SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
s.B.No)2'72 
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AUG 13 P 3 :07 
Introduced By Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
According to the Bangko Sentral ng Pilipinas, 8 out of 10 households have no 
deposit accounts. Of the existing deposit accounts, only 6 out of 10 earn interest. This 
reveals an alarming practice of failure to either save or to invest savings in interest-
earning accounts. The 2013 Asia-Pacific MasterCard Index of Financial Literacy shows 
that Filipinos have little knowledge on saving and investment instruments or good 
practices therefor. 
Surveys show that 3 out of 4 Filipino children are unaware of any kind of 
investment tool, including bank deposits. The Bangko Sentral ng Pilipinas ("BSP") has 
launched several programs in an attempt to address this issue. In 2011, the BSP, in 
partnership with several banks, launched a Kiddie Account Program that pegged the 
initial deposit for savings account at Php100, making the same easily affordable for 
children. 
Early this year, the BSP partnered with the Department of Education 
("DepEd") to launch a campaign to teach students the value of saving and to teach them 
practices to promote saving. 
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Long-term changes in Filipino mindsets regarding finances will be attained by 
promoting and teaching financial literacy at a young age. Similar concerns in foreign 
countries, such as the United States and the United Kingdom, caused the institution of 
tax free savings and investments for children. These provide good models to be 
emulated in our country. 
The proposed measure seeks to incentivize minors to save their money in bank 
deposit accounts by increasing the rate of return realized therefrom through the 
exemption of such accounts from applicable taxes. The tax exemption covers deposits 
. amounting to not more than One Hundred Thousand Pesos (Php100,000), the average 
amount of a Filipino deposit account. The proposed measure hopes to create a 
sustainable culture of financial literacy in the country. 
The undersigned sponsor urges the passage of the present measure. 
~O 
MANUEL "LITO" M. LAP~ 
Senator 
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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S.B.No1272 
Introduced By Senator Manuel "Lito" M. Lapid 
AN ACT 
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AUG 13 P 3 :07 
• 
CREATING A TAX FREE MINORS' DEPOSIT ACCOUNT, 
AMENDING FOR THE PURPOSE SECTION 24(B)(I) OF PRESIDENTIAL DECREE 
NO. 1158, AS AMENDED, OTHERWISE KNOWN AS THE 
NATIONAL INTERNAL REVENUE CODE 
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 and cited as the 
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"Kiddie Savers Act of 2013." 
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SEC. 2. 
Policy Statement. - It is the policy of the State to promote fiscal 
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literacy and stability at the individual and household level. Further, the State shall 
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create a culture of long-term saving and investment. In line therewith, the State shall 
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ensure that the youth are brought up with an awareness of the importance of fiscal 
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security and are equipped with the habits necessary to attain the same. 
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SEC. 3. 
Tax Free Minor Deposit Accounts. - Interest income accruing to 
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bank deposits, of whatever nature, held by minors shall be exempt from tax: Provided, 
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That such exemption shall only be used with respect to deposits opened and 
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maintained in one banking institution so designated by the minor and/ or the person 
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exercising parental authority over him: Provided further, That the aggregate total of all 
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deposit accounts held by a minor within the designated banking institution shall not 
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exceed One Hundred Thousand Pesos (Phpl00,000): Provided finally, That in cases 
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where the aggregate total shall exceed One Hundred Thousand Pesos (Phpl00,000), 
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such excess shall be subject to tax. 
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SEC. 4. 
Account Name and Signatory. - The deposit accounts covered by 
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this Act shall be opened and maintained under the name of the minor: Provided, That 
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the person exercising parental authority over the minor may be named a signatory 
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therein. 
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SEC. 5, 
Withdrawals from Minor's Deposit Account. - Withdrawals shall 
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only be for expenses that will accrue to the benefit of the minor, the parameters of 
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which shall be deterinined iri. the implementing rules and regulations of this Act. 
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SEC. 6. 
Source of Funds. - Any deposit made into the account shall only be 
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from lawful sources available to the child. The aggregate total of deposits made by 
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parents into the minor's deposit account shall be subject to a limit of Twenty Five 
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Thousand Pesos (Php25,000) per parent. Should the aggregate total deposit per parent 
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exceed such limit, then the whole account shall be taxable. 
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SEC. 7. 
Amendment of National Internal Revenue Code. - Section 24(B)(I) 
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of Presidential Decree No. 1158, as amended up to Republic Act No. 9504, is hereby 
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amended to read as follows: 
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(B) Rate of Tax on Certain Passive Income. -
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(1) Interests, Royalties, Prizes, and Other Winnings. - A final tax at the rate of 
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twenty percent (20%) is hereby imposed upon the amount of interest from 
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any currency bank deposit and yield or any other monetary benefit from 
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deposit substitutes and similar arrangements; 
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xxx 
xxx 
xxx 
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Provided, further, That interest income from long-term deposit or 
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investment in the form of savings, common or individual trust funds, 
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deposit substitutes, investment management accounts and other 
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investments evidence by certificates in such form prescribed by the Bangka 
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Sentral ng Pilipinas (BSP) shall be exempt from the tax imposed under this 
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Subsection: Provided, lfinally,] FURTHER, That should the holder of the 
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certificate pre-terminate the deposit or investment before the fifth (5th) 
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year, a final tax shall be imposed on the entire income and shall be 
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deducted and withheld by the depositary bank from the proceeds of the 
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long-term deposit or investment certificate based on the remaining 
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maturity thereof: 
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xxx 
xxx 
xxx 
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PROVIDED, FINALLY, THAT THE FINAL TAX IMPOSED IN THIS 
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SECTION SHALL BE SUBJECT TO THE PROVISIONS OF THE 
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KIDDIE SAVERS' ACT OF 2013. 
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SEC. 8. 
Implementing Rules and Regulations. - The Bureau of Internal 
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Revenue CBIR") and the Bangko Sentral ng Pilipinas CBSP"), shall formulate the 
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necessary rules and regulations for the effective implementation of this Act. 
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SEC. 9. 
Repealing Clause. - All laws, decrees, executive orders, issuances, 
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rules and regulations, or parts thereof inconsistent with the provisions of this Act are 
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hereby repealed or modified accordingly. 
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SEC. 10. 
Separability Clause. - If any provision or part of this Act shall be 
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declared invalid or unconstitutional, the remaining parts or provisions not affected shall 
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remain in full force and effect. 
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SEC. 11. 
Effectivity Clause. - This Act shall take effect fifteen (15) days after 
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its publication in the Official Gazette or in two (2) newspapers of general circulation. 
Approved, 
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