OFW Pre-employment Loan Assistance Act

Senate Office of the erectarp TWENTIETH CONGRESS OF THE 26 JAN 27 A11 :23 REPUBLIC OF THE PHILIPPINES First Regular Session RECEIVED BY: SENATE Senate Bill No. 1696 Introduced by Senator Erwin T. Tulfo AN ACT ESTABLISHING A PRE-EMPLOYMENT LOAN ASSISTANCE PROGRAM FOR OVERSEAS FILIPINO WORKERS, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES EXPLANATORY NOTE

Section 3, Article XVIII of the 1987 Constitution provides that

the State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. Every year, millions of Filipinos aspire to work overseas to secure better opportunities and a brighter future for themselves and their families. In 2024, the number of Overseas Filipino Workers (OFWs) reached about 2.19 million, with the majority engaged as overseas contract workers!' Despite their significant contribution - OFW remittances reached a record US $38.34 billion in 2024, accounting for a notable 1 https://www.philstar.com/business/2025/12/19/2495253/ofws-rise-219-million-2024-psa Accessed on 15 Jan 2026. 2 https://www.pids.gov.ph/details/news/in-the-news/remittances-reach-record-high-38-3-billion Accessed on 15 Jan 2026.

share of the national economy, aspiring OFWs face substantial financial barriers before departure. Recruitment visa and fees, travel costs, processing, documentation expenses can be overwhelming, forcing many OF Ws to borrow money to cover upfront costs. Without access to formal financing, some turn to informal lenders charging high interest, trapping them in cycles of debt and financial insecurity even before they begin earning abroad. The proposed measure addresses this challenge by providing regulated loans coupled with financial literacy support, enabling our OFWs to begin their employment abroad with greater financial security. This bill aims to provide loan assistance to OF Ws up to P100,000, interest-free for the first year (up to 18 months for first-time OFWs), with repayment based on income. Likewise, first-time OFWs get priority access and free mandatory financial literacy orientation. It also mandates the creation of a Joint Congressional Oversight Committee to monitor the implementation and conduct a sunset review within five (5) years. This representation believes that it is our duty as a nation to protect and empower our OFWs. By reducing their financial vulnerability, we acknowledge their hard work, respect their rights, and affirm our collective responsibilty to safeguard their welfare. This will ensure that seeing work abroad does not come at the cost of financial exploitation. In view of the foregoing, the passage of the measure is earnestly sought. ERWIN T. TULFO

• . • .. Senate Bilice of the sberretary TWENTIETH CONGRESS OF THE JAN 27 A11 :23 REPUBLIC OF THE PHILIPPINES ) First Regular Session RECEIVED BY: SENATE Senate Bill No. 1696 Introduced by Senator Erwin T. Tulfo AN ACT ESTABLISHING A PRE-EMPLOYMENT LOAN ASSISTANCE PROGRAM FOR OVERSEAS FILIPINO WORKERS, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES 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 "OFW

Pre-Employment Loan Assistance Act."

SEC. 2. Declaration of Policy. - It is hereby declared the policy

of the State to afford full protection to labor, local and overseas, and to promote the welfare of Overseas Filipino Workers (OFWs). Likewise, > the State hereby recognizes the need to reduce the financial burden of pre-employment expenses which often force OFWs into high-interest and exploitative lending arrangements.

SEC. 3. Coverage. - This Act shall apply to all OF Ws who have

secured valid overseas employment contracts and who require financial assistance for pre-employment expenses.

SEC. 4. OFW Pre-Employment Loan Assistance Program. -

There is hereby established an OFW Pre-Employment Loan Assistance

1 Program to be administered by the Department of Migrant Workers Welfare 2 (DMW), in coordination with the Overseas Workers Administration (OWWA), for the benefit of qualified OF Ws. Loans granted under this Program shall be subject to the 6 following terms and conditions: a) At least one (1) member of the OFW's immediate family, who is not otherwise disqualified by existing law, shall participate in the loan as co-borrower. Such co-borrower shall execute and deliver all documents, instruments, or agreements necessary or incidental to effectuate such participation, including but not limited to co-borrowing agreements and acknowledgments of obligations. b) The maximum loanable amount for each qualified OF W shall be limited to the amount necessary to cover documented pre- employment expenses which shall not exceed One Hundred Thousand Pesos (P100,000.00); c) Such loans shall be interest-free during the first year of repayment; d) Upon the lapse of the first year, any interest imposed shall in no case exceed the prevailing government lending rates; and e) The loan amount and repayment period shall be reasonable and shall be determined with due regard to the OF W's income level and employment conditions.

SEC. 5. OFW Pre-Employment Expenses. - Pre-employment

expenses eligible under this Act shall include, but not be limited to: a) Placement and processing fees; b) Medical and psychological examinations; c) Training, skills assessment, and certification fees; d) Passport, visa, and work permit fees;

e) Airfare and travel expenses not shouldered by the employer; and f) Such other expenses as may be determined by the implementing agency.

SEC. 6. Loan Repayment Account. - OFWs availing of pre-

employment loan assistance under this Act shall maintain a bank account into which all loan payments shall be deposited and shall authorize the bank to automatically deduct monthly amortizations from remittances: Provided, That in case of non-compliance, the entire loan shall become immediately due and demandable.

SEC. 7. First-Time Overseas Filipino Workers. - First-Time

OFWs shall be entitled to the following: a) Priority access to the Loan Assistance Program; b) An extended interest-free repayment period up to eighteen (18) months; c) Free mandatory financial literacy and debt management orientation prior to the release of the loan, to be administered by the DMW, in coordination with OWWA, Department of Finance (DOF), and Bangko Sentral ng Pilipinas (BSP);

SEC. 8. Audit. - The Commission on Audit (COA) shall be the

ex officio Auditor of all the funds provided for in this Act and is, accordingly, empowered to designate and appoint its representative(s) and other subordinate personnel to perform such necessary audit duties as the Commission shall direct. They shall be responsible to and shall only be removed by the COA.

SEC. 9. Joint Congressional Oversight Committee. (JCOC). -

Joint Congressional Oversight Committee is hereby constituted to monitor and ensure the effective implementation of this Act, identify

1 the deficiencies, limitations, and propose necessary amendments to address them. The Committee shall be composed of five (5) members each from the Senate and House of Representatives to be designated by the Senate President and the Speaker of the House of Representatives, respectively. The Committee shall be jointly chaired by the respective Chairpersons of the Senate Committee on Migrant Workers and Committee on Overseas Workers Affairs of the House of Representatives. The Minority in the Senate and House of Representatives shall each have at least one (1) seat in the Committee, as Co-Vice Chairpersons. The Secretariat of the Committee shall come from the existing Secretariat personnel of the Senate Committee on Migrant Workers and Committee on Overseas Workers Affairs of the House of Representatives. The JCOC shall conduct a hearing at least once a year review the implementation of this Act and identify other necessary legislation.

SEC. 10. Sunset Review. - Within five (5) years after the

effectivity of this Act, or as the need arises, the Joint Congressional Oversight Committee shall conduct a sunset review. For purposes of this Act, the term "sunset review" shall mean a systematic evaluation by the Joint Congressional Oversight Committee of the accomplishments and impact of this Act, as well as the performance and organizational structure of its implementing agencies, for purposes of determining remedial legislation.

SEC. 11. Implementing Rules and Regulations. - Within ninety

(90) days from approval of this Act, the DMW, in consultation with OWWA, DOF, BSP, Department of Foreign Affairs (DFA), non- government organizations advocating the rights and welfare of OF Ws

1 and other stakeholders, shall formulate the implementing rules and 2 regulations necessary in the proper implementation of this Act.

SEC. 12. Appropriations. - The amount necessary for the initial

5 implementation of this Act shall be charged against the current year's 6 appropriations of DMW. Thereafter, such sum as may be necessary for > the continued implementation of this Act shall be included in the annual General Appropriations Act.

SEC. 13. Separability Clause. - Should any provision or part of

11 this Act be declared unconstitutional or invalid, the other provisions and parts hereof, insofar as they are separable from the invalid ones, shall remain in full force and effect.

SEC. 14. Repealing Clause. - All laws, decrees, orders, issuances,

rules and regulations or parts thereof which are inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 15. Effectivity. - This Act shall take effect fifteen (15) days

after its publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved,