Davao City First District Representative Paolo Duterte has urged the House of Representatives to “swiftly” approve a measure that can help provide overseas Filipino workers (OFWs) with a 50% discount on their remittance fees and thus safeguard their hard-earned money from excessive charges.
In particular, the Dabawenyo lawmaker urged his fellow lawmakers at the House Committee on Overseas Workers Affairs to fasttrack deliberations on House Bill No. 4469, a bill that he has filed together with Rep. Eric Yap of Benguet, and ACT-CIS Partylist Representatives Jeffrey Soriano and Edvic Yapor.
As the nation commemorates “Month of Overseas Filipinos” this December, he also asked his colleagues in the lower house to look further into House Bill Numbers 185, 1190, 2944, 3020, 4170, 4257, 4343, 4397, and 4469 — all seeking to protect the remittances of OFWs from usurious charges.
“The billions of dollars in remittances sent home by our OFWs, who we consider modern-day heroes, have always been one of the country’s major economic drivers,” said Duterte in a press statement. “The money they send home helped the country ride out the economic shock triggered by the COVID-19 pandemic. It is (therefore) important that we protect their hard-earned earnings.”
He said that House Bill No. 4469 would make it mandatory for OFWs and their families to attend financial education seminars to be conducted by the government so that they may be taught how to handle and invest their money more adequately.
The bill also backs a proposal setting a 50 per cent cut on OFW remittance fees as imposed by banks and non-bank financial intermediaries. These institutions can, in turn, claim such discounts as tax deductions on gross income. The total deductions that can be claimed from the grant of the 50 per cent discount are capped at P24,000 per OFW every taxable year.
Hefty deductions possible
Duterte pointed out that the hefty reduction in OFW remittance fees is possible and may even be lowered further with the use of technology, as shown by the innovations done by fintech developers that utilize mobile apps and other digital platforms to process remittances in order to offer zero transaction fees and reasonable foreign exchange rates.
These pioneering financial services are now available in the market and are expected to flourish after the COVID-19 pandemic has forced a shift to more digital options in transactions.
Duterte added that the bill would “complement the OFW-friendly legacy” of his father, former President Rodrigo Duterte, who pioneered digital banking services for OFWs with the establishment of the Overseas Filipino Bank (OFBank) — the first branchless and digital-only bank in the country that caters exclusively to the financial needs of Filipinos based abroad.
He shared that OFBank not only offered 24/7 availability but it also shielded OFWs from the ludicrous foreign exchange rates and unreasonable remittance fees by offering zero charges on transfers between OFBank accounts and Landbank of the Philippines (LandBank) accounts.
OFBank account holders were also able to invest in retail treasury bonds through the OFBank Mobile Banking App, among other financial services.
“These innovations pioneered by OFBank can be strengthened by passing House Bill 4469 and the eight other bills now pending in Congress with similar provisions,” Duterte said.
Raising fees to be barred
Under House Bill No. 4469, banks and other financial service providers will be barred from raising their current remittance fees without prior consultation with the Department of Finance (DOF), Bangko Sentral ng Pilipinas (BSP), and the Philippine Overseas Employment Administration (POEA).
Violations committed under HB No. 4469 such as the misappropriation or conversion of foreign exchange remittances that prove prejudicial to the OFW or their beneficiary and imposition of excessive remittance fees, among other infractions, will be penalized with imprisonment and fines depending on the amount of money involved.
Duterte also underscored the need for OFWs and their families to be financially literate so that they can learn to spend, save and invest their money wisely. This is the reason why the bill also contains a provision that requires the DOF, BSP, POEA, and other relevant government agencies to educate them on handling their earnings and remittances.
According to data from the Bangko Sentral ng Pilipinas (BSP), OFW remittances rose 3.8 per cent year-on-year in September 2022 alone to $2.84 billion.
Even amid a pandemic, the money sent home by OFWs also hit a new high last year, reaching $31.42 billion, exceeding the previous record of $30.13 billion in 2019. Cash remittances in 2021 also rose 5.1 per cent from $29.9 billion in 2020.