DMW Escrow Requirement for Recruitment Agencies: Capital and Deposit Rules

A recruitment or manning agency applying for a DMW license must set up an escrow agreement with a BSP-authorized bank and deposit not less than PhP 1,500,000 in it. This escrow deposit is separate from the agency's capital: a sole proprietor or partnership must have at least PhP 5,000,000 in capitalization, and a corporation must have at least PhP 5,000,000 in paid-up capital in cash. The equity must be substantially maintained for as long as the license is in force. The escrow deposit must likewise remain at PhP 1,500,000, proven by an updated bank certificate.

What the escrow requirement is for

The escrow deposit is a trust account held by a bank authorized by the Bangko Sentral ng Pilipinas (BSP). It is part of the post-qualification requirements an applicant must satisfy before a provisional license is issued.

Under the 2026 DMW Rules and Regulations Governing the Recruitment and Employment of Seabased Overseas Filipino Workers, the escrow agreement must be with a BSP-authorized bank to handle trust accounts, with a deposit of not less than One Million Five Hundred Thousand Pesos (PhP 1,500,000.00).

The applicant must also submit an updated bank certificate stating that the escrow deposit remains at PhP 1,500,000. This means the amount is not a one-time submission. It must stay intact.

Capitalization rules for recruitment and manning agencies

The same Rules set the capital thresholds:

• A sole proprietor or partnership must have a minimum capitalization of PhP 5,000,000.
• A corporation must have a minimum paid-up capital in cash of PhP 5,000,000.
• The sole proprietor, partnership, one person corporation, or corporation must substantially maintain an equity of PhP 5,000,000 during the duration of its license.

Ownership is also regulated. At least seventy-five percent (75%) of the authorized and voting capital stock must be owned and controlled by Filipino citizens. This is without prejudice to the Anti-Dummy provisions of applicable laws, rules, and regulations.

Where the escrow fits in the application process

The escrow requirement is a post-qualification requirement. The sequence under the Rules runs as follows:

1. Submit the application for a license to the DMW Licensing and Regulations Bureau.
2. Complete the pre-qualification requirements, including proof of financial capacity — a bank certificate showing a deposit of at least PhP 5,000,000 with authority to examine the account, income tax returns for the last two years, and proof of sources of investment.
3. Pay the non-refundable filing fee of PhP 50,000 upon receipt of a complete and compliant application, and submit proof of payment.
4. Undergo a panel interview to ascertain qualifications and compliance.
5. Submit post-qualification requirements once notified, which include the escrow agreement and the updated bank certificate, along with the office lease or ownership proof, office layout, equipment inventory, organizational chart, and a notarized undertaking.

The escrow is therefore not filed with the initial application. It is a condition for the issuance of the provisional license.

The notarized undertaking that accompanies the escrow

The post-qualification stage also requires a duly notarized undertaking by the sole proprietor, managing partner, or corporation president. Among the commitments in that undertaking, the applicant must:

• Assume joint and several liability with the employer, shipowner, or principal for claims arising from the implementation of the contract, including unpaid wages, death and disability compensation, and repatriation.
• Assume full and complete responsibility for all claims and liabilities arising from the use of the license.
• Select and deploy only medically fit and technically qualified recruits.
• Guarantee compliance with Philippine labor and social legislation and applicable regulations of the flag State and international organizations such as the International Maritime Organization and the International Labour Organization.

The escrow deposit and the undertaking work together: the deposit provides a funded security, while the undertaking fixes the agency's legal responsibility.

Frequently asked questions

How much is the DMW escrow requirement for a recruitment agency? Not less than PhP 1,500,000, held under an escrow agreement with a bank authorized by the Bangko Sentral ng Pilipinas to handle trust accounts. An updated bank certificate must show the deposit remains at that amount.

Is the escrow the same as the agency's capital? No. The escrow deposit is separate from the PhP 5,000,000 minimum capitalization for a sole proprietor or partnership, or the PhP 5,000,000 minimum paid-up capital in cash for a corporation.

When is the escrow agreement submitted? During post-qualification, after the applicant passes the panel interview and is notified to submit post-qualification requirements — before the provisional license is issued.

Practical takeaways

• The escrow requirement is PhP 1,500,000, with a BSP-authorized bank handling the trust account.
• Minimum capitalization is PhP 5,000,000 for a sole proprietor or partnership, and PhP 5,000,000 in paid-up capital in cash for a corporation.
• The PhP 5,000,000 equity must be substantially maintained for the duration of the license, and the escrow deposit must remain at PhP 1,500,000.
• At least 75% of the authorized and voting capital stock must be owned and controlled by Filipino citizens.
• The escrow and bank certificate are post-qualification requirements, submitted after the panel interview and before the provisional license issues.

Primary sources

The rules discussed above are drawn from the following primary sources. Where the firm's library holds the document as a PDF it is embedded here in full; the rest are cited by title.

DMW-DC-06-2026 — 2026 DMW Rules and Regulations Governing the Recruitment and Employment of Seabased Overseas Filipino Workers, which shall take effect on 2 July 2026Open in Law LibraryDownload PDF

• IRR of REPUBLIC ACT NO. 11641 (Approved by the Transition Committee) - THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 11641, OTHERWISE KNOWN AS THE "DEPARTMENT OF MIGRANT WORKERS ACT"

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.