, , 
SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
St'l111 tr 
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'13 
JUL lOA 9 :22 
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Introduced by Senator FRANCIS G. ESCUDERO 
S.B.No. 
709 
EXPLANATORY NOTE 
To achieve social justice, social stability, economic development, peace and prosperity, 
one of the most compelling concerns that we must address is the total development of the person 
as a functional and productive member of the society. 
It is in this light that our Government has long recognized that'Education should be given 
the highest priority in terns of State supporj: and State resClurces, Consequently with this 
prioritization, education has been consistently given the biggest slice of the budgetary pie. 
Article XIV, Section 1 ofthe Constitution declares: 
"The State shall protect and promote the right of all citizens to quality 
education at all levels and shall take appropriate steps to make education 
accessible to all." 
Likewise, Article II, Section 17 of the Constitution also declares: 
"The State shall give priority to education, science and technology, arts, 
culture and sports to foster patriotism and rationalism, accelerate social progress 
and promote total human liberation and development." 
To achieve our concerns and implement this Constitutional mandate, the State shall 
provide the mechanisms to broaden opportunities to higher education in addition to what is 
already provided for in RA 7722. "The Higher Education Act of 1994," RA 6728 "The 
Government Assistance to Students and Teachers in Private Education Act," and RA 8392 "The 
Higher Education Modernization Act of 1998." 
Considering that our financial capability as a nation does not permit us to subsidize every 
Filipino child's education from pre-school all the way to college, it is therefore a fact that 
government alone can not address the issue of providing education for all. 
This bill therefore proposes to broaden opportunities and promote education as an 
accessible equalizer through the partnership of Government and the private sector thus, ensuring 
the education shall become an effective instrument in improving the life of the majority of the 
Filipino people. 
In fact in our hierarchy of values, most consider education over and above clothing and 
shelter. This bill shall strengthen education as a means of an upward mobility; thus passage of 
this bill is hereby urged. 
FRANCIS G. ESCUDERO 


SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S. B. No. 709 
Introduced by Senator FRANCIS G. ESCUDERO 
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JUL 10 :19:22 
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AN ACT 
ESTABLISHING AN EDUCATION TRUST FUND FOR GRANTEES OF GSIS AND SSS 
MEMBERS AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
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SECTION 1. Short Title. - This Act shall be known as the "Education Trust Fund Act." 
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SECTION 2. Declaration of Policy. - The Constitution provides that the State shall protect 
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and promote the rights of all citizens to quality education at all levels and shall take appropriate 
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steps to make education accessible to all. Towards this end, the State shall endeavor to extend 
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social security protection to provide the opportunity of making education accessible commodity 
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to realize the right of all citizens, particularly the under privileged, the equal opportunity to 
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quality education for them to contribute in a more productive and active role in social life 
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specially in the economic and political spheres. 
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SECTION 3. Definition of Terms. - The following terms shall be understood in this Act to 
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mean: 
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(1) ETF - refers to the Education Trust Fund created by this Act. 
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(2) Government Service Insurance System (GSIS) refers to the agency entrusted to take 
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charge of all matters pertaining to the officials and employees, as created and 
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established under Commonwealth Act No. 186, as amended by Presidential Decree No. 
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1146, and further amended by Republic Act No. 8291. 
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(3) Social Security System (SSS) refers to the agency entrusted to take charge of all matters 
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pertaining to the benefits and insurance claims of all private employees, embodied in 
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republic Act No. 1161 and amended by republic Act No. 8282. 
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(4) Optional means the voluntary act of qualified members of GSIS or SSS to be included 
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in the pre-need education trust fund coverage for their grantee, deductible to their 
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salaries and / or payable to the system concerned in a form of equal number of monthly 
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contributions as deterinined in the policy contract. 
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(5) Education Trust Fund (ETF) refers to the accumulated amount of money deducted from 
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GSIS and SSS members and I or paid by the members to the system concerned for the 
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use in the education of their grantee to be paid directly to universities or colleges for a 
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baccalaureate degree and I or institutions for a vocational I technical program to be 
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determined as provided for in the policy contract. 
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(6) Planholder refers to a member of the GSIS and the SSS who avails ofETF Plans for the 
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education of this grantee according to his desired vocational I technical and I or 
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baccalaureate education program. 
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(7) Plan agreement refers to the policy contract issued by either the GSIS or the SSS to the 
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provisions of the planholders' benefits ,and responsibilities. 
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(8) Grantee refers to the child designated by the planholder regardless of relationship to 
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avail of the ETF benefits according to the education program determined in the policy 
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contract. 
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(9) Monthly contributions refer to the amount of money to be deducted out of the salaries 
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of the qualified member and I or paid directly to the system concerned as specified in 
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the policy contract to be determined by the Education Trust Fund Board. 
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(10) 
Education Trust Fund (ETF Board refers to the governing body which shall 
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formulate policies, implementing, rules and regulations, guidelines, and other related 
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matter pertaining to the operation and management of the ETF created under this Act. 
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SECTION 4. Education Trust Fund (ETF) Plans. - There is hereby established in the GSIS 
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and the SSS a special education trust fund to be known as the "GSIS/SSS Education Trust 
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Fund (ETF) Plans" through enrollment in any desired education program to ensure the 
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education of the grantee of members for both systems respectively. 
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SECTION 5. Management and Supervision. - (a) To carry out the purposes of this Act, 
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the ETF Board is created, hereinafter referred to as the "ETF Board", a governing body 
26 
which shall formulate policies, implementing rules and regulations, guidelines and other 
27 
related matter to oversee, manage and supervise the operation of ETF with principal place 
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of business in Metro Manila, Philippines. 
29 
(b) The ETF Board composed of nine (9) members shall be comprised of one (1) member 
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for the Government Service Insurance System (GSIS); one (1) member from the Social 
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Security System (SSS); one (1) member from the Senate Committee on Government 
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Corporations and Public Enterprises; one (I) member from the House of Representatives 
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Committee on Higher and Technical Education; one (1) member from the House of 
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Representatives Committee on higher and Technical Education and Skills (TESDA); and 
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one (1) Independent Pre-need Resource Person with adequate knowledge and a minimum of 
36 
ten (10) years experience in pre-need marketing and industry exposure which shall be 
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appointed upon recommendation by the majority members of the proposed Board. The term 
of the appointive members shall be six (6) years. The members of the Board shall receive 
atleast Two Thousand Five Hundred Pesos (P2,500.00) per diem for each meeting actually 
attended by them, but not to exceed Ten Thousand Pesos (PIO,OOO.OO) a month: Provided, 
further, That said members of the Board shall also receive reasonable transportation and 
representation allowances as may be fixed by the ETF Board, but not to exceed Ten 
Thousand Pesos (PI 0,000.00) a month. 
(c) The ETF Board upon the recommendation of the GSIS and the SSS, shall appoint an 
actuary and such other personnel as may be deemed necessary; fix their reasonable 
compensation, allowance and other benefits; prescribe their duties and establish such 
guidelines and procedures as may be necessary to ensure the efficient, honest and 
economical administration of the provision and purposes of this Act. 
(d) The GSIS and the SSS shall create an Education Trust Fund (ETF) Department 
respectively, to manage the general conduct of the operation and management functions: 
Provided, however, That all personnel of the ETF Department shall be appointed by the 
President of the GSIS / SSS, as the case may be, subject to the confirmation of the ETF 
Board: Provided, further, That the personnel of the ETF Department in both the GSIS and 
, 
the SSS shall be selected only from Civil Service eligible and be subjected to civil service 
rules and regulations. 
(e) The ETF Board shall be responsible for the formulation and implementation of the 
Implementing Rules and Regulations (IRR) of this Act, to ensure the effectiveness and 
viability of the ETF for a self sustaining operation, including its budgetary support, 
operating capital and other related' expenditures, monitoring and categorizing of schools 
according to the cost of its existing tuition fees and other related school fees and charges, 
monitoring of rate schedules according to the age, terms of payment, number of years 
before availment and other related matters to safeguard the implementation and operation of 
this Act. 
SECTION 6. Educatiol1 Trust Fund (ETF) Plans Agreement. - For the attainment of its 
main objectives, the general provisions of a plan agreement shall be issued by both the GSIS and 
the SSS, respectively, to all availing members as planholders which shall govern the terms and 
conditions in the implementation of premium payments and benefits inclusive of the plan cash 
value which shall be determined by the ETF Board. 
SECTION 7. Trust Fund Management. - The ETF must be separated from the general 
funds of the system concerned and must be self sustaining to be invested according to the 
provisions and guidelines of the Social Security Fund in the case of the SSS; Investment of 
3 


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Funds in the case of the GSIS, except on members loans for a greater yield investment. No 
2 
amount of money from the ETF Plans shall be loaned to the members andlor planholders of 
3 
system concerned 
4 
SECTION 8. Grantee. - For purposes of this Act the term "grantee" shall include 
5 
legitimate, legitimated, legally adopted or illegitimate child.' grandchild andlor whoever be the 
6 
child to be assigned by the member regardless Of relationship. A 'grantee is a duly appointed and 
7 
registered grantee on or before enrollment to avail of the ETF benefits. A member may apply for 
8 
a deferred plan ifhe does not have a child and or grantee. 
9 
SECTION 9. Optional Coverage. - Subject to the rules and regnlations prescribed by the 
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ETF Board, all GSIS and SSS members, regardless of civil status, with or without a child andlor 
11 
grantee, may opt to participate under this ETF plans program. 
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SECTION 10. Premium Payments. - The amount of premiums to be paid to the ETF by 
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the member shall be in accordance with the schedule of payments to be prescribed by the ETF 
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Board taking into consideration the fallowing criteria: 
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(~) The interval of the time between the effectivity of the coverage and the estimated time of 
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enrollment of the grantee in any desired education level for a vocationall technical or a 
17 
baccalaureate program; 
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(b) The number of monthly contributions to be made to complete the contracted price 
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stipulated in the plan agreement or policy contract; 
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(c) 'The benefits to be availed of, as provided in Section 12 of this Act; 
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(d) the amount of tuition and the other standard fees charged by the institutions, colleges, and 
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I or universities according to the school category for a vocation/technical or a 
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baccalaureate education level; and 
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(e) Such other factors as may be determined by the ETF Board. 
25 
SECTION 11. Reinsurance. - The GSIS or the SSS may reinsure any of its interest wholly or 
26 
in part thereof with any private company or reinsurer whether domestic or foreign: Provided, 
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That the System concerned shall submit an annual report on its reinsurance operation to, the 
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Insurance Commission through the ETF Board. 
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SECTION 12. Education Benefits. - only members who have completed the payment of 
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the contract price stipulated, in the plan agreement or policy contract before enrollment of the 
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grantee shall be entitled to avail of the benefits provided for under this Act. 
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The benefits shall include the payment ofETF by the System concerned of: 
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(a) Such school fees as may be required for enrollment, for completion of a vocational/ 
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technical or a baccalaureate program which shall include tuition fees for all subjects 
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officially prescribed by the institution, colleges and/or universities and part of a regular 
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curriculum as requisite for graduation and other standard fees such as science and speech 
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laboratory, audio-visual, medical and dental, library# athletics, counseling, registration, 
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matriculation, official school publication and other fees may further be approved by the 
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CHED and the TESDA; and 
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(b) Any other benefits to be provided form as stipulated in the policy contract as determined 
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and approved by the ETF Board. 
10 
The payment shall be made by the ETF of the System concerned directly to the institution, 
II 
college and/or university prior or upon enrollment as the case may be, an open-ended education 
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trust fund benefit that pays all Schools expenses as stipulated in the policy contract regardless of 
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whatever cost of a designated education program during the availment period, for a 
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vocational/technical and/or a baccalaureate education program on a semestral or trimestral basis. 
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The ETF Board shall provide for safeguards to ensure the prompt payment of benefits. 
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SECTION 13. Incentives. - In appreciation of excellent performance of the grantee and for 
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future use of the planholder, an incentive is hereby provided 
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(a) Should the grantee earn any acceleration or scholarship award in any education program 
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desired, all amounts due and payable to the institution, college and/or university or its 
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equivalent amount, shall be awarded to the availing grantee of the phanholder; and 
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(b) Any other incentives and/or benefits to be determined by the ETF Board as provided for 
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in the plan agreement or policy contract issued by the System concerned. 
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SECTION 14. Transferability af Benefits. - The benefits for in this Act may be transferred 
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to any active member of both System and maybe assigned to another grantee at the option of the 
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planholder. 
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SECTION 15. Cash Value. - In cases of inability of the planholder to continue the payment 
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ofhislher premium due to financial reasons and/or any other reasons as the case may be, the ETF 
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Board shall determine the cash value of the Education Trust Fund Plans which shall form part of 
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the general responsibility of the solvency of the ETF. 
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SECTION 16. Death ar Diability af the Planhalder. - The death or total and permanent 
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disability of the planholder shall not preclude the grantee from availment of the benefits 
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provided, in application of Section II as stipulated in this Act. 
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SECTION 17. Government Guarantee. - The benefits prescribed in this Act shall not be 
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diminished and to guarantee said benefits, the Govermnent of the Republic of the Philippines 
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accepts general responsibility for the solvency of the ETF. 
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SECTION 18. Exemption from Tax, Legal Process and Lien. - The actuarial solvency of 
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funds for the ETF shall be preserved and maintained at all times and that contribution rates 
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necessary to sustain the benefits under this Act shall be kept as low as possible in order not to 
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burden the member of both the GSIS and the SSS. Notwithstanding any laws to the contrary, the 
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ETF, its assets and properties, all proceeds from collections, income or investment earnings 
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therefrom, all supplies, papers or documents, all accruals thereto and benefits paid shall be 
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exempt from all taxes, assessments, fees, charges, or duties of all kinds such as customs or 
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import duties, these exemptions shall be irrevocable and any assessment against the ETF as of 
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the approval of this Act are hereby considered paid. Consequently, all laws, ordinances, 
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regulations, issuances, opinions or jurisprudence contrary to or in derogation to this provision are 
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hereby deemed repealed, superseded and rendered ineffective and without legal force and effect. 
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Moreover, these exemptions shall not be affected by subsequent laws to the contrary unless 
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this section is expressly, specifically and categorically revoked or repealed by law and a 
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provision is enacted to substitute or replace the exemption referred to herein as an essential 
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factor to maintain or protect the solvency of the fund, notwithstanding and independently of the 
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guarantee of the. national Govermnent to secure such solvency of the liability: Provided, That all 
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securities of the ETF must be registered with the Securities and Exchange Commission (SEC) 
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and transaction tax must be imposed hereto to safeguard the viability and transparency of 
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investment for a self-sustaining ETF. 
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The funds and r or properties referred to herein as well as the benefits, sums or monies 
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corresponding to the benefits under this Act shall be exempt from attachment, garnishment, 
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execution, levy or other process issued by the courts, quasi-judicial agencies, or administrative 
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bodies including the Commission on Audit (COA) disallowances and from all financial 
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obligations of both the GSIS· and the SSS members, including his pecuniary accountabilities 
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arising from or caused or occasioned by his exercise or performance of his official functions or 
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duties, or incurred relative to or in connection with his position or work except when his 
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monetary liability, contractual or otherwise, is in favor of the Education Trust Fund (ETF). 
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SECTION 19. Supplementary Clause. - In case of insufficiency of a provision of this Act, 
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ETF Board Resolutions shall apply in a suppletory manner to safeguard the interest of the ETF 
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operations towards a self-sustaining implementation of this Act. 
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SECTION 20. Implementing Rules and Regulation (IRR). -
The ETF Board shall 
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promulgate the necessary rules and regulations for the effective implementation of this Act 
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within ninety (90) days following its approval, to be embodied in the Implementing Rules and 
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Regulations (lRR) duly confitmed and approved by the majority members of the ETF Board, 
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which should prescribe under the active participation of the Senate committee on Education, Arts 
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and Culture; the Senate Committee on Government Corporations and Public Enterprises; the 
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House of Representatives Committee on Higher and Technical Education; the House of 
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Representatives Committee on Government Enterprises and Privatization; the Commission on 
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Higher Education'(CHED) and an Independent Private Pre-need Resource Person. 
, 
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SECTION 21. Separability Clause. - If, for any reason, any section of this Act shall be held 
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to be unconstitutional or invalid, the other sections or provisions of this Act shall not be affected 
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thereby as they are separable from the invalid ones and shall remain in force and effect. 
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SECTION 22. Repealing Clause. - All laws, executive orders, decrees, instructions, rules 
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and regulations in contrary or inconsistent with any provision of this Act are hereby repealed or 
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modified accordingly. 
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SECTION 23. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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publication in the Official Gazette or in two (2) national newspaper of general circulation 
15 
whichever comes earlier. 
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1pproved, 
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