Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. 244

Introduced by Rep. ROBERT NAZAL

AN ACT PROVIDING FOR THE REVISED CHARTER OF THE OVERSEAS FILIPINO
BANK, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Overseas Filipinos play a vital role in the economic development of the Philippines
through their substantial remittances, which sustain millions of Filipino families and bolster
the country's financial stability. In 2024 alone, remittances exceeded US$38.34 billion,
representing nearly 8.3% of the national gross domestic product.’ Despite their immense
contributions, many Overseas Filipinos continue to face significant barriers in accessing
secure, affordable, and efficient financial services tailored to their unique circumstances.
Recognizing these challenges, Executive Order No. 44, series of 2017, mandated the
conversion of the Philippine Postal Savings Bank into the Overseas Filipino Bank
(OFBank), envisioned as the primary digital government financial institution for Overseas
Filipinos. Subsequently, in 2020, the OFBank was launched as the country's first
branchless, fully digital bank licensed by the Bangko Sentral ng Pilipinas (BSP). While
this milestone improved access to digital banking and remittance services, persistent
issues remain, including high remittance costs, limited credit facilities, and the need for
stronger reintegration support mechanisms for returning Overseas Filipinos and their
families.

This proposed measure, entitled the “Overseas Filipino Bank Act,” institutionalize and
strengthens the OFBank through the enactment of a revised Charter that establishes the
Bank as a dedicated and independent government financial institution. Specifically, the
bill:

1 Personal Remittances Reach a Record High of US$3.7 Billion in December 2024; Full-Year Level of
Us$38.3 Billion Highest to Date February 7, 2025,
hitps://www.bsp.gov. ph/SitePages/MediaAndResearch/MediaDisp.aspx?Itemid=7426


1. Confirms the OFBank’s status as an independent government financial institution
dedicated exclusively to Overseas Filipinos, in line with Republic Act No. 10000
(Agri-Agra Reform Credit Act of 2009), Republic Act No. 11641 (Department of
Migrant Workers Act of 2021), and Republic Act No. 8791 (General Banking Law of
2000);

2. Sets an authorized capital stock of Ten Billion Pesos (10,000,000,000), with
at least fifty percent (50%) reserved for subscription by Overseas Filipinos and their
families to strengthen ownership and ensure alignment of interests;

3. Mandates the earmarking of net income exclusively for reintegration support,
financial literacy, education and welfare assistance, and crisis and legal support for
distressed Overseas Filipinos;

4. Expands the Bank's powers to issue electronic money products, provide
microinsurance, and deliver investment and savings products consistent with BSP
regulations and consumer protection standards;

5. Strengthens governance and accountability through a nine-member Board of
Directors with representation from government agencies, the private sector, and the
Overseas Filipino community.

This measure builds upon and refines the version of the bill previously filed by
Representative Ron P. Salo during the Nineteenth Congress, which sought to modemize
and scale the OFBank’s operations to meet the evolving demands of a growing Overseas
Filipino population. It also supports the policy directions articulated in the Philippine
Development Plan 2023-2028, particularly Chapter 9 (Expanding Economic
Opportunities in Industry and Services) and Chapter 11 (Ensuring Safe, Orderly, and
Regular Migration).

‘The proposed Charter further advances the State's constitutional mandate under Article
Il, Section 18, to afford full protection to labor, local and overseas, promote equality of
opportunity, and raise the quality of life for all. It operationalizes the national commitment
to Sustainable Development Goal 10 (Reduced Inequalities), specifically Target 10.c,
which calls for reducing the transaction costs of migrant remittances to less than 3 percent
by 2030.

By enacting this measure, Congress will provide Overseas Filipinos with a robust,
competitive, and secure financial platform that recognizes their invaluable contributions
to the nation’s growth and ensures that their earnings are safeguarded and reinvested in
their welfare and development.

In view of the foregoing, the immediate passage of this billl i garnestly sought.

Rep. ROBERT NAZAL
Bagong Henerasyon Party-List


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. 244

Introduced by Rep. Robert Nazal

AN ACT PROVIDING FOR THE REVISED CHARTER OF THE OVERSEAS FILIPINO
BANK, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES,

Be it enacted by the Senate and House of Representatives in Congress assembled:

Section 1. Short Title. — This Act shall be known as the “Overseas Fi

Sec. 2. Declaration of Policy. - Itis hereby declared the policy of the State to recognize
the invaluable contributions of Overseas Filipinos to the nation’s economic growth and
social development. In pursuit of this, the government shall ensure their financial well-
being by promoting accessible, cost-effective, fast, and secure remittance systems for
both senders and recipients. The State shall also enhance credit facilities and financial
assistance programs to support enterprise development and personal needs of Overseas
Filipinos and their families, Furthermore, the government shall strengthen its presence in
the remittance market to foster competitiveness and drive down remittance costs for the
benefit of Overseas Filipinos and their beneficiaries.

Sec. 3. Name, Place of Business, and Physical Touchpoints. — There is hereby
created the Overseas Filipino Bank, a digital bank that offers products and services that
are processed end-to-end through a digital platform and/or electronic channels. It shall
hereinafter be referred to as the OFBank.

It shall maintain a principal/head office in the Philippines to serve as the main point of
contact for stakeholders, including the Bangko Sentral and other regulators, and shall
house the offices of management and support operations. As a digital bank, it may offer
financial products and services through cash agents and other qualified service providers,
subject to existing laws, rules, and guidelines by the Bangko Sentral ng Pilipinas (BSP)
and in foreign countries it will operate. The OFBank may establish physical touchpoints
in any part of the Philippines or abroad upon approval of its Board of Directors.


Sec. 4. Primary Functions of the Bank. — As a government financial institution

dedicated to addressing the nancial needs ofthe Overseas Flipinos, the OFBank shal:
Develop financial services and instruments for the Overseas Filipinos, including
migrant workers, both land-based and sea-based, Retuming Overseas Filipinos
(ROFs), dual citizens, emigrants, immigrants, students studying abroad, and OFW
families and dependents.

b. Ensure that all Overseas
instruments of the bank.

c. Ensure that the cost of its services and facllities, including remittances, are kept at
the bare minimum.

inos have access to the financial services and

Sec. 5. Powers in General. — The OFBank, upon its organization, shall be a corporate
body and shall have the power:

a. To prescribe, repeal, and alter its own by-laws and its operating policies, and to

issue such rules and regulations as may be necessary to achieve the main purpose

for the creation of the OFBank;

To adopt, alter and use a corporate seal;

To make contracts;

To sue and be sued;

To borrow money;

To own real or personal property and introduce improvements thereon, and to sell,

Mortgage or otherwise dispose of the same;

To employ officers and personnel, preferably from the OFs sector, as may be

necessary to carry overseas Filipinos banking business;

h. To establish physical touchpoints in the Philippines as may be necessary to carry
on its overseas Filipinos banking business;

reaos

i, To perform any or all of the following banking services
i. Grant loans, whether secured or unsecure:
ji, Accept savings and time deposits, including basic deposit accounts as defined
in the — Manual == of--—Regulations = for_~=s Banks (MORB);
ili, Accept foreign currency deposits, as defined under Republic Act No. 6426, as
amended;

iv. Invest in readily marketable bonds and other debt securities, commercial papers
and accounts receivable, drafts, bills of exchange, acceptances or notes arising out
of commercial transactions;
v. Act as correspondent for other_—financial_insfitutions;
Act as collection agent for_—non-government entities;
vii, Issue electronic money products subject to the guidelines provided under the

vili.Issue credit cards;
ix. Buy and sell foreign exchange; and
x. Present, market, sell and service microinsurance products subject to the
guidelines provided under the MORB.


i. To exercise the powers granted under this Charter, including incidental powers as
may be necessary to carry on its business, subject to existing laws, rules, and
guidelines as may be established by the BSP;

k. To exercise the general powers mentioned in Republic Act No. 11232, otherwise
known as the Revised Corporation Code of the Philippines and Republic Act No.
8791, otherwise known as the General Banking Law of 2000, in so far as they are
not inconsistent or incompatible with the provisions of this Act.

Sec. 6. Authorized Capital Stock. — The authorized capital stock of the OFBank shall
be TEN BILLION PESOS (P10,000,000,000.00) divided into one hundred million par
value shares of One hundred pesos each. All shares are nominative and indivisible. The
Board of Directors and stockholders are hereby authorized to increase the authorized
capital stock and provide the classification and features of shares, subject to pertinent
laws and the rules and regulations of the BSP and Securities and Exchange Commission
(SEC).

The subscription to and ownership of such shares, including the transfer thereof to third
parties, shall be governed by pertinent laws, rules, and regulations; Provided, That at
least fifty percent (50%) of the authorized capital stock shall be subscribed by the
Government of the Republic of the Philippines, while the remaining fifty percent (50%)
shall be made available for subscription exclusively to Overseas Filipinos and their
families and dependents.

Sec. 7. Utilization of Income for the Benefit of Overseas Filipinos. — The income
generated by the OFBank shall be utilized exclusively to fund programs, projects, and
services aimed at enhancing the welfare and development of Overseas Filipinos including
Overseas Filipino Workers (OFWs), Retuming Overseas Filipinos (ROFs), dual citizens,
emigrants, immigrants, students studying abroad, and OFW families and dependents and
their families.

The income shall be dedicated to the following programs, but not be limited to:

1. Reintegration Support — Programs for livelihood, entrepreneurship, and financial
assistance for returning Overseas Filipinos

2. _ Education and Welfare Assistance — Scholarships, skills training, and emergency
aid for dependents and families of Overseas Filipinos.

3. Financial Literacy and Empowerment — Initiatives that promote responsible financial
management and investment opportunities for beneficiaries.

4. Crisis and Legal Support - Aid for Overseas Filipinos in distress, including
repatriation, legal representation, and counseling.

5. _ Other programs consistent with this provision as approved by the Board of Directors.


Sec. 8. Loans, Investments, and Liabilities. - The OFBank is hereby authorized:

a. To grant loans, advances, or other credit accommodations for the establishment,
rehabilitation, expansion, or development of any agricultural, commercial or
industrial enterprise, or personal service, including public utilities, in accordance with
Republic Act No. 8791, the BSP rules and regulations, and under such terms as
may be prescribed by the Board of Directors and that preference be given to
applicants enumerated under Section 7 hereof, subject to pertinent BSP rules and
regulations;

b. To invest in stocks and other investment instruments subject to Republic Act No.
8791, and the BSP rules and regulations;

c. To issue bond and other certificates of indebtedness subject to Republic Act No.
8791, and the BSP rules and regulations.

Sec. 9. The Board of Directors, Composition, Tenure, and Per Diems. — The Board
of Directors, hereinafter referred to as the Board, shall consist of nine (8) members to be
appointed by the President of the Philippines. The term of office of the Chairperson,
President, and the members of the Board shall be for a period of THREE (3) years or until
such time as their successors are appointed. The Board shall direct the affairs and
business of the OFBank shall manage, control, and preserve its properties, unless
otherwise provided in this Act.

The Chairperson of the Board, and the President of the OFBank, who shall serve as Vice
Chairperson, shall be appointed by the President of the Philippines. The position of
Chairperson of the Board and President of the OFBank shall not be held by the same
person. In case of incapacity or absence of both the Chairperson and the Vice-Chairman,
the Board of Directors shall designate a temporary Chairperson from among its members.

The Secretary of Finance, Secretary of Migrant Workers, and the Secretary of the
Commission on Filipinos Overseas shall serve as ex officio members of the Board. As
such, they may designate their respective alternates who shall be the officials next-in-
rank to them and whose acts shall be considered the acts of their principals.

No person shall be appointed regular director of the OFBank unless he/she is a natural-
bom citizen of the Philippines, not less than thirty-five (35) years of age, of good moral
character and has attained proficiency, expertise and recognized competence in one or
more of the following: banking, finance, economics, law, foreign affairs, business
management or government administration

Four (4) of the members of the Board shall be independent directors composed of one
(1) representative from the private sector, one (1) representative from land-based OFWs,
one (1) representative from sea-based OFWs, and one (1) representative from overseas
Filipinos.


Except for the Chairperson and the President, no officer or employee of the Bank may be
appointed as a member of the Board of Directors; nor shall any director, officer or
employee of any other bank be eligible as a member of the same.

The Board, shall upon a majority vote of all its members, elect its chairperson, vice-
chairperson, and secretary, at such time and place as shall be provided for in its by-laws.

The members of the Board, except for those serving ex officio, shall receive a per diem
or allowance for every meeting of the board actually attended by them, the amount of
which shall be within the acceptable banking industry rates and shall be set in accordance
with the pertinent provisions of Republic Act No. 11232.

Sec. 10. Powers and Functions of the Board of Directors. — The Board of Directors
shall:

a. Formulate policies necessary to carry out effectively the provisions of this Act and
adopt such by-laws, rules and regulations for the effective operation of the OFBank
in conformity with this Act and other existing laws;

b. Determine the organization of the OFBank by creating the necessary departments
or offices essential for its efficient operation;

¢. Subject to prior approval of the Monetary Board, establish physical touchpoints in
other countries; and

d. Create an executive committee and such other committees as may be deemed
Necessary and proper in the conduct of the business of the corporations, with
composition, powers and duties as it may prescribe, subject to BSP rules and
regulations, and act on all matters affecting the general policies of the OFBank.

Sec. 11. Chairperson and Chief Executive Officer. — The Chairperson shall be the
Chief Executive Officer of the OFBank, which shall have the direction and control of its
business affairs and properties in all matters which are not explicitly stated to be done by
the Board or other offices of the bank in this Charter or by the By-Laws of the bank. For
this purpose, the Chairperson shall, among other powers and duties, execute, carry out,
and administer the policies, measures, orders, and resolutions approved by the Board;
direct and supervise the operation and administration of the Bank; and exercise such
other powers and perform such other functions or duties as may be directed or assigned
to him/her by law or by the Board from time to time.

Particularly, the Chairperson shall have the power and duty:

a. To sign and execute all contracts concluded by the Bank and enter into all necessary
obligations required or permitted by this Act, upon proper authorization by the Board;
and sign all notes, securities, certificates, and other major documents of the bank;

b. To exercise, as Chief Executive Officer of the Bank, the powers of control and
supervision over decisions and actions of subordinate officers and all other powers
that may be granted by the Board;

c. To report monthly to the Board on the operations of the Bank and propose policies
for the efficient, effective and economical operation of the Bank;


d. To submit an annual report to the President of the Philippines on the result of the
operations of the bank;

e. To recommend to the Board the appointment, promotion, or removal of all officers
of the bank, with the rank of at least vice-president or its equivalent;

f. As required by circumstances, to delegate any of his powers, duties or functions to
any officer or director of the bank, with the approval of the Board.

Sec. 12. Vice Chairperson and Chief Operating Officer. — The Vice Chairperson shall
be the Chief Operating Officer of the Bank and shall assume and exercise such specific
duties and responsibilities as may be delegated to him by the Chairman.

Sec. 13. Legal Counsel. — The OFBank shall have its own legal department, the chief
of members of which shall be appointed by the Board of Directors. The Board may engage
the professional services of private external legal counsel whenever deemed necessary.

Sec. 14. Bank Auditor Reports. — The OFBank shall have its own auditing department,
the head of which shall be appointed by the Board of Directors preferably from among
recognized veterans or their heirs of good standing who are certified public accountants
and with actual experience in the work of a comptroller or auditor. The auditor shall not
suffer any diminution in salary during the auditor's term of office, and may not be removed
except for cause.

Sec. 15. Conduct of Business. — The OFBank shall be subject to the prudential
requirements set out by the BSP including corporate governance and risk management,
particularly on information technology and cyber security, outsourcing, consumer
protection and anti-money laundering (AML) and combating the financing of terrorism
(CFT), as provided under existing regulations.

Sec. 16, Authority to Receive Deposit of Government Funds as an Official
Government Depository. — The Secretary of Finance, the National Treasurer, and their
authorized representatives, all city and municipal treasurers as well as official custodians
of public funds, or those belonging to government-owned or controlled corporations are
hereby authorized, if they so desire, to make and actually maintain deposits of any
government or corporate fund with the OFBank, which is hereby declared to be an official
government depository.

Sec. 17. Appropriations. — The amount necessary for the implementation of this Act
shall be provided in the annual General Appropriations Act.

Sec. 18. Separability Clause. — if any provision or part hereof is held invalid or
unconstitutional, the remaining provisions not affected thereby shall remain valid and
subsisting.


Sec. 19. Repealing 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.

Sec. 20. Effectivity. — This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in any two (2) newspapers of general circulation in the Philippines.

Approved.