Regulation on OFW Foreign Exchange Remittance

Executive Order No. 857 requires foreign exchange remittances to be coursed through official financial institutions and their authorized Philippine-government regulated agents.
The Order protects the welfare of families, dependents, and beneficiaries of Filipino workers abroad.
The Order ensures remittances follow the country’s economic development program through authorized financial institutions of the Philippine Government.
The Order targets the harmful effects of non-compliance and reliance on unauthorized and unofficial financing institutions on the country’s balance of payments and economic development program.
The Order mandates full compliance through appropriate remittance facilities and the imposition of effective sanctions.

Section 1 makes remittance mandatory for every Filipino contract worker abroad to remit regularly a portion of foreign exchange earnings to a beneficiary in the Philippines through the Philippine banking system.
Section 1 likewise requires licensed agencies and other entities authorized by the Ministry of Labor and Employment to recruit Filipino workers for overseas employment to remit their workers’ earnings as provided in the Order.
Section 2 requires employment and agency/service agreements submitted to the Ministry of Labor and Employment to include a proviso making the worker’s remittance mandatory.

Section 2 requires workers to remit to the Philippines in foreign exchange at least the following portions of basic salary:
- Seamen or mariners: Seventy (70) percent.
- Workers of Filipino contractors and construction companies: Seventy (70) percent.
- Doctors, engineers, teachers, nurses and other professional workers whose contract provide for free board and lodging: Seventy (70) percent.
- All other professional workers whose employment contracts do not provide for free board and lodging facilities: Fifty (50) percent.
- Domestic and other service workers: Fifty (50) percent.
- All other workers not falling under the aforementioned categories: Fifty (50) percent.
Section 2 fixes the remittance measure as a portion of basic salary and applies the category-based percentages through the employment proviso.

Section 3 grants passports issued to Filipino contract workers an initial validity period of one year, subject to adjustment by the Ministry of Foreign Affairs.
Section 3 provides that passports are renewable every year upon submission of usual requirements and presentation of documentary proof of compliance with the mandatory remittance requirement at the percentages in the Order.
Section 3 prohibits extension or renewal of any contract worker’s passport unless proof of compliance with the mandatory remittance requirement is submitted.
Section 4 requires the Ministry of Labor and Employment to not approve renewal of employment contracts and agency/service agreements unless proof of remittance is submitted.

Section 5 states that proof of compliance with the mandatory remittance requirement may consist of any of the following documents, or such alternatives approved by the Central Bank of the Philippines:
- A confirmed bank (foreign) remittance form.
- A certification from employer, duly authenticated, that remittance has been effected.
- A certification as to the surrender for pesos to the Philippine banking system.
- A receipt of International Postal Money Order.
Section 5 requires that the proof show the contract worker effected the remittance and caused the surrender for pesos through the Philippine banking system.

Section 6 permits remittances to be made individually by the contract worker.
Section 6 permits collective remittance through the employer under a payroll deduction scheme.
Section 6 requires any payroll deduction scheme to be in accordance with Central Bank regulations and applicable guidelines.

Section 7 requires an employer to commit—as a prerequisite for accreditation by the Ministry of Labor and Employment—to provide facilities to effect remittances and to enable monitoring of foreign exchange earnings of Filipino workers in the employer’s employ.
Section 8 directs the Central Bank of the Philippines to make necessary arrangements with appropriate financing institutions to handle remittances under the Order.
Section 8 authorizes the Embassy or Consulate nearest to the job site to act in the interim as the channel for remittance if appropriate banking facilities are absent.
Section 8 requires the Ministry of Foreign Affairs to immediately inform the Central Bank of these arrangements and to remit all funds thereto.

Section 9 provides that contract workers who fail to comply with requirements of the Order are suspended or excluded from the list of eligible workers for overseas employment.
Section 9 provides that for subsequent violations, the contract worker shall be repatriated from the job site.
Section 9 provides that repatriation expenses are paid at the expense of the employer, unless the case is at the contract worker’s expense “as the case may be.”
Section 9 provides that Filipino or foreign employers and/or their representatives who fail to comply are excluded from the overseas employment program.
Section 9 provides that for local private employment agencies and entities, failure to comply is a ground for cancellation of their license or authority to recruit workers for overseas employment.
Section 9 states that license cancellation is without prejudice to liabilities under existing laws and regulations.

Section 10 requires the Ministries of Labor and Employment and Foreign Affairs and the Central Bank of the Philippines to draw up necessary rules and procedures for proper implementation.
Section 10 requires the rules and procedures to be completed within ten (10) days from the signing of the Order.
Section 11 repeals all provisions of existing orders, rules, and regulations that are inconsistent with Executive Order No. 857.