House OKs bill granting 50% discount on OFW remittance fees

MANILA, Philippines — The House of Representatives has passed a measure providing discounts on overseas Filipino workers’ (OFWs) remittance fees.

In plenary session earlier this week, congressmen approved on third and final reading House Bill 7951 or the proposed OFWs Remittance Protection Act that aims to aid OFWs and their families.

A total of 224 House members votead unanimously to approve the bill authored by Deputy Speaker and Pampanga Rep. Aurelio Gonzales Jr., which seeks to grant discounts of up to 50 percent on OFW remittance fees and also impose a limit on remittance charges and tax incentives to financial and non-bank financial institutions.

Under the bill principally authored by Gonzales, financial intermediaries and non-bank financial intermediaries may impose fees for services rendered in sending money of OFWs to their immediate family members subject to a 50 percent discount.

The proposed measure also grants discounts on remittance fees to financial intermediaries through tax deductions from gross income based on the cost of services rendered to OFWs.

The total deduction from the gross income of establishments providing discounts on remittance fees shall not exceed P24,000 per OFW every taxable year.

Gonzales, chair of special committee on bases conversion, revealed that the proposed measure could save OFWs and their families at least P56 billion.

The lawmaker 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 OFW families, money they could spend for necessities,” Gonzales said.

The Department of Finance, upon recommendation of the Bureau of Internal Revenue, shall issue the revenue regulation for this purpose.

The bill prohibits all financial intermediaries and non-bank financial intermediaries offering remittance services to OFWs from raising their current remittance fees without prior consultation with the Department of Finance, Bangko Sentral ng Pilipinas and the Philippine Overseas Employment Administration.

Lastly, the bill imposes penalty for violators of an imprisonment of six months up to six years and a fine of P200 up to P750,000.