There's an existing proposal to establish a credit assistance program for overseas workers. This is separate from any existing program that the Philippine Overseas Employment  Administration (POEA) or the Overseas Workers and Welfare Administration (OWWA) may have. The proposal is covered by House Bill No. 161 (see full text). The proposed law shall be known as the “Overseas Workers Credit Assistance Act of 2008,” providing credit facilities to overseas workers even before departure.

In essence, it proposes that an overseas contract worker with a valid contract through/from an accredited employment of the POEA may avail of a loan of not more than P50,000 from the OWWA to defray the living expenses of his/her family during the first months of absence as well as recruitment expenses including placement fees, documentation costs and plane tickets. The loan shall be paid in 12 equal monthly installments at a preferred annual interest rate not to exceed 6%. The downside, at least for those who fails to pay the loan or violate the terms, is that they shall be barred from future overseas employment.

Of course, you may have heard about the request to lift the suspension of the existing pre-departure loan program for OFWs on the ground of insufficiency of funds. Without the assistance program, the argument goes, overseas workers are left at the mercy of private loan sharks which lends money with an interest rate of up to 10% a month. On the other hand, others say that it shows the government's policy to encourage Flipinos to leave the country. The loan facility should instead be extended to those who are left in the Philippines, particularly entrepreneurs who need the money to start their businesses. After all, the argument goes, these entrepreneurs may also run to loan sharks for their capital needs.

So, let's hear everyone's opinion on this matter. You could vote through the poll found at the left side of this site. You could also express your opinion at the comment section below.

Posted by Becha, on 11-09-2008, I agree with Muchas Gracias that this will open the gloodgate to corruption. How will we know that the "receipients" of the loan actually exist (and that the supporting documents are not bogus). The bureaucracy does not do well in managing money. Instead, encourage private (and legitimate) lending institutions to increase loans to OFWs (and keep interest low by granting benefits or exemptions). Making it less difficult to transact with government agencies would go a long way in encouraging financial institutions to contribute.   Posted by Muchas Gracias, on 11-09-2008, Well, such proposed law granting loans to overseas workers, comes with sides of the coin, yes, I totally agree it can really help some of our "first timer outgoing OFWs" to defray some expenses left behind to their families; however the amount in Php50K is not sufficient. still, their families will resort to "Loan Shark" outlets for added funds, while waiting for the expecting remittances of their loved ones(OFWs, the other side of the coin, this will be again a gateway to corruptions when such loans be administered by a government agency.   Posted by j, on 11-09-2008, well 6% per annum doesnt hurt much, but if it is computed 6% add on interest per month that will really hurt OFWs. to tell u frankly i dont think it is fair to if this certain person doesnt pay his dues on time shouldnt be barred from future overseas employment... there are alot of OFW who earns 15t in peso when converted on our currency , that really meager. i think goverment should concentrate on long term proj insurance retirement policy for our OFW i seen alot OFW when they come back here after few years .... when they mis manage their finances they live in ruts!!!!