Date Jo TWEENTIETH CONGRESS OF THE) REPUBLIC OF THE PHILIPPINES First Regular Session JUL -7 MO:28 SENATE S. No. _ Introduced by SENATOR CAMILLE VILLAR AN ACT PROVIDING FOR PROTECTION OF THE REMITTANCES OF OVERSEAS FILIPINO WORKERS EXPLANATORY NOTE Overseas Filipino Workers, our "OFWs", are rightly hailed as modern-day heroes. Through their sacrifice, hard work, and perseverance, they have become a lifeline to millions of Filipino families and a true pillar of the Philippine economy. In the year 2023 alone, OFW remittances reached over USD37.2 billion, sustaining millions of Filipino families, providing for daily household consumption, education, healthcare, entrepreneurship, and even contributing to national economic stability. However, despite their immense contributions, OFWs continue to face structural and organizational challenges when sending their hard-earned money home. Excessive remittance fees, hidden charges, currency conversion discrepancies, and limited access to financial literacy programs diminish the value of their remittances and expose them and their families to exploitation and risk of financial insecurity. This bill seeks to institutionalize a framework of protection and empowerment of OFWs and their beneficiaries by mandating several key reforms: (1) A mandatory 50% discount on remittance service fees for money sent by OFWs to their immediate families, with corresponding tax deductions for compliant remittance service providers; (2) Transparent and standardized posting of currency exchange rates to prevent undervaluation of remittances; (3) Prohibition against arbitrary increases in remittance fees without prior consultation with key government agencies;
(4) Penal provisions against misappropriation, unauthorized deductions, and other abusive practices involving OFW remittances; (5) Comprehensive, free financial literacy education for OFWs and their families, to be integrated into pre-departure and post-arrival orientation programs and continuously supported through online platforms and barangay-level engagement. Moreover, this measure empowers the Department of Migrant Workers (DMW), in coordination with other government agencies, to lead the implementation of robust protections for OFWs against fraudulent schemes, irresponsible borrowing, and financial management. Along with recognizing OFWs economic contributions, they must also be protected, empowered, and educated to ensure that the fruits of their labor create long-term prosperity for themselves and their families. The remittances they send back home is not just money; it is the product of years of sacrifice, love, and labor across vast lands and oceans. In view of the foregoing, the immediate passage of this measure is earnestly sought. Camill wein CAMILLE VILLAR
TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 25 JUL -7 MO :23 SENATE Ni.: S. No. - Introduced by SENATOR CAMILLE VILLAR AN ACT PROVIDING FOR PROTECTION OF THE REMITTANCES OF OVERSEAS FILIPINO WORKERS Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: ARTICLE I GENERAL PROVISIONS
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 earings 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 22 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
2 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 11 of Finance (DOF), Bangko Sentral ng filipinas (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, or 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 (PhP50,000.00) but not exceeding Seven Hundred Fifty Thousand Pesos (PhP750,000.00). 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. -
18 The DMW as the lead agency, in coordination with the Overseas Workers Welfare 19 Administration (OWWA), the DOF, and the BSP, shall ensure that a mandatory 20 financial education program - 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 30 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 OFWs 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, 10 Association of Bank Remittance Officers, Inc., Philippine Association of Foreign 11 Exchange Dealers, Money Changers and Remittance Agents, Inc., representatives 12 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, decrees, executive orders, issuances,
rules and regulations which may be inconsistent with any of the provisions of this Act are hereby 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 Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation. Approved,