PH may lose up to P3.5-B in revenues if OFW remittance law is passed

As a House panel moved to consolidate nine bills that seek to protect the remittances from overseas Filipino workers (OFWs), an official from the Department of Finance (DOF) warned that the country could lose as much as P3.5 billion if the proposed measure becomes law.

Overseas Filipino workers (Jansen Romero/File Photo/ MANILA BULLETIN)

The measures—House Bills (HB) No. 185 (Pampanga 3rd District Rep. Aurelio "Dong" D. Gonzales Jr.), 1190 (Tarlac 2nd District Rep. Christian Tell Yap), 2944 (Cagayan 3rd District Rep. Joseph "Jojo" Lara), 3020 (Antique Lone District Rep. Antonio "AA" Legarda Jr.), 4170 (Northern Samar 2nd District Rep. Harris Christopher Ongchuan), 4257 (OFW Party-list Rep. Marissa "Del Mar" Magsino), 4343 (Malabon City Rep. Josephine Veronique "Jaye" Lacson-Noel and AN WARAY Rep. Florencio Gabriel "Bem" G. Noel), 4397 (Valenzuela City 1st District Rep. Rex Gatchalian) and 4469 (Davao City 1st District Rep. Paolo Z. Duterte, Benguet Lone District Rep. Eric Go Yap, and ACT-CIA Party-list Reps. Edvic G. Yap and Jeffrey Soriano)–would lower the remittance transfer fees, reduce taxes, impose a ceiling limit on fees, and penalize intermediaries and institutions who violate the terms.

But while Department of Foreign Affairs’ (DFA) Migrant Workers Affairs Undersecretary Eduardo de Vega and Overseas Workers Welfare Administration (OWWA) head Arnel Ignacio expressed support for the lawmakers’ proposals, Finance Division Chief Jeanne Guinto cautioned about how much the country stands to lose in terms of revenues.

The Finance official said that the department already made a presentation about the proposed law during the previous 18th Congress and requested to be allowed to submit the agency’s official position on the proposal.

“In the previous position paper we estimated the government loss that we . . . in the amount of P2.8 to P3.5 billion. We will still update this figure as the number of OFWs increased at this time,” Guinto stated when asked by KABAYAN Party-list Rep. Ron Salo.

She cited “various existing policies being imposed by the government to reduce the transaction cost of OFW remittances,” among them are Republic Act 10022 or the Migrant Workers and Overseas Filipino Act of 1995 and the Expanded Foreign Currency Deposit System that exempt an overseas contract worker from the 15 percent final reporting tax on interest income.

De Vega also pointed out that the country “can’t impose rules on those banks, on foreign centers as to how they would charge for remittance” after he noted that OFWs send remittances through banks and centers.

He also suggested for the proposal to include all Filipinos abroad, including dual citizens, who don’t necessarily fall under the category of OFWs or migrant workers.

“Perhaps, the idea is all remittances from abroad to the Philippines should be covered instead of just limiting it to a certain type of Filipino. For example, contract workers, because they are going to compete among each other,” he said.

“But, in principle, we support any measure to help our overseas Filipinos,” De Vega reiterated.

For his part, Ignacio stressed that OWWA “will always champion the cause of our OFWs.”

But since OWWA “is currently conducting financial education to OFWs and their families in all stages of their migration,” he proposed for the consolidated bill to specify OWWA as among the agencies—together with the DOF and Bangko Sentral ng Pilipinas (BSP)—that will lead the mandatory financial education program.

“The program shall include the instruction on financial planning, management, budgeting, investment option, and similar topics which shall educate the OFWs and their families in the handling of earnings and remittances,” he said.

“OWWA can participate actively in providing education, training to echo our support,” Ignacio added.