Filipino expats to get discount on remittance fees

Overseas Filipino Workers (OFWs) in Oman will receive an up to 50 per cent discount on remittance fees following the ratification of a bill in the Philippines House of Representatives.

The OFW Remittance Protection Bill seeks to limit fees imposed on remittances, stipulating that mandatory discounts of 10-50 per cent be provided to OFWs, and that establishments that do so will receive tax incentives in exchange for the discounts.

According to a press release from the House of Representatives, all establishments that provide discounts on remittance fees may claim them as a tax deduction based on the cost of services rendered to OFWs. The tax deduction, like the discounts, will be mandatory.

Representative Aurelio Gonzales Jr. of Pampanga, the principal author of the bill, said, “These OFW remittances are transferred from the OFWs to intermediaries, such as financial and non-bank financial institutions, before they reach their beneficiaries. In the course of the fund transfer, the amounts remitted are subject to several fees and high remittance charges which result in the depletion of the amount to be remitted and received.”

The bill bans financial intermediaries offering remittance services from raising their current fees without consulting the Department of Finance (DOF), Bangko Sentral ng Pilipinas (BSP), and the Philippines Overseas Employment Administration (POEA).

Additionally, institutions governed and supervised by the BSP shall be subjected to the necessary fines, penalties, and sanctions as provided under the “New Central Bank Act”, “General Banking Law of 2000”, and other pertinent banking regulations.

 

The bill has also mandated that the DOF, the BSP, and POEA ensure that the mandatory financial education programme be made available to OFWs.

In Oman, however, OFWs are divided over the bill and its impact. Edgardo Lora, Chairman of the Filipino Community Social Club (FILCOSOC), said, “It will not have much of an impact given the fact that the amount OFWs would save is minimal. It would be better if they just made it free. What is happening now is that when we send money home, we first pay fees in the country we are sending it from. Then when it gets to the Philippines, the banks there charge an amount for their service. Because we are paying the remittance fees abroad, at least the charge from banks in the Philippines should be waived off since all OFWs are tax free. With this new bill, OFWs would most likely only save a few hundred pesos per transaction.”

Jamie, who has lived in Muscat for five years, however, sees it as a positive step. He said, “It’s a good step towards alleviating some of the problems OFWs face. It shows that our representatives are thinking about us, even when we are not home.”

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