The House Committee on Ways and Means has vowed to pass "by hook or by crook” a measure seeking to protect the remittances of the Overseas Filipino Workers (OFWs) from usurious interest rates and fees charged by financial institutions.
Albay 2nd district Rep. Joey Salceda, chairperson of the panel, assured Deputy Speaker and Pampanga 3rd District Rep. Aurelio Gonzales Jr. that his panel will prioritize on Tuesday, Sept. 1 the approval of House Bill No. 826 or the proposed Overseas Filipino Workers (OFWs) Remittance Protection Act, which the latter principally authored.
"On Tuesday, the first thing is we will approve your bill by hook or by crook. We will override the DOF (Department of Finance), and all the other players around because it is time to make our OFWs real heroes,” he said in a recent virtual meeting of the panel.
The Salceda panel decided to defer approval of the measure subject to refinements after it was disclosed that such proposal would result in P1.4 billion revenue loss on the part of the government.
During the panel’s virtual deliberation on August 24, Salceda noted that based on the computations provided, the revenue impact of the remittance discounting proposal would amount to P4.5 billion, P3.1 billion of which will be borne by remittance companies, while the remaining P1.4 billion would be the government’s revenue loss.
The Association of Remittance Company Compliance Officers – Philippines Inc. expressed its opposition to Gonzales’s measure, saying that it would result in higher administrative cost, tedious implementation, and weakened state of competition among remittance players.
The Association of Bank Remittances Officers Inc. said it would be administratively difficult to implement the proposed discounting scheme. Its president, Marlon Hernandez, told the Salceda panel that technology and competition should be allowed to naturally bring down the cost of sending remittance.
Gonzales said the two groups should have expressed their opposition against the measure earlier during the hearing of the House Committee on Overseas Workers Affairs, which is the principal panel that tackled HB 826.
He criticized the concerned remittance entities for their failure to participate in the Overseas Workers Affairs’ panel hearing despite proper sending of invitations.
During the deliberations, Salceda proposed that the remittances be instead made tax-free.
Salceda tasked Nueva Ecija 1st District Rep. Estrellita Suansing, vice chairperson of the panel, to “refine” HB 826.
Gonzales called on his colleagues to support his measure, explaining that in course of the transfer of OFW remittances to financial and non-bank financial institutions, the amount remitted is subjected to several fees and high remittance charges. These result in the depletion of the amount to be remitted and received by beneficiaries.
Gonzales said Congress must enact a law that will effectively put a stop to the imposition of high remittance charges and safeguard the remittance sent by OFWs. He said there should be educational programs on how the OFWs can manage their finances,” he said.
HB 826 seeks to establish a limit on the amount of remittance charges to be imposed by intermediaries, and provide discounts on remittance fees to be shouldered by OFWs based on a graduated scale.
It also provides for tax incentives to intermediaries which shall provide for such discounts.
Gonzales’s measure mandates government agencies, such as the DOF and the Overseas Workers Welfare Administration (OWWA), to provide for financial management programs to OFWs and their families.