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TWENTIETH CONGRESS ) Date 20 AUG Ws
OF THE REPUBLIC OF THE PHILIPPINES ) .
First Regular Session ) iva

HOUSE OF REPRESENTATIVES

House Bill No. 392 2

Introduced by Representative FRANZ FERNANDEZ LEGAZPI

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. According to the Philippine Statistics Authority (PSA), there are 2.16 million
OFWs from April to September 2023, increasing 9.8% from the previous year of an estimated
1.96 million.’ In 2023, the Bangko Sentral ng Pilipinas (BSP) estimates that personal remittances
of overseas Filipinos reached an all-time high of $37.2 billion, increasing year-on-year and
contributing to 8.5% of the country’s gross domestic product (GDP).?

The income that OFW receive from their foreign employers are transferred 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.

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 usurious and exorbitant charges. Thus, we file this bill to protect the income
that OFWs earned for their families by requiring financial intermediaries to conspicuously
disclose their currency exchange rates, prohibiting the increase of fees without prior consultation
from the relevant government agencies, and by subjecting these remittance fees to a 50%
discount. Moreover, this legislation aims to equip OFWs and their families by providing free
financial education programs as a way to ensure their financial security even after their overseas
work.

This bill has passed the 17%, 18% and 19% Congresses of the House of Representatives.
We implore the 20" Congress to consider this piece of legislation and enact it into law for the
welfare of our OFWs and their families in the Philippines.

In view of the foregoing, the approval of this bill is earnestly sought-——_

—_
FRANZ FERNANDEZ LEGAZPI
Representative, PINOY WORKERS PARTYLIST

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TWENTIETH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session

HOUSE OF REPRESENTATIVES

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House Bill No. 3922
Introduced by Representative FRANZ FERNANDEZ LEGAZPI

AN ACT
PROVIDING FOR PROTECTION OF THE REMITTANCES OF OVERSEAS FILIPINO
‘WORKERS

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

SECTION 1. Short Title. This Act shall be known as the “Overseas Filipino
Workers (OFWs) Remittance Protection Act."

SEC. 2. Declaration of Policy. - The Constitution affirms that labor is the primary
social economic force and mandates the State to protect the rights of the workers and promote
their welfare.

Recognizing the significant contribution of OFWs to the national economy through
foreign exchange remittances, the State shall adopt measures to protect the hard-earned money
they remit home against usurious interest rates and exorbitant fees charged by financial
institutions that deplete the value of their remittances and provide them and their families
adequate education and training on financial literacy, such as financial planning and
management of finances or savings, to help ensure a source of livelihood even after their
overseas employment.

SEC. 3. Definition of Terms. — As used in this Act:

(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 the person is not a citizen
or on board a vessel navigating the foreign seas other than a government ship used
for military or non-commercial purposes or on an installation located offshore or on
the high seas; to be used interchangeably with migrant worker;

(b) Remittance refers to the foreign exchange earnings sent home by OFWs or their
employers or agents through formal channels; and

(c) Remittance fee refers to the service fee or charge imposed by bank and non-bank
financial intermediaries for sending money of OFWs through formal channels.

SEC. 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.

SEC. 5. Discount on Remittance Fees and Tax Deduction Granted to
Establishments. - Fees imposed by banks and non-bank financial intermediaries on OFW
remittances to immediate family members shall be subject to a fifty percent (50%) discount.


Bank and non-bank financial intermediaries providing discounts on remittance fees
may claim the discounts granted as tax deduction based on the cost of services rendered to
OFWs to be treated as ordinary and necessary expense deductible from the gross income of the
intermediary falling under the category of itemized deductions: Provided, That the Secretary of
Finance shall, upon the recommendation of the Commissioner of Internal Revenue, issue the
pertinent revenue regulation for the purpose.

SEC. 6. Requirement of Posting of the Peso Equivalent of the Currency to be
Exchanged. - All bank 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 as remitted shall be the same amount that shall be received by the
beneficiary of the remittance.

SEC. 7. Prohibition from Raising Remittance Fees. - All banks and non-bank
financial intermediaries offering remittance services to OFWs are prohibited from raising their
current remittance fees without prior consultation with the Department of Finance (DOF),
Bangko Sentral ng Pilipinas (BSP), and the Department of Migrant Workers (DMW).

SEC. 8. Prohibited Acts. - The following acts are also prohibited:

(a) Misappropriation or conversion, to the prejudice of the OFW or beneficiary, of
foreign exchange remittances received in trust. or on commission, of for
administration, or under any other obligation involving the duty to make delivery
of, or to return the same, or by denying having received such foreign exchange
remittance;

(b) Taking of foreign exchange remittances without the consent of the OFW or
beneficiary;

(c) Imposition of remittance fees in excess of those prescribed under Section 5 of
this Act;

(d) Failure to post in a conspicuous place of the establishment the Philippine Peso
rate of the foreign currency being transacted; and

(e)Failure to conduct consultation with the DOF, BSP. and the DMW before raising
remittance fees.

SEC. 9. Penalties. Any person who is found guilty of any of the acts described in
Section 8 hereof shall be punished by an imprisonment of six (6) months and one (1) day to six
(6) years and a fine of Fifty thousand pesos (Php 50,000.00) but not exceeding Seven hundred
fifty thousand pesos (Php 750,000.00).

Aside from the criminal liability provided in the preceding paragraph, institutions
governed and supervised by the BSP found to have violated the provisions of Section 8 of this
Act shall be subjected to the necessary fines, penalties, and sanctions as provided under Republic
‘Act No. 7653, or "The New Central Bank Act", Republic Act No. 8791, or "The General
Banking Law of 2000", and other pertinent banking regulations

In case the violation is committed by a corporation or partnership. the liability shall
be imposed on the president, managing director or partner, general manager, or other responsible
officers of the corporation or partnership.

SEC. 10. Free Mandatory Financial Education for OFWs and their Families. The

DMW as the lead agency, in coordination with the Overseas Workers Welfare Administration
(OWWA), the DOF, and the BSP, shall ensure that a mandatory financial education program

2


which shall be served free-of-charge shall be provided to OFWs and their families. These
agencies shall likewise educate the OFWs and their families on the following financial subjects,
issues or programs: Consumer Protection, Protection on Mortgaged or Collateralized Properties,
Avoidance of Exorbitant Interests on Loans or Debts, and Credit Information on Micro and
Small-Scale Enterprises to prospective lenders

Financial education shall also include information on Obligations and Contracts,
Credit Transactions, Interests, Pledges, Mortgages, Guarantees, and knowledge on Financial
Products, such as stocks, bonds, insurance, and mutual funds, which are available in the market

As such, all OFWs shall undergo mandatory and continuously updated financial
education (literacy training) seminars which shall become an integral part of the Pre-Departure
Orientation Seminar (PDOS) of departing OFWs. Moreover, Post-Arrival Training Seminars
(PATS) on financial education or literacy shall likewise be required of OFWs within a
reasonable time upon their arrival in their respective countries of destination on their first
employment contract, or those who transfer from one place of work to another without stopping
by the Philippines. Overseas Filipino Seafarers shall have the option of attending these
continuously updated financial education (literacy training) seminars at their respective points-
of-hire, or within a reasonable time, after their return to the Philippines,

Families of OFWs throughout the Philippines shall likewise be equipped with financial
education and knowledge through on-line seminars and other feasible and effective means.

The PDOS and PATS shall be primarily conducted by the DMW, in coordination with
the OWWA, the DOF, the BSP, the Department of the Interior and Local Government and all the
barangays under it, and the accredited PDOS providers across the country, including the
embassies or consulates, whichever may be available, in the countries of destination.

The DMW shall regularly coordinate with the Department of Information and
Communications Technology and social media companies to disallow posts and messages that
are meant to confuse, mislead, victimize, defraud or entice OF Ws and their families to engage in
gambling and other similar activities, including on-line scams, pyramiding schemes, and the like.

As the lead agency, the DMW is tasked to formulate training modules on financial
education or literacy: initiate and conduct training programs on financial management and
responsibility; apprise OFWs on financial opportunities and pitfalls, among others; ensure the
accessibility of qualified on-line financial and economic advisors and/or counselors; and
disseminate knowledge-expanding activities that promote financial education (literacy) among
OFWs and their dependents.

SEC. 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 other laws,

SEC. 12. Implementing Agency. - The DMW shall, in consultation with the BSP, DOF,
OWWA, Department of Foreign Affairs, Bankers Association of the Philippines, Association of
Bank Remittance Officers, Inc., Philippine Association of Foreign Exchange Dealers, Money
Changers and Remittance Agents, Inc., representatives from the placement or recruitment
industry, non-government organizations advocating the rights and welfare of OFWs, and other
stakeholders, issue the necessary rules and regulations for the effective implementation of this
Act, within ninety (90) days after the approval of this Act.

SEC. 13. Repealing Clause. - All laws, executive and administrative orders, rules and
regulations inconsistent with the foregoing provisions are hereby repealed or modified
accordingly.

SEC. 14. Separability Clause. - If any provision of this Act is held unconstitutional or
invalid, such holding shall not affect other provisions not affected thereby.


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

Approved,

Approved,