FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First gegular Session 
SENATE 
) 
) 
) 
S. No. 2090 
Introduced by Senator FRANCIS G. ESClJDERO 
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 support and State iesources· ..... 
Consequently with this prioritization, education has been consistently given the 
biggest slice of the budgetary pie. 
Article XIV, Section 1 of the 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 C. ESCIJDERO 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILlPPINES 
Firsl Regular Session 
SENATE 
) 
) 
) 
S. No. 2090 
Introduced by Senator FRANCIS G. ESCUDERO 
AN ACT 
'j 0 
,JUL 27 i\lC :31 
ESTABLISHING AN EDUCATION TRUST FUND FOR GRANTEES OF 
GSIS AND SSS MEMBERS AND FOR OTHER PURPOSES 
He it enacieri by the Senate (l11d the Uouse of Represen 
tlltipes o( the Republic o( the Philippines in Congress assembled: 
SECTION 1. Short Tille. - This Act shall be known as the "Education 
2 
Trust Fund Act." 
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SECTION 2. Declaration of Policy. - The Constitution provides that the 
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State shall protect and promote the rights of all citizens to quality education at 
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all levels and shall take appropriate steps to make education accessible to all. 
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Towards this end, the State shall endeavor to extend social security protection 
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to provide the opportunity of making education accessible commodity to 
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realize the right of all citizens, particularly the under privileged, the equal 
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opportunity to quality education for them to contribute in a more productive 
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and active role in social life specially in the economic and political spheres. 
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SECTION 3. Definition. of Ter11lS. -
The following terms shall be 
12 
understood in this Act to mean: 
13 
(1) ETf - refers to the Education Trust Fund created by this Act. 
14 
(2) Government Service Insurance System (GSIS) refers to the agency 
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entrusted to take charge of all matters pertaining to the officials and 
employees, as created and established under Commonwealth Act No. 
186, as amended by Presidential Decree No. 1146, and further 
amended by Republic Act No. 8291. 


(3) Social Security System (SSS) refers to the agency entrusted to take 
2 
charge of all matters pertaining to the benefits and insurance claims 
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of all private employ~es, embodied in republic Act No. 1161 and 
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amended by republic Act No. 8282. 
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(4) Optional means the voluntary act of qualified members of CSIS or 
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SSS to be included in the pre-need education lTust fund coverage for 
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lheir grantee, deductible to their salaries and / or payable to the 
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system concerned in a form of equal number of monthly 
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conlTibutions as determined in the policy conlTact. 
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(5) Education Trusl Fund (ETF) refers lo the accumulated amount of 
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money deducted from CSIS and SSS members and / or paid by the 
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members to the system concerned for the use in the education of their 
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grantee to be paid directly to universities or colleges [or a 
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baccalaureate degree and / or institutions for a vocational/technical 
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program to be determined as provided for in the policy contract: __ 
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(6) Planholder refers to a member of the CSIS and the SSS who avails of 
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ETF Plans for the education of this grantee according to his desired 
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vocational/technical and / or baccalaureate education program. 
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(7) Plan agreement refers to the policy contract issued by either the CSIS 
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or the SSS lo the provisions of the planholders' benefits and 
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responsibilities. 
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(8) Crantee refers to the child designated by the planholder regardless of 
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relationship to avail of the ETF benefits according to the education 
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program determined in the policy contract. 
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(9) Monthly contributions refer to the amount of money lo be deducted 
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out of the salaries of the qualified member and / or paid directly to 
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the system concerne9 as specified in the policy contract to be 
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determined by the Education Trust Fund Board. 
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(10) 
Education Trust Fund (En: Board refers to the governing body 
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which shall formulate policies, implementing, rules and regulations, 
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guidelines, and other related matter pertaining lo the operation and 
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management of the Ell' created under this Act. 
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SECTION 4. J:dllclltio}1 Trust fund (1:-1'1-) Plans. -
There is hereby 
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established in the CSIS and the SSS a special education trust fund to be 
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known as the "GSIS/&SS Education Trust Fund (ETF) Plans" through 
2 


enrollment in any desired education program to ensure the education of 
2 
the grantee of members for both systems respectively. 
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SECTION 5. Management and Superoision. -
(a) To carry out the 
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purposes of this Act, the ETF Board is created, hereinafter referred to as 
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the "]]"J"1" Board", a governing body which shall formulate policies, 
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implementing rules and regulations, guidelines and other related matter 
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to oversee, manage and supervise the operation of ETF with principal 
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place of business in Metro Manila, Philippines. 
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(b) The Ell' Board composed of nine (9) members shall be comprised of 
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one (1) member for the Government Service Insurance System (GSIS); 
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one (1) member from the Social Security System (SSS); one (1) member 
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from the Senate Committee on Government Corporations and Public 
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Enterprises; one (1) member from the House of Representatives 
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Committee on Higher and Technical Education; one (1) member from.the". 
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House of Representatives Committee on higher and Technical Education 
I G 
and Skills (TESDA); and one (1) Independent Pre-need Resource Person 
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with adequate knowledge and a minimum of ten (10) years experience in 
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pre-need marketing and industry exposure which shall be appointed 
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upon recommendation by the majority members of the proposed Board. 
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The term of the appointive members shall be six (6) years. The members 
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of the Board shall receive atleast Two Thousand Five Hundred Pesos 
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(1'2,500.00) per diem for each meeting actually attended by them, but not 
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to exceed Ten Thousand Pesos (1'10,000.00) a month: Provided, !wtlzer, 
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That said members of the Board shall also receive reasonable 
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transportation and representation allowances as may be fixed by the ETF 
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Board, but not to exceed Ten Thousand Pesos (1'10,000.00) a month. 
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(c) The Ell' Board upon the recommendation of the GSIS and the SSS, 
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shall appoint an actuary and such other personnel as may be deemed 
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necessary; fix their reasonable compensation, allowance and other 
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benefits; prescribe their duties and establish such guidelines and 
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procedures as may be necessary to ensure the efficient, honest and 
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economical administratio'n of the provision and purposes of this Act. 
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(d) The GSIS and the SSS shall create an Education Trust Fund (ETF) 
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Department respectively, to manage the general conduct of the operation 
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and management functions: Prooided, however, That all personnel of the 
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ETF Department shall be appointed by the President of the CSIS I SSS, as 
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the case may be, subject to the confirmation of the ETF Board: Prm)iried, 
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JlIrl/lPr, That the personnel of the ETF Department in both the GSIS and 
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the SSS shall be selected only from Civil Service eligible and be subjected 
8 
to civil service rules and regulations. 
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(e) The FIT Board shall be responsible for the formulation and 
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implementation of the Implementing Rules and Regulations (IRR) of this 
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Act, to ensure the effectiveness and viability of the FIT for a self 
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sustaining operation, including its budgetary support, operating capital 
13 
and other related expenditures, monitoring and categorizing of schools 
14 
according to the cost of its eXisting tuition fees and other related school 
15 
fees and charges, monitoring of rate schedules according to tl1~~' as;;' '0 
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terms of payment, number of years before availment and other related 
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matters to safeguard the implementation and operation of this Act. 
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SECTION 6. [dumlion Trusl Fund (EiF) Plllns Agreement. - For the 
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attainment of its main objectives, the general provisions of a plan agreement 
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shall be issued by both the GSIS and the SSS, respectively, to all availing 
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members as planholders which shall govern the terms and conditions in the 
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implementation of premium payments and benefits inclusive oj the plan cash 
, 
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value which shall be determined by the ETF Board. 
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SECTION 7. Trusl Fund MIl11ngc11leni. - The ElF must be separated 
25 
from the general funds of the system concerned and must be self sustaining to 
26 
be invested according to the PI;Ovisions and guidelines of the Social Security 
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Fund in the case of the SSS; Investment of Funds in the case of the CSIS, 
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except on members loans for a greater yield investment. No amount of money 
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from the FTF Plans shall be loaned to the members andlor planholders of 
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system concerned 
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SECTION 8. Grantee. - For purposes oj this Act the term" grantee" shall 
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include legitimate, legitimated, legally adopted or illegitimate child:· 
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grandcbild and/or whoever be the child to be assigned by the member 
4 


regardless of relationship. 1\ grantee is a duly appointed and registered 
2 
grantee on or before enro[[ment to avail of the ETF benefits. 1\ member may 
3 
apply for a deferred plan if he does not have a child and or grantee. 
4 
SECTION 9. Optio11al Coowlge. - Subject to the rules and regulations 
S 
prescribed by the ElF Board, all GSIS and SSS members, regardless of civil 
6 
status, with or without a child and/ or grantee, may opt to participate under 
7 
this E I'F plans program. 
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SECTION 10. l'rp11liu11l Payments. - The amount of premiums to be 
9 
paid to the ElF by the member shllll be in accordance with the schedule of 
10 
payments to be prescribed by the ETF Board taking into consideration the 
I 1 
fallowing cri teria: 
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(a) The interval of the time between the effectivity of the coverage and the 
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estimated time of enrollment of the grantee in any desired education 
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2S 
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level for a vocational/ technical or a baccalaureate program; 
(b) The number of monthly contributions to be made to complete the 
contracted price stipulated in the plan agreement or policy contract; 
(c) 'The benefits to be availed of, as provided in Section 12 of this Act; 
(d) the amount of tuition and the other standard fees charged by the 
• 
institutions, colleges, and / or universities according to the school 
category for a vocation/ technical or a baccalaureate education level; 
and 
(e) Such other factors as may be determined by the El'F Board. 
SECTION 11. Rei115uYllnce. - The GSIS or the SSS may reinsure any of its 
interest wholly or in part thereof with any private company or reinsurer 
whether domestic or foreign:' Provided, That the System concerned shall 
submit an annual report on its reinsurance operation to, the Insurance 
Commission through the ElF Board. 
SECTION 12. Lduclllion Benefits. - only members who have completed 
thl' payment of the contract price stipulated in the plan agreement or policy 
contract before enrollment of the grantee shall be entitled to avail of the 
benefits provided for under this Act. 
5 


The benefits shall include the payment of ETF by the System concerned 
2 
of: 
3 
(a) Such school fees as may be required for enrollment, for completion of a 
4 
vocational/technical or a baccalaureate program which shall include 
.') 
tuition fees for all subjects officially prescribed by the institution, 
6 
colleges and/ or univE'rsities and part of a regular curriculum as 
7 
requisite for graduation and other standard fees such as science and 
8 
speech laboratory, audio-visual, medical and dental, library# athletics, 
9 
counseling, registration, matriculation, official school publication and 
10 
other fees may further be approved by the CI-IED and the TESDA; and 
11 
(b) Any other benefits to be provided form as stipulated in the policy 
12 
contract as determined and approved by the ETF Board. 
13 
The payment shall be made by the ETF of the System concerned directly to 
14 
the institution, college and/ or university prior or upon enrollment as the case,. _ ... _ .. 
15 
may be, an open-ended education trust fund benefit that pays all Schools 
16 
expenses as stipulated in the policy contract regardless of whatever cost of a 
17 
designated education program during the availment period, for a 
18 
vocational/ technical and/ or a baccalaureate education program on a 
19 
semestral or trimestral basis. ·\"he ETF Board shall provide for safeguards to 
20 
ensure the prompt payment of benefits. 
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SECTION 13. lncenliues. - In appreciation of excellent performance of the 
22 
granl"ee and for future use of the planholder, an incentive is hereby provided 
23 
(a) Should the grantee earn any acceleration or scholarship award in any 
24 
education program desired, all amounts due and payable to the 
25 
institution, college and/ or university or its equivalent amount, shall 
26 
be awarded to the availing grantee of the phanholder; and 
27 
(b) Any other incentives and/ or benefits to be determined by the ETF 
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28 
Board as provided for in the plan agreement or policy contract issued 
29 
by the System concerned. 
30 
SECTION 14. "/"f"{lIlsji:rabilily of 13ene(ils. - The benefits for in this Act may 
3 I 
be transferred to any active member of both System and may be assigned to 
32 
another grantee atth(, option of the planholder. 
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SECTION 15. Cash Value. - In cases of inability of the planholder to 
continue the payment of his/ her premium dUE, to financial reasons and/ or 
any other reasons as the case rnay be, the Ell' Board shall determine the cash 
value of the Education Trust Fund Plans which shall form part of the general 
responsibility of the solvency of the FIF. 
SECTION 16. Dellth or ])illqility of the I'lllnilOlder. - The death or total and 
permanent disability of the planholder shall not preclude the grantee from 
availment of the benefits provided, in application of Section 11 as stipulated 
in this i\ct. 
SECTION 17. Gouemment Gurmllliee. - The benefits prescribed in this i\ct 
shall not be diminished and to guarantee said benefits, the Government of the 
Republic of the Philippines accepts general responsibility for the solvency of 
the ElF 
SECTION 18. Exemption from Tax, Leglll Process and Lien. - The actuariit! ,. 
solvency of funds for the Ell', shall be preserved and maintained at all times 
and that contribution rates necessary to sustain the benefits under this i\ct 
shall be kept as low as possible in order not to burden the member of both the 
CSIS and the SSS. Notwithstanding any laws to the contrary, the E'1"1', its 
assets and properties, all proceeds from collections, income or investment 
earnings therefrom, all supplies, papers or documents, all accruals thereto and 
benefits paid shall be exempt from all taxes, assessments, fees, charges, or 
duties of all kinds such as customs or import duties, these exemptions shall be 
irrevocable and any assessment against the ETF as of the approval of this i\ct 
are hereby considered paid. Consequently, all laws, ordinances, regulations, 
issuances, opinions or jurisprudence contrary to or in derogation to this 
provision are hereby deemed repealed, superseded and rendered ineffective 
and without legal force and effect. 
Moreover, these exemptions shall not be affected by subsequent laws to 
, 
the contrary unless this section is expressly, specifically and categorically 
revoked or repealed by law and a provision is enacted to substitute or replace 
the exemption referred to herein as an essential factor to maintain or protect 
the solvency of the fund, notwithstanding and independently of the 
guarantee of the national Cowirnment to secure such solvency of the liability: 
7 


Provided, That all securities of the ETF must be registered with the Securitie~ 
2 
and Exchange Commission (SEC) and transaction tax must be imposed hereto 
3 
to safeguard the viability and Iransparency of investment for a self-sustaining 
4 
liTF. 
5 
The funds and / 01' properties referred to herein as weIl as the benefits, 
6 
sums or monies corresponding to the benefits under this Act shall be exempt 
7 
from attachment, garnishment, execution, levy or other process issued by the 
8 
courts, quasi-judicial agencies, or administrative bodies including the 
9 
Commission on Audit (COA) disaIlowances and from all financial obligations 
10 
of both the GSIS and the SSS members, including his pecuniary 
II 
accountabilities arising from or caused or occasioned by his exercise or 
12 
performance of his official functions or duties, or incurred relative to or in 
13 
connection with his position or work except when his monetary liability, 
14 
contractual or otherwise, is in favor of the Education Trust Fund (ETF). 
15 
SECTION 19. Supple11lentary Clause. -
In case of insufficiency of a 
16 
provision of this Act, liT!' B<'lard Resolutions shall apply in a suppletory 
17 
manner to safeguard the interest of the ETF operations towards a self-
18 
sustaining implementation of this Act. 
19 
SECTION 20. Implementing Rules lind Regulntion (lR.R.). - The ETF Board 
20 
shall promulgate the necessary rules and regulations for the effective 
21 
implementation of this Act within ninety (90) days following its approval, to 
22 
be embodied in the Implementing Rules and Regulations (IRR) duly 
23 
confirmed and approved by the majority members of the ETF Board, which 
24 
should prescribe under the active participation of the Senate committee on 
25 
EdUcation, J\rts and Clliture; the Senate Committee on Covernment 
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26 
Corporations and 
Public 
Enterprises; the House of Representatives 
27 
Committee on Higher and Technical Education; the I-louse of Representatives 
28 
Committee on Government Enterprises and Privatization; the Commission on 
29 
JIigher 13ducation (CI-IED) and an Independent Private Pre-need Resource 
30 
Person. 
31 
SECTION 21. Sepllrllbilily Cilluse. - If, for any reason, any section of this 
32 
Act shall be held to be unconstitutional or invalid, the other sections or 
8 


provisions of this Act shall not be affected thereby as they are separable from 
2 
the invalid ones and shall remain in force and effect. 
3 
SECTION 22. Repealing Clallse. - All laws, executivE' orders, decrees, 
4 
instructions, rules and regulations in contrary or inconsistent with any 
5 
provision of this Act are hereby repealed or modified accordingly. 
6 
SECTION 23. Effectivity Clause. - This Act shall take effect fifteen (15) days 
7 
after its publication in the Official Gllzeile or in two (2) national newspaper of 
8 
general circulation whichever comes earlier. 
9 
Approved, 
9