REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

uno, 4740

Introduced by Rep. AURELIO "DONG" D. GONZAL

EXPLANATORY NOTE

The 1987 Constitution provides in Article II, Section 9 that:

SECTION 9. The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the people from
poverty through policies that provide adequate social services, promote full
employment, a rising standard of living, and an improved quality of life for
all.

It likewise provides in Section 18 that:

TION 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.

It further provides in Section 20 that
SECTION 20. The State recognizes the indispensable role of the private
sector, encourages private enterprise, and provides incentives to needed
investments.

‘The principal consideration of our Overseas Filipino Workers in working abroad is to
provide for their families. These OFWs endure living away from their families and in a
foreign land in order to provide a better life for their loved ones by sending a portion of their
earnings, in a form of remittances, to their families back home. According to Bangko Sentral
ng Pilipinas Governor Amando M. Tetangco, Jr., in 2016 personal remittances from overseas
Filipinos for the first ten months of the year reached US$24.4 billion, equivalent to a 3.9
percent growth year-on-year, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr
announced today. These remittances sent by OFWs to their families in the Philippines are
then used to cover household expenses, tuition fees, and other expenses of the family.



These OFW remittances are transferred from the OFWs, to intermediaries such as
financial and non-bank financial institutions, before it reaches beneficiaries. In the course of
the transfer of the funds, the amounts remitted are subjected to several fees and high
remittance charges which result to the depletion of the amount to be remitted and received by
beneficiaries.

In view of the effect of this high remittance charges on the hard earned wages of
OFWs, which should instead be enjoyed by them and their families, it becomes a matter of
utmost urgency and necessity for Congress to enact a law that will adequately and effectively
put a stop to the imposition of high remittance charges and protect the remittances sent by
OFWs, as well as provide education for them and their families on how they can manage
their remittances.

‘The proposed measure seeks to provide for a limit on the amount of remittance fees to
be imposed, provide for discounts to OFWs and provide for tax incentives to establishments
providing for such discounts. It also encourages establishments and institutions to provide for
loans to OFWs and mandates government agencies to provide for financial education to
OFWs and their families.

Itis for this reason that the early approval of the bill is earnestly sought.

RE}. ING” GONZALES, JR.
fict, Pampanga


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

4740

H. NO.

Introduced by Rep. AURELIO "DONG" D. GONZALES, JR.

AN ACT PROVIDING FOR PROTECTION OF THE REMITTANC
OVERSEAS FILIPINO WORKERS, AND FOR OTHER PURPOS|

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 “OF W Remittance
Protection Act of 2017”.

SECTION 2. Declaration of Policy.~ The States upholds the dignity of all of its
, whether residents of the Philippines or overseas.

The State shall afford full protection to labor, local and overseas, organized and
unorganized and shall promote full employment and equality of employment opportunities
for all.

The State recognizes the significant contribution of Overseas Filipino Workers to the
national economy through their foreign exchange remittances. Towards this end, the State
shall ensure that effective mechanisms be instituted to ensure the protection of the rights and
interests of Overseas Filipino Workers, particularly, the protection of their foreign exchange
remittances, The State likewise guarantees the protection of OFW remittances from usurious
interest rates and fees charged by financial institutions.

The State guarantees protection of the foreign exchange remittances of Overseas
Filipino Workers. With this regard, the State recognizes the right of Overseas Filipino
Workers to access to courts, quasi-judicial bodies and adequate legal assistance. Towards this



end, the State ensures that no OF W shall be denied access to courts, quasi-judicial bodies and
to adequate legal assistance by reason of poverty.

‘The State recognizes the need to educate Overseas Filipino Workers and their families
on financial planning, management of finances and savings. Towards this end, the State
undertakes to provide programs and seminars to ensure the education of OFWs and their
families.

SECTION 3. Definition of Terms. For purposes of this Act, the following terms shall
be defined as follows:

(a) “Overseas Filipino worker” refers to a person who is to be engaged, is engaged
or has been engaged in a remunerated activity in a state of which he or she is not a citizen or
on board a vessel navigating the foreign seas other than a government ship used for miliatry
or non-commercial purposes or on an installation located offshore or on the high seas; to be
used interchangeably with migrant worker.

(b) “Overseas Filipino Workers' (OFW) remittance” is defined as the foreign
exchange earnings sent home by Filipinos working abroad either through formal or informal
channels,

(c) “Remittance Fee” is defined as the service fee or charge imposed by financial
intermediaries and non-bank financial intermediaries for sending money of OFWs through
formal or informal channels.

(d) “Immediate Family Membei
or affinity.

is relative up the fourth degree of consanguinity

Section 4, Applicability of this Act. The provisions of this Act shall be applicable to
all OFW remittances, whether voluntary or mandated by law, orders, issuances or rules and
regulations.

Section 5, Access to Credit, Loans and Accommodations. Financial intermediaries
and non-bank financial intermediaries are directed to provide assistance to OF Ws through the
grant of credits, loans, and accommodations,

Subject to the written consent of the OFW concerned, remittances may be used as
collateral for the credit, loan, or accommodation obtained.

Section 6. Discounts on Remittance Fees and Discounts Granted to
Establishments. Financial intermediaries and non-bank financial intermediaries may impose
fees for services rendered in sending money of OFWs to their immediate family members,
subject to the following discounts:


| Amount to be Remitted |Diseount

Not more than USD 500 or its equivalent in other currencies |'50% of the remittance fee

USD 500 —not more than USD 1,000 oF its equivalent 40% of the remittance fee

30% of the remittance fee

USD 1,000 - not more than USD 1,500 or its equivalent

| USD 1,500 ~ not more than USD 2,000 or its equivalent | 20% of the remittance fee

| More than USD 2,000 or its equivalent in other currencies 10% of the remittance fee

Provided that, financial intermediaries and non-bank financial intermediaries shall not
impose a minimum amount of remittance that can be sent out by OF Ws through their
channels.

All establishments providing discounts on remittance fees may claim the discounts
granted as a tax deduction based on the cost of services rendered to OFWs, The discounts
granted to OFWs by financial or non-bank financial intermediaries shall be treated as an
ordinary and necessary expense deductible from the gross income of the seller falling under
the category of itemized deductions.

Section 7. Requirement of Posting of the Peso Equivalent of the Currency to be
Exchanged. All financial intermediaries and non-bank financial intermediaries offering
remittance services to OFWs shall be required to post in a conspicuous place within the
establishment's premises the Philippine peso equivalent rate of the foreign currencies being
transacted, The Philippine peso equivalent of the amount to be remitted will be the same
amount that will be received by the beneficiary of the remittance.

Section 8. Prohibited Acts. The following acts are hereby prohibited:

(a) The misappropriation or conversion of foreign exchange remittance of
OFWs received by any person/s, groups, associations, institutions and
others in trust or on commission, or for administration, or under any other
obligations involving the duty to make delivery of or to return the same, or
by denying having received such foreign exchange remittance.

(b) ‘Theft of foreign exchange remittance of OFWs by any persons/s, groups,
associations, institutions and others.

© The imposition of usurious interest rates on transactions involving foreign
exchange remittances of OF Ws.

@ The imposition of remittance fees in excess of what is prescribed under
Section 4 of this Act.
() The failure to post in a conspicuous place of the establishment the

Philippine Peso rate of the foreign currency being transacted.


Section 9. _ Penalties.

(@) Apperson who will be found guilty of violating the provisions of Section 6 (a)
hereof shall be penalized under the provisions of Article 315 of the Revised Penal Code.

(b) A person who will be found guilty of violating the provisions of Section 6 (b)
hereof shall be penalized under Article 310 of the Revised Penal Code.

(©) Apperson who will be found guilty of violating the provisions of Sections 6 (c),
(@ and (@) shall be subject to a fine of Fifty thousand pesos (Php50,000.00) but not
exceeding Seven hundred fifty thousand pesos (Php750,000,00) and imprisonment of six (6)
months and one (1) day to six (6) years and one (1) day.

Aside from the criminal liability provided in the afore-mentioned paragraphs,
institutions governed and supervised by the BSP found to have committed violations of
Section 6 hereof shall be subject to the necessary fines, penalties and sanctions as may be
provided by the BSP.

In case of corporations or partnerships, the liability shall be imposed on the president,
managing director or partner, general manager, or other responsible officers of the
corporation or partnership.

Section 10. Mandatory Financial Education for OFWs and their families. The
Department of Education, together with the Philippine Overseas Employment Agency,
Department of Finance, Bangko Sentral ng Pilipinas and other agencies, shall ensure that a
mandatory financial education program shall be provided to OF Ws and their families.

‘The program shall include, but not be limited to, providing information on financial
management, budgeting, investment options and similar topics which shall educate the OF Ws
and their families in the handling of their earnings and remittances.

Section 11, Liability under the Revised Penal Code and other laws. ~ Prosecution
under this Act shall be without prejudice to any liability for violation of any provision of the
Revised Penal Code or any other law.

Section 12. Separability clause. ~ If any separable provision of this Act be declared
unconstitutional, the remaining provisions shall continue to be in force.

Section 13, Repeating clause. — Any law, presidential decree or issuance, executive

order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent
with, the provisions of this Act is hereby repealed, modified or amended accordingly.

Section 14. Effectivity clause. ~ This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.