's child, which shall not exceed five,
beginning with the youngest and shall be without substitution.

SEC, 12. Death Benefits. - Upon the death of a covered OFW, his primary

beneficiaries shall be entitled to the monthly pensions and dependents’ pensions: Provided,
however, That the deceased has paid at least thirty-six (36) monthly contributions prior to the

3


semester of his death, If the foregoing condition is not satisfied, his primary beneficiaries
shall be entitled to a lump sum benefit equivalent to thirty-five (35) times his monthly
pension,

SEC. 13. Permanent Disability Benefits. - When a covered OFW suffers from a
permanent total disability, and such occurs after he had paid at least thirty-six (36) monthly
contributions prior to the semester of disability, he shall be entitled to the monthly pension,
and his dependents to the dependents’ pension. If the disability occurs before he has paid
thirty-six (36) monthly contributions prior to the semester of disability, he shall be entitled to
a lump sum benefit equivalent to thirty-five (35) times the monthly pension.

SEC. 14. Rules and Regulations. - The Department of Labor and Employment shall,
in coordination with the Overseas Employment Administration and the Commission on
Overseas, formulate the necessary rules and regulations that shall govern the implementation
of this Act.

SEC. 15. Appropriation. - The amount of Two Million Pesos (P2,000,000.00) is
hereby appropriated from the National Treasury for the operation of the Fund, its secretariat
and personnel. Thereafter, the amount of Twenty Million Pesos (P20,000,000.00) is hereby
appropriated to be taken from the Contingency Fund of the Office of the President to
complement the OFWs Pension Fund Reserve.

SEC. 16. Repealing Clause. - All laws, decrees, rules and regulations inconsistent
with the provision of this Act are hereby repealed or modified accordingly.

Approved,