The House of Representatives approved on second reading the bill which seeks to grant overseas Filipino workers (OFWs) discounts to their remittances to their families in the Philippines in a bid to recognize their contribution to the national economy.
House Bill 9032 or the proposed “Overseas Filipino Workers (OFWs) Remittance Protection Act”, principally authored by Rep. Aurelio Gonzales Jr., stipulates that banks and non-bank financial intermediaries shall provide a mandatory discount on remittance fees of 10 to 50 percent depending on the amount to be remitted, reported Manila Bulletin.
“These OFW remittances are transferred from the OFWs to intermediaries, such as financial and non-bank financial institutions, before they reach their beneficiaries. In the course of the fund transfer, the amounts remitted are subject to several fees and high remittance charges which result in the depletion of the amount to be remitted and received,” said Gonzales.
All establishments providing discounts on remittance fees may claim these discounts as a tax deduction based on the cost of services rendered for the OFWs. The tax deduction shall be mandatory, thus it shall grant incentives for remittance establishments as they grant the discounts.
The bill prohibits the imposition of remittance fees in excess of those prescribed under the proposed Act.
Financial intermediaries offering remittance services to OFWs shall not be allowed to raise their current fees without prior consultation with the Department of Finance (DOF), Bangko Sentral ng Pilipinas (BSP), and Philippine Overseas Employment Administration (POEA).
The measure also provides for penalties of imprisonment and fines to any person found violating provisions of the Act.
Meanwhile, institutions governed and supervised by the BSP shall be subjected to the necessary fines, penalties, and sanctions as provided under the “New Central Bank Act,” “General Banking Law of 2000,” and other pertinent banking regulations.
Gonzales said the measure will also encourage establishments and institutions to provide for loans to OFWs and mandate government agencies to provide for financial education to OFWs and their families.
Hence, the bill mandates the DOF, the BSP, and POEA to ensure that the mandatory financial education program shall be available for them. It shall include providing information on financial management, budgeting, and investment options, among others, to educate the OFWs and their families in the handling of earnings and remittances.