The PH House of Representatives has made a unanimous approval of House Bill 7951, otherwise known as the OFW Remittance Protection Bill.
This is good news as many OFW remittances to the Philippines are now secured. The interest, hard-earned money, and beneficiaries of the millions of overseas Filipino workers (OFWs) worldwide are now protected by the government.
OFW Remittance Protection Bill: Everything you need to know
The OFW Remittance Bill is a law proposed by lawmakers primarily for the protection of OFW remittances. According to Pampanga Rep. Aurelio Gonzales Jr., the principal author of the bill, “Those OFW remittances are transferred from the OFWs to the intermediaries, such as financial and non-bank financial institutions before it reaches beneficiaries. In the course of the transfer of the funds, the amount remitted is subjected to several fees and high remittance charges which result in the depletion of the amount to be remitted and received by beneficiaries.”
That said, the bill was meant to stop the high remittance charges and safeguard the remittances sent by OFWs.
What are the benefits of the OFW Remittance Protection Bill?
The OFW Remittance Bill is a law proposed by lawmakers to protect the OFWs and their families’ interests while safeguarding the bank’s welfare along with the non-bank financial intermediaries. It offers hordes of other benefits, which we listed here especially for you.
1. Discount on remittance transfer fees.
OFWs can avail of up to 50% discount on remittance fees under this bill, depending on the amount being remitted. By mandating bank and non-bank financial intermediaries to slash their money remittance charges by half, the discount slab may take a proportionally more significant amount, depending on the total remittance amount.
2. Tax Deduction
Naturally, the bill can’t be entirely one-sided and protect only the OFWs’ interest. To balance it out, the law proposes that the establishments and intermediaries providing remittance services claim mandatory tax deductions to offset the cost of discounts on the cost of services rendered to the OFWs.
Note that the law also says, “The total deduction from the gross income of establishments providing discounts should not exceed ₱24,000 per OFW every taxable year.”
3. Ceiling Limit on fees
The bill is also dead-set on setting a ceiling limit on the remittance fees. By imposing limits on the prices and discounts, financial intermediaries, banks, and transfer operators are forced not to raise costs without prior consultation and approval from the Bangko Sentral ng Pilipinas (BSP), the Department of Finance (DOF), and the Philippine Overseas Employment Administration (POEA).
4. Penalty
Like every other law, the OFW Remittance Protection Bill also details the penalties for not adhering to its terms. It also varies between individuals and institutions. Under the terms of the bill, individuals who violate the law’s provision will face penalties like imprisonment and fines. On the other hand, institutions are generally governed by the BSP. They will be under the penalties, liabilities, and sanctions provided under the New Central Bank Act, General Banking Law of 2000, and other banking regulations.
5. Education
Also listed as one of the benefits of this bill is the support from government agencies. This measure aims to provide a mandatory financial education program to OFWs and their families. This program should help guide them on how to better handle their earnings by providing information on financial management, training on budgeting, and explaining various investment and loan options to improve the OFWs and their beneficiaries’ financial literacy.
The Philippines recorded significant inward remittances that contributed towards keeping the economy. As the government recognizes their contribution as modern-day heroes, the OFW Remittance Protection Bill offers to save billions of dollars on remittance charges, leaving more money in the hands of their beneficiaries.