The House of Representatives has approved on second reading a bill mandating banks and non-bank financial intermediaries to provide up to 50 percent discount on remittance fees.
House Bill 9032 or the proposed “Overseas Filipino Workers (OFWs) Remittance Protection Act” provides a mandatory discount on remittance fees of 10 to 50 percent depending on the amount to be remitted.
Pampanga Rep. Aurelio Gonzales Jr. said the measure seeks to recognize the OFWs’ significant contribution to the national economy.
He cited the need to institute effective mechanisms to protect the rights and interests of the OFWs, particularly their remittances.
“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,” Gonzales said.
House Bill 9032 seeks to provide for a limit on the remittance fees to be imposed, discounts to OFWs, and tax incentives for the establishments providing for such discounts.
Under the bill, 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,” according to the measure.
HB 9032 provides that 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).
Under the bill, 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 noted that the measure “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.”
HB 9032 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.
It was ANGKLA partylist Rep. Jesulito Manalo, an author of the bill, who sponsored the bill on the floor.
Other authors of the bill are Deputy Speaker Linabelle Ruth Villarica, and Reps. Micaela Violago, Francisco Datol Jr., and Fernando Gonzalez.
