Philippines: 50% discount on OFW remittance fees set, what happens next
Lawmakers approve Overseas Filipino Workers Remittance Protection Act
Manila: The House of Representatives approved a measure on its third and final reading to cut remittance fees for overseas Filipino workers (OFWs) by 50 per cent.
House Bill No. 10959, or the Overseas Filipino Workers Remittance Protection Act, aims to ease the financial burden on OFWs sending money to their families in the Philippines.
The bill passed with 174 votes in favour and provides a 50 per cent discount on fees imposed by banks and remittance centres.
How it works
These institutions can claim the discount as a tax deduction on their operational costs. Legislators hope this incentive would encouraging participation by remittance companies.
OFWs contribute over $30 billion annually in remittances, making the Philippines the fourth-largest recipient of global remittances.
Speaker Ferdinand Martin Romualdez described the bill as a gesture of gratitude for OFWs' sacrifices. It signifies the government’s commitment to supporting OFWs, often referred to as modern-day heroes.
$37.2b
OFW remittances went up by 3 per cent to $28.07 billion in January–September 2024, up from $27.24 billion in the same period in 2023.
Filipinos based in the US were the leading source of remittances received by the Philippines. Remittances from the US amounted to around 13.71 billion US dollars in 2023, Singapore follows, with remittances amounting to around $2.36 billion US dollars, according to Statista.
Key points of House Bill No. 10959:
- Banks and remittance centers must consult with the Department of Finance (DOF), Bangko Sentral ng Pilipinas (BSP), and the Department of Migrant Workers (DMW) before increasing fees.
- Specific violations, such as unauthorised use of remittances or imposing fees above legal limits, are punishable by imprisonment (6 months to 6 years) and fines ranging from Php50,000 to Php750,000.
- Transparency is required, including prominently displaying exchange rates.
- The measure ensures that all OFW remittances, whether mandated or voluntary, are protected under this proposed legislation.
What happens next:
After its passage in the House, the Bill will now be referred to the other chamber, the Senate, where it follows the same route (through committees and finally to the “floor”).
The Senate may approve the bill as received, reject it, ignore it or change it. Congress may form a “bicameral” conference committee to resolve or reconcile the differences between the versions of a bill. If an agreement is reached, the committee members prepare a conference report with recommendations for the final bill.
Both the House and Senate must vote to approve the conference report. If the conference committee is unable to reach an agreement, the bill dies.
After both the House and Senate approve a bill in identical form, the bill is sent to the President. If the President approves of the legislation, it is signed and becomes law. If the President takes no action for 10 days while Congress is in session, the bill automatically becomes law.
The President, however, can oppose (“veto”) the bill. And if no action is taken for 10 days and Congress has already adjourned, there is a “pocket veto”. If the President vetoes the bill, Congress can override the veto with a two-thirds majority vote in both the Senate and the House.