Congress Approves Bill Granting Discounts to OFW Remittances

On Dec 25, 2020

A bill seeking to provide 50% discount on fees for overseas Filipino remittances has been approved by the House of Representatives on the third and final reading.

With a unanimous 224-0 vote, the congress representatives approved House Bill no. 7951, which mandates all bank and non-bank financial intermediaries to cut in half charges on money sent home by OFWs to their immediate family members.

Filipinos migrant workers send money back home in a remittance center, on Wednesday, June 11, 2008, in Hong Kong, China. Remittances from Filipinos working abroad rose 9.4 percent from a year earlier to a record $1.4 billion, the central bank said in Manila. The amount grew 15.5 percent in February. The value of remittances, equivalent to about a 10th of the $117 billion Southeast Asian economy, is shrinking in local currency terms as the peso trades near an eight-year high against the dollar. Photographer: Jerome Favre/Bloomberg News

The bill also states that financial institutions may claim the discounts as tax deductions based on cost of services rendered to OFWs. The total deduction from the gross income of establishments who provide the discounts, however, may not exceed P24,000 per OFW for a given taxable year.

The bill also prohibits the increase of current remittance fees by all establishments offering remittance services without consulting the Department of Finance (DOF), the Bangko Sentral ng Pilipinas (BSP), and the Philippine Overseas Employment Administration (POEA). It also directs the DOF, BSP, POEA and other agencies to provide financial education program for OFWs and their families to enable them to handle their income better.

Source: CNN Philippines