OSTENSIBLY to help overseas Filipino workers (OFWs) safely invest their savings, the chairman of the House Committee on Overseas Workers Affairs is pushing for the creation of an OFW-oriented sovereign fund.
In House Bill (HB) 6519, Party-list Rep. A. Jesulito Manalo of Angkla, panel chairman, said approximately 10 million OFWs all over the world would benefit from such a fund.
“Their cash remittances peaked at $25.6 billion in 2015, and increased by roughly 5 percent in 2016. With the enormous amount of cash Filipino overseas workers bring in, the Philippines is now regarded as the third-largest recipient of foreign remittances around the
world,” he said.
“Considering the huge number of our OFWs and the high volume of remittances they bring into the country, there is no doubt that they continue to largely contribute to the economic growth of the country,” he added.
With these contributions, the government can find other mechanisms to help OFWs utilize their monies better, and in the process, also help the government programs or projects and to introduce a new revenue-generation mechanism for the country.
Manalo said the proposal should encourage OFWs to invest a part of their income or cash remittances in a pool under a special fund.
“Similar to Treasury bills or bonds, but under a special fund devised solely for OFWs’ enjoyment, wherein they can invest their monies with the government through a program to be created by the Bureau of Treasury [BTr], ideally for a higher return, better tax incentives and with lesser risks than in regular banks,” he added.
The proposed “OFW Sovereign Fund Act” tasks the BTr to create the special fund where all investments by OFWs, their immediate family members and other Filipino citizens overseas shall be initially lodged. The pooled money is then used to fund select key projects.
The bill proposes to exempt from any and all kinds of tax existing, as well as former OFWs and other investors patronizing the bonds and debt or investment instruments that the government shall issue in exchange for their cash investment.
It added projects include the purchase or the establishment by the government of strong cash-generating private or government corporations involved in the downstream petroleum industry, electric power generation, transmission and distribution industry, information and communications technology industry and other strong cash-generating enterprises to wean away the government from its reliance on taxes and fees as main source of funding
HB 6519 is now being fine-tuned by a technical working group (TWG) at the committee on overseas workers affairs.
The measure also tasks the BTr to help notify and educate all OFWs, as well as create an OFW sovereign fund.
The implementing rules and regulations (IRR) of the Act specifies that the bonds and other debt or investment instruments issued by the government shall be denominated in Philippine peso and in small denominations such as, but not limited to, P5,000.
The treasurer of the Philippines, in consultation with other concerned government agencies, including the House Committee on Overseas Workers Affairs and the Senate Committee on Labor, Employment and Human Resources Development, shall formulate the IRR upon enactment of the bill into law.