Lawmaker pushes loan program for OFWs
MANILA, Philippines - A congressman pushed on Tuesday for the enactment of a bill that seeks to institutionalize a credit program for overseas workers, replacing a P100-million loan facility that failed in previous years.
Rep. Juan Edgardo Angara of Aurora said the proposed Overseas Credit Workers Assistance under House Bill No. 161 intends to provide a loan of up to P50,000 to an overseas worker even before he leaves the country for posting abroad.
The loan facility is proposed to be coursed through the Overseas Workers Welfare Administration, which administered the P100-million borrowing program that was suspended in 2005 after just two years in operation.
“We had to suspend it kasi 70 percent ng umutang hindi nagbayad. Nauubos ang pondo dahil walang umiikot na pera. It should be a revolving fund," explained Marianito Roque, administrator of OWWA.
John Leonard Monterona, Migrante Middle East regional coordinator, said he was surprised to find out last month that OWWA’s loan program had been suspended after his wife inquired about its availment.
Angara said the pitfalls of the previous OWWA loan program should be taken into account to avoid a repeat of the experiences under the scheme he is proposing.
“I hope the committee will immediately schedule a hearing on the bill when session resumes next month (April). I believe that many OFWs need this kind of program," he said in a phone interview with GMANews.TV.
While the bill is pending in the committee, Angara asked Roque to lift the suspension on OWWA’s pre-departure and family loan programs to assist OFWs who badly need financial assistance.
“May be two years of suspension is enough for the OWWA to find a solution to the problem of the loan facility about the non-payment of OFWs who availed of the program. Hindi dapat magdusa ang mga OFW dahil sa kasalanan ng iba," Angara said.
Under the old loan program, an OFW can avail himself of up to P40,000 loan without collateral.
Angara’s proposal provides for a higher maximum loan amount of P50,000, payable in 12 months at a preferred interest rate of not more than six percent a year.
Angara said the program was intended to ease the financial burden of departing OFWs who usually end up leaving behind his family in huge debts due to the costs of processing of their overseas employment contract.
“This bill aims to defray the living expenses of his family during the first few months of his absence as well as other expenses incurred in his pre-employment,’ the young lawmaker explained.
OFWs qualified for the borrowing program are those with valid contract from an employment agency accredited by the Philippine Overseas Employment Administration (POEA).
The loan amount would be covered with loan redemption insurance from the Government Service Insurance System (GSIS), with the OFW paying the premium through an account with any domestic or foreign banking institution authorized to do business in the Philippines, with a member of his family designated as a co-borrower.
The OFW has to submit his employment contract, certified by the recruitment agency and verified by the POEA. His plane ticket and bank account details would also have to be shown to the bank.
The OFW would have to remit his earnings abroad using the bank account. Monthly payments for the loan will be automatically deducted from the bank account balance. The OFW would be required to execute the necessary authority for the bank to withhold the monthly amortizations from his remittances.
To ensure payment of the loan, an OFW who would default would be barred from future overseas employment, Angara said.
Christopher Lomibao, acting secretary of the House committee on overseas workers affairs, said Angaras bill is on the panel’s priority agenda, as well as the resolution for an audit of OWWA funds. – Fidel Jimenez, GMANews.TV
Rep. Juan Edgardo Angara of Aurora said the proposed Overseas Credit Workers Assistance under House Bill No. 161 intends to provide a loan of up to P50,000 to an overseas worker even before he leaves the country for posting abroad.
The loan facility is proposed to be coursed through the Overseas Workers Welfare Administration, which administered the P100-million borrowing program that was suspended in 2005 after just two years in operation.
“We had to suspend it kasi 70 percent ng umutang hindi nagbayad. Nauubos ang pondo dahil walang umiikot na pera. It should be a revolving fund," explained Marianito Roque, administrator of OWWA.
John Leonard Monterona, Migrante Middle East regional coordinator, said he was surprised to find out last month that OWWA’s loan program had been suspended after his wife inquired about its availment.
Angara said the pitfalls of the previous OWWA loan program should be taken into account to avoid a repeat of the experiences under the scheme he is proposing.
“I hope the committee will immediately schedule a hearing on the bill when session resumes next month (April). I believe that many OFWs need this kind of program," he said in a phone interview with GMANews.TV.
While the bill is pending in the committee, Angara asked Roque to lift the suspension on OWWA’s pre-departure and family loan programs to assist OFWs who badly need financial assistance.
“May be two years of suspension is enough for the OWWA to find a solution to the problem of the loan facility about the non-payment of OFWs who availed of the program. Hindi dapat magdusa ang mga OFW dahil sa kasalanan ng iba," Angara said.
Under the old loan program, an OFW can avail himself of up to P40,000 loan without collateral.
Angara’s proposal provides for a higher maximum loan amount of P50,000, payable in 12 months at a preferred interest rate of not more than six percent a year.
Angara said the program was intended to ease the financial burden of departing OFWs who usually end up leaving behind his family in huge debts due to the costs of processing of their overseas employment contract.
“This bill aims to defray the living expenses of his family during the first few months of his absence as well as other expenses incurred in his pre-employment,’ the young lawmaker explained.
OFWs qualified for the borrowing program are those with valid contract from an employment agency accredited by the Philippine Overseas Employment Administration (POEA).
The loan amount would be covered with loan redemption insurance from the Government Service Insurance System (GSIS), with the OFW paying the premium through an account with any domestic or foreign banking institution authorized to do business in the Philippines, with a member of his family designated as a co-borrower.
The OFW has to submit his employment contract, certified by the recruitment agency and verified by the POEA. His plane ticket and bank account details would also have to be shown to the bank.
The OFW would have to remit his earnings abroad using the bank account. Monthly payments for the loan will be automatically deducted from the bank account balance. The OFW would be required to execute the necessary authority for the bank to withhold the monthly amortizations from his remittances.
To ensure payment of the loan, an OFW who would default would be barred from future overseas employment, Angara said.
Christopher Lomibao, acting secretary of the House committee on overseas workers affairs, said Angaras bill is on the panel’s priority agenda, as well as the resolution for an audit of OWWA funds. – Fidel Jimenez, GMANews.TV
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