P50–K loan for OFWs looms

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CONGRESS is in favor of granting at least a P50,000 loan to the family of an overseas Filipino worker during the first months of the OFW’s absence to offset his expenses
in getting a job abroad.

Toward that end, the House of Representatives has approved on third reading House Bill 4985 or the Overseas Workers Credit Assistance Act, which would allow an OFW to avail of at least a P50,000 loan from the Overseas Workers Welfare Administration (OWWA) to defray the living expenses of his or her family for payment of recruitment expenses, including placement fees, documentation costs and plane tickets.

Under the measure, a next-of-kin of the overseas worker-borrower should participate as co-borrower in the loan agreement entered into by the OFW and OWWA. The loan will then be covered with loan redemption insurance by any private insurance provider duly registered with and accredited by the Insurance Commission.

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 will accrue to the OWTF.


The loan is payable in 12 monthly installments at a preferred interest rate of not more than six percent per annum.

The measure, however, will only cover OFWs with valid employment contracts and whose documents were processed through licensed recruitment and manning agencies accredited by the Philippine Overseas Employment Administration (POEA).

The OWWA will accredit as many domestic or foreign banking institutions as possible that are duly authorized to do business in the Philippines in order to serve the loan payment needs of overseas workers-borrowers.

The obligation to remit the loan payment regularly to OWWA through the banking institutions would rest on the overseas worker-borrower.

The bill provides that an online payment system should be established wherein the OFW-borrower may pay the loan amortization within one year after the measure is enacted into law.

Failure to pay the loan or any violation of the terms imposed on the loan will authorize POEA and all its offices, including its deputized and accredited private entities and Philippine Overseas Labor Offices to withhold issuance of the Overseas Employment Certificate (OEC) and any other exit permit or clearance to work abroad to the overseas worker-borrower concerned.

A 60-day suspension without pay will be the penalty for the first offense and dismissal from the service with a five-year disqualification to hold any public office for the second offense to any government official or employee.

On the other hand, the private entity that issues an OEC and exit permit to any overseas worker-borrower will face a 60-day suspension of its license or accreditation for the first offense and permanent cancelation of license or accreditation for the second offense.

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1 Comment

  1. Napakagandang panukalang batas po ito. Sana hindi matulad ito noong panahon ni Pres. Ramos na despite kompleto ang papeles ng borrowing OFW: plane ticket, visa, passport stamp with arrival date, Balik Manggagawa certificate, OWWA will still make it hard by requiring the departing OFW to bring co-maker in person just for the amount of twenty five thousand pesos they are assisting. Siguro po ay wala silang pondo kaya ginagawa ang ganito para idis-courage ang bowwer.