OFW Remittance Cost Reduction to be Filed with Senate

The Senate is working on pending corrective legislation to provide further protection for the hard-earned money orders that Overseas Filipino Workers (OFW) regularly send to their families.

In Bill 10’s submission to the Senate, Senator Lauren B. Lagarda indicated that the money transferred by OFW to its beneficiaries in the Philippines “passes through intermediaries or financial institutions.”

The four-time senator recalled that “during the transfer, the amount allegedly transferred [by OFWs] are subject to various fees and usury fees, thus depleting the amount that the beneficiaries should receive.”

Citing Bangko Sentral ng Pilipinas, Legarda said personal remittances accounted for 8.9 percent of the country’s gross domestic product in 2021. She said the BSP notes that 8.5 percent of that is gross national income.

Legarda also recalled that in the same year, the World Bank named the Philippines as the fourth largest remittance destination in the world. Therefore, she recalled that “the government needs to protect remittances from several fees and distrustful interest rates charged by financial institutions.”

At the same time, Legarda explained that the authorization bill intends to “set a cap on the amount of money transfer fees and charges that intermediaries must charge, provide a rebate of up to 50 percent for OFWs sending money to their immediate family members, and provide tax relief. deductions to intermediaries that provide discounts on commission fees.

The proposed measure also requires relevant government agencies to provide financial education programs for OFWs and their families.

Recall that during her chairmanship of the Committee on Foreign Relations, Legarda sponsored the consent of the Senate to the ratification of several international agreements. These include International Labor Organization Convention No. 189, the Maritime Labor Convention and the Social Security Convention between the Philippines and Spain. All of them are designed to enhance the protection of land-based and sea-based OFW.