Overseas Filipino Workers Credit Assistance Act

winner Offier of thr TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 25 AUG -5 P2:05 First Regular Session SENATE RECEIVED BY S. No. - Introduced by Senator Jinggoy Ejercito Estrada AN ACT ESTABLISHING A CREDIT ASSISTANCE PROGRAM FOR OVERSEAS FILIPINO WORKERS EXPLANATORY NOTE Overseas Filipino Workers (OFWs) are widely recognized as modern-day heroes for their significant contribution to the Philippine economy through remittances that support millions of Filipino families which help sustain economic growth. Despite their vital role, many OFWs face financial challenges, especially during the pre-deployment phase or in times of emergency. At present, numerous OFWs are forced to borrow from informal lenders with high interest rates just to cover the costs of placement fees, training, documentation, and travel. This often leads to a cycle of debt even before they can begin earning abroad. Others who are returning home may struggle to access affordable capital to start businesses or reintegrate economically. Under this measure, a credit facility for the benefit of OFWs is to be established. An OFW with a valid employment contract may avail of a loan of not more than P50,000 from the Overseas Worker and Welfare Administration to defray the living expenses of his family during the first three months, as well as recruitment expenses including placement fees, documentation costs and plane tickets.

This proposal will not only protect OFWs from financial exploitation but also promote financial literacy, sustainable reintegration, and inclusive economic growth. It is also a concrete step toward recognizing the sacrifices and responding to the needs of migrant workers. In view of the foregoing, the early passage of this bill is earnestly sought. JINGGOY EJERCITO ESTRADA

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 25 AUG -5 P2:05 SENATE RECEINED EY S. No. _ Introduced by Senator Jinggoy Ejercito Estrada AN ACT ESTABLISHING A CREDIT ASSISTANCE PROGRAM FOR 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

2 Workers Credit Assistance Act .

Sec. 2. Declaration of Policy. - Consistent with the State policy that the State

affirms labor as a primary economic force and that it shall protect the rights of workers and promote their welfare, it is hereby declared that the government and its instrumentalities must promote and carry out programs geared towards advancing the interest of the Overseas Filipino Workers (OFWs) by providing them access to credit facilities even before their departure and/or deployment.

Sec. 3. Loans. - An OFW with a valid employment contract, as certified by the

10 Philippine Overseas Employment Administration (POEA), may avail of a loan of not more than Fifty thousand pesos (Php50,000.00) from the Overseas Worker and Welfare Administration (OWWA) to defray the living expenses of his family during the first three (3) months of absence, as well as recruitment expenses including placement fees, documentation costs and plane tickets: Provided, That any one of the members of his family not otherwise disqualified by law shall participate in the loan as co- borrower and execute necessary documentation to that effect: Provided, further, That the loan shall be granted and released by the OWWA upon proper submission of the

1 following documents, duly certified to in writing by the recruitment agency with corresponding authentication and properly certified/verified by the POEA: a) Employment Contract; b) Plane ticket; and c) Bank account.

Sec. 4. Establishment of Bank Account. - OFWs availing of the credit assistance

7 under this Act, who do not yet have a valid bank account in the Philippines, shall open a bank account in which payments for the loan shall be made.

Sec. 5. Payment of Loan. - The loan shall be paid in twelve (12) equal monthly

installments or more but not exceeding twenty-four (24) months at a preferred interest rate not to exceed six percent (6%) per annum through the bank account to be established under the immediately preceding Section. For this purpose, the applicant shall execute the necessary authority for the bank to withhold the monthly loan amortization from his remittances.

Sec. 6. Implementing Rules and Regulations. - The OWWA, in consultation with

organized labor groups and the relevant sectors, shall issue the implementing rules and regulations (IRR) for the effective implementation of this Act. The IRR shall include provisions that will address non-payment of loans provided under this Act and the corresponding penalties that may be imposed, 20 collection and administration of loans, and other issues of significance relevant to this 21 Act.

Sec. 7. Appropriation. - The amount needed to implement the provisions of this

23 Act shall be appropriated out of the Overseas Workers Welfare Fund.

Sec. 8. Repealing Clause. - Any other provisions of law or rules and 24

regulations inconsistent to the provisions of this Act are hereby repealed, amended, or modified accordingly.

Sec. 9. Effectivity. - This Act shall take effect fifteen (15) days after its

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