EIGHTEENTH CONGRESS
OF THE REPUBLIC OF THE PHILIPPINES }
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No. 524

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

Overseas Filipino Workers (OFWs) are the modern-day heroes of our nation. They leave
the country in search for better-paying jobs in foreign lands to provide for their families they
leave behind. Pursuant to the mandate of the State to promote the rights of all workers whether
domestic or overseas, it is necessary that the money that OF Ws send to their families are well
protected against exorbitant charges by the money transfer industry.

According to the Department of Labor and Employment (DOLE), personal remittances of
OFWs amounted to $32.213 billion in 2018, equating to 1.6 trillion pesos or approximately 25%
of the national budget. For the year 2019, it is projected that OFW remittances may shoot up to
more than $32 billion. Evidently, personal remittances of OFWs are not only essential to the
families they left behind but also for the prosperity of our national economy.

The income that OF Ws receive from their foreign employers aretransferred through bank
and non-bank financial institutions for the benefit of their families here in the Philippines. In
compensation to their service, these financial institutions impose money-transfer fees and
charges which in effect reduces the amount received by the families of OFWs relying on these
remittances. For example, in 2018, OFWs had to spend more than three billion dollars ($3.1
billion) in bank charges to send home twenty-nine billion dollars ($29.3 billion) in remittances'.

The World Bank recently published a study stating that the average cost of personal cash
transfers through banking channels amounted to 10.49% of the cash remitted”. This equates to an
OFW paying ten dollars ($10) per one hundred dollars ($100) from his or her remittance sent to
these money-transfer companies.While it is not prohibited for the money-transfer industry to
charge remittance fees, banks and non-bank financial institutions must actively disclose the rates
for their service to ensure the maximum protection of OFW remittances against malpractices of
charging excessive fees at the expense of all OF W families.

Thus, it is in the best interest of the State to protect all OFWs and their families by
requiring intermediary financial institutions to actively disclose their service fees and ensuring
that these third-party service providers are following proper and just practices under the law.

In view of the foregoing, immediate passage of this bill is earnestly fequested.

VICTOR A. YAP
Representative, 2nd District of Tarlac

" Data retrieved athttps://businessmirror.com.ph/2018/06/07/cut-excessive-transfer-fees-of-banks-on-ofw-remittances-lawmakers/
‘on October 14, 2019.
2Data retrieved at htps://remit ices,worldbank.org/sites/defaulV/files‘pw_report_june_2019.pdf on October 14, 2019.



EIGHTEENTH CONGRESS
OF THE REPUBLIC OF THE PHILIPPINES }
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No.” Seat

Introduced by Representative Victor A. Yap

AN ACT
PROTECTING THE REMITTANCES OR MONEY TRANSFERS OF OVERSEAS
FILIPINO WORKERS (OFWs) BY REQUIRING THE DISCLOSURE OF FINANCE
CHARGES AND OTHER FEES IN CONNECTION WITH MONEY TRANSFER,
COMPELLING STRICT ADHERENCE TO THE TERMS AND CONDITIONS OF THEIR
TRANSFER, PENALIZING VIOLATIONS THEREOF, AND FOR OTHER PURPOSES

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 “Remittance Act."

1

2

3 SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to protect
4 its citizens from deceptive, unfair, and unconscionable acts of remittance agents and money
5 transfer companies. Toward this end, they shall be required to render full disclosure of the terms
6 and costs of the money transfer service being offered by them and to strictly adhere to the terms
7 and conditions of the said transfer or remittance.

8

9 SEC. 3. Definition of Terms.- For purposes of this Act, the following terms shall mean:
10 (a) Exchange Rate - the price of a unit of foreign currency in terms of the domestic
un currency;

2 (b) Money Transfer — moving money electronically or physically for a specified account
3 or person;

4 (c) Remittance - the funds that an expatriate sends to the expatriate’s country of origin
1s via wire, mail, or online transfer;

16 (d) Remittance Agents and Companies - persons or entities that offer to remit, transfer,
"7 or transmit money on behalf of any person to another person and/or entity. These
18 shall include money or cash couriers, money transfer agents, remittance companies,
19 and the like; and
20 (c) Price Gouging - charging unconscionably high prices or fees that are excessive
21 relative to what the free market offers.

2

23 SEC. 4. Strict Adherence. - All remittance agents and companies shall strictly adhere to
24 the following:

25 (a) Registration. - Remittance agents and companies providing the transfer mechanism
26 shall be duly registered, licensed, and must have met all the requirements issued by
27 the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission

28 (SEC), Department of Trade and Industry (DTI), and the Bureau of Internal
29 Revenue (BIR).


(b) Exchange Rates and Fees.

1) All remittance agents and companies shall follow the exact real time
exchange rate at the beginning of the business day as posted in the
Reference Exchange Rate Bulletin of the BSP.

2) For senders from the Philippines, a flat rate transaction fee shall be imposed
in accordance with rules and regulations to be issued by the BSP.

(©) Disclosure. - In addition to standard paperwork, remittance agents and companies
shall be required to include a waiver form for each transaction which shall contain
the following information in clear and concise words:

1) The specific exchange rate provided for that currency;
2) Any and all additional fees being deducted from the original remittance;

3) A signed acknowledgment that the recipient understands that the recipient is
accepting currency exchange from the original currency to Philippine Peso,
forfeiting a percentage equivalent to the flat rate fee for the remittance
service;

4) Notice to senders and recipients that senders are generally not permitted to

require that the money transfer be made in the form of original currency,

except in the specific countries where senders are given the option of
specifying the money to be received in original currency form without any
additional exchange rates compensation being charged to the sender; and

5

The list of countries, as determined by the BSP, which give the option to
require that money transferred be paid out to the recipient in the original
currency sent.

(A) Valid Identification - Senders and recipients must each provide at least one (1) form
of valid and legally acceptable identification.

(©) Request for Original Currency - Remittance agents and companies receiving
remittances from countries which give the option to specify that original currency
be paid out to recipient shall, in addition to the conditions enumerated above, be
required to adhere to the contractual commitment entered into by the remittance
agent and the sender.

In cases where only Philippine currency is available and thus paid out to recipients in
direct contradiction of the sender's specified currency or the currency of the originating country,
remittance agents companies shall be required to obtain an additional waiver from the recipient
that the recipient is waiving the right to receive the specified currency.

SEC. 5. Punishable Acts. - The following acts committed by the remittance agents and
companies, and/or all of its employees, shall be punishable under this Act:

(a) Failure to comply with the provisions of this Act;
(b) Price gouging of currency exchange rates; and

(c) Substituting Philippine Peso for the specified original currency without the express
or written consent of the recipient.

SEC. 6. Penalties. - Any person, or in case of partnership or corporation, the managing
partner or the president, committing any of the unlawful acts or omissions provided under this
Act shall be punished with imprisonment of not less than six (6) years but not more than ten (10)


years and a fine of not less than Two Hundred Thousand Pesos (P200,000.00) but not more than
One million pesos (P1,000,000.00).

SEC. 7. Restitution. - In addition to the penalties provided herein, any person found
guilty of violating this Act shall be required to make restitution payments upon determination by
the BSP or other governing judicial authority that a remittance agent has willfully acted to avoid
compliance and/or charged rates in excess of the prescribed standards in this Act. All recipients
shall consequently reserve and retain their right to collect the excessive amount proven to have
been charged to them.

SEC. 8. Enforcement and Monitoring. - Aside from the BSP's Manual of Regulations
for Non-Bank Financial Institutions, the entire money transfer industry shall be under further
guidance, requirements, and rules prescribed by the BSP. The BSP shall likewise periodically
monitor compliance by remittance agents and companies of the provisions of this Act.

SEC. 9. Rules and Regulations. - The BSP shall prescribe the necessary rules and
regulations to effectively implement the provisions of this Act within ninety (90) days from the
effectivity of this Act.

SEC. 10. Separability Clause. If any provision of this Act is declared invalid or
unconstitutional, the other provisions not affected by such declaration shall remain in full force
and effect.

SEC. 11. Repealing Clause. - All laws, executive and administrative orders, rules and
regulations inconsistent with the foregoing provisions are hereby repealed or modified
accordingly.

SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,