Migrant Workers and Overseas Filipinos Act
RULE XV
MIGRANT WORKERS LOAN GUARANTEE FUND
Section 1. Definitions.
(a) Pre-Departure Loans - refer to loans granted to departing migrant workers covered by new contracts to satisfy their pre-departure requirements such as payments for placement/processing fees, airplane fare, subsistence allowance, cost of clothing and pocket money.
(b) Family Assistance Loans - refer to loans granted to currently employed migrant workers or their eligible dependents/families in the Philippines to tide them over during emergency situations.
(c) Guarantee Agreement - refers to a contract between the participating financial institution and OWWA whereby the latter pledges to pay a loan obtained by a migrant worker from the former in case the worker defaults.
(d) GFIs - refer to government financial institutions.
Section 2. Loan Guarantee Fund.
The Migrant Workers Loan Guarantee Fund is hereby established:
(a) to prevent any recruiter from taking advantage of workers seeking employment abroad by expanding the grant of Pre-Departure and Family Assistance Loans to covered migrant workers;
(b) to establish and operate a guarantee system in order to provide guarantee cover on the pre-departure and family assistance loans of migrant workers who lack or have insufficient collateral or securities; and
(c) to ensure the participation of GFIs in extending loan assistance to needy migrant workers who are to be engaged or is engaged for a remunerated activity abroad.
Section 3. Coverage and Scope.
All departing migrant workers who need financial assistance to pay or satisfy their pre-departure expenses may avail of the Pre-Departure Loans.
Currently employed migrant workers or their eligible dependents who need emergency financing assistance may avail of the Family Assistance Loan.
Section 4. Administration of the Fund.
Pursuant to Sec. 21 of the Act, the amount of One Hundred Million pesos (P100,000,000.00) from the Capital Funds of OWWA shall constitute the Migrant Workers Loan Guarantee Fund. The Fund, which shall be administered by the OWWA, shall be used exclusively to guarantee the repayment of Pre-Departure and Family Assistance Loans granted by participating GFIs.
All existing revolving funds earmarked for the Pre-Departure and Family Assistance Loans shall revert back to the OWWA Capital Fund.
Section 5. Financing Scheme.
The OWWA shall initiate arrangements with GFIs to implement mutually agreed financing schemes, that will expand the Pre-Departure and Family Assistance Loans.
Section 6. Guarantee Agreement.
No loan shall be considered covered by a guarantee unless a Guarantee Agreement has been prepared and approved by both the participating financial institution and the OWWA.