SIXTEENTH CONGRESS
OF THE REPUBLIC OF THE PHILIPPINES
First Regular Session

HOUSE OF REPRESENTATIVES

House Bill No. 1643

Introduced by Representative Susan A. Yap

EXPLANATORY NOTE

It is the policy of the State to protect, foster, and promote the right of all citizens to
affordable quality education at all levels and shall take appropriate steps to ensure that
education shall be “accessible to all. The State shall likewise ensure and protect academic
freedom and shall promote its exercise and observance for the continuing intellectual growth,
the advancement of learning and research, the development of responsible and effective
leadership, the education of high-level and middle-level professionals, and the enrichment of
our historical and cultural heritage

In a tecent study of the Asian Development Bank, it cited that in Asia, higher
education is viewed as “more than the provision of a public good but is also a strategic move
toward achieving greater growth and social solidarity.”

In view of this, there is a need to restructure and reform the higher education s;
in the Philippines in order to cope up with the accelerating development among countries in
the region.

The proposed measure seeks to grant more institutional autonomy to higher education
institutions (HEIs) with the hope that the increasing management flexibility will expedite the
process of higher education development recognizing that “higher education sector is a
strategic lever for long-term and sustainable development.”

‘The creation of an independent Department of Higher Educattion emphasizes the
importance and adapatation to objectives and vision geared towards growth and social
solidarity while addressing isues and problems concerning quality, access, equity, and
inefficient governance systems.

Increasing autonomy seems to hold the key to solving the problems and securing the
success of higher education development. The degree of success in transforming the higher
education sector into a development lever depends very much on the capability of the
Departament, the HEIs and the national government “to create more alignment, lessening
tension and achieving a more balanced governance system.”

SUSAN
Representative, 2 District of Tarlac


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SIXTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )

First Regular Session )
HOUSE OF REPRESENTATIVES.

House Bill No._1643

Introduced by Representative Susan A. Yap

AN ACT
ESTABLISHING A FRAMEWORK OF GOVERNANCE AND DEVELOPMENT
FOR HIGHER EDUCATION, CREATING THE DEPARTMENT OF HIGHER
EDUCATION, APPROPRIATING FUNDS THEREFOR AND FOR OTHER,
PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress. assembled:

SECTION 1. Short Title.
and Development Act of 2013.

his Act shall be known as the “Higher Education Governance

SECTION 2. Declaration of Policy. tate shall protect, foster and promote the right
of all citizens to affordable quality education at all levels and shall take appropriate steps to
ensure that education shall be accessible to all. The State shall likewise ensure and protect
academic freedom and shall promote its exercise and observance for the continuing
intellectual growth, the advancement of learning and research, the development of responsible
and effective leadership, the education of high-level and middle-level professionals, and the
enrichment of our historical and cultural heritage.

SECTION 3. Purposes and Objectives. - The purposes and objectives of this Act are:

a) To provide the framework for the governance of post-secondary, technical-vocational and
higher education which shall set the general directions for educational policies, quality
standards, guidelines and supervision for achieving learning outcomes;

b) To define the roles and responsibilities of and provide resources to the different offices at
various levels of the department for the implementation of educational programs, projects and
services in their respective jurisdictions;

©). To empower educational institutions to develop as effective partners in tertiary education
provisioning and in attaining and sustaining greater access to educational opportunities.

SECTION 4. Definition of Terms. - For purposes of this Act and except as otherwise
provided, the terms or phrases used shall mean ot be understood as follows:

1) “Accreditation” is a voluntary activity or process leading to the issuance of a certificate
of accredited status by an organized body of educational institutions attesting to the
quality or standards of a higher education institution or to any of its educational
Programs, and to the effectiveness of the management and operations of the institution



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offering the program, as exceeding the minimum standards or criteria for government
recognition as provided for in this Manual. Accreditation shall be voluntary in nature.

2) “Autonomy” refers to the special regulatory treatment and benefits accorded by the
Commission to certain higher education institutions for demonstrated and consistent
adherence to high standards of instructions, research and scholarships.

3) “Course” is a discrete component of a higher education degree program. It is identified
by a course name while its coverage is defined by a course description and its outline or
syllabus. This is also known as subject.

4) “Deregulation” represents degrees in the liberalization of rules and regulations of the
Commission. The Commission accords to a deregulated higher education institution
certain benefits and advantages as may be provided for in this Manual and in applicable
legislation.

5) “Formal Education” refers to the hierarchically structured and chronologically graded
learning experience organized and provided by the formal school system and for which
certification is required in order for the student to progress through the grades or move
to higher levels. Formal education shall correspond to the levels of the elementary,
secondary and tertiary education.

6) “Government Authority” means either a permit or recognition issued by the
Commission to a private higher education institution for the operation of a particular
higher education degree program.

a) “Permit” refers to a form of government authority issued by the Commission to a
higher education institution for the operation of a particular higher education
program on probation. The Permit is renewable and generally revocable for non-
compliance with the program requirements.

b) “Recognition” is another form of government authority or approval granted to a
particular higher education program for operation as a continuing or permanent
concern, after having been satisfactorily operated under a government permit,
Recognition constitutes the basis for the graduation of students. It remains valid
unless revoked for cause.

7) “Higher Education Degree Program” refers to the specific courses of study in the
higher level of the education system leading to a bachelor’s, master’s or doctoral
degree.

8) “Higher Education Institution” or “Institution” means an educational institution,
private or public, undertaking operations of higher education programs/s with an
organized group of students pursuing defined studies in higher education, receiving
instructions from teachers, usually located in a building or group of buildings in a
particular site specifically intended for educational purposes.

9) “Institutional Academic Freedom” refers to the freedom of higher education
institutions to determine their aims and objectives and how to attain them without
threat of coercion or interference, except, when the overriding public interest calls for
some restraint.

10) “Institutional Policies and Rules” means the standards prescribed by the higher
education institution for the international governance of its educational operations, as


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defined and approved by its governing body in accordance with law, and the applicable
policies and rules of the Commission.

11) “Non-Stock Educational Institution” is a higher education institution organized as a
non-stock corporation in accordance with the Corporation Code of the Philippines,
where no part of its income is distributable as dividends to its members, trustees, of
officers, subject to the provisions of the Code on dissolution: Provided, that any profit
which a non-stock corporation may obtain as an incident to its operations shall,
whenever necessary or proper, be used for the furtherance of the purpose or purposes
for which the corporation was organized.

12) “Post Secondary Program” refers to courses of study which do not lead to a
bachelor’s degree but which require the possession of a high school diploma for
admission, and which are generally for obtaining technical and vocational skills.

13) “Regional Office” refers to any of the offices of the Commission in the different
regions throughout the country; they exercise direct supervision over higher education
institutions under their jurisdiction and area of responsibility.

14) “Stock Educational Institution” is a higher education institution organized as a
stock corporation in accordance with the Corporation Code of the Philippines, which
has capital stock dividend into shares and is authorized to distribute to the holders of
such shares dividends or allotments of the surplus profits on the basis of the shares
held.

15) “Tertiary Education” refers to post secondary technical/vocational education and
training, as well as higher education programs.

16) “Alternative Learning System” is a parallel learning system to provide a viable
alternative to the existing formal education instruction. It encompasses both the
nonformal and informal sources of knowledge and skills;

17) “Basic Education” is the education intended to meet basic learning needs which lays
the foundation on which subsequent learning can be based. It encompasses early
childhood, elementary and high school education as well as alternative learning systems
for out-of-school youth and adult learners and includes education for those with
special needs;

18) “Informal Education” is a lifelong process of learning by which every person acquires
and accumulates knowledge, skills, attitudes and insights from daily experiences at home, at
work, at play and from life itself

SECTION 5. Governance. -'The Department of Higher Education, which is created pursuant
to this Act and hereinafter, referred to as the Department shall be vested with authority, accountability
and responsibility for ensuring access to, promoting equity in, and improving the quality of post-
secondary, technical-vocational and higher education.

SECTION 6. Creation of the Department of Higher Education. - In pursuance of the
abovementioned policies, the present Commission on Higher Education (CHED) and the Technical
Education and Skills Development Authority (TESDA) are hereby abolished and thus, absorbed as part
of the Department of Higher Education, which is created pursuant to this Act and hereinafter referred to
as the Department.

‘The Department shall be independent and separate from the Department of Education (DEPED)


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and shall be a cabinet level department of government headed by the Department Secretary. Its
coverage shall be both public and private educational institutions including but not limited to private
higher education institutions, state universities and colleges, local universities and colleges, post-secondary,
technical/ vocational schools, other similar non-degree and degree granting institutions operated by
other government entities.

SECTION 7. The Office of the Secretary. - ‘The authority and responsibility for the exercise of the
mandate of the Department and for the discharge of its powers and functions shall be vested in the
Secretary, who shall be part of the Cabinet and who shall have supervision and control of all the offices,
and personnel of the Department .and its attached agencies.

SECTION 8. Appointment of the Department Secretary and Undersecretaries, - The
President, with the concurrence of the Commission on Appointments, shall appoint the Department
Secretary who should be a holder of an earned doctorate degree taken in a reputable higher
education institution and has been actively engaged in higher education for at least ten (10) years,
and must not have been a candidate for elective positions in the elections immediately preceding his
appointment. ‘The appointee shall be an academician known for his high degree of professionalism
and integrity and who has distinguished himself as an authority in his chosen field of learning, In the
appropriate cases, the above qualifications shall also be applicable to the undersecretaries to be
appointed.

SECTION 9. The Office of the Undersecretaries. - Yhe Department shall have as many
undersecretaries as allowed by law to assist the Secretary for the discharge of the mandates, powers and
functions of the Department; provided, bowerer, that the undersecretaries shall be permanent, career
undersecretaries with the appropriate career executive service eligibility such as the Careet Executive
Service eligibility given by the Career Executive Service Board.

SECTION 10. Office of the Undersecretary for Higher Education Programs. - The Office
of the Undersecretary for Higher Education Programs shall include all the staff bureaus and services
involved in educational program guidelines formulation, quality standards development, regulatory, and
service delivery programs pertinent to higher education programs and courses being implemented by
the Department's line operating units. It shall also include all other concerns pertaining to higher
education including but not limited to research, policy, student services, scholarships, among others.

SECTION 11. Office of the Undersecretary for Administration. - The Office of the
Undersecretary for Administration shall supervise all offices and units involved in the formulation
and implementation of agency wide plans, human resource development, regional operations and other
concems pertaining to administration and governance of the Department. ‘The Office shall oversee the
rigorous implementation of Department regulations, and proper implementation of Department plans
and programs by the Regional Offices/ Field Offices in their respective administrative jurisdictions.

SECTION 12. Office of the Undersecretary for Polytechnic Education Programs. - The
Office of the Undersecretary for Polytechnic Education Programs shall include all the staff bureaus
and services involved in program guidelines formulation, quality standards development, regulatory,
and service delivery programs pertinent to post-secondary, vocational and polytechnic programs
being implemented by the Department's line operating units.

SECTION 13. Office of the Undersecretary for Finance. - The Office of the Undersecretary for
Finance shall exercise supervision over the Department's Budget formulation and implementation in

all the units of the Department, among others. It shall see to it that effective fiscal management and
control is ensured in the Department.

SECTION 14. The Office of the Assistant Secretaries. - The Department shall have as

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many assistant secretaries as allowed by law to assist the Secretary and the Undersecretaties for the
discharge of the mandates, powers and functions of the Department; provided, however, that at least two
(2) assistant secretaries shall be permanent, career executive service officers with CESO eligibility.

SECTION 15. Board of Advisers. - There shall be constituted a Board of Advisers which shall meet
with the Department at least once a year to assist it in aligning its policies and plans with the
cultural, political and socioeconomic development needs of the nation and with the demands of
world-class scholarship, technological development, and globalization.

The Board of Advisers shall be composed of the following:

a. The Secretary of Higher Education as chairman;

b. The Director-General of the National Economic and Development Authority, as co-
chairman;

c. The Secretary of Basic Education;

d. The Secretary of Science and Technology

¢. The Secretary of Trade and Industry;

f. The Secretary of Labor and Employment;

‘Two (2) additional members of the Board of Advisers may be appointed by the President
upon recommendation of the Secretary of Higher Education.

SECTION 16. Powers and Functions of the Department. - Aside fom the usual functions of a
Department mandated by the Revised Administrative Code of 1987, the Department shall have
the following additional powers and functions:

a. formulate development plans, policies, priorities, and programs on tertiary education and
research;

b, formulate development plans, policies, priorities and programs on research;

¢. approve priorities and grants on tertiary education and research;

d._ set minimum standards for programs/courses of studies formulated by panels of experts in the
field and subject to public hearing, and enforce the same as well as to approve trade skills standards
and trade tests as established and conducted by private industries including registrations of tertiary
education institutions and the conduct of certifications;

€. monitor and evaluate the performance of programs and tertiary education institutions for
appropriate incentives as well as the imposition of sanctions such as, but not limited to, diminution or
withdrawal of subsidy, downgrading or withdrawal of permit/ recognition/ registration and/or of
status conferred by the Department, non- recognition of accreditation, or termination of program or
certificate, or closure of the school or training center;

£ identify, support and develop potential centers of excellence in program areas needed for the
development of world-class scholarship, nation building and national development,

& approve and allocate the budgets of state universities and colleges (SUCs) and other educational
institutions under the Department as well as implement general guidelines for the use of their income;
h. rationalize tertiary education institutions and their degree and non-degree programs and set
standards, policies and guidelines for the creation of lew ones as well as the conversion or elevation of
schools to institutions of higher learning, subject to budgetary limitations and the number of
institutions of higher learning in the province or region where creation, conversion or elevation is sought
to be made;

i. develop criteria for allocating additional resources such as research and program development grants,
scholarships, and other similar programs: Provided, That these shall not detract from the fiscal
autonomy already enjoyed by colleges and universities;



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j. direct or redirect purposive research by tertiary education instinutions to meet the needs of agro
industriaization, ICT, science and technology development, and likewise encourage increasing
utilization of the dual training system as provided for by Republic Act No. 7686;

devise and implement resource development schemes for higher and technical/ vocational education
and skills development purposes;

1 administer the Higher Education Development Fund and other existing Development
Funds and those to be established which will promote the purposes of this Act,

m, review the charters of public educational institutions under the jurisdiction of the Department
by virtue of this Act including the chairmanship and membership of SUCs governing boards to
the extent allowed by law and regulate the offering of their education programs as well as other
‘government educational institutions consistent with existing laws;

promulgate such rules and regulations and exercise such other powers and functions as may be
necessary to carry out effectively the purpose and objectives of this Act; and

©. perform such other functions as may be necessary fot its effective operations and for the
continued enhancement, growth or development of tertiary education.

SECTION 17. The Department Secretariat. - There shall be created a Secretariat, which shall
provide technical and management staff support to the Office of the Secretary and the
Undersecretaries and shall be headed by an Executive Director who is a permanent, career executive
service officer (CESO). The Executive Director shall prepare and recommend the Secretariat's staffing
pattern, determine the duties, qualifications, responsibilities and functions, compensation scheme
and budget subject to the national compensation and position classification plan. The Secretary shall
appoint the members of the staff upon the recommendation of the Executive Director.

SECTION 18. The Higher Education Development and Support Fund (HEDSF). - ‘The
Higher Education Development Fund created under RA 7722, hereinafter referred to as the Fund, is
hereby strengthened as a Trust Fund and henceforth be transformed as the Higher Education Development
and Support Fund and to be used exclusively for the upgrading and strengthening of higher/ tertiary
education in the entire country. Thus, all other existing similar development in the TESDA shall be
integrated in the said HEDSF. The Fund shall be allocated and disbursed subject to the needs of
institutions and in consonance with the priorities and development thrusts of the country.

‘The Fund shall be supported and sustained from the following sources, among others:
1, the equivalent of forty percent (40%) annual share on the total gross collections of the travel tax;
2. the equivalent of thirty percent (30%) share of the collections from the Professional
Registration Fee; and

3. the equivalent of one percent (1%) of the gross sales of the lotto operation of the Philippine
Charity Sweepstakes Office (PCSO),

4, the contribution of an equivalent to not less than three percent (3%) but not more than five
percent (5%) of the unimpaired surplus realized during the immediately preceding year starting
Fiscal Year 2011 and every year thereafter from government financing institutions identified and
requested by the Department; and

5. the contributions, donations, gifts, legacies and other conveyances including materials, equipment,
real and personal properties as well as services by gratuitous title from private sources such as private
individuals, corporations, NGOs and GOs, both locally and internationally, subject to the usual
procedures and to be known as the private portion of the Fund.

SECTION 19. Management and Administration of the Higher Education Development and
Support Fund. - The Fund shall be administered by the Department and for sound and
judicious management of the Fund, the Secretary shall appoint a reputable government financial
institution as portfolio manager of the Fund, subject to the following conditions.


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As administrator of the Fund, the Department shall prepare the necessary guidelines for
its use, subject to the following conditions:

a. No part of the seed capital of the Fund, including earnings thereof, shall be used to underwrite
overhead expenses for administration;

b. The equivalent of 30% of the amount of private contributions may be used for administrative
expenses one time only and on an annual basis; provided, however, that no part of the earnings shall be
used for administrative expenses unless otherwise stipulated by the private donor,

c. The Secretary shall appoint and organize a separate staff, independent administratively and
budgetarily from the Department personnel complement to provide staff support to the 1
provided, however, that the compensation of said staff shall be subject to the approval of the Secretary
and sourced from the private portion of the Fund and from the allowable portion of the earnings.

d. ‘The Fund shall be utilized equitably according to such criteria to be formulated by the Department
taking into consideration the following considerations, among others, such as: regional spread, the
needs of the institutions, the priorities and programs of the Department, national and regional needs
and priorities.

SECTION 20. Governance of State Universities and Colleges. - Contrary provisions of other
laws particularly Section of RA 8292 notwithstanding, the Chairmanship of State Universities and
Colliges shall be vested in the Secretary of Higher Education and shall continue to chair and govern
the boards of state colleges and universities; provided, however, that in meritorious instances, the
Secretary may designate his Undersecretaries and Assistant Secretaries to represent him in the
governing boards as chair-designates subject to his control and supervision.

SECTION 21. The Bureaus, Offices, Department Services Regional Offices, District
Offices and Other Field Offices. - Except as otherwise provided by law, the Department is
hereby authorized to establish, operate and maintain such Bureaus, Offices and Department Services
including but not limited to the Financial and Management Service, the Administrative Service,
Public Assistance Service, Management Information Service and whenever necessary the
Technical and Legal Services. Likewise, bureaus which are cither line or staff m: ted to
perform a single major function or closely related functions of the Department such as the Bureau.
of Programs and Regional Operations, Bureau of Policy, Planning and Information, Bureau of
Student Services and Scholarships, Bureau of Policy, Planning and Information, Bureau of Educational
Quality Assurance and Management, Bureau of Technical-Vocational Education, Bureau of
Alternative Learning Systems. The bureaus created shall be headed by a Director IV and whenever
necessary, shall be assisted by an Assistant Director (Director III).

be cr

‘The Department shall establish Regional Offices, District Offices and Other Field Offices in
cach of the administrative regions of the country, insofar as necessary to promote economy and
efficiency in the delivery of its services. Its Regional Office shall be headed by a Regional Director
who shall have supervision and control thereof. The Regional Director, whenever necessary, shall be
assisted by an Assistant Regional Director. Likewise, District Offices and other Field Offices may be
created as necessary for the effective fulfillment and discharge of the Department mandates and shall be
headed by Directors or officers of appropriate rank.

SECTION 22. The Technical Panels. - At the discretion of the Department, it may organize technical
panels/industy boards/committees/councils and for different disciplines/ program/certification areas
insofar as necessary to promote professionalism and efficiency in the delivery of its services. ‘They
shall assist the Department in setting standards, certification and policy development. The
technical panels/industey boards/committees/councils shall be composed of senior specialists or
academicians, industry/business leaders and experts, noted practitioners, and other eminent persons in
the filed to be appointed by Secretary.


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SECTION 23. Guarantee of Academic Freedom. - Nothing in this Act shall be construed as
limiting the academic freedom of universities and colleges. In particular, no abridgment of curricular
freedom of the individual educational institutions by the Department shall be made except for: (@)
minimum unit requirements for specific educational programs; (b) general education distribution
requirements as may be determined by the Department; and (c) specific professional subjects as may
be stipulated by the various licensing entities. No academic ot curricular restriction shall be made
upon private educational institutions, which are not required for chartered state colleges and
universities,

SECTION 24. Pathways and Incentives for Quality Assurance. - The Department shall
encourage educational institutions to upgrade their status to higher quality categories or levels
through adoption of various quality pathways including but not limited to undergoing voluntary
accreditation, compliance with Institutional Quality Assurance Monitoring and Evaluation
(IQUAME), ISO status, ot in any combination of these pathways. Moreover, the Department may
provide incentives to institutions, public and private, that are undergoing upgrading of their
programs to attain higher quality status.

SECTION 25. Tax Exemptions. - Any donation, contribution, bequest, and grant which may be
made to the Department shall constitute as allowable deduction from the income of the donor for
income tax purposes and shall be exempt from donor's tax, subject to such conditions as provided under
the National Internal Revenue le, as amended.

SECTION 26. Appropriation. - In addition to the existing balance of the HEDF and similar Fund in
the TESDA, the amount of Five Billion pesos (P5,000,000,000.00) is hereby authorized to be
appropriated as additional capital of the Fund for investment out of the funds in the National ‘Treasury
not otherwise appropriated, the Philippine Amusement and Gaming Corporation (PAGCOR), and the
Development Funds of the agencies absorbed by the Department.

‘The sum equivalent to the appropriations for the current year for the Commission on Higher
Education (CHED) and Technical Education and Skills Development Authority ([ESDA) such as
those for personal services, maintenance and other operating expenses and capital outlay, shall be
transferred to the Department. Thereafter, the funds necessary shall be included in the General
Appropriations Act.

Henceforth, pursuant to Section 16 (g) hereof, the sum equivalent to the allocation
of all state universities and colleges in the General Appropriations Act shall be transferred to the
Department which shall be responsible in approving and allocating said budgets to the SUCs pursuant
to guidelines and procedures.

SECTION 27. Transitory Provisions. - Such qualified personnel, properties, assets and liabilitie
functions and responsibilities of the Commission on Higher Education (CHED) and Technical
Education and Skills Development Authority (TESDA) as well as their attached agencies affected are
hereby transferred to the Department. The Department shall have the authority to appoint its own
personnel and the compensation and benefits shall be exempt from the Salary Standardization Law
(SL).

All regular or permanent employees transferred to the Department shall not suffer any loss
of seniority or rank or decrease in emoluments. Personnel of the Commission on Higher Education
(CHED) and Technical Education and Skills Development Authority ([ESDA) not otherwise
transferred to the Department, either voluntarily or involuntarily, may be reassigned to other
Departments or agencies of government; Provided, however, that, any employee who cannot be
accommodated shall be given all the retirement benefits, if qualified, or the appropriate separation

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benefits as may be provided under pertinent existing laws, rules and regulations.

Jurisdiction and administration of TESDA-supervised TVET schools, training centers ot
similar facilities as well as similar instrumentalities administered by CHED, if any, shall be
transferred to the Department.

‘A transitory body is hereby created which shall be composed of the Chairman of the
CHED as Chair and as members: the Director-General of the TESDA, Chair of the Senate
‘Committee on Education, Chair of the House Committee on Higher and Technical Education and the
Secretary of the DBM.

‘The transitory body shall facilitate the complete and full operation of the Department, which shall
not be later than three (3) months after the effectivity of this Act. It shall likewise, promulgate the rules
and regulations necessary to effectively implement the smooth and orderly transfer to. the
Department of such personnel, properties, assets and liabilities, functions and responsibilities of the
Commission on Higher Education (CHED) and the Technical Education and Skills Development
Authority (TESDA) as well as other attached agencies affected.

‘The transition period not exceeding three (3) months and shall commence from the approval of
this Act.

SECTION 28. Repealing Clause. - All laws, specifically the affected provisions of RA 7722 and

RA 7796, and presidential decrees, executive orders, rules and regulations or parts thereof that are
inconsistent with the provisions of this Act are hereby superseded, repealed or modified accordingly.

SECTION 29. Separability Clause. - lf any part or provision of this Act shall be held
unconstitutional or invalid, other provisions hereof which are not affected thereby shall continue to
be in full force and effect.

SECTION 30. Effectivity. - This Act shall take effect upon its approval.

Approved,