Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No._ 1362

Introduced by Representatives Ron P. Salo

EXPLANATORY NOTE

In the age of globalization, there is a need to adapt to continually evolving international
trends and standards. The methods and institutions that are the giants of the industries will
eventually falter if they will not be able to keep up with the ever changing demands of the world.
The developed countries are showing the way to a strong and stable economy and the
Philippines can very much learn from their best practices. What better way to learn the best
practices of developed countries than by exposing ourselves to the methods and techniques of
their educational system and learn from their classrooms from a first-hand perspective.

The quality of education differs from country to country. It depends on their methods,
facilities, available resources, and also on their norms, culture and tradition. In the advent of
globalization, it is essential that the gaps and differences of the quality of education be closed in
order for those countries that are lagging behind to keep up, or at least emulate, the trends of
developed countries. Those countries that fail to adapt and adopt the trends are doomed to suffer
from slow economic development.

One avenue for the Philippines to keep up with the trends in globalization is to open our
higher education institutions to partnerships with foreign higher education institutions. In this way,
we get to expose ourselves to the best practices of other countries that we may adopt and
integrate into our higher educational system. For their part, they will be able to immerse
themselves into our methods and practices and expose our higher education institutions to their
commendations and suggestions.

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 are
critical for economic and social development.

Collaborative provision of education through TNE will improve access to 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

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Asia, such as Hong Kong and Malaysia, show that good quality TNE provision can widen access
to higher education, an important national priority.

TNE has the potential to create more jobs inside the Philippines for teaching professionals,
academics and support staff. Added to the existing advantage that the Philippines has in the
English language, TNE can 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 their capacity to carry out research 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 overseas of
skilled workers, many of whom are college graduates with high English proficiency.

The offering of programs and establishment of transnational education institutions is not
new to us. In fact, there have been various issuances on this matter. In 2008, pursuant to the
UNESCO/Council of Europe Code of Good Practice in the Provision of Transnational Education
(adopted in 2001), the CHED issued Memorandum Circular No. 2, adopting and promulgating
the Policies, Standards, and Guidelines for Transnational Education. Very recently, CHED
conducted consultations in Luzon (June 24, 2016), Visayas and Mindanao (June 15, 2016) on
the proposed guidelines for transnational education.

However, as it stands, there is no law that provides the overall framework for the operation
and administration of transnational education in the Philippines. There is a need to create a
legislation that will institutionalize the mechanisms for transnational education in the country.

This Bill 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 will be addressed
to facilitate the operation of TNE institutions and the enrolment of foreign students in the country.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

GY

RON P. SALO
KABAYAN Partylist

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 1362

Introduced by Representatives Ron P. Salo

AN ACT
EXPANDING ACCESS TO EDUCATIONAL SERVICES THROUGH THE ESTABLISHMENT
AND ADMINISTRATION OF TRANSNATIONAL HIGHER EDUCATION, AND
APPROPRIATING FUNDS THEREFOR

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

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 which is relevant to the changing needs of the people and society. Higher
education shall serve as a principal instrument for generating productive knowledge, innovation
and technology to develop relevant and technical higher order skills needed to compete in the
knowledge economy to redound in, and ensure, resource generation.

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 programs, the internationalization of higher education in the
country, and the development of the transnational higher education sector. Further, the State
shall strengthen educational, cultural, social, economic, and political bonds between Philippine
and foreign institutions of higher learning, thereby fostering a vibrant exchange of cultures,
conducive to peaceful living within the global community. It shall 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 gain or acquire valuable experiences, skills and
knowledge as well as international and foreign diplomas, degrees, and certificates.

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SEC. 3. Definition of Terms. — As used in this Act:

a) Academic franchising — also known as “other instructional side" or “offshore location",
refers to a form of transnational higher education (TNHE) whereby a higher education
institution (HE), as a franchiser, from a certain country grants another institution, as a
franchisee, in another country the right to provide the franchiser's programs and
qualification requirements in the franchise's host country, regardless of the students’
origin;

b) Academic program - refers to a set of courses of study, which when completed, leads
to a degree;

©) Articulation. — refers to an arrangement whereby students for a sub-degree in one
country are guaranteed advanced entry into a degree program in another country if
they achieve an agreed level of performance in their studies;

d) Auxiliary services - refer to services that support the delivery of educational services
including promotion procedures and activities, recruitment of students, admission,
registration, processing of payments, student orientation, and such other related
activities, except teaching and learning activities;

€) Awarding institution — refers to an offshore BEI that is in partnership with a local HEI
provider of TNHE programs and which awards a diploma or certificate of graduation
solely or in addition to the diploma or certificate of graduation awarded by the local
partner HEI to students who have completed a degree course or program in the partner
local HEI;

f) Branch campus — also known as a local branch or a satellite campus, refers to a
campus of an HEI of another country established in the Philippines to offer its own
educational programs and to impose qualification requirements, regardless of the
students’ origin.

g) Distance education - refers to a mode of educational delivery whereby the teacher and
the leamer are physically separated from each other, and instruction is delivered
through appropriate communication technologies using specially designed materials
and methods, and supported by organizational and administrative arrangements and
structures;

h) Double degree - refers to a partnership arrangement or program which leads to two
(2) degrees awarded by two (2) institutions;

i) Education services - refer to any study program, course of study or parts thereof that
qualifies and enables students to participate meaningfully in social and economic
development;

i) Foreign higher education institution (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;

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k) 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,
anamed degree, diploma, or certificate indicating qualifications or skills proficiencies.
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;

|) Higher education institutions (HEIs) - refer to public and private post-secondary
education institutions, which include universities and colleges, TVET institutions and
specialized institutions that provide undergraduate and graduate degree programs in
such fields as law, theology, medicine, business, music, and art, among others;

m) International branch campus — refers to an HEI located in another country, a separate
country from the country where the institution originated or where the Main Campus is
located. An international branch campus would have some physical presence in the
host country; awards at least one degree in the host country that is accredited in the
country of the originating institution; and typically have local partner HEIs, as specified
in Section 9 of this Act;

n) Internationalization of higher education - refers to the process of integrating
international, intercultural and global dimensions into the goals, functions (teaching,
learning, research and services) and delivery of higher education;

©) Joint degree — refers to a partnership arrangement or program which leads to a single
degree awarded by two (2) or more institutions. The program is jointly developed,
delivered and jointly assessed;

p) Offshore- refers to any locality outside of the country where a higher program has its
base of operation;

q) Onshore — refers to the country where a higher education program has its base of
operation;

1) Open distance leaming (ODL) - refers to the merger of two (2) concepts, that of open
learning and distance education. It is a system which combines the methodology of
distance education with the concepts of open learning and flexible learning. Distance
instruction may be delivered by post or mobile phone;

s) Providing institution — refers to an HET which provides TNHE programs in partnership
with another HEI located offshore;

t) 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 or where
the learners are located in a country different from the one where the awarding
institution is based;

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u) Transnational higher education arrangement - refers to an educational, legal,
financial, or other system agreed upon formally by partners in order to provide educational
services;

v) Transnational higher education institutions — refer to higher education institutions,
both local (within the country or onshore) and foreign (outside the country or offshore),
offering transnational higher education programs;

w) — Twinning arrangement - refers to an arrangement 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 institution; and

x) __ Validation - refers to an arrangement whereby the main HEI agrees to award its
own degree to students who complete a program from a partner HEI in another country.

SEC. 4. Strategy for TNHE. — Consistent with the provisions of this Act, the Commission
on Higher Education (CHED) shall formulate a coherent national strategy to encourage and
facilitate the establishment of the most effective forms of TNHE programs and institutions in the
country.

SEC. 5. Establishment of TNHE Programs in HEls. - TNHE programs shall be
established and administered by duly authorized HEls.

SEC. 6. Types or Modes of TNHE. — TNHE programs and arrangements, whether
existing, emerging, or anticipated, shall include the following types or modes:

@) Academic Franchising, which is a franchise arrangement whereby an. HEL

{franchiser) from a cerlain country arants another insitution (franchisee), which is

@ partner HEI, in another country the right to provide the franchiser's programs

and 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 for a sub-degree in one country are guaranteed
advance entry nto a degree program in another country i they achieve an agreed
level of performance in their studies;

) Branch campus, which refers to a campus of an HEI of another country established
in the Philippines to offer its own educational programs and qualifications,
regardless of the students’ origin;

d) International branch campus, which refer to an HEI located in another country, a
separate country from the country where the institution originated or where the
Main Campus is located. An inferational branch campus would have some
physical presence in the host country; awards at least one degree in the host
‘country that is accredited in the country of the originating institution; and typically
have local partner HEIs, as specified in Section 9 of this Act;

e) Joint degree, which refers to a partnership arrangement or program which leads
toa single degree awarded by two (2) or more institutions. The program is jointly
developed, delivered and jointly assessed;

) Double degree, which refers to a partnership arrangement or program which leads
to two (2) degrees awarded by two (2) institutions;

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g) Online, blended, and distance learning, which refers to a program delivered across
an international border. The delivery medium is typically online, but distance
learning can be delivered or conducted by post or mobile phone. The online
component of the program can range from zero to one hundred percent (100%).
Approgram, which is partly online and face-to-face, is blended;

h) Open Distance Learning (ODL), which refers to the merger of two (2) concepts,
that of open learning and distance education. It is a system which combines the
methodology of distance education with the concepts of open learning and flexible
learning. Distance instruction may be delivered by post or mobile phone;

i) TNHE Offshore institution, which refers to an autonomous institution established
in a host country, which'in terms of its organization and education contents,
belongs to the education system of another country. An institution is deemed
autonomous if it is independent of the ministry, commission or department of
education in a host country;

i) Twinning arrangements, which refer to an arrangement 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 institution; and

k) Validation, which refers to an arrangement whereby the main HEI agrees to award
its own degree to students who complete a program from a partner HEI in another
country.

HEIs intending to enter into partnerships or arrangements, with other HEIs may explore
or propose to the CHED any other mode or arrangement. The CHED, in consultation with other
agencies and HEIs, may add other forms or modes of TNHE as it may deem suitable and in
furtherance of the objectives of providing quality TNHE programs in the country. These modes
or arrangements must be consistent the Philippine development plans, and not in
contravention of the Constitution, and other laws and policies.

SEC. 7. Commercial Presence of Foreign HEIs (FHEIs) in the Philippines. — An FHEI
may engage in the business of providing educational services 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, and other laws and policies, and based on mutually
agreed terms.

The FHEls shall conform to the following minimum standards:

a) Only FHEIs 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, shall be given government authority to offer undergraduate, graduate,
and post-graduate degrees;

b) The FHEls shall have standards at par with, or higher than, Philippine HEIs in terms
of government recognition, faculty strength and curriculum; and

c) The FHE!s 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 other
collaborative arrangements with Philippine HEls, such as twinning arrangements 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:
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a) The FREI shall seek prior authority from CHED to operate specific educational and
auxiliary services and shall comply with the requirements set forth in this law and by
CHED policies and regulations. No FHE! 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 FHEls. The
CHED shall determine the level of accreditation which Philippine HEls are required to
acquire 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 and shall ensure that it complies with all the relevant national laws and the
CHED's policies. The CHED shall determine the documentary requirements needed
to be submitted by the parties. Any document executed or issued outside the
Philippines must first be authenticated with the appropriate Philippine Foreign Service
post before submission to the CHED;

d) The academic quality of the higher education programs involved is at least comparable
to the established standards of the local programs, or compliant with established
international standards. The critical details of the collaborative arrangements and the
procedures concerning the quality of education services provided by TNHE
arrangements shall be based on specific and systematic criteria;

e) The programs must have complied with the required level of accreditation and other
quality assurance requirements;

) The critical details of the collaborative arrangements are transparent or open to
scrutiny by the government and the public; and

g) Public announcements about collaborative arrangement or any TNHE program must
have the proper government authorization.

Philippine HEls and all providers of educational and 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 the case of sole proprietorship, for the purpose of
providing educational and auxiliary services. All existing entities seeking to expand their services
to include TNHE operations must amend their articles of incorporation with the SEC, or register
their expansion with the DTI.

SEC. 9. Establishment of Branch Campuses. — FHE!s may establish branch campuses in the
Philippines through a local partner, at least sixty percent (60%) of which is owned by Filipino
citizens, and duly registered with the SEC or the DTI, as the case may be. The FHEI 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. The local partner
shall be accountable for assuring the quality of the programs offered

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The FHE! may also incorporate a Philippine company to operate its branch campus:
Provided, That at least sixty percent (60%) of its voting stocks are 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 FREI shall be required to post a bond in an amount to be
determined by the SEC, to guarantee the fulfillment of future obligations and liabilities.

Foreign citizens may constitute up to eighty percent (80%) of the faculty and academic
personnel and up to forty percent (40%) of the administrative personnel and staff members in
any of the local branches. However, foreign students may not comprise more than one-third (1/3)
of enrolment.

SEC. 10. Philippine HEIs 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 the course or program requirements, the HEIs shall provide support services as
necessary, including information on legal requirements and living arrangements.

SEC. 11. Programs and Degrees Offered. — Courses offered by TNHEIs may include
undergraduate, graduate, and post-graduate degrees. The CHED, in consultation with
stakeholders from the HEls 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 the offering of TNHE courses, all TNHE!s shall submit their curricula to the CHED, which
shall review and ensure that such curricula conform to international standards.

The curricula of TNHEs which belong to the top five hundred (500) World's Best Universities
based on international ranking acknowledged by CHED are deemed to have met international
standards and shall be exempt from complying with CRIED standards: Provided, That if the
TNHEls fall out of the top 500 ranking, their subsequent new programs or course offerings shall
be reviewed by the CHED to ascertain if these meet international standards.

SEC. 12. Quality Assurance. — TNHEls, which include both the awarding and providing
institutions, shall be accountable for quality assurance and control. They shall develop,
implement, and review internal quality assurance processes and cooperate with the CHED or
other duly recognized local or international audit and accreditation bodies to protect and
strengthen the reputation of bona fide institutions engaged in TNHE, as well as to protect the

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students and other stakeholders from low quality services of institutions with questionable
reputation or engaged in malpractice and fraud.

To facilitate the entry of high-ranking universities in the country, TNHEls belonging to the
top five hundred (500) HEls in the world for three (3) consecutive years based on reputable
international ranking acknowledged by the CHED shall be presumed to be compliant with
international standards and shall be exempt from the standard quality assurance review by the
CRIED or other audit and accreditation bodies: Provided, That those that fall out of the top 500
ranking 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. 13. 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 the respective weights to the following performance indicators:

a) Curriculum innovation, which pertains to the manner and degree to which the
curricula are relevant and adaptable to current and global developments, trends,
and values. Curriculum innovation includes the assessment of the conformity of
certificates, diplomas and degrees granted by the TNHEls with internationally
accredited programs of reputable international accreditation bodies;

b) Student diversity, which includes the promotion of a respectful classroom climate
under egalitarian norms and principles; encouraging plurality and the contribution
of diverse perspectives brought about by differences in race, gender, religion, and
culture; use and monitoring of both spoken and written languages 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 used in international fora 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;

e) Job placement and career services, which generally refer 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 TNFIEI can structurally align its
graduates to programs for economics needs, and the human resource
requirements of industry to the general employment demands and the specific
industry demands in local and foreign markets;

f) Facilities and infrastructure, which pertain to the extent to which the school's

facilities and infrastructure address the needs of the programs in accordance with
set standards, as well as provide for the welfare of students and teachers. The

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students’ experiences 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 involvement in
research and other institutions in their field. Greater weight is given to institutions
with a higher percentage of full-time faculty holding doctorate 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 internationally-accepted best practice for faculty-to-
student ratio;

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 economies outside 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 CHED, or other duly recognized local or
international audit and accreditation bodies, may identify other bases for
assessing performance relevant to international linkages, such as the benefits that
accrue or are expected to accrue to TNHEIs 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 per
capita-endowment ratios, and the degree to which the endowment can fund
operating expenses otherwise financed by tuition;

|) Other criteria analogous to the foregoing.
The following criteria may also be considered: i) environmental sustainability; ii) gender

and race sensitivity; ii) social responsibility; iv) housing facilities, both in-house
and affiliated housing; v) health facilities and medical services; vi) retirement

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facilities; vi) job generation; and other quasi-indicators analogous to the
foregoing.

SEC. 14. Creation of a Transnational Higher Education Division. — There is hereby
created a Transnational Higher Education Division (TNHED) under the International Affairs
Service of the CHED to act on all matters related to TNHE institutions and programs established
in the country, whether existing or yet to be established. In the performance of its functions, the
TNHED shall coordinate with the Technical Committee for Transnational Education and the
Technical Panel for ODL of the CHED.

The functions currently being performed by other offices and divisions of the CHED in
relation to TNHE, including those undertaken by the Programs Development Division under the
Office of Programs and Standards Development, are hereby transferred to the TNHED.

The TNHED shall have the following functions:
a) Formulate policies, standards, and guidelines in the operation of TNHE programs;

b) Formulate strategies and mechanisms for the implementation of TNHE programs in the
country;

c) Accept, evaluate and process all applications of PHEls and FHEls for authority to operate
any of the types/modes of TNHE, including educational and auxiliary services;

d) Conduct the review and evaluation of performance of TNHEls, including visitation and
other regulatory activities, for purposes of determining compliance with Philippine laws,
tules, policies, and regulations;

e) Perform such other duties necessary to carry out the purposes of this Act.

SEC. 15. 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 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 (BI) and the Department of Labor are 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 who work
in an institution or 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 TNHEI;

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d) The Professional Regulation Commission (PRC) is hereby directed to establish a
mechanism to facilitate and expedite the processing of certificate of registration or 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
who work in an institution or 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. 16. Tax Exemptions. — Pursuant to Section 4, Article XTV of the Constitution, all
revenues and assets of non-stock, non-profit TNHEIs which are used actually, directly, and
exclusively for educational purposes shall be exempt from taxes and duties.

All grants, bequest, endowments, donations and contributions made to the TNHEI to be
used actually, directly and exclusively by the TNHEI shall be exempt from donor's tax and the
same shall be allowed as allowable deduction from the gross income of the donor for purposes
‘of computing the taxable income of the donor in accordance with the provisions of the National
Internal Revenue Code of 1997 (NIRC), as amended.

Further, in accordance with Section 28, Article VI of the Constitution, all lands, buildings,
and improvements, actually, directly, and exclusively used by a TNHE! 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 in accordance with the provisions of the National Internal Revenue Code of 1997, as
amended.

SEC. 17. Proprietary TNHE Institutions. — All TNHEIs which do not satisfy the definition
of “non-stock, non-profit educational institutions" as defined by 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 Il, 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 Order No. 226, otherwise
known as the "Omnibus Investments Code of 1987", and Republic Act 7844, otherwise known
as the "Export Development Act of 1994".

SEC. 18. Repatriation of Capital and Remittance of Dividends, Profits and Earnings
48 from Foreign Investments. — Repatriation of capital and remittance of dividends, profits and
earings arising from foreign investments in TNHEIs may be done, using foreign exchange
sourced from authorized agent banks (AAB) or AAB-subsidiary or affiliate foreign exchange
corporations;

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Provided, That such foreign investments have been previously registered with the Bangko
Sentral Ng Pilipinas (BSP). For this purpose, the BSP rules and regulations governing registration
of foreign investments shall be complied with.

SEC. 19. Labor and Management Relations. — Labor and management relations in all
TNHEls shall be governed by existing labor laws. Employees and personnel of TNHEls shall
enjoy working conditions not less than those provided under Presidential Decree 442, or the
Labor Code of the Philippines, as amended, and other relevant laws, issuances, rules and
regulations of the Philippine government and the Department of Labor and Employment.

SEC. 20. Termination of Partnership or Closure of Program. — In the event of
termination of a partnership, or the phase out or closure of a program, institutions engaged in
TNHE shall 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 in accordance with the applicable laws, rules and regulations of the Philippines.

SEC. 21. Continuing Research. - The CHED shall conduct continuing research and
development on the improvement of transnational higher education and the internationalization
of higher education, for the purpose of enhancing knowledge creation and revenue generation.

‘SEC. 22. Appropriations. — The amount necessary to carry out the provisions of this Act
shall be charged against the current year's appropriation of the CHED. Thereafter, the amount
necessary for the continued implementation of this Act shall be included in the Annual General
Appropriations Act. The operating requirements of the Transnational Higher Education Division
under the International Affairs Staff of the CHED shall be included in the budget of the CHED in
the Annual General Appropriations Act.

SEC. 23. Implementing Rules and Regulations. — Within ninety (90) days from the
effectivity of this Act, the Chairperson of 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, BI, SEC, Board of Investments, and other stakeholders and
relevant government agencies, shall issue the implementing rules and regulations of this Act.
Such rules and regulations shall take effect fifteen (15) days after its publication in a newspaper
of general circulation in the Philippines.

SEC. 24. Separability Clause — If any provision of this Act is declared unconstitutional,
the remainder of this Act or any provision not affected shall remain in full force and effect.

SEC. 25. Repealing Clause. — All laws, acts, presidential decrees, executive orders,
proclamations or administrative regulations which are inconsistent with the provisions of this Act,
are hereby amended, modified, superseded or repealed accordingly.

SEC. 26. Effectivity. — This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation

Approved.

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