HOUSE OF REPRESENTATIVES

RECEIVED
SEVENTEENTH CONGRESS OF THE ) 08 AUG 2016
REPUBLIC OF THE PHILIPPINES. ) DATE
First Regular Session ) INE: be

HOUSE OF REPRESENTATIVES
WNo,_2998

RATION UNIT

INOEX SERVICE

Introduced by Representative Vilma Santos-Recto
6th District of Batangas

AN ACT
IMPROVING THE QUALITY OF EDUCATION BY AUGMENTING THE BUDGET
FOR THE K TO 12 PROGRAM OF THE DEPARTMENT OF EDUCATION (DEPED),
PROVIDING FUNDS FROM THE PHILIPPINE AMUSEMENT AND GAMING
CORPORATION (PAGCOR) INCOME, AMENDING FOR THE PURPOSE
PRESIDENTIAL DECREE NO. 1869, AS AMENDED BY REPUBLIC ACT NO. 9487

Explanatory Note

The Philippine Amusement and Gaming Corporation (PAGCOR) in the recent past
shares the spotlight with other Government Owned and Controlled Corporations (GOCCs) in a
spate of controversies involving the alleged misuse of their funds, thereby shorichanging the
National Government and their mandated beneficiaries.

Based on recent findings of the current management, former PAGCOR officials are
indicted for transgressions in the proper use of the income generated by the corporation in the
past few years. These anomalous transactions include the use of generated revenues to finance
partisan activities in the previous elections, and failure to allocate and remit the mandatory
contributions to beneficiaries, among others. More importantly, the overall financial statements
of PAGCOR remains concealed to the public eye, as government audit is limited to the 5%
franchise tax and the 50% net government share of winnings.

At present, PAGCOR contributes to a number of government agencies performing
various services, and to development programs on sports, early childhood care, micro, small and
medium enterprises, and the arts, as mandated by existing laws. Aside from the national
government share of the income, cities hosting the casinos also benefit from the income
generated by PAGCOR, Finally, the net income of the corporation goes to the Social Fund of the
President of the Philippines.

The public finds itself unapprised of the financial status of PAGCOR. With the limited
coverage of the audit, as mandated by the existing charter, transparency in the utilization of the
funds PAGCOR generates becomes intractable. Moreover, the funds of PAGCOR is considered
an off-budget item and not included among those evaluated during public hearings on the
General Appropriations Bill, hence it is devoid of any Congressional scrutiny.

This bill intends to amend the charter of PAGCOR. Under the bill, the 50% share of the
government in the aggregate gross earnings of the government corporation shall be allocated to
fund the K to 12 Program of the Department of Education (DepEd). This allocation is meant to
improve the quality of education in all public schools nationwide by augmenting funds for the
following: construction of needed classrooms, hiring of teachers, provision of additional chalk
allowances for all public teachers, conduct of supplementary feeding program in all public
elementary schools, continuing education program for public school teachers, provision of
intemet access in all public schools, and acquisition of equipment and facilities for the technical-
vocational courses under the K to12 program.


‘The provision of funds for the K to 12 Program will benefit more than 22 million students
in the public schools nationwide. With this measure, shortages for both classrooms and teachers
will be addressed. Thus, students will no longer suffer from overcrowded classrooms, or from
classes held under the trees and teachers will no longer shoulder the burden of overloaded
teaching workloads. More so, public school students can benefit from quality education at more
conducive learning environments, equipped with the proper tools for learning, and mentored by
capable teachers.

In order to promote transparency, the amount to be allocated to fund the K to 12 Program
under the DepEd shall be included in the General Appropriations Act (GAA).

With PAGCOR funds used to finance the K to 12 Program, the government will no
longer be pressured to raise new taxes nor cut budget allocations of other agencies in order to
meet the requirements of the public school system. This will also result in a higher quality of
education that will mean a brighter future for Filipino children.

In view of the foregoing, the approval of the bill is eamestl

VILMA SANTOS-RECTO


SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )

First Regular Session )
HOUSE OF REPRESENTATIVES
H.No,_ 2598

Introduced by Representative Vilma Santos-Recto
6th District of Batangas

AN ACT
IMPROVING THE QUALITY OF EDUCATION BY AUGMENTING THE BUDGET
FOR THE K TO 12 PROGRAM OF THE DEPARTMENT OF EDUCATION (DEPED),
PROVIDING FUNDS FROM THE PHILIPPINE AMUSEMENT AND GAMING
CORPORATION (PAGCOR) INCOME, AMENDING FOR THE PURPOSE
PRESIDENTIAL DECREE NO, 1869, AS AMENDED BY REPUBLIC ACT NO. 9487

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

SECTION 1. Section 1 of Presidential Decree No. 1869, as amended by Republic Act No.
0487 is hereby further amended to read as follows:

"Section 1. Declaration of Policy. — It is hereby declared to be the policy of the
State to centralize and integrate all games of chance not heretofore authorized by existing
franchises or permitted by law in order to attain the following objectives:
(a) To centralize and integrate the right and authority to operate and conduct games of
chance into one corporate entity to be controlled, administered and supervised by the
Government;
(b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools (basketball, football, lotteries, etc.) and such other forms of
amusement and recreation including games of chance, which may be allowed by law
within the territorial jurisdiction of the Philippines and which will [:(1)] generate sources
of additional revenue to fund THE K TO 12 PROGRAM OF THE DEPARTMENT
OF EDUCATION (DEPED); [infrastructure and socio-civie projects, such as flood
control programs, beautification, sewerage and sewage projects, Tulungan ng Bayan
Centers, Nutritional Programs, Population Control and such other essential public
services;]
(© [(2)] TO create recreation and integrated facilities which will expand and improve the

country's existing tourist attractions; AND.


(D) [@)] TO [minimize, if not totally] eradicate [,] the evils, malpractices and corruptions
that are normally prevalent in the conduct and operation of gambling clubs and casinos
without direct government involvement.”

SEC. 2. Section 7 of Presidential Decree No. 1869, as amended by Republic Act No. 9487 is

hereby further amended to read as follows:

"Section 7. Powers, Functions and Duties of the Board of Directors, — The Board
shall have the following powers, functions and duties;
To allocate and distribute[, with the approval of the Office of the President of the
Philippines, the earnings of the Corporation AS PROVIDED FOR BY LAW [earmarked

a)

to finance infrastructure and socio-civic projects];

b) To designate the commercial bank that shall act as the depository bank of the Corporation

and/or trustee of the funds of the Corporation;

©)

To prepare and approve at the beginning of each calendar year the budget that may be
necessary under any franchise granted to it, to insure the smooth operation of the
Corporation; and to evaluate and approve budgets submitted to it by other corporations or
entities with which it might have any existing contractual arrangement; AND

[d) To submit to the Office of the President of the Philippines before the end of February of

each year a list of all the infrastructure and/or socio-civic projects that might have been
financed from the Corporation's earnings, and to submit such periodic or other reports as
may be required of it from time to time; and]

() ((©)] To perform such other powers, functions and duties as may be directed and authorized
by the President of the Philippines or as may be necessary or proper for the

accomplishment of its purposes and objectives.”

SEC. 3, Section 12 of Presidential Decree No. 1869, as amended by Republic Act No. 9487 is

hereby further amended to read as follows:

“Section 12. Special Condition of Franchise. — After deducting five (5%)
percent as Franchise Tax, the Fifty (50%) percent share of the Government in the
aggregate gross earnings of the Corporation from this Franchise shall be immediately set
aside and allocated to fund the K TO 12 PROGRAM OF THE DEPARTMENT OF
EDUCATION (DEPED) THROUGH THE following: [infrastructure and socio-civil
projects within the Metropolitan Manila Area:

(a) Flood Control
(b) Sewerage and Sewage
(©) Nutritional Control

(@) Population Control

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(e) Tulungan ng Bayan Centers

(© Beautification

(g) Kilusang Kabuhayan at Kaunlaran (KKK) projects; provided, that should the aggregate
‘gross earning be less than P150,000,000.00, the amount to be allocated to fuund the above-
mentioned project shall be equivalent to sixty (60%) percent of the aggregate gross
earning.

In addition to the priority infrastructure and socio-civie projects with the Metropolitan
Manila specifically enumerated above, the share of the Government in the aggregate gross
earnings derived by the Corporate from this Franchise may also be appropriated and
allocated to fund and finance infrastructure and/or socio-civic projects throughout the
Philippines as may be directed and authorized by the Office of the President of the
Philippines.]

(A) CONSTRUCTION OF CLASSROOMS;

(B) HIRING OF PUBLIC SCHOOL TEACHERS;

(©) PROVISION OF ADDITIONAL ANNUAL CHALK ALLOWANCE IN THE
AMOUNT OF TWO THOUSAND PESOS (PhP2,000.00) FOR ALL PUBLIC
SCHOOL TEACHERS NATIONWIDE;

(D) SUPPLEMENTARY FEEDING PROGRAM IN ALL PUBLIC ELEMENTARY
SCHOOLS NATIONWIDE;

(E) CONTINUING TEACHERS EDUCATION PROGRAM FOR PUBLIC
SCHOOL TEACHERS;

(F) PROVISION OF INTERNET ACCESS IN ALL PUBLIC SCHOOLS
NATIONWIDE; AND

(G) ACQUISITION OF EQUIPMENT AND FACILITIES FOR THE
TECHINICAL-VOCATIONAL COURSES UNDER THE K TO 12 PROGRAM:
PROVIDED, THAT THE EQUIVALENT AMOUNT HEREIN PROVIDED SHALL
BE INCLUDED IN THE GENERAL APPROPRIATIONS ACT (GAA) UNDER
THE BUDGET OF THE DEPARTMENT OF EDUCATION (DEPED).

SEC. 4, Implementing Rules and Regulations. ~ Within sixty (60) days upon effectivity of
this Act, the PAGCOR, the Department of Education and the Department of Budget and
Management (DBM) shall provide the necessary rules and regulations for the proper disposition of
the said funds and the effective implementation of this Act.

SEC. 5. Separability Clause. - If any provision of this Act is subsequently declared

unconstitutional, the validity of the remaining provisions hereof shali remain in full force and effect.

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a bh oON

SEC. 6. Repealing Clause. — All laws, decrees, executive orders, rules and regulations and
other issuances or parts thereof which are inconsistent with this Act are hereby repealed or modified
accordingly.

SEC. 7. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any two (2) newspapers of general circulation.

Approved,

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