3Republtt ot tbe ipbtltppi"es
a©ouse ot 3Represeittdtttleg
®ue3o« ®ttp, givctro giva«tla
Nineteenth Congre ss
First Regular Session
HOusei3iir^N-O.
5902
Introduced by:
HON. MARISSA "DEL MAR" MAGSIN0
0FW- PARTYLIST
EXPIANATORY NOTE
Overseas Filipino Workers (OFWs), also referred to as Filipino migrant workers, are a
significant segment of Philippine labor force accounting for roughly a minimum of 1.5 million
jobs at any given time, and sending back an annual average of foreign exchange remittances of
USD 3o billion, or about lo% of the Gross Domestic Product (GDP) of the country in a year.
These remittances help fuel our economy and provide lifelines to thousands of OFW families
and their dependents. For these contributions, they are often hailed as our `modem day heroes'.
However, despite their immense contribution, the government has yet to put in place a
reliable and sustainable social security and retirement system for OFWs that they can lean on in
times of need while still employed, and more importantly, upon their retirement.
A social security and retirement system  aims to provide  social protection to covered
workers  giving them  a  degree  of financial  independence  and  stability when  faced with  the
contingencies of old age,  survivorship, disability, unemployment,  and needs for medical care
and family support.   The development of social security and retirement plans has also been
supported by various international conventions and instruments, and their recognition as basic
human rights was enshrined in the 1948 Universal Declaration of Human RIghts.
In  the  Philippines,  workers  in  the  private  sector  are  covered by the  Social  Security
System (SSS), a state-run social insurance program established in 1954 by virtue of Republic Act
No.  1161.  Meanwhile, `active and systemic migration' of Filipinos for temporary employment


abroad began by the 196os leading the government to come up with a new labor code in 1974
which included Filipino migrant workers in its scope. However, the SSS started its coverage for
OFWs  only  in  1995  in  accordance  with  Republic Act  No.  8282, and  iliitially  for  voluntary
membership only. This is the first indication that, in the eyes of the law, OFWs are treated
differently  from  the  other  categories  of  workers  in  the  private  sector  considering  the
peculiarities of overseas employment.
In March 2olg, pursuant to Republic Act No. 11199, or the `Social Security Act of 2ol8',
SSS coverage became compulsory for all sea- and land-based OFWs as defined under Republic
Act No. 8o42, also known as the `Migrant Workers Act' of 1995', as amended by Republic Act
No. 1oo22, provided they are not yet over 6o years of age.
While RA 11199 guarantees that all benefit provisions under the Act shall apply to all
covered OFWs, it does not, in other respects, account for the unique and peculiar conditions of
overseas employment that require `different treatment' to be more equitable for OFWs.
For  one,  the  seasonal  and/or  intermittent  character  of overseas  employment  with
contracts ranging from 2-5 years with no guaranteed renewal, calls for a different framework of
determining  appropriate  rates  of  contributions  and  the  corresponding  social  welfare  and
retirement  benefits,   such   as  in  cases  of  separation  from  employment  due  to  contract
termination. Most importantly, OFWs usually find reemployment difficult past the age of 45
years, thus, a lower age for mandatory retirement is more appropriate for OFWs for their timely
availment  of  retirement  benefits.  Moreover,  the  cross-national  border  nature  of  overseas
employment presents jurisdichonal issues on the supposed counterpart contributions of foreign-
based employers, particularly their mandatory imposition, enforcement and remittance to the
Philippines.  This  challenge  demands  a more  aggressive  effort on the part of the  Philippine
government to successfully forge bilateral agreements with the host countries to address it.
Providing for a separate social security and retirement system for OFWs does not violate
equal protection for labor. Article Ill, Section 1 of the 1987 Constitution provides that `no person
shall be denied the equal protection of the laws'. `TheJilndamenfaJ n.ghf o/ equal p7iofecffon I.s
not absolute but sukyect to reasonable classifeation. The classification in:ust be characterized
by substantial distinetious thai make real differences to justify that cme class may be treated
and regulated differeritly from another. The classiifec[tion in:ust also be germane to the puxpose
Of the law and in:ust apply to all those belonging to the scl.me class.' (ITu us CA, En Bane, GR
No. i2742o, January 20,1999)
As alluded to above, the substantial distinctions that separate OFWs from other classes
of workers are the seasonal character of their employment abroad, the cross-border nature of
their  employment    which  presents  issues  of jurisdiction  with  respect  to  enforcement  and
protection of their rights while in foreign soil, the significance of their contributions to the
national economy through their remittances, and the personal sacrifices they endure as well as
their families resulting from their physical  separation from one  another. These distinctions
require and justify the provision of a different system, policies and mechanisms of a social


security and retirement plan adapted to their unique circumstances. Moreover, the classification
is germane to the purpose of the law which is to ensure that OFWs are guaranteed and provided
the ample social security and retirement benefits they deserve, and applies to all categories of
migrant workers as defined in the proposed measure.
Finally,  the  International  Convention on the  Protection of the  Rights of All  Migrant
Workers and Members of Their Families provides that with respect to social security, migrant
workers shall enjoy in the State of employment the same treatment granted to nationals as long
as they fulfill the requirements of that State and the applicable treaties, while at the same time
adequately  protected  by  the  social  security  system  of their  State  of  origin.  The  State  of
employment and the State of origin shall at any time establish the necessary agreements of this
norm.
This bill  aims to  establish  a  social  security and retirement system for  OFWs that is
tailored and adapted to the distinct and unique circumstances of their overseas employment,
with the end in view of ensuring that they receive the welfare assistance and retirement benefits
they truly deserve. By necessity, they shall be removed from their present coverage under the
SSS law.
For  the  foregoing  reasons,  the  immediate  consideration  and  approval  of this  bill  is
earnestly sought.
HON%At:DELksrfu;


3Republtc ot toe ffiDmppttteS
az>ouse of 3RerreBeittattt]eg
®ue?ou ®ttp, jmetro fofLantha
Nineteenth Congress
First Regular Session
House Bill No.
5902
Introduced by:
HON. MARISSA "DEL MAR" MAGSINO
oFwr PARTV[ZST
JEN ACT
ESTABLISHING THE OVERSEAS FILIPINO WORKERS SOCIAL SECURITY
AND RETIREMENT SYSTEM, APPROPRIATING FUNDS THEREFOR, AND
FOR OTHER PURPOSES
Be it enacted by the Senate and House Of Representatives Of the Philippines in  Congress
assembled:
SECTION 1. Short r¥tze. -  This Act shall be known as the  "Oi;erseas FIJI.pi.no  Workers
Retiremerit System Act Of 2o22. "
SECTION 2. Deczaraft.on oJPozi.c!/.  -  It is hereby declared the policy of the State to
recognize the significant contributions of overseas Filipino workers to the national economy
and shall uphold their rights to social security. Towards this end, the State shall establish a
social security and retirement system adapted to the distinctive employment conditions and
status of overseas Filipino workers and their families, while guaranteeing equal treatment and
protection to all workers in the country. Likewise, the State shall endeavor to establish the
necessary bilateral agreements with the States of employment of overseas Filipino workers to
ensure that same treatment enjoyed by their nationals with respect to  social security are
equally available to overseas Filipino workers.
SEorloN 3. Dej{nt.n.on oj. Terms. -  For purposes of this Act, the following terms shall
mean:
a)    "Otjerseas  FiHJ.£7io  Wo7.ke7.  (OF140"  refers  to  a  Filipino  citizen  with  a valid


contract of employment outside the Philippines through a  legitimate ageney or employer
and who possesses the necessary documents to work abroad, including:
(i)   Land-based oFWs;
(ii)  Seafarers and other sea-based workers, whether aboard foreign or domestic vessels,
other than those on a government ship for military or non-commercial purposes or on
a government installation located on high seas or offshore; and,
(iii) Other documented OFWs not previously classified elsewhere.
b)    `'Dooumen[ed OFW." refers to an overseas Filipino worker who has a  valid contract of
employment and possesses the necessary documents to work abroad;
c)    "BeneJict.an.es" refers to the legal spouse of an OFW, his dependent children, whether
legitimate  or  illegitimate,  who  are  the  primary  beneficiaries.  In  their  absence,  the
dependent  parents shall be the secondary beneficiaries. In the absence of the foregoing,
another person designated by the OFW.
d)    "Deperidenf " refers  to  the  legitimate,  1egitimated  or  legally  adopted  child who  is
unmarried,  not  gainfully  employed,  and  not  over  twenty-  one  years  of age,  or  over
twenty-one years of age: Proul.did, That he is congenitally incapacitated and incapable of
self-support, physically or mentally; legitimate spouse dependent for support upon the
employee; and the legitimate parents wholly dependent upon the covered employee for
regular support.
SLICT\ON 4. Oi]erseas Filipino Workers Social Secu:rity and Retire.neat Sgste:in.
- There is hereby established an Overseas Filipino Workers Social Security and Retirement
System, hereinafter referred to as the System, which shall cover all documented OFWs who
are duly registered with the Philippine Overseas Employment Administration (POEA).
SECTION 5. Ot}jecriues. -The System shall have the following objectives:
a)    Provide retirement benefits and welfare assistance to oFWs and their dependents;
b)    Develop a savings pension plan by which OFWs can be encouraged collectively to save
and contribute part of their earnings in order to protect them against the hazards of old-
age, disability, sickness and death; and,
c)   Ensure the viability of the funds remitted by OFWs and their employers.
The system shall endeavor to strike a right balance in management and safekeeping of the
funds remitted by OFWs while extending the benefits of the System's services to the rightful
beneficiaries.
SECTION   6.  Board oj] Trustees.  -  The System shall be administered by a Board of
Tmstees which shall be composed of the Secretary of the Department of Migrant Workers


(DMW), as chairman, the Administrator of Philippine Overseas Employment Administration
(POEA) as vice-chairman, the Director of the System, three (3) representatives from the land-
based overseas  workers,  three  (3) representatives  from  the seafarer's  group,  and two (2)
representatives  from  the  management   sector  representing  the  placement  and  manning
agencies, as members. The Board of Trustees and the System shall be under the supervision of
the Department of Migrant Workers.
The Director of the System, upon the recommendation of the Secretary of the Department of
Migrant Workers, and the representatives of both the land-based overseas workers and the
the seafarers, and of both management sectors, upon the recommendation of their respective
organizations, shall be appointed by the President.
The  Director   shall   be  the  chief  executive   officer   of  the  System.   He  shall   have  the
qualifications, rank and compensation of bureau director. The Director shall be assisted by a
Deputy Director who  shall be appointed by the Board of Trustees upon the recommendation
of the chairman.
SECTION 7. Pouners and Functt.oris. - The Board of Trustees shall have the following
powers and functions:
a)    Formulate and implement measures and programs to attain the system's objectives and
Purposes;
b)    Enter  into agreements  or contracts  as may be necessary for the proper and effective
administration of the System;
c)    Manage  the  retirement  fund  and  other  sources  of the  System  subject  to  pertinent
accounting rules and regulations issued by the Commission on Audit: Prout.ded, That
continuing  actuarial  and  statistical  studies  are  conducted to  determine  the  financial
viability of the System taking into account readjustment of the benefits,  contribution
rates, interest rates or the allocation of funds for the contingencies covered;
d)   Adopt from time to time a budget of expenditures for the System including its annual
budget which shall not be more than thirty percent (3o%) of the retirement fund;
e)    Acquire property, real or personal, which may be necessary for the attainment of the
purposes of this Act;
f)     Determine  and  fix  the  monthly  contribution  of  the  OFWs  based  on  minimum  and
maximum salary credits, and their employers whenever practicable and applicable;
g)   Approve restructuring proposals for the payment of due but unremitted contributions and
unpaid loan amortizations, including the rates of imposable penalties, under such terms and
conditions as it may prescribe;
h)   Sue and be sued in court;
i)    Appoint   such   personnel   as   may   be   deemed   necessary   to   ensure


administration of the System; and,
j)  Perform such other acts as may be necessary and authorized by the Board of Trustees for
the effective implementation of this Act.
SEcrloN 8. CThde7rma7t,. Poujers a7rd Functt.o7ts. - The chalrlnan shall have authority
and responsibility of exercising the powers and functions of the System.
The Chairman shall have the following powers and functions:
a) Formulate and implement policies and programs to attain the objectives and purposes
of the System;
b) Issue rules and regulations, subject to the approval of the Board of Trustees, to carry
out the objectives and purposes of the System;
c) Administer fund resources and recommend to the Board of Trustees the annual budget
oftheSystem;
d) Determine  the  functions,  composition,  and  compensation  of the  personnel   of the
System;
e) Coordinate all policies and programs relating to OFWs as provided in this Act; and,
I)  Undertake necessary consultations concerning matters affecting the welfare of OFWs
and their families,  and recommend to the  President policies  and programs  relative
thereto.
SECII0N  9. Secretan.ar. - The Secretariat personnel shall be appointed by the Chairman,
upon the  recommendation  of the  Director.  The  compensation  of the  personnel  and the
operating expenses of the Secretariat shall be charged to the General Fund of the System.
SECTION  io.  Computsort/  Couerage.  -  The  System  shall  be  compulsory  upon  all
documented OFWs as defined in this Act: Prot/ided, That they are not over fifty (5o) years of
age: ProtJI.dedrfurfher, That if an OFW is a member of the Social Security System (SSS) or any
similar entity as provided under existing laws, the same shall be discontinued and any benefit
or benefits accruing to the OFW from such membership shall be integrated into the System.
Compulsory coverage of the OFW under this system shall take effect on the first day of his
employment in the foreign country, or upon boarding the foreign or domestic vessel and
throughout the duration of his tour of duty, which entitles hin to all benefits that shall be
provided under this Act, including but not limited to retirement, death, disability, funeral,
sickness and maternity benefits.
For purposes of this Act, manning agencies in the case of sea-based OFWs, and placement or
recruitment agencies in the case of land-based OFWs, are deemed agents of their principals
and are considered employers of the OFWs concerned and shall be jointly and solidarity liable
with their principals with  respect to civil liabilities incurred for any violation of this Act,


without prejudice to any criminal liability arising out of any violation of the provisions of this
Act.
Other  OFWs  not falling  under the  preceding  paragraph  shall be  considered in the  same
manner as self-employed persons under such rules and regulations that the Board of Trustees
may prescribe.
SECTION 11. Saparaft.onJhom Empzoumenr. - When a covered OFW is separated from
employment, the obligation to pay contributions from that employment shall cease at the end
of the month of separation, but he shall be credited with all contributions  paid, including
those  made  by his  employer,  and  shall  be  entitled to  all  benefits  provided  in  this  Act.
Intermittently, while awaiting the renewal or a new contract, he may continue to pay the total
contributions to maintain his right to full benefit.
SECTION  12.   Retr.remerit  BerieJEts.  -All  covered  OFWs  who had  paid  at least_one
hundred twenty (12o) monthly contributions prior to the semester of retirement and who
has  reached  the  age  of  fifty  (5o)  years  shall  be  entitled  to  a  monthly  pension.  The
computation  of the  monthly  pension  shall  be  determined  by  the  Board  of Trustees in
accordance with the actuarial system to be established for the purpose.
Upon the death of the retired OFW pensioner, his primary beneficiaries as of the date of his
retirement  shall  be  entitled  to  receive  his  monthly  pension  and  his  dependents  to  the
dependent's pension: Prat/I.did, That no dependent shall receive double pension: Prouz.ded
Jitrther, That if he has no primary beneficiaries and he dies within sixty months from the start
of his monthly pension, his secondary beneficiaries, or his designated person in the absence
of secondary beneficiaries,  shall be entitled to a lump sum benefit equivalent to the greater
of : (a) twenty (2o) times the monthly pension or; a) the difference of sixty (6o) times the
monthly pension and the total monthly pensions by the System.
SECTION 13. Deperidlenr's Perisi.on. -  The dependent's pension shall be equivalent
to ten percent (1o%) of the monthly pension for each dependent child which shall not
exceed five.
SECTION +4. Early Retirement and Votunta:ry Separation Benefits. -  Any
OFW who voluntarily elects in writing to retire prior to the age of fifty (5o) but who has
cumulatively served for  at least five  (5)  years  in  overseas  employment,  shall be  paid
retirement or separation benefits equivalent to one and one-fourth (1  1/4) month basic
salary for every year of his respective overseas employment based on the highest salary
which he received in the course of his employment overseas.
SECTION  15.  OiJerseas Fill.pt.no  Workers Reft.rement Fund - There  shall be
established an Overseas Filipino Workers Retirement Fund, hereinafter referred to as the
Retirement Fund, consisting of the contributions of OFWs and their employers, and serf
employed OFWs as the case may be, which shall be used for the purpose of providi


retirement benefits and similar gratuities to OFWs or their beneficiaries in accordance
with this Act.
SECTION  16.    Ot7erseas F[Zfp€7io  Wo7.hers J}otn.de7i[ Fu7id -  There  shall be
established an Overseas Filipino Workers Provident Fund, hereinafter referred to as the
Provident Fund, consisting of voluntary contributions of OFWs covered by the System in
excess of the prescribed contribution rates, or the maximum salary credits, subject to
rules and regulations that may be promulgated by the Board of Trustees.
The Provident Fund shall be used for the provision of other benefits to covered OFWs and
their famflies, such as but not limited to loans for start-up capital for entrepreneurial
undertakings, in addition to the benefits that shall be provided for pursuant to this Act.
SECTION 17.  Sources  oJ. Fttrrd.  -  In addition  to the  monthly  contribution  of the
OFWs to the Fund, the Fund shall be financed from the following sources:
a)    Ten  percent  (1o9/o)  from  the  fees  charged  by  medical  testing  centers  which  provide
medical tests to overseas job-applicants;
b)   Ten percent (1o%) from fees charged by Philippine international airports to outgoing
OFWs;
c)    Ten percent (io%) from fees charged by oFwtraining centers; and,
d)   Fifty Million Pesos (P5o,ooo,ooo.oo) annually for five (5) years to be appropriated and
be taken from the Contingeney Fund of the Office of the President to complement the
Overseas Filipino Workers Retirement Fund.
SECII0N 18. Bilatermz Agrreements - The Department of Migrant Workers (DMW), the
Department of Foreign Affairs  (DFA)  and the System shall  ensure  compulsory coverage of
OFWs through bilateral social security and labor agreements with the host countries, and other
measures for enforcement: Prowl.did, That in countries which already extend social security
coverage to OFWs, the DFA through the Philippine embassies and the DMW shall negotiate
further agreements to serve the best interests of the OFWs.
SEcrl0N  19.  Settlement o/Diaputes -Any dispute arising under this Act with respect to
coverage,  contributions,  benefits  and  penalties,  or  any  matter  related  thereto,  shall  be
cognizable by the Board of Trustees and shall be decided by the Board of Trustees within the
mandatory period of thirty (3o) days after submission of evidence of the parties concerned. The
filing, determination and settlement of disputes shall be governed by the mles and regulations
promulgated by the Board of Trustees.
Any  decision  of the  Board  of Trustees,  without  any  appeal  therefrom,  shall  be  final  and
executory fifteen (15)  days  after receipt of the decision by the party concerned,  subject to
judicial review by the Court of Appeals on questions of facts and law, and by the


only on questions of law in accordance with the pertinent provisions of the Rules of Court. No
appeal bond shall be required.
The Board of Trustees may, mofu propI.o or on motion of any interested party, issue a writ of
execution to enforce its decision after the same has become final and executory.
SECTION   2o.   Penal Clause - Any violation of this Act or of the rules and regulations
promulgated by the Board of Trustees in the implementation of this Act, shall be punished by a
fine of not less than Fifty Thousand Pesos  (P 5o,ooo.oo) but not more than Two hundred
Thousand Pesos (P 2oo,ooo.oo) and imprisonment of not less than six (6) years and one (1)
day but not more than twenty (2o) years, or both, at the discretion of the court.
Criminal  action  arising  from  a  violation  of  this  Act  and  of  the  rules  and  regulations
promulgated by the Board of Trustees in implementation of this Act, may be commenced by the
Director of the System or by the concerned party, either under this Act, or in appropriate cases
under the Revised Penal Code and applicable special laws.
SECTION 21. Appropn.atiori. -To  effectively implement the provisions of this Act, there is
hereby appropriated the amount of One Hundred Million Pesos (P loo,ooo,ooo.oo) for the
initial capitalization of the System to be charged to the  current appropriations of the Office of
the President. Thereafter, the amount necessary for the continuous operation of the System
shall be included in the annual General Appropriations Act.
SECTION 22. J77ipzerrte7ib-7ig Ruzes arid Reguzaft.ons.  - The DMW, the POEA and the
Board of Trustees of the System, in consultation with concerned stakeholders shall,  within
ninety (9o) days after the effectivity of this Act, promulgate the necessary rules and regulations
for the implementation of this Act.
SECTION 23. Separabt.Zft!/ Clause. - If any portion of this Act is declared unconstitutional
or invalid, the other provisions not affected shall continue in full force and effect.
SECTION  24. Repealing  Clause.  -  Any  provision  of laws,  decrees,  executive orders,
proclamations, rules and regulations, or parts thereof, which are inconsistent with this Act are
hereby repealed, amended or modified accordingly.
SECTION 25. Effectr.un.rty Clause. - This Act shall take effect fifteen (15) days following the
completion of its publication in two (2) newspapers of general circulation.
Approved.