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

HOUSE OF REPRESENTATIVES

House Bili No. pus a

Tatroduced by Representative VICTOR A. YAP

EXPLANATORY NOTE

Overseas Filipino Workers (OF V\ 5) are the modern-day heroes of our nation. They leave
the country in search for better-paying jobs in foreign lands primarily to provide for their
families they leave behind and to improve their quality of life. However, oftentimes, OF W
families are compelled to borrow money to pay for the expenses of their loved ones’ departure.

According to the latest data of the Philippine Statistics Authority (PSA), there are around
2.3 million OFWs abroad du:ing the period of April to September 2018. Further reports from the
Department of Labor and Employment (DOLE) show that 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, the contributions of OFWs are paramount to the prosperity of our
national economy.

Pursuant to the mandate of the State to protect all its citizens, including the families of
OFWs they left behind, Republic Act No. 8042 or the Migrant Workers and Overseas Filipinos
Act of 1995 was enacted. One of the objectives of this law is to provide for the families of
currently employed OFWs to avail of the Family Assistance Loan from the Overseas Worker
Welfare Administration (OWWA) in cases of emergency situations. However, this law omits the
initial stages of OFW employment wherein families may suffer from bearing the cost of their
living expenses in the absence of their OF W relative.

Thus, it is in the best ir terest of the State to support the families of OFWs by providing a
credit assistance program to capacitate the families of OFWs left behind to pay for their living
expenses. This bill gives a prospective OFW who has a valid contract as certified by the
Philippine Overseas Employment Administration (POEA) the opportunity to avail of the fifty
thousand peso (P50,000) loan from the OWWA to shoulder the living expenses of his/her family
during the initial period of the laiter’s overseas employment. Adequate safeguards in the
fulfilment of the loan obligation and imposition of penaities for erring government officials are
further established under this measure.

In view of the foreg

2, immiediate passage of this bill is carnostly requested.



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

HOUSE OF REPRESENTATIVES

House Bill No. ~~’ 5098

Introduced by Representative Victor A. Yap

AN ACT
ESTABLISHING A CREDIT ASSISTANCE PROGRAM FOR OVERSEAS FILIPIN(
WORKERS

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

SECTION 1. Title. — This Act shall be known as the “Overseas Workers Credit

Assistance Act”.

SEC. 2. Declaration of Policies. - It is hereby declared a policy of the State to protect
the interest of the overseas workers by providing them access to credit facilities even before their
departure

SEC 3. Loans. - An overseas Filipino worker (OF W) with a valid employment contract
processed through a licensed recruitment and manning agency accredited by the Philippine
Overseas Employment Administration (POEA) may avail of a loan of not more than fifty thousand
pesos (P50,000.00) from the Overseas Workers Welfare Administration (OWWA) for any of the
following purposes:

a) To defray the living expenses of one’s family during the first months of absence;
and/or

b) To pay for recruitment expenses including placement fees, documentation costs
and plane tickets: Provided, That any member of the OFW’s family not otherwise disqualified
by law shall be a co-borrower and shall execute the necessary documentation to that effect
Provided, further, That the loan shall be granted and released by the OWWA upon proper
evaluation and submission of the employment contract and plane ticket, duly certified to in
writing by the recruitment agency or direct hirer as to their authenticity and properly verified
by the POEA. The aforementioned maximum amount of fifty thousand pesos (P50,000.00)
specified herein may be increased by the OWWA, taking into account inflation and other
relevant factors, through a resolution duly approved by the OWWA Board of Trustees.


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The loan shall be entered into by and between the overseas worker-borrower and the
OWWA, with the next-of-kin as a co-borrower. The Ioan shall be covered with a Ioan
redemption insurance from any private insurance provider duly registered with and accredited
by the Insurance Commission, the premium of which shall be paid by the applicant overseas

worker-borrower.

SEC. 4. Accreditation of Banks as Payment Conduits. - The OWWA shall accredit as
many domestic or foreign banking institutions as possible which are duly authorized to do business
in the Philippines in order to serve the Ioan payment/amortization needs of overseas workers-
borrowers. It shall be the obligation of the overseas worker-borrower to remit the loan
payment/amortization regularly to the OWWA through the banking institutions. The OWWA shall
likewise establish, within one (1) year after the effectivity of this Act, an on-line payment system

wherein the overseas worker-borrower may pay the loan amortization through the internet,

SEC. 5. Payment of Loan. - The loan shall be paid in twelve (12) equal monthly
installments at a preferred interest rate not to exceed six percent (6%) per annum.

SEC. 6. Loan Payment Assurance Mechanisms. ~ Failure to pay the loan and/or any
violation of the terms imposed upon the loan shall be sufficient ground for the POEA and all its
offices, including its deputized/accredited private entities and the Philippine Overseas Labor
Offices (POLOs), to withhold the issuance of the Overseas Employment Certificate (OEC) and any
other exit permit/clearance to work abroad to the overseas worker-borrower concerned unless:

(a) The overseas worker-borrower agrees to the restructuring of the loan, and
thereupon pays the first installment on the said restructuring, as duly certified by the OWWA, and,
together with this restructuring, the overseas worker-borrower justifies in writing the cause for the
failure to pay the balance due in connection with the loan; or

(b) The overseas worker-borrower is able to pay in full, as duly certified by the
OWWA, whatever balance is due in connection with the loan.

The certification of the OWWA account officer concerned indicating therein the
just cause/reason for the failure to pay, duly attested to by the said account officer’s immediate
supervisor, shall serve as proof of just cause/reason. This certification and all other certifications
mentioned in this section may be issued electronically, through the internet, with the electronic
signatures of the persons executing and/or attesting to the said certifications and other
authenticating safeguards.

SEC. 7. Loan Veri
authentication and to facilitate the OWWA’s administration of this Credit Assistance Program, the

tion. — For purposes of faster loan verification and/or

Balik-Manggagawa Processing Center, Regional Offices and Labor Assistance Centers (LACs) of


the POEA, all POLOs abroad, all OWWA offices in the Philippines and abroad, and all other
concerned government agencies/offices and all licensed recruitment and manning agencies
deputized/accredited by the POEA to issue OECs and other exit permits/clearances to work abroad,
shall coordinate closely and regularly with the OWWA using all available means of verifiable and
properly protected communications including, but not limited to, at least one (1) dedicated, real-
time and interactive website to be maintained and regularly updated on a twenty-four (24)-hour-a-
day, seven (7)-day-a-week (24/7) basis by the OWWA.

SEC. 8 Prohibited Acts and Penalties. - Any government official and/or employee
who issues an OEC and/or an exit permit/clearance to any overseas worker-borrower in violation of
any provision of this Act shall suffer the penalty of sixty (60)-day suspension without pay for the
first offense and dismissal from the service with a five (5)-year disqualification to hold any public
office for the second offense.

Any private entity which issues an OEC and/or an exit permit/clearance to any overseas
worker-borrower in violation of any provision of this Act shall suffer the penalty of sixty (60)-day
suspension of its license or accreditation for the first offense and permanent cancellation of license
or accreditation for the second offense.

SEC. 9. Additional Personnel for the OWWA. — To ensure the proper implementation
of this Act, the OWWA is hereby authorized to hire additional personnel who possess the necessary
skills, qualification and experience in bookkeeping, accounting, information technology, and credit
administration, including, but not limited to, the areas of evaluation of loan applications, credit
investigation, verification, authentication, and collection.

SEC. 10. Funding. - The amount needed by the OWWA to implement the Credit
Assistance Program for OF Ws shall be charged against the Overseas Welfare Trust Fund: Provided,
That all payments and interests earned on the loans shall accrue to the Overseas Welfare Trust
Fund.

The funding requirement of other agencies/offices charged to assist the OWWA in
implementing the program shall be included in the annual General Appropriations Act.

SEC. 11. Implementing Rules and Regulations. ~The OWWA, in consultation with
the Senate Committee on Labor and Employment and the House Committee on Overseas Workers
Affairs, shall, within sixty (60) days after the effectivity of this Act, issue the necessary rules and

regulations for its effective implementation.


SEC. 12. Separability Clause. — If, for any reason, any section or provision of this Act
is held unconstitutional or invalid, the other sections or provisions hereof shall not be affected
thereby.

SEC. 13. Repealing Clause. — Any other provisions of law or rules and regulations
inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

SEC. 14, Effectivity. — This Act shall take effect fifteen (15) days after its publication
in the Official Gazette and in two (2) newspapers of general circulation

Approved,