Overseas Filipino Workers (OFWS) Remittance Protection Act

Sockali a Pifice of the Ore comp TWENTIETH CONGRESS OF THE 25 OCT -6 P1:14 REPUBLIC OF THE PHILIPPINES First Regular Session RECEIVED BY: SENATE S. No. 1439 Introduced by Senator Raffy T. Tulfo AN ACT PROVIDING FOR PROTECTION OF THE REMITTANCES OF OVERSEAS FILIPINO WORKERS EXPLANATORY NOTE OFW remittances serve as a major pillar of the Philippine economy, providing a stable source of foreign exchange that strengthens the peso, sustains household spending, and drives national growth. Beyond their economic impact, these remittances uplift millions of Filipino families and help ensure the country's financial resilience even in times of global uncertainty. Cash remittances to the Philippines rose by 3.7 percent year-on-year to USD 2.99 billion in June 2025—the highest level in six months-according to data from the Bangko Sentral ng Pilipinas (BSP). This marks the strongest inflow from overseas Filipinos since December 2024, when remittances reached USD 3.38 billion. Land-based overseas Filipinos contributed the bulk of the total, posting USD 2.43 billion, a 3.7 percent increase from the previous year. Meanwhile, sea-based overseas Filipinos accounted for USD 555 million, representing a 3.5 percent year-on-year growth. Philippine remittances from OFWs remain the fourth largest in the world, following India, Mexico, and China, and continue to serve as a major driver of the country's economic growth. The experience during the pandemic has likewise demonstrated that OFW remittances were instrumental in keeping the Philippine economy afloat amid a global financial crisis.

Given their vital contribution to national development, it is imperative to protect Overseas Filipino Workers (OFWs) from financial institutions that unduly impose excessive transfer and interest charges on their remittances. It is likewise necessary to establish secure, transparent, and efficient channels for the transmission of their hard-earned income, thereby ensuring that their families and beneficiaries receive the full and rightful value of their remittances. In view of the foregoing, the passage of this bill is earnestly sought.

Sainta TWENTIETH CONGRESS OF THE 25 OCT -6 P1:14 REPUBLIC OF THE PHILIPPINES First Regular Session RECEIVED BY: . No. - SENATE C Introduced by Senator Raffy T. Tulfo PROVIDING FOR PROTECTION OF THE REMITTANCES OF OVERSEAS FILIPINO WORKERS Be it enacted by the Senate and the House of Representatives of the Philippines 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 States to protect the rights of the workers and promote their welfare. Recognizing the significant contribution of OFWs to the national economy through 7 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. -

a) Overseas Filipino Worker (OFW) - refers to a person who is to be engaged, is engaged or has been engaged in a renumerated activity in state of which the person is not a citizen or on board a vessel navigating the foreign seas of other than a government ship used for military or non-commercial purpose 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. c) Remittance Fee - refers to the services fee or charged imposed by bank and nonbank 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

9 OFW remittances, whether voluntary or mandated by law, orders, issuances or rules and regulations.

Sec. 5. Discount on Remittances Fees and Tax Deduction Granted to Establishment.-

Bank and non-bank financial intermediaries may impose fees for services rendered in sending money of OFWs to their immediate family members, subject to a fifty percent (50%) discount. Bank and non-bank financial intermediaries providing discounts on remittance fees may claim the discounts granted as a tax deduction based on the cost of services rendered to OFWs. The discounts given should be treated as an ordinary and necessary expense deductible from the gross income of the intermediary falling under the category of itemized deductions: Provided, that the total deduction from the gross income of establishments providing discounts on remittance fees shall not exceed Twenty-four thousand pesos (P24,000.00) per OFW every taxable year: Provided, further, that the Secretary of Finance shall upon the recommendation of the Commissioner of Internal Revenue, issue the 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 will be the same amount that will be received by the beneficiaries of the remittance.

Sec. 7. Prohibition from Raising Remittance Fees. - All banks and non-banks

financial intermediaries offering remittances services to OFWs are prohibited from raising their current remittances fees without prior consultation with the Department of Finance (DOF), Bangko Sentral ng Pilipinas (BSP), and Department of Migrant Workers (DMW).

Sec. 8. Other Prohibited Acts. - The following act 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, or for administration, or under any other obligation, involving the duty to make delivery of, or 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 DOF, BSP and DMW before raising remittances fees.

Sec. 9. Penalties. -

a) Any person who is found guilty of any of the acts described in Section 8 (a) hereof shall be punished by: i. Imprisonment of two (2) months and one (1) day to six (6) months, if the amount of the remittances does not exceed Two Hundred pesos (P200.00); ii. Imprisonment of two (2) years and four (4) months to four (4) years and two (2) months, if the amount of the remittances is over Six Thousand Pesos (P6,000.00) but does not exceed Twelve Thousand Pesos; iii. Imprisonment of four (4) years, two (2) months and one (1) day to eight (8) years if the amount of the remittances is over Twelve Thousand Pesos (P12,000.00) but does not exceed Twenty Two Thousand Pesos (P22,000.00); and

iv. Imprisonment of six (6) years to eight (8) years, adding one (1) year for each additional Ten Thousand Pesos (P10,000.00) but nor exceeding twenty (20) years, if the amount of the remittances is more than Twenty-Two Thousand Pesos (P22,000.00). b) Ary person who is found guilty of violating Section 8 (b) of this Act shall be punished by: i. Imprisonment of six (6) months and one (1) day to four (4) years and two (2) months, if the amount of the remittance is over Two Hundred Pesos (P200.00) but does not exceed Six Thousand Peso (P6,000.00); ii. Imprisonment of two (2) years, four (4) months and one (1) day to six (6) years, if the amount of the remittance is over Six Thousand Pesos (P6,000.00) but does not exceed Twelve-Two Thousand Pesos (P12,000.00); MIT. Imprisonment of six (6) years and one (1) day to ten (10) years, if the amount of the remittance is over Twelve Thousand Pesos (P6,000.00) but does not Twenty-Two Thousand Pesos (P22,000.00); and iv. Imprisonment of ten (10) years and one (1) day to twelve (12) years, adding one year for each additional Ten thousand pesos (P10,000.00) but not exceeding twenty (20) years, if the amount of remittances exceeds Twenty-Two Thousand Pesos (P22,000.00). c) Any person who is found guilty of violating Section 8 (c), (d) and (e) of this Act shall be punished by imprisonment of six (6) months and one (1) day to six (6) years and one (1) day and a fine of Fifty Thousand pesos (P50,000.00) but not exceeding Seven Hundred Fifty Thousand Pesos (P750,000.00). Aside from the criminal liability provided in the preceding paragraphs, 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 the 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. Mandatory Financial Education for OFWs and their Families. - The DOF,

5 together with the BSP, DMW and other agencies, shall ensure that a mandatory financial 6 education program will be provided to OFWs and their families. The program shall include instruction on financial management, budgeting, investment 8 options and similar topics, which shall educate the OFWs and their families in the handling 9 of their earnings and remittances.

Sec. 11. Liability under the Revised Penal Code and Other Laws. - Prosecution under

11 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 DOF shall in consultation with the BSP, DMW,

Overseas Workers Welfare Administration, Department of Foreign Affairs, Bankers 15 Association of the Philippines, Association of Bank Remittance Agents, Inc., 16 representatives from the placement or recruitment industry, non-government 17 organizations advocating the rights and welfare of OFWs and other stakeholders, issue 18 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, decrees, executive orders, issuances, rules and

regulations which may be inconsistent with any of the provisions of this Act are hereby 22 deemed repealed, amended 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 Acy shall take effect fifteen (15) days after its publication

in the Official Gazette or in a newspaper of general circulation. Approved,