Bill protecting OFW remittance passed

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Filipino migrant workers considered modern day heroes by bill. FILE PHOTO

The House of Representatives has approved House Bill 9032 or the Overseas Filipino Workers (OFW) Remittance Protection Act on second reading.

In deference to the country’s modern heroes, the bill intends to protect the money earned by migrant workers by offering discounts on their remittances to their families in the Philippines.

The bill provides effective mechanisms to protect the rights and interests of the overseas workers who contribute significantly to the national economy through foreign exchange remittances.

This will also provide tax incentives for the establishments providing for discounts.

“These OFW remittances are transferred from the OFW 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,” Pampanga Rep. Aurelio Gonzales Jr., principal author of the bill, said.

HB 9032 provides mandatory 10-50 percent discount depending on the amount of remittances from banks and non-bank financial intermediaries.

This will also provide tax incentives for the establishments providing for discounts.

They can claim these discounts as tax deduction based on the cost of services rendered for the OFWs but the tax deduction will be mandatory and shall grant incentives for remittance establishments as they provide the discounts.

However, the bill will not allow the imposition of remittance fees that exceeds the prescribed charge provided in the bill.

Financial intermediaries offering remittance services to OFW are prohibited from increasing their current fees without consultation with the Department of Finance (DoF), Bangko Sentral ng Pilipinas (BSP) and the Philippine Overseas Employment Administration (POEA).

Any person who will violate the prohibitions of this bill will be penalized accordingly while institutions governed by BSP will be charged with fines and sanction provided under the New Central Bank Act, General Banking Law of 2000 and pertinent banking rules.

The bill also mandates DoF, BSP and POEA to provide financial education programs for the families of the overseas workers.

Financial education should include management, budgeting, and investment options to ensure proper handling of earnings and remittances.

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