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House OKs 50% discount on OFWs’ remittance fees

THE House of Representatives has approved on third and final reading a bill giving millions of overseas Filipino workers (OFWs) a 50 percent discount on fees and charges on remittances they regularly send to their families.

Pampanga Rep. Aurelio “Dong” Gonzales Jr., principal author of House Bill 7951, said Thursday the bill, if it becomes a law, “would save OFWs billions in remittance fees that their families could use as additional funds during this time of pandemic.”

Citing official data, Gonzales said the country’s “modern day heroes” sent home about $28 billion (P1.4 trillion) in 2017 through official channels, paying remittance charges ranging from six percent to 10 percent, or an average of eight percent.

“At eight percent, the total cost of remitting the P1.4 trillion to OFW families amounted to P112 billion. Cutting that by half would mean an additional P56 billion in the pockets of OFWs families, money they could spend for necessities,” he said.

A counterpart measure has been filed in the Senate by boxing icon Sen. Manny Pacquiao.

Under House Bill (HB) 7951, banks and other remittance centers can claim the 50-percent discount on fees as an expense that they can deduct from their gross income for taxation purposes.

They 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).

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They are also required to post in a conspicuous place in their establishments the peso equivalent of the OFWs’ foreign currency remittances. Such peso equivalent shall be the same amount to be received by the OFW beneficiary-families.

The proposed law enumerates several prohibited acts, including imposition of excessive fees, failure to post the conversion rate, conversion of the OFW remittance to the disadvantage of his beneficiary, and taking of the remittance without the consent of the OFW or his beneficiary.

It imposes the penalty of imprisonment ranging from two months and one day to 12 years, depending on the gravity of the offense.

Aside from criminal liability, banks and other remittance centers that commit any of the prohibited acts face fines and other sanctions from the BSP.

The bill also mandates the BSP, DOF, POEA, and other concerned agencies to provide financial education to OFWs and their families.

The DOF, in consultation with relevant agencies, bankers’ associations and OFW groups, would issue implementing rules and regulations.

Publication Source :    People's Journal