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This page features the full text of
Republic Act No. 7111
"Overseas
Workers' Investment (OWI) Fund Act"
AN
ACT ESTABLISHING THE OVERSEAS WORKERS' INVESTMENT FUND TO PROVIDE
INCENTIVES
TO OVERSEAS WORKERS, REDUCE THE FOREIGN DEBT BURDEN, AND FOR OTHER
PURPOSES.
REPUBLIC
ACT NO. 7111AN
ACT ESTABLISHING THE OVERSEAS WORKERS' INVESTMENT FUND TO PROVIDE
INCENTIVES
TO OVERSEAS WORKERS, REDUCE THE FOREIGN DEBT BURDEN, AND FOR OTHER
PURPOSES.
Section
1. Short Title. — This Act shall
be known as the "Overseas Workers' Investment (OWI) Fund Act."
chanrobles virtuallaw libraryred
Sec.
2. Declaration of Policy. — It
is the policy of the State to protect and promote the welfare of
Filipino
overseas workers; to pioneer and develop innovative means to provide
incentives;
and to uplift the workers' families' living standards. It is likewise
the
policy of the State to reduce the foreign debt burden in order to
better
achieve sustained economic growth by way of tapping the unofficial and
informal remittances of said workers.
Sec.
3. Scope. — This Act shall apply
to all Filipino citizens overseas, who are workers duly registered with
the Philippine Overseas Employment Administration (POEA) and/or the
Commission
on Filipino Overseas (CFO), and their beneficiaries in the Philippines:
Provided, That the additional benefits as enumerated in Section 8 of
this
Act shall not apply to Filipinos overseas, as defined in Section 2 of
Batas
Pambansa Blg. 79, who have already acquired immigrant status in their
host
countries: Provided, further, That the participation of Filipinos
overseas,
as defined in Batas Pambansa Blg. 79, in the remittance programs under
this Act shall be limited to the first two (2) years of operation of
said
programs effective from the date of publication of the implementing
rules
and regulations of this Act.cralaw:red
The
participation of said overseas workers shall not exceed their total
salaries
or earnings for the period, counting from the effectivity of this
Act. chanrobles virtuallaw libraryred
Sec.
4. Overseas Workers' Investment
Fund Board. — There is hereby created the Overseas Workers' Investment
(OWI) Fund Board, which is hereby vested with corporate powers in
accordance
with existing laws, to encourage the greater remittance of earnings of
Filipino workers overseas and to safeguard and oversee the
participation
of said workers' remittances and savings in the Government's
debt-reduction
efforts and other productive undertakings. The Board shall be composed
of the following as members:
(1) The
Secretary of the Department of Labor and Employment; (2) The
Secretary of the Department of Finance;
(3) The
Governor of the Central Bank of the Philippines; chanrobles virtuallaw libraryred
(4) The
Administrator of the Philippine Overseas Employment Administration;
and
(5) One
(1) representative of the overseas workers to be appointed by the
President
who shall receive a per diem of One thousand pesos (P1,000.00) for
every
OWI Fund Board meeting attended.
The
Secretary of the Department of Labor and Employment shall serve as the
Chairman of the Management Board.
All
ex officio members of the Board shall receive no additional
compensation
or remuneration from the OWI Fund.chanrobles virtual law library
The
President shall appoint the members of the Board within, thirty (30)
days
from the approval of this Act.cralaw:red
chan robles virtual law library
The
Board shall within forty-five (45) days from the appointment of its
members
promulgate such rules and regulations as may be necessary to implement
the provisions of this Act. In addition, the Board shall adopt the
bylaws
of the Fund and set the date, time and place of regular Board meetings.
The Board shall enter into necessary trust agreements and establish the
essential organizational support, hire and oversee highly competent
personnel
and/or existing institutions to implement the appropriate operating
systems,
plans, modern and efficient communication networks and the other
provisions
of this Act.
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robles
virtual law library
The
Board shall report to the President and to Congress the progress of its
tasks and business on a semiannual basis.chanrobles virtual law library
Sec.
5. Powers/Functions of the OWI
Fund Board. — The OWI Fund Board shall have the following powers and
functions:
(1) To
encourage the greater participation of Filipino overseas workers in
official
remittance schemes by way of: (a) Assuring
the prompt and safe delivery of such remittances to the workers'
beneficiaries
by processing these within forty-eight (48) hours at the most and by
maintaining
a reliable express communication and delivery systems;(b) Developing
a network/consortium of commercial banks to maximize the use of their
resources
in serving the remittance and other transaction needs of the overseas
workers; chanrobles virtuallaw libraryred
(c) Adopting
an appropriate technology or system which will expedite the delivery of
participatory debt reduction certificates (PDRCs) to the
beneficiaries;
(d) Providing
for reasonable charges and fees for the remittance services of
participating
financial institutions, agents, courier services, etc.; and
(e) Enlisting
the support of various government agencies in information and marketing
campaigns concerning its remittance services and other programs, and
enhancing
their capability through financial and other kinds of support;
(2) To
accredit, in conjunction with the Central Bank, domestic as well as
foreign
financial and other institutions, money couriers, and communication
organizations
and delivery services, etc. as official foreign exchange remittance
centers/collection
agents or official couriers;
chan
robles
virtual law library(3) To
issue special receipts through accredited financial institutions or
certified
couriers abroad as evidence of Government's guarantee for the workers'
foreign exchange remittances;chanrobles virtuallaw libraryred
(4) To
pool the remittances of overseas workers coursed through accredited
money
couriers and other informal channels to be used in debt-for-note
arrangements,
including leveraged debt paper purchases, and to participate in
international
secondary financial markets by purchasing Philippine debt papers within
the limits set forth in Section 6 hereof;
(5) To
forward purchased debt papers to the Central Bank and/or any other
concerned
original borrowing agency/obligor in exchange for their agreement to
back
up and/or underwrite specific issues of negotiable certificates to be
known
as the participatory debt reduction certificates (PDRCs). The OWI Fund
Board may decide to share with the original obligors up to forty
percent
(40%) of the discounts gained on debt papers: Provided, That this does
not undermine the viability of the OWI Fund remittance/investment
program
in the long run. Likewise, the OWI Fund Board may decide to reduce the
interest rates on the remaining portions (net of discount sharing with
the original obligors) of the loans purchased;chanrobles virtuallaw libraryred
(6) To
pool the peso equivalent of remittances of overseas workers coursed
through
the banking system, establishing therewith a peso loan and investment
fund,
which may be entrusted to a particular bank for purposes of lending
and/or
investing, especially into productive concerns of overseas workers and
their families, small business entities, etc.;
(7) To
issue PDRCs to the workers' beneficiaries through accredited local
financial
institutions, money couriers, and communication and delivery services
acting
as official couriers;
(8) To
accept and administer trust funds which shall then be guaranteed by the
Republic of the Philippines;
(9) To
ensure that the workers shall remit only a maximum amount equal to the
average earnings of their occupational group in their host countries;
(10) To
adopt measures and/or penalties to ensure the integrity of the OWI Fund
remittance system and investment funds;
(11) To
cause the conduct of periodic surveys about the condition of workers
and
workers' remittances;
(12) To
ensure that the debt conversions that will be undertaken shall abide by
the special guidelines of the Central Bank on debt redemption to be
issued
for purposes of this Act; chanrobles virtuallaw libraryred
(13) To
administer the funds and other property under its custody with the
skill,
care, prudence, and diligence of a prudent man engaged in similar
business
affairs and with objectives similar to those of the trust in question;
and
(14) To
adopt, amend or change its bylaws; to adopt, alter, or use a seal; to
enter
into contracts; to sue and be sued; and to exercise the general powers
of a corporation.
Sec.
6. Debt Purchase Guidelines.
— In buying Philippine foreign debt papers pursuant to the
debt-for-note
scheme, the OWI Fund Board shall observe the following guidelines and
standards:
(1) Priority
shall be given to Philippine foreign debt papers where the loan
proceeds
were actually utilized in projects, programs and balance of payments
financing
which benefited the Filipino people; chanrobles virtuallaw libraryredchan
robles
virtual law library(2) Loans
categorized by law or pronounced by the President pursuant to the
recommendation
of the Joint Legislative-Executive Foreign Debt Council as immoral,
odious,
and/or illegal shall not be subject to the debt-for-note scheme;
(3) Foreign
indebtedness which are subject to any pending litigation or repudiation
shall not be subject to any debt conversion or reduction
arrangements;
(4) Only
debt papers having a minimum discount rate of thirty-five percent (35%)
shall be considered for debt-for-note this Act; and
(5) Only
remittances coursed through the nonfinancial entities and money
couriers
shall be utilized for debt conversion. Such remittances coursed through
the financial institutions shall be used as loan and investment funds
that
will give priority to the needs and concerns of overseas workers and
their
families. Said loan and investment funds may also be utilized to
finance
the needs of small business enterprises: Provided, That the workers'
funds
are one hundred percent (100%) guaranteed by the Government.
Sec.
7. Investment Instrument. — The
participatory debt reduction certificate (PDRC) shall be a negotiable
government
security guaranteed by the Republic of the Philippines to be issued in
any of the following denominations: US$ 100, $200, $300, $400, $500,
$1,000
and $2,000, redeemable in Philippine pesos at the full value of the
Central
Bank buying rate one (1) day prior to redemption. It shall
automatically
bear an interest rate which shall be reckoned based on the quarterly
average
of the London Interbank Offered Rates (LIBOR) plus one percent (1%), to
be determined at the end of each quarter but payable at the end of each
semester, and shall have a maturity of five (5) years from the date of
issuance.chanrobles virtual law library
chan robles
virtual law library
The
PDRC shall incorporate a tax-free premium over and above the face value
of the same certificate, the percentage of which shall be fixed at
one-half
(1/2) of the numerical value of the discount of the purchased debt
papers
at the time of the remittance. The premium shall not earn
interest. chanrobles virtuallaw libraryred
The
holder of a PDRC shall be entitled to receive in cash one-fifth (1/5)
of
the premium rate, which shall be stamped on the PDRC upon issuance, at
the end of every one (1) full year from the date of issue of the
certificate.cralaw:red
The
PDRCs shall be directly and immediately released/delivered to the
beneficiaries.
At
the option of the remitting worker or his beneficiary in the
Philippines,
the PDRC may be exchanged for cash at face value at the official
exchange
rate with any of the accredited financial institutions, used as
collateral
for loans with concessional interest rates, sold to any investor, or
kept
to earn market interest rates. chanrobles virtuallaw libraryred
Sec.
8. Additional Incentives. — At
the end of each calendar quarter, after providing for the settlement of
all accounts payable and other obligations of the Fund and other
charges
of the Central Bank, the balance of the gains/proceeds in the OWI Fund
shall be used in providing for the following, which shall accrue to the
original holder:
(1) Four-year
scholarship grant in favor of a worker of any member of his family if
said
worker has remitted under the OWI Fund system Ten thousand dollars
(US$10,000.00)
worth of PDRC with a continuous two-year period: Provided, That such
grant
shall conform to the set minimum academic standards of the school
attended;
that the grantee shall undergo six-month apprenticeship training before
graduation; and that any remaining unused period of the four-year
scholarship
may be transferable to other qualified beneficiaries of said
worker; chan
robles
virtual law library(2) Housing
program for overseas workers;
(3) Credit
facility for overseas workers who may want to engage in business
enterprises
and/or livelihood projects: Provided, That the participating overseas
workers
shall be entitled to borrow up to twenty-five percent (25%) of the
amount
remitted at concessional interest rates to be determined, and subject
to
such guidelines to be promulgated, by the OWI Fund Board;
(4) Health/hospitalization
insurance for the family of the workers for the duration that the
worker
continuously holds on to at least Two thousand dollars (US$2,000.00)
worth
of PDRC;
(5) Raffles
of airline tickets, appliances, and other items for all who have
remitted
under the OWI Fund; and
(6) Other
programs that will benefit the workers.
The
gains from debt conversion arrangements and profitable investments of
the
peso loan funds shall be the primary sources of funding for the
incentives
and benefits granted to the overseas workers, and of the investment
operations
of the OWI Fund programs, including the provision of reasonable returns
to the other participants and the possible placements in investment
ventures/opportunities
with comparatively high returns and minimal risk.chanrobles virtual law library
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virtual law library
Sec.
9. Coordinating Agencies. — The
following agencies of the Government shall provide complementary
support
services to the OWI Fund as follows:
(1) The
Central Bank (CB) shall formulate and implement the guidelines for a
special
debt-for-note conversion program exclusive to the OWI Fund;
chanrobles virtuallaw libraryred(2) The
Philippine National Bank (PNB) and other financial institutions shall
serve
as remittance and redemption conduits of PDRCs and shall ensure the
immediate
purchase or conversion of the same, or redemption of the equivalent
cash
at face value upon the request of the overseas worker's
beneficiary;
(3) The
Department of Labor and Employment (DOLE) and the Philippine Overseas
Employment
Administration (POEA) shall assist the Fund by providing and updating
the
list of duly registered overseas workers and their beneficiaries;
(4) The
Overseas Workers Welfare Administration (OWWA), the Commission on
Filipinos
Overseas (CFO) and the Philippine Overseas Employment Administration
(POEA)
shall conduct intensive marketing and information campaigns regarding
the
remittance system of the OWI Fund through:
(a) Pre-departure
orientation seminars to overseas workers; chan
robles
virtual law library(b) Information
desks of the coordinating agencies of the OWI Fund;
(c) Mass
media campaigns; and chanrobles virtuallaw libraryred
(d) Strengthening
its linkages with accredited financial and other institutions.
Sec.
10. Contingency Measures. — To
ensure the continuity of the grant of premium and incentives to the
overseas
workers in cases of unavailability of debt papers in the international
secondary market and the discount rate of Philippine debt paper falling
to such levels that may impair the viability of the OWI Fund in the
short
run:chanroblesvirtualawlibrary
(1) The
OWI Fund shall set aside five (5) percentage points of the discounts of
the debt papers purchased as a reserve/contingency fund; chan
robles
virtual law library(2) The
Office of the President may authorize the OWI Fund to draw from its
Contingent
Fund to complement the OWI Fund's reserve/contingency fund; and
(3) Congress
may set aside an additional contingency incentives fund to encourage
workers
to remit their foreign exchange through accredited channels.
Sec.
11. Initial Funding. — The Philippine
National Bank (PNB), the Overseas Workers Welfare Administration (OWWA)
and the other government financial institutions may place in trust with
the OWI Fund a minimum amount of Two million dollars (US$2,000,000.00)
each (or its peso equivalent) or provide the same in the form of a
short-term
loan to the OWI Fund which shall earn them the same interest as the
yield
on ninety-day treasury bills. This initial funding shall serve as
standby
fund.chanrobles virtual law library
chan robles
virtual law library
In
addition, the accredited financial institutions, money couriers, and
other
service participants in the remittance system shall be required to
deposit
in trust with the OWI Fund the equivalent of twenty percent (20%) of
their
projected quarterly remittance transactions under this Act which shall,
likewise, earn them the same interest as the yield on ninety-day
treasury
bills.chanrobles virtual law library
Sec.
12. Program Period. — The OWI
Fund shall operate for not more than five (5) years from the date of
publication
of the implementing rules and regulations of this Act: Provided, That
this
period may be extended by the President for a period of not exceeding
three
(3) years upon recommendation of the OWI Fund Board. chanrobles virtuallaw libraryred
Upon
termination of operations, the OWI Fund support organization and/or
trustee
shall nevertheless continue its functions for three (3) years after the
termination of the remittance system for the purpose of prosecuting and
defending suits by or against the OWI Fund and enabling it to settle
and
wind up its affairs, but not for the purpose of continuing the
remittance,
debt-for-note and other operations for which the Fund was established.
Sec.
13. Separability Clause. — If
any provision of this Act is declared unconstitutional, the other
portions
shall remain valid.cralaw:red
Sec.
14. Repealing Clause. — Any provision
of law, decree, order, or rules and regulations inconsistent with the
provisions
of this Act is hereby repealed or modified accordingly.
Sec.
15. Effectivity. — This Act shall
take effect upon its approval. chanrobles virtuallaw libraryred
Approved:
August 22, 1991
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Copyright©1998-2006 by
ChanRobles
Publishing Company
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Since 19.07.98
Back
to Top - Back
to Main Index - Back
to Home
Copyright©1998-2006 by
ChanRobles
Publishing Company
All Rights Reserved
Since 19.07.98