SEVENTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
S E N A T E
S. B. No. 1593
•W. .  
Ol .'i:
'17 
SEP 20 
P ? :1 2
Introduced by Senator FRANCIS G. ESCUDERO
AN ACT
PROVIDING FOR THE LEGAL FRAMEWORK AND MECHANISMS FOR THE 
CREATION, OPERATION, AND ADMINISTRATION OF TRANSNATIONAL 
HIGHER EDUCATION IN THE PHILIPPINES, PROVIDING FUNDS THEREFOR, AND
FOR OTHER PURPOSES
EXPLANATORY NOTE
We are seeing an increasing need to adapt to continually evolving global 
trends and standards. This ability to be in-sync with the rest of the world thru 
knowledge transfer of best practices and information is crucial to an emerging economy 
such as ours.
The pathway to this, as we propose in this measure, is the ability to be exposed to 
the methods and techniques of the educational systems of developed countries, and 
learn from their systems thru a first-hand perspective; for in this age of an increasingly 
globalized and connected world, it is essential that the gaps and differences of the 
quality of education between and among educational institutions be narrowed in order 
for those countries that are lagging behind to keep up, or at least emulate, the trends of 
developed countries.
This bill proposes opening our higher education institutions to partnerships with 
foreign higher education institutions, allowing us to get exposure to the best practices of 
other countries that we may adopt and integrate into our system. This likewise allows 
foreign higher educational institutions to immerse themselves to our methods and 
practices and facilitate constructive exchanges in terms of methods and systems.
By entering into partnerships and other collaborative arrangements with 
reputable universities from around the globe through transnational education (TNE), 
the Philippines will be able to attract a flow of talented faculty and international 
students who pay fees and contribute to the economy, with potential benefits to its 
research and development base. It will enable the country to develop greater teaching 
and research capacity in niche and technical fields that will prove critical to economic 
and social development.
Further, the collaborative environment fostered through TNE will improve 
access to the best in higher education - local students who are otherwise unable to travel 
abroad will have access to the best foreign universities, thereby stemming the outflow 
of currency. Examples from other countries in East Asia, such as Hong Kong and


Malaysia, show that good quality TNE provision widens access to higher education and 
research, an important national priority.
TNE will also have the potential to create more jobs inside the Philippines for 
teaching professionals, academics and support staff. And given our comparative 
advantage in terms of the English language, TNE will of course enhance the 
international attractiveness of the Philippine higher education system, positioning 
domestic higher education institutions more positively as preferred partners for 
international collaboration and strengthening its capacity to carry out world-class 
rc.search that supports the country's growing knowledge economy.
In addition, the improvement of talent retention will address some of the issues 
associated with the large-scale diaspora of skilled workers who opt to work abroad, 
many of whom are .skilled college graduates.
However, there is no law that provides for the overall framework for the 
operation and administration of transnational education in the Philippines. Thus, there 
is a need to create a measure that will institutionalize the mechanisms for transnational 
education in the country.
This measure thus seeks to provide the legal framework for the creation, 
operation, administration, and coordination of transnational higher education in the 
Philippines. It also provides measures to ensure that the barriers in the country's 
legislative and regulatory framework be addressed to facilitate the operation of TNE 
institutions including the enrolment of foreign students in the country.
In view of the foregoing, the immediate passage of this bill is earnestly sought.
RESPECTFULLY SUBMITTED.
FRANCIS G. ESCUDERO


SEVENTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
S E N A T E
S. B. No. 1593
<v- 
. 
-  
•
■
V,' ; 
oil-;.’ !?• • ■
•17 
SEP 20 P ? n 2
-Rtriii.' ^ 1. . .
Introduced by Senator FRANCIS G. ESCUDERO
AN ACT
PROVIDING FOR THE LEGAL FRAMEWORK AND MECHANISMS FOR THE 
CREATION, OPERATION, AND ADMINISTRATION OF TRANSNATIONAL 
HIGHER EDUCATION IN THE PHILIPPINES, PROVIDING FUNDS THEREFOR, AND
FOR OTHER PURPOSES
Be it enacted by the Senate and blouse of Representatii^es of the 
Philippines in Congress assembled:
1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
SECTION 1. Short Title. - This Act shall be known as the "Transnational 
Higher Education Act."
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to 
provide quality education that is relevant to the changing needs of the people and 
society. 
The State recognizes 
that rapid developments brought about by 
globalization, including liberalization of trade in goods and services and expanding 
use of information and communication technologies, have created a climate for 
borderless teaching and learning. In this light, the State shall endeavor to modernize 
the Philippine higher education sector, and bring international quality standards and 
expertise into the country, with a view to making higher education globally 
competitive; attracting a flow of talented students, faculty, and staff and improving 
the country's human resource base.
The State shall actively encourage, promote, and accelerate the establishment 
of transnational higher education institutions in the country, and shall take an active 
part in developing the Transnational Higher Education sector. Further, it is declared 
a policy of the State to: strengthen educational, cultural, social, economic, and 
political bonds between Philippine and foreign institutions of higher learning, 
thereby fostering a vibrant exchange of cultures integral to a peaceful living within 
the global community; develop collaborative arrangements between and among 
Philippine universities and training institutes, on one hand, and foreign universities, 
on the other, with the aim of building the capacity of all partner institutions to 
operate, manage, and administer post-secondary and graduate programs and to 
provide opportunities for students and learners to acquire international and foreign 
diplomas, degrees, and certificates.
SEC. 3. Definition of Terms. - As used in this Act:
a) 
Academic Program refers to a set of courses of study the completion of 
which areas leads to a degree;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
b) 
Auxiliary services refers to services that support the delivery of 
educational services including promotion activities, recruitment of students, 
admission, registration, processing of payments, student orientation, and such other 
related activities, but not to include teaching and learning activities;
c) 
Distance education refers to a mode of educational delivery whereby the 
teacher and the learner are physically separated from each other, and instruction is 
delivered through appropriate communication technologies and using specially 
designed 
materials 
and 
methods, 
and 
supported 
by 
organizational 
and 
administrative arrangements and structures;
d) 
Education services refers to any study program, course of study or parts 
of a course of study that leads to a qualification, after successful completion;
e) 
Foreign Higher Education Institutions (FHEl) refers to a foreign-owned 
and duly recognized higher education institution abiding by a prescribed system of 
education duly registered in a country other than the Philippines;
f) 
Higher Education refers to any of the various types of education given 
in post-secondary institutions of learning and usually affords, at the end of a course 
of study, a named degree, diploma, or certificate indicating qualifications. For 
purposes of this Act, higher education includes technical and vocational education 
and training (TVET) institutions such as teacher-training schools, junior colleges, and 
institutes of technology;
g) 
Higher Education Institutions (HEls) refers to post-secondary education 
institutions which include universities and colleges, TVET institutions, and 
specialized institutions that provide advanced degrees in such fields as law, theology, 
medicine, business, music, and art. HEIs may be public or private entities;
h) 
Transnational Higher Education (TNHE) includes all types and modes 
of delivery of higher education study programs, sets of courses of study, or 
educational services, including distance education and study- abroad programs, 
which involve education systems of a State different from the State where a TNHE 
provider operates, or programs which may operate independently of any national 
education system;
i) 
Transnational higher education arrangement refers to an educational, 
legal, financial, or other arrangement agreed upon formally by partners in order to 
provide educational services;
j) 
TNHE Zones or Hubs are specialized zones of academic centers, 
training centers, or institutions of learning. "Hubs" may refer to smaller units. For 
purpo.ses of this Act, "Zones" and "Hubs" are interchangeable.
SEC. 4. Strategy for Transnational Higher Education. - Consistent with the 
provisions of this Act, the Commission on Higher Education (CITED) shall formulate 
a coherent national strategy to encourage and facilitate the establishment of the most 
effective types of transnational higher education (TNHE) programs and institutions 
in the country.


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
SEC. 5. General Framework for Establishment ofTNHE Programs and Institutions. - 
The establishment, ownership and administration of transnational higher education 
institutions shall be promoted, encouraged, and facilitated, subject to the following 
principles pursuant to Section 4(2), Article XIV of the 1987 Constitution;
a) 
All educational institutions shall be owned solely by citizens of the 
Philippines or corporations or associations at least sixty per centum of the capital of 
which is owned by such citizens; except in the instances provided in the succeeding 
sub-paragraph (b);
b) 
The above sub-paragraph does not apply to educational institutions 
established by religious groups and mission boards;
c) 
No educational institution shall be established exclusively for aliens and 
no group of aliens shall comprise more than one-third of the enrolment in any school, 
except in the instances provided in sub-paragraph (e);
d) 
The control and administration of educational institutions shall be 
vested in citizens of the Philippines. Provided, that this control and administration 
requirement is deemed met once positions on the level of "President," "Dean," 
"Principal," "Chancellor," or other functionally equivalent positions, and an absolute 
majority of the membership of the governing body or board, are held by citizens of 
the Philippines. Every decision of the governing board shall require the vote of a 
majority of the Filipino members;
e) 
The provisions of sub-paragraphs (a), (c), and (d) of this Section do not 
apply to schools established for foreign diplomatic personnel and their dependents, 
and for other foreign temporary residents. For purposes of this Act, "other foreign 
temporary residents" shall include those stationed in the Philippines for a specific 
period under public or private contract, or foreign students who are in the 
Philippines specifically to pursue higher education. The TNUE is deemed established 
specifically for foreign diplomatic personnel and their dependent.s, or other foreign 
temporary residents when the student population is at least fifty (50%) foreigners, 
while its faculty members are at least twenty-five percent (25%) foreigners.
SEC. 6. Modes of Transnational Higher Education Programs. - TNHE programs 
and arrangements that are existing, emerging, or anticipated include, but not limited 
to, the following:
a) 
Academic 
Franchising, 
whereby 
a 
higher 
education 
institution 
(franchiser) from a certain country grants another institution (franchisee) in another 
country the right to provide the franchiser's programmes/qualifications in the 
franchisee's host country, regardless of the students' origin;
The local franchisee must be registered with the Securities and Exchange 
Commission (SEC) and authorized to deliver educational programs or materials;
b) 
Articulation, whereby students studying for a sub-degree in one country 
are guaranteed advanced entry into a degree programme in another country if they 
achieve an agreed level of performance in their studies;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
c) 
Branch campus, which refers to a campus of a higher education 
institution (HEI) from one country established in another country (host country) to 
offer its own educational programs/qualification, regardless of the students' origin;
International branch campuses, whereby HEls located in another country from 
the institution which either originated it or operates it, with some physical presence 
in the country, and which awards at least one degree in the host country that is 
accredited in the country of the originating institution, typically have local partner 
HEls, as specified in section 9 of this Act.
d) 
Joint and double degrees - Joint degrees refer to a partnership provision 
which leads to a single degree awarded by two or more institutions. The program is 
jointly developed, jointly delivered, and jointly assessed. Double degrees refer to a 
partnership provision which leads to two degrees awarded by two institutions;
e) 
Online, blended, and distance learning, which refer to a program 
delivered across an international border. The delivery medium is usually online, but 
distance education may be delivered by post or mobile phone. Provision which is 
partly online and face-to-face is blended;
f) 
TNE Offshore institution, 
which is an autonomous 
institution 
established in a host country, which in terms of its organization and education 
contents, belong to the education system of another country;
g) 
Twinning arrangements, where students study for a degree in two 
countries, starting in their own and finishing in another, which typically is the 
country of a partner institutions;
h) 
Validation, where a HEI agrees to award its own degree to students who 
complete a program from a HEI in another country.
Any other modes or arrangements may be explored or proposed to CHED by 
HEls intending to enter into partnerships or arrangements with other HEls. The 
CHED, in consultation with other agencies and HEls, may add other modes of TNHE 
as it may deem suitable and in furtherance of the objectives of providing quality 
TNHE programs in the country, provided that these modes or arrangements are 
consistent with the Philippine development plans, and are not in contravention of the 
Constitution, laws and related policies.
SEC 7. EstablisJmient of Foreign Higher Education Institutions in the Philippines. - 
Foreign Higher Education Institutions (FHEls) may establish a commercial presence 
in the Philippines through any of the modes indicated in this Act or through any 
other arrangement with a Philippine HEI that is consistent with the Philippine 
Constitution, laws and policies, and based on mutually agreed terms.
The FHEls shall conform to the following minimum standards:
a) 
Only FHEls recognized by their respective governments as quality 
higher education providers and accredited by a recognized accrediting body in the 
country of origin or its equivalent may be given government authority to offer 
undergraduate, graduate, and post-graduate degrees;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
b) 
The FHEIs shall have standards at par with, or higher than, Philippine 
HEIs in terms of government recognition, faculty strength and curriculum;
c) 
The FHEIs shall have the requisite capabilities and resources for higher 
education provision, and the ability to provide support services to students.
SEC 8. Partnerships and Collaborative Arrangements. - FHEIs may enter into 
collaborative arrangements with Philippine HEIs, such as but not limited to, twinning 
arrangements as defined under Section 3 of this Act; or joint degrees, whereby study 
programs, or parts of a course or study, or other educational services of the awarding 
institutions, are provided by another partner institution.
The parties shall conform to the following minimum standards:
a) 
The FHEI shall seek prior authority from CHED to operate specific 
educational and/or auxiliary services and shall comply with the requirements set 
forth in this law and by CHED policies and regulations. No FHEP shall be allowed to 
establish its branch or any entity purporting to deliver educational programs without 
approval of the CHED;
b) 
Only Philippine HEIs which are CHED - recognized and duly 
accredited shall be authorized to conduct and initiate collaborative or twinning 
programs with FHEIs. The CHED shall determine the level of accreditation which 
Philippine HEIs are required to possess in order to be authorized to enter into 
collaborative arrangements with FHEIs;
c) 
Both partners shall draft a memorandum of agreement (MoA) in terms 
of the programs, duration, evaluation and termination of the agreement, which MoA 
shall be legally binding to both parties. The CHED shall be consulted in the 
finalization of the MoA, which shall determine whether it complies with all the 
national laws as well as the CHED's policies. The CHED shall determine the 
documentary requirements needed to be submitted by the parties. Provided, that any 
document executed or issued outside the Philippines must first be authenticated with 
the appropriate Philippine Foreign Service post before submission to CHED;
d) 
The academic quality of the higher education programs involved are at 
least comparable to the local programs based on established standards, or otherwise 
compliant with established international standards. Procedures concerning the 
quality of education services provided by TNHE arrangements shall be based on 
specific criteria, which are transparent, systematic, and open to scrutiny;
e) 
The 
programs 
involved 
have 
achieved 
the 
required 
level 
of 
accreditation and other quality assurance requirements;
f) 
The critical details of the collaborative arrangements are transparent to 
government and to the public;
g) 
Public announcements about collaborative arrangement or about any 
TNHE program shall be authorized by government.
Philippine HEIs and all providers of educational and/or auxiliary services 
who are partners of the FHEI must be registered with the SEC (in the case of 
corporation or partnership) or with the Department of Trade and Industry (DTI) in


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
the case of sole proprietorship) for the purpose of providing educational and 
auxiliary services. Likewise, existing entities seeking to expand their services to 
include TNE operations must register expansion with SEC or DTI.
SEC. 9. Establishment of Local Branches. - FHEIs may establish local branches or 
satellite campuses in the Philippines through a local partner, at least 60% of which is 
owned by Filipino citizens, duly registered with the SEC or the DTI, as the case may 
be. The FFIEI may maintain its name, offer the education programs through the 
branch, and award the degree or credit. The local branch shall be managed and 
administered jointly by the parties, subject to the provisions of the Constitution on 
control and administration of educational institutions, as reiterated in Article 5 (d) of 
this Act. The local partner shall be accountable for quality assurance of the programs 
offered.
The FHEI may also incorporate a Philippine company to operate its local 
campus, provided that at least 60% of its voting stocks arc reserved for Filipino 
citizens; Provided further, that the FHEI shall first secure the approval of the SEC by 
filing its incorporation papers, together with authenticated copies of its foreign 
charter and by-laws; Provided, finally, that the FHEI shall be required to post a bond 
in an amount to be determined by the SEC, to guarantee fulfillment of future 
obligations and liabilities.
Foreign citizens may constitute up to 80% of the faculty and academic 
personnel and up to 40% of the administrative personnel and staff members in any of 
the local branches; Provided, that in no case shall foreign students comprise more 
than one-third of the enrolment; Provided, further, that this limitation shall not apply 
to FHEIs for foreign residents established pursuant to Section 11 of this Act.
SEC 10. FHEIs Owned by Religious Groups. - Foreign religious groups or 
mission boards may establish, or continue to operate in the country, FHEIs, courses, 
and programs that are solely owned by such foreign religious groups or mission 
boards, or with foreign equity amounting to more than 40%. Provided, that Filipino 
students shall comprise not less than two-thirds enrolment in the said .schools.
SEC 11. FHEIs for Foreign Residents. - FHEIs for foreign temporary residents 
may be established and allowed to operate in the country. These institutions may be 
solely owned, controlled, and administered by foreign citizens. Likewise, all faculty, 
staff, and student may comprise wholly of foreign citizens. An FHEI is deemed 
established specifically for foreign temporary residents when at least fifty percent 
(50%) of the student population, and twenty-five percent (25%) of faculty members, 
are foreign citizen.s; Provided, further, that the TNHE shall have a maximum of ten 
(10) years from its initial operation within which to comply with the 50% requirement 
for foreign students and 25% faculty members, after which, TNHEs that fail to meet 
this threshold shall be required to comply with the ownership and administration 
requirements specified under Section 5 (a) and (d) of this Act.
Provided, finally, that these institutions shall first obtain the necessary license 
and permits from the SEC or DTI, as the case maybe, and where applicable, from 
appropriate LGUs; and shall comply with the provisions of Batas Panibansa Big. 68, 
otherwise known as "The Corporation Code of the Philippines", Republic Act No. 
7042 as amended by RA No. 8179, otherwise known as the "Foreign Investments Act 
of 1991", and other relevant laws, rules, and regulations.


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
FHEls may be established in special economic zones to cater to the needs of 
foreign investors and their dependents in the said special economic zones. Such 
FHEls shall be entitled to all the benefits granted to institutions and enterprises 
under Republic Act No. 7916, as amended by Republic Act No. 8748, otherwise 
known as "The Special Economic Zone Act of 1995"; Provided, that in cases where 
these FHEls are granted similar benefits and incentives in any other laws, rules, and 
regulations, the provisions most beneficial to the FHEls shall apply, but in no case 
shall there be a duplication of benefits and incentives to be enjoyed by any FHEI.
SEC. 12. Establishment of Special Economic Zones for TNHEs. - TNHE zones or 
hubs, as defined under Section 3 of this Act, may be established in selected areas, in 
accordance with the guidelines for the establishment of special economic zones as 
specified in the Special Economic Zone Act and its Implementing Rules and 
Regulations. All FHEls established within the TNHE zones and hubs shall be entitled 
to all incentives granted to enterprises in the economic zones.
The PEZA and CHED shall issue the necessary guidelines to facilitate the 
establishment of TNHE zones or hubs.
SEC. 13. Philippine HEls Operating Offshore. - Philippine HEIs operating 
offshore shall conform to the following guidelines:
a) 
Only Philippine HEIs with programs recognized by CHED may be 
given government authority to offer services offshore. Philippine HEIs providing 
education offshore must preserve the reputation of the Philippines as a provider of 
quality higher education;
b) 
Philippine HEIs operating offshore should abide by the laws, rules, and 
regulations of the country where it seeks to operate or deliver its educational 
programs; and
c) 
In cases where offshore students are to spend a period of time in the 
Philippines as part of course or program requirements, the HEIs should provide 
students support servicers as necessary, including information on legal requirements 
and living arrangements.
SEC. 14. Programs and Degrees Offered. - Courses offered by TNHEls may 
include undergraduate, graduate, and post-graduate degrees. The CHED, in 
consultation with stakeholders including higher education 
institutions and 
appropriate government agencies, may determine the propriety of offering other 
specialized courses including Bachelor of Laws and Bachelor of Medicine, by 
qualified institutions.
Prior to offering, all TNHEI shall submit their curricula to CHED, which shall 
review and ensure that such curricula conform to international standards; Provided 
that the curricula of TNHEls which belong to the top 400 World Best Universities of 
reputable International Ranking Institutions are deemed to have meet international 
standards; Provided, further, that when the TNHEI fall out of the top 400 ranking, its 
subsequent new programs or offerings shall be reviewed by CHED whether the same 
meet international standards.
SEC. 15. Quality Assurance. - Entities engaged in TNHE, which includes both 
the awarding institutions and providing institutions, shall be accountable and fully


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
responsible for quality assurance and control. They shall develop, implement, and 
review internal quality assurance processes, and cooperate with quality assurance 
reviews by CHED or other duly recognized local or international audit and 
accreditation bodies. These processes will protect and strengthen the reputations of 
bona fide institutions engaged in TNHE; and at the same time, protect students and 
other stakeholders from low quality provision and from disreputable institutions that 
are engaged in malpractice and fraud.
The TNHEls are not required to comply with CHED standards, provided that 
they are compliant with international standards. To facilitate the entry of high- 
ranking universities in the country, TNHEls ranking in the top five hundred (500) for 
three (3) consecutive years in any international rating institutions acknowledged by 
CHED shall be presumed to be compliant with international standards and shall 
enjoy exemption from any other quality assurance reviews by CHED or other audit 
and accreditation bodies. Provided, that after three years, the CHED will review the 
qualifications of the TNHEls, and whenever the TNHEl falls out of the top 500 
ranking, it shall be required to undergo quality assurance processes as provided in 
this section.
The CHED shall issue the necessary guidelines for the implementation of this 
section.
SEC. 16. Benchmarks for Ensuring Quality of TNHE. - In reviewing the 
performance of TNHEls, the CHED, or other duly recognized local or international 
audit and accreditation bodies, may ascribe weight to the following performance 
indicators:
a) 
Curriculum innovation, which pertains to the manner and degree to 
which the curricula arc relevant and adaptable to current and global developments, 
trends, and values. Curriculum innovation includes the assessment of whether 
certificates, diplomas and degrees granted by the TNHEls conform to internationally 
accredited programs by reputable international accreditation bodies; whether 
certificates, diplomas, and degrees granted by the TNHEls are accredited both in the 
sending and receiving jurisdictions; the presence of study-abroad programs whose 
certificates, diplomas or degrees are accredited in both the sending and receiving 
jurisdictions; the accreditation and reputation of partner institutions; and cros.s- 
border delivery of academic services;
b) 
Student diversity, which includes the promotion of a respectful 
classroom climate under egalitarian norms and principles; encouraging plurality of 
the contribution of diverse perspectives based on differences in race, gender, religion, 
and culture, implicit and explicit; use and monitoring of vernacular in ways that 
consider implicit assumptions, exclusions, overgeneralizations, stereotypes, and 
social discrimination;
c) 
Research and development, which can be measured in terms of the 
number and quality of articles and papers published in international journals and 
other publications and/or used in international forums and conferences;
d) 
Graduation and retention rate, which pertains to the number of first- 
year students who graduate within a given time period in light of course 
requirements and internationally acceptable best practices;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
e) 
Job placement and career services, which generally refers to the 
effectiveness of in-house career services that educate, connect, and advise students 
and new graduates about opportunities for internships, externships, fellowships, 
post-graduation employment opportunities, and career advancement. Job placement 
services include the degree to which the TNHEI can structurally align its graduates to 
both general employment demands and specific industry demands in local and 
foreign markets;
f) 
Facilities and infrastructure, which pertains to the physical capacity of 
the school's facilities and infrastructure to address the needs of the programs in 
accordance with set standards, as well as provide for the welfare of students and 
teachers. Provided, that students' experience on the availability, adequacy, and 
suitability of facilities and infrastructure shall be assessed through surveys and other 
appropriate means;
g) 
Faculty and faculty diversity, which pertains to the credentials of the 
faculty in terms of their education, work background and expertise, and their 
involvement in research and other institutions in their field. Greater weight is given 
to institutions with a higher percentage of full-time faculty holding doctorates or 
equivalent degrees in their fields. Visiting faculty from other regions, countries, 
cultures, and backgrounds are encouraged. There should also be a sufficient number 
of qualified faculty to adhere to a faculty to student ratio under internationally 
accepted best practices;
h) 
Alumni leadership and performance, which includes entry-level and 
mid-career-level income of alumni; for public interest positions, the international 
reputation of the positions which alumni hold; alumni performance and passing rates 
in 
licensure 
examinations, 
especially 
those 
examinations 
administered 
by 
jurisdictions in major economics beyond the Philippines; performance and passing 
rates in internationally acceptable standardized tests and testing methods by foreign 
jurisdictions; the extent to which the skill sets of alumni meet legitimate employment 
demand in domestic and foreign markets; alumni mobility and transferability of 
one's skill set across jurisdictions or industries;
i) 
Alumni participation, which may be measured in terms of donations, 
endowment building, network building and network database management, alumni- 
initiated partnerships and linkages, extent and reach of foreign alumni, alumni 
cohesiveness
j) 
International linkages, which refer to institutional relationships made on 
the basis of formal or informal agreements, which lead to cooperative action resulting 
in the accomplishment of shared or specific objectives by the parties involved. 
Provided, that the number of signed agreements alone shall not be sufficient basis for 
assessing international linkages. The CIIED, or other duly recognized local or 
international audit and accreditation bodies, may identify other basis for assessing 
performance relevant to international linkages, such as the benefits that accrued or 
are expected to accrue to TNHEls as a result of agreements entered into.
k) 
Grant and endowment management, which pertains to how effective the 
TNHEI can build and manage an endowment corpus for purposes of sustaining a 
system of scholarships and fellowships, such as the sustainability of its endowment, 
the efficiency of grant compliance measures and grant administration, progressive


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
per capita-endowment ratios, and the degree to which the endowment can fund 
operating expenses otherwise financed by tuition;
1) 
Other criteria analogous to the foregoing;
The following criteria may also be considered: i) Environmental sustainability; 
ii) Gender and race sensitivity; iii) Social responsibility; iv) Housing facilities, both in- 
house and affiliated housing; v) Health facilities and medical services; vi) Retirement 
facilities; v) Job generation; and Other quasi-indicators analogous to the foregoing
SEC. 17. Creation of Transnational Higher Education Division. - There 
created an Office under the International Affairs Staff of the CHED, to be 
the Transnational Higher Education Division, to act on all matters related 
institutions and programs established in the country, whether existing or 
established. In the performance of its functions, it shall coordinate with the 
Committee for Transnational Education and the Technical Panel for 
Education.
is hereby 
known as 
to TNHE 
yet to be 
Technical 
Distance
The functions of the Transnational Higher Education Division shall include:
a) 
Assist CHED in determining participation of individuals/HEls in 
international academic programs;
b) 
Accept, evaluate, and process all applications of FHEls for authority to 
operate an educational and/or auxiliary service;
c) 
Closely coordinate with concerned government agencies including the 
SEC, Bureau of Immigration, Professional Regulation Commission (PRC), Bureau of 
Internal Revenue (BIR), the appropriate local government units (LGUs), and all other 
concerned government agencies, for the purpo.se of facilitating and expediting the 
processing and acquisition of the necessary documentary requirements and permits 
of the FHEls authorized by CHED to establish and operate TNHE and auxiliary 
services in the country, as well as for faculty, students, academic personnel, and other 
staff members certified as such by TNHEls operating or duly authorized to operate 
in the country;
d) 
Assist CHED in conducting review and evaluation of TNHEl 
performance, including visitation and other regulatory activities, for purposes of 
determining compliance with Philippine laws, rules, policies, and regulations; and 
recommend the necessary sanctions in cases of violations, including revocation of 
authority to operate a TNHE and/or auxiliary service;
e) 
Perform such other duties and functions necessary to carry out the 
purposes of this Act.
The functions currently being performed by other offices and divisions of 
CHED in relation to transnational education, including tho.se undertaken by the 
Programs Development Division under the Office of Programs and Standards 
Development, are hereby transferred to the Transnational Higher Education Division.
SEC.18. Role of Government Agencies. - Consistent with the policy and objective 
of encouraging, promoting, and accelerating the establishment of TNHE institutions 
and programs in the country, all concerned government agencies and LGUs are
10


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
hereby mandated to establish mechanisms to expedite the processing of the relevant 
applications, documents, and permits for FHEls and all other institutions authorized 
by CHED to establish and operate education and auxiliary services in the country.
a) 
The SEC is hereby mandated to establish a mechanism to facilitate and 
expedite the processing of the applications for registration to operate transnational 
higher education and/or auxiliary services, as well as registration of partnerships, 
corporations, or other arrangements established under this Act;
b) 
The concerned LGUs are hereby directed to establish a mechanism to 
facilitate and expedite the processing of business permits for TNHE institutions and 
partnerships;
c) 
The Bureau of Immigration is hereby directed to establish a mechanism 
to facilitate and expedite the processing of VISA and other immigration requirements 
for foreign faculty, academic personnel, and all staff members who work in an 
institution/study program established through a transnational arrangement; and for 
students who are enrolled or registered for a course of study or parts of it, in a 
TNHEl.
d) 
The Professional Regulation Commission (PRC) is hereby directed to 
establish a mechanism to facilitate and expedite the processing of certificate of 
registration/license and professional identification cards, as required in accordance 
with Section 7, paragraphs (J) and (L) of Republic Act No. 8981, otherwise known as 
the "PRC Modernization Act", and related Resolutions and Issuances, to be issued to 
foreign faculty and other international academics who work in an institution/study 
program established through a transnational arrangement.
Within six (6) months from the effectivity of the Implementing Rules and 
Regulations of this Act, the foregoing government agencies shall submit a report to 
Congress as to the status and progress of the respective mechanisms formulated and 
established under this Section.
SEC. 19. Tax Exemptions. - Pursuant to Section 4, Article XIV of the 
Constitution, all revenues and assets of non-stock, non-profit TNHEls which are used 
actually, directly, and exclusively for educational purposes shall be exempt from 
taxes and duties. All grants, endowments, donations, or contributions used actually, 
directly, and exclusively for education purposes shall likewise be exempt from tax. 
Further, in accordance with Section 28, Article VI of the Constitution, all lands, 
buildings, and improvements, actually, directly, and exclusively used for educational 
purposes shall be exempt from taxation. All non-stock, non-profit TNHEls shall also 
be entitled to all tax incentives granted to such entities by the National Internal 
Revenue Code (NIRC), BIR Rules and Regulations.
SEC. 20. Proprietary TNHE Institutions. - All TNHEls which do not satisfy the 
definition of "non-stock, non-profit educational institutions" within the meaning of 
the NIRC are deemed, for purposes of this Act, to be proprietary educational 
institutions. All proprietary educational institutions shall be subject to the taxes, 
exemptions, and other duties and privileges under the NIRC, specifically Section 27, 
Title 11, Ch. IV thereof, and BIR Implementing Rules and Regulations.
To the extent applicable, TNHEls shall enjoy the same benefits, tax credits and 
incentives provided for in existing laws including those provided under Executive
11


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Order No. 226, otherwise known as the Omnibus Investment Code of 1987, and 
Republic Act 7844, otherwise known as the Export Development Act of 1994.
SEC. 21. Remittance of Profits and Repatriation of bwestnient. - Without prior 
approval of the Bangko Sentral ng Pilipinas (BSP), profits and other earnings of foreign 
investments in TNHEIs may be remitted outward, and foreign investments may be 
repatriated, using foreign exchange sourced from authorized agent banks (AAB) 
and/or AAB-subsidiary/affiliate foreign exchange corporations, provided that such 
foreign investments have been previously registered with the BSP.
SEC. 22. Income of Foreign Faciilhj and Staff - The income, including allowances 
and honoraria, received by foreign faculty, academic personnel, and all staff members 
who work in an institution/study program established through a transnational 
arrangement, shall be free from taxes, provided that these are derived from work 
directly performed, and paid by, the TNHEIs. All other income derived from other 
sources shall be subject to applicable taxes under the NIRC, BIR Rules and 
Regulations.
SEC. 23. Labor and Management Relatioyis. - Labor and management relations in 
all TNHEIs shall be governed by existing labor laws. Employees and personnel of 
TNHEIs shall enjoy working conditions not less than those provided under the 
Philippine Labor Code and other relevant laws, issuances, rules and regulations of 
the Philippine government and the Department of Labor and Employment.
SEC. 24. Termination of Partnership or Closure of Program. - In the event of 
termination of a partnership or pha.se out/closure of a program, institutions engaged 
in TNE should ensure that commitments made to enrolled students are met, 
including offering students suitable alternative pathways for completing the program 
to which they have been accepted.
The assets of the closed enterprise can be transferred and the funds can be 
remitted out of the country subject to the rules, guidelines and procedures prescribed 
jointly by the BSP, the Anti-Money Laundering Council, and the Department of 
Finance.
SEC. 25. Implementing Rules and Regulations. - Within ninety (90) days after the 
effectivity of this Act, the CHED, with technical support of the Technical Committee 
for Transnational Education and the Technical Panel for Distance Education, and in 
consultation with the TESDA, PRC, Bureau of Immigration, SEC, Board of 
Investments, and other stakeholders and relevant government agencies, shall 
formulate the implementing rules and regulations of this Act. Such rules and 
regulations shall take effect fifteen (15) days after their publication in a newspaper of 
general circulation in the Philippines.
SEC. 26. Appropriation. - The amount necessary to carry out the provisions of 
this Act shall be charged against the current year's appropriation of the CHED. 
Expenses incurred by SEC, Bl, PRC, and the appropriate LCDs in relation to Section 
16 of this Act shall be charged against their respective current year's appropriation. 
Thereafter, the amount necessary for the continued implementation of this Act shall 
be included in the Annual General Appropriations Act.
SEC. 27. Suppletory Application. -The applicable provisions of Republic Act No. 
8424, otherwise known as the Tax Reform Act of 1997, further amending Presidential
12


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
Decree No. 1158, otherwise known as the National Internal Revenue Code, as 
amended; Executive Order No. 226, otherwise known as the Omnibus Investment 
Code of 1987; Republic Act No. 7916, as amended by Republic Act No. 8748, 
otherwise known as "The Special Economic Zone Act of 1995"; Republic Act 7844, 
otherwise known as the Export Development Act of 1994 and Republic Act 10650, 
otherwise known as "Open Distance Learning Act"; insofar as they are not 
inconsistent with the provisions of this Act, shall apply suppletorily.
SEC. 28. Separability Clause. - The provisions of this Act are hereby declared 
separable, and in the event one or more of such provisions, or part thereof, is 
declared unconstitutional, such declaration of unconstitutionality shall not affect the 
validity of the other provisions of this Act.
SEC. 29. Repealing Clause. - All laws, acts, presidential decrees, executive 
orders, proclamations and/or administrative regulations which are inconsistent with 
the provisions of this Act, are hereby amended, modified, superseded or repealed 
accordingly.
SEC. 30. Effectivity. - This Act shall take effect fifteen (15) days following the 
completion of its publication in two (2) national newspapers of general circulation.
Approved,
13