The proposed measure to create an Overseas Filipino Workers (OFW) Sovereign Fund has moved closer to enactment.

The House Committee on Ways and Means chaired by Albay Rep. Joey Salceda approved the tax exemption provision of House Bill (HB) No.530 during a virtual hearing Monday.

Salceda and the measure's author, ABANG LINGKOD party-list Rep. Joseph Stephen Paduano, reached an agreement after just 10 minutes of discussion on what would be the wording on the particular provision on Section 6. The section covers the "Tax Exemption of Interest Income and other Earnings from Investments in the OFW Sovereign Fund."

In the approved language of the section that the panel proposed, it was indicated that the earnings of OFWs and former OFWs from their investments in the bonds or other debt or investment instruments that the government shall issue in the implemenation of the Act "shall be exempt from income tax and documentary stamp tax; provided, that the amount of investments exempted herein shall not exceed (P250,000) per OFW and former OFW per year; provided, further, that the tax exemption shall be reviewed after five (5) years of the effectivity of the tax regulations implementing this Act."

The amended provision further states that nothing in HB No.530 shall be construed to repeal the provisions of Republic Act (RA) No.9505, also known as the Personal Equity and Retirement Act. Salceda approved the measure after Paduano gave his concurrence.

Also taking part in Monday's proceedings was TUCP party-list Rep. Democrito Mendoza, chairman of the Committee on Overseas Workers Affairs. The Mendoza panel serves ss the main referral of the proposed OFW Sovereign Fund Act.

This measure is designed to encourage all OFWs to invest part of their income or cash remittances with the government, to be pooled under a special fund to be referred to as "OFW Sovereign Fund."

Once enacted, the bill will enable OFWs to be investors in nation-building towards the industrialization of the country, allowing, for example, Filipino seafarers to be reintegrated into the Philippine domestic economy by becoming industrialist themselves.

Such is achieved by using the know-how and experience that they've acquired in working abroad to be owners and or officials of their own shipbuilding companies and ship yards.

"Proceeds of all the investments lodged in the OFW Sovereign Fund shall be used solely by the national government to finance significantly urgent national government and private projects with strong emphasis on productive and job-generating industrial or agricultural projects, which shall be directed by the President," the explanatory note of HB No.530 said

The Bureau of the Treasury will be tasked to monitor the fund.

The measure was first filed during the 17th Congress wherein it was extensively discussed. Despite this, it failed to gain second and third reading approval in the House of Representatives.