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House Bill 4985 granting credit loans to OFWs finally approved by the House of Congress

Credit loans
Good News for all Overseas Filipino Workers / OFWs – House Bill 4985 granting credit loans to OFWs finally approved by the House of Congress.

A measure creating a credit assistance program for overseas Filipino workers even before they leave the country has been approved by the House of Representatives on third and final reading.

Under House Bill 4985 or the proposed Overseas Workers Credit Assistance Act, OFWs may borrow up to P50,000 from the Overseas Workers Welfare Administration (OWWA) to defray the living expenses of his or her family during the first months of absence or to pay for recruitment expenses including placement fees, documentation costs and plane tickets.

However, only OFWs with valid employment contracts processed through licensed recruitment and manning agencies accredited by the Philippine Overseas Employment Administration (POEA) may avail themselves of a loan.

Under the proposed legislation, the next-of-kin of the OFW should sign as co-borrower in the loan entered into by the OFW and OWWA. The credit should be paid in 12 monthly installments at a preferred interest rate of not more than six percent per annum.

The loan shall be covered with a loan redemption insurance from any private insurance provider duly registered with an accredited by the Insurance Commission.

OWWA will be tasked to accredit as many domestic or foreign banking institutions as possible which are duly authorized to do business in the Philippines in order to serve the loan payment needs of the OFW borrowers.

The OFW will be responsible for remitting the loan payment regularly to OWWA through the accredited banking institutions.

A provision in HB 4985 mandates the establishment of an online payment system one year after the effectivity of the measure to allow OFWs to pay the loan amortization through the Internet.

An OFW’s failure to pay the loan or any violation of the terms imposed upon the loan will be considered as sufficient ground for the POEA and all its offices, including its deputized and accredited private entities and the Philippine Overseas Labor Offices (POLOs) to withhold the issuance of the Overseas Employment Certificate (OEC) and any other exit permit or clearance to work abroad to him or her.

Any government official or employee who violates the provisions of the measure faces a 60-day suspension without pay for the first offense and dismissal from the service with a five-year disqualification to hold any public office for the second offense.

Meanwhile, a private entity which issues an OEC and exit permit to the OFW who fails to pay the loan will be meted with a 60-day suspension of its license or accreditation for the first offense and permanent cancellation of license or accreditation for the second offense.

The amount needed by OWWA to implement the Credit Assistance Program for OFWs shall be charged against the Overseas Welfare Trust Fund and all payments and interest earned on the loans shall accrue to the Overseas Welfare Trust Fund.

The main authors of HB 4985 are House Majority Leader and Mandaluyong City Rep. Neptali Gonzales Jr., Tarlac Rep. Susan Yap, Nueva Ecija Rep. Joseph Gilbert F. Violago and OFW party-list Rep. Juan Johnny Revilla.

via GMA News

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