Republic of the Philippines 
1 
First Regular Session 
1 
FQUKTEENTH CONGRESS 
1 
s E N AT E 
To aclueve 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 resources. Consequently with this priodizaiion, edacatiun plrrs beem 
consistently given the biggest slice of the budgetary pie. 
Article Xrv, Section 1 of the Comfitutioon declares: 
"The State shall protw? and pwmote the light of all 
citizens to quality education at aM lev& and .&a3 take 
appropriate steps to make education accessible .to aU." 
I&cwise, Article JI, Section 19ofthe Coistitirtion &so declares: 
"The State s l d  give priority to education, science and 
technology, arts, culture and sports to foster patriotism and 
nationalism, accelerate social propas an promote total human 
liberation and development." 
To achieve OUT concerns and implement this Constitutional mandate, 
the State shall provide the mechanisms ta byoaden 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." 


and the private sector thus, ensuring the tducation shall become an effedive 
instrument in improving the life of the majority ofthe Filipino people. 
In fact in ow hierarchy of values, most consider education over and 
above clothing and shelter. This bin shaH strengtken education iwi a nieam of 
an upward mobility; thus, the passage of this bill is hereby urged. 
FRANCIS G. ES-ERO 
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Republic of the Philippines 
1 
Filst Regular Session 
f 
FOURTEENTH CONGRESS 
S E N A T E  
AN ACT 
ESTABLISHING AN EDUCATION TRUST "I 
FOX G
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OF GSIS 
AND SSS MEMBERS ANT3 FOR OTHER P
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SECTION 2. Declaration of Policy. The Constiihrtin provides that the state 
shall protect and promote the rights of all atizem to quality education at all levels 
and shall take appropriate steps to make education acTeSSjble to all. Towards &is 
end, the State shall endeavor to extend social security protection to provide the 
opportunity of making education an accesiik commodity to realize the right of all 
citizens, particularly the under privileged, the equal ~p~~~ 
to quality 
education for then1 to contribute in a mow productive and active rote in s d a l  life 
specMly in the economic and p&cd spheres. 
SECTIQN 3. &$nition of Tms. - The h k d g  terms shall be uncterstoad in 
this Act to mean: 
(I) E n  refers tu the Education T m t  Fund aeated by this Act. 
(2) Gwerrzmmt Service lnslrrana System (GSE,) refers to the agency entrusted 
to take charge of all matters pertaining to the social security benefits and 
insurance claims of al3 government offieiak and employees, as created 
and established under Commonwealth Act No. 186, as amended by 
Presidential Decree No. 1146, an9 further antended by Republic Ad No. 
8291. 


(3) Social Seeirri.lty Systenz (SSS) reJh %o t k  agmcy ~~~~~~d to take dwgc ofdl 
inaffvrs pertaining to the b m j t s  and immance claims of all prinai~ mtrpIoyresg 
embodied in Republic Act No. 1167 and f f ~ ~ n d e d  
by Republic Act No. 8282. 
(4) Optional means the voluntary act of qualified members of GSB or SSs to 
be included in the pre-need education trust fund coverage for their 
grantee, deductible to their salaries and/or payable to the system 
concerned in a form of equal number of monthly contributons as 
determined in the policy contract. 
(5) Education Trust Fund (ETF) refers to the zcunidated amount of money 
deducted from GSJS and SSS men&m and/or paid by the mt.nlbers to the 
system concerned for the use in the ducathn of their grantee to be paid 
directly to universities or colleges for a bacc&mate degree and/or 
institutions for a vwatioml/te&nical program to be d ~ u n e d  
as 
provided for in the policy contiact. 
(6) Plonholder refers to a member of &e GSIS and the SSS who avails of ETF 
Plans for the education of this grantee according to his desired 
vocational/technical and/or baccalaureate education program. 
('7) Plan agreement refers to the policy contraft issued by either the CSES or the 
S55 to the planholder containing the ETE Plan specifications and general 
provisions of the planholders' benefits and responsibilities. 
(8) Granke refers to the child designated by the plruzholder regardless of 
relationship to avail of &e ETF befits amor+ 
tn &e eduratirzn 
program determined in fhe policy contract. 
(9) Monthly confributions refer to tkt: mount of money to be deducted out of 
the salaries of the qumed member and/or paid directly to the Vtem 
concerned as specified in the policy coniract to be determined by the 
Education Trust Fund Board. 
(10) 
Educution Trust Ftmd (ETF) Bawd refers to the governing body wbkh 
shall formulate policies, implementing rules and regulations, guidelines, 
an other related matters pertaining to the operation and management of 
the ETF created under this Act. 
SECTTKQON 4 Education TrusP Fund (ETF) Plms. - There is hereby t3stipfplished 
in the GSE and the SSS a special education trust fund to be lcrpown as the "GSIS/SSS 
Education Trust Fund (Em) Plm" t.IwyL)I1gh enro&nt?np in any desised educatjcrlm 
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program to ensme the education of the grantee of nmmb for both systems 
respectively. 
SEC"I[QN 5. Managcmnf and supemision. - (a) To carry out the purposes of 
this Act, the EiTF Board is created, hereinafm referred to as the W E  Board", a 
governing body which shall formdate poliaes, implementing rules and r e g ~ h c i ~ ~ ~ ~  
guidelines and other related matters to oversee, manage and supenrise the operation 
of ETF with principal place of business in Metro Manila, PIPilippines. 
(b) The ETF hard composed of nine (9) members shall be comprised of o x  
(1) member from the Government Service Insurance System (GlsIs); one (1) member 
from the sw'al Security System (SSS); one (I) member from &e Senate C&nmi& 
of 
Education, Arb and Culture; one (1) member from the Senate Comn&ee on 
Government Corporations and P ~ b k  
Enterprises; one (1) member from the H o w  
of Representatives Committee on Higher and Tecslnical E
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one (1) member 
from the House of Representatives Conmittee on Government Enteqirim and 
Priwatizacion; one (1) member from the T
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Er.lucacion m d  Skills (TESDA); and 
one (1) Independent he-need Resource Persun with adequate knowledge and a 
minimum of ten (10) years experience in pre-need marketing and industry exposure 
which shall be appointed upon recommendation by the majority members of the 
proposed Board. The term of the appointive members shall be six (6) years. The 
members of the Board shall receive at least Two Thousand Five Hundred Pems 
(P2,500.00) per diem for each meeting actually attended by them, but not to exceed 
Ten Thousand Pmos (ul0,OOO.W) a month: Prmided, That members of &e Board 
who hear and evaluate cases pending More the hard shall also receive a pr diem 
of at least Two Thousand Five Hundred Pesas (~00.00) 
pex S & Q ~  but mt to 
exceed Fifteen Thousand Pesos (M5,OOO.W) a month Pmided, furtherf That said 
members of the Board s h U  also receive reasonab3e ~ a n s ~ ~ t i o n  
and 
representation allowances as may be fixed by the ETI; b a d ,  k t  not to exceed Ten 
Thousand Pesos (P10,OOO.OO) a month. 
(c) 
The ETF Board upon the recommendalion of the G5Is and the S, 
shall appoint an actuary and such other personnel as may 'be deemed necessay, fix 
their reasonable compensation, allowance and other benefits; p r e m i  their duties 
and establish such guidelines and procedures as may be necessary to ensure the 
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(d) 
The dJSI!3 and the S S  shall crate an Education Trust Fund (ETF) 
Department respectively, to manage the general conduct of the operation and 
management functions: Provicieri, huzvcver, That all personnel of the FiTF Department 
shall be appointed by the President of the GSJS/S, as the case may be, subject to 
the confirmation of the ETF Board: Prm)i&d, fidrfhw, That the personnel of the ETF 
Department in both the GSS and the 3% shall be selected only horn Civil Sennice 
eligible and be subjected to ad Service d e s  and regulations. 
(e) 
The ETF Board shall be responsible for the fonnulaton and 
implementation of the Implementing Rules and Regulations ORR) of this Act, to 
ensue the effectiveness and viability of the ETF for a self sustaining operation, 
including its budgetary supports operating capital and other related ~
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monitoriag and cafegorimtion of schools according to the cost of its cxisaing tuition 
fees and othw related school fees and clm=ges, moxMtming of rate schedules 
according to the age, terms of payment, number of years before avaihent and &a 
related matters to safeguard the implementation and operation of this Act. 
SECTION 6. Education Trust Fmd (ETF] PiansAgreet?wzt. - For the attainment 
of its main objectives, the general provisions of a plan agreement sJAl be jssued by 
both the GSE and the SSS, respectively, to all availing members as planholders 
which shall govein the terms and conditions in the ~ p ~ ~ e ~ t i o n  
of premium 
payments and beneflts inclusive of the plan cash value which shall be determined by 
the BTF Board. 
SECTION 17. Tnisf Fund Mmagcnierit. - The ETF must be separated from the 
general funds of the system concerned and must be self sustaining to be invested 
according to the provisions and guidelines of the S d a l  !%cui=ity Fund in the m e  of 
the SSS; hvestment of Funds in the case of the GSS, exeept on memkrs laans for a 
greater yield investment. No amount of money Prcpm the ETF P h s  shall be loaned 
to the members and/or planholders of the sy- 
cmemed. 
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SECTION 8. Grantte. - For purposes of this Act the term ‘.graniee“ shall 
indude legitimate, legitimated, legally adopted or iuegithate child: grandchild 
and/or whoever be the child to be assigned by the member regardless of 
relationship. A grantee is a duly appointed and registered grant” on or before 
enrollment to avail of the ETF benefits. A member may apply for a deferred pian if 
he does not have a child and or grantee. 
SECTION 9. 
Optional Covprage. - Subjer% to the rules and regulations 
prescribed by the ETF Board, all GSLS and SSS members, regardless of dvi? status, 
with or without a child and/or grant”, may opt to participate under this JZTF Hans 
program. 
SECTION 10. Premium Puyimts. - The amount of premiums to be paid to 
the ETF by the member shall be in accordance with the schedule of payments to be 
prescribed by the ETF Board taking into considwafion the fallowing dterh 
(a) The interval of the time between the effectivity of the coverage and the 
estimated time of enrollment of the pmtee in any desired education level 
for a vocational/ t e c h u  or a baccalaureate program; 
(b) The number of monthly contributions to be made tn complete the 
contracted price stipulated in the plan agreement or poky contract; 
(c) ‘The benefits to be availed of, as provided in Section 12 of phis Aci; 
(d) the amount of tuition and the other standard fees charged by the 
i n ~ t i i ~ t i ~ ~ ~ ~ ,  
colleges, and/or universities accarding to the school category 
for a vocation/technical or a baccalaureate education level; and 
(e) Such other factors as may be determined by the ETF Board. 
SECTION 11. Reinsurance. - The GSB or the SSS may reinsure any of its 
interest wholly or in part thereof with any private company or reinsurer whether 
domestic or foreign: Provi&d, That €he System concerned shall submit an annual 
report on its reinsurance operation ik, the b w m e  Commi.;Sion through the ETF 
Board. 
SECTION 12. Educnfion Bewjifs. - only membe~s who have compplelted the 
payment of the conkxf price stipulated in the plan agreement or policy contract 
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before enrollment of the grantee shall be entitled to avail of the hefits pmwided for 
under this Act. 
The benefits shall include the payment of ETF by the System concerned of: 
(a) Such school fees as may be required for enrollment, for CORI~MOR 
of a 
vocationd/technicd or a baccalaureate program which sMl include 
tuition fees for all subjects offiL;lally prescribed by the institutio~ 
colleges 
and/or universities and part of a regular curriculum as requisite for 
graduation and other standard fees snch as science and speech 
laboratory, audio-visual, medical and dental, library# athletics, 
counseling, registration, matriculaticm, officiaI school publifation an 
other fees may further be appraved by the CHED and the TESDB; and 
(b) Any other benefits to be provided form as stipuhted in the policy 
contract as determined and approved by the EfF Board. 
The payment shall be made by the ETF of the System concerned directly to 
the institution, college and/or university prior or upon enrolhent as the case may 
be, an an open-ended education trwt fund bnefi;t that pays all SchoOIs expenses as 
stipuJated in the policy contract regardas of whatever cost of a designated 
education program during the availment period, for a vocational/techid and/or a 
baccalaureate education program on a semestrd or tn2mestral basis. The IT 
Board 
shall provide for safeguards to ensure &e prompt payment ofbenercits. 
SECTION 13. lnrenfives. _I In appreciation of excellent prfomnce of the 
grantee and for future use of the planholder, an incentive is hereby providd 
(a) 
Should the grantee earn any acceleration or SchoLarShip awmd in any 
education program desired, all amounts due and payable io the 
institution, college and/or univcpsity or its equivalent amount, shall be 
awarded to the availing grantee of the phnholder; and 
Any otlw incentives and/or benefits to be determined by the ETF 
Bomd as provided for in the plan agreement or poky contract issued 
by the System concerned. 
(b) 


SECTION 14. ~
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of BLTE~&. - The hefits provided for in this Act 
may be transferred to any active member of both System md may be assigned t~ 
another grantee at the option of the planholder" 
SECTION 15. Cash Value. - in cases of inability of the planholder to continue 
the payment of his/lier premium due to financial reasons and/or any other reasons 
as the case may be, the ETF Board shall dekmhe the cash value of the Educazion 
Trust Fund Plans which shall form part of the general provisions of the policy 
contract issued by t h  System concerned. 
SECTION 16. Deafh or Diability of f f ~  
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- The death or t~td 
and 
permanent disability of the planholder shall not preclude the panfee from 
avallment of the benefits provided, in application of Section 11 as stipulated in this 
Act. 
SECTION 17. Government Gunrantat. - The benefits p-i 
in this k t  
shall not be diminished and to guarantee said benefits, the Government of the 
Republic of the Philippines accepts general responsibitity for the solvency of the 
EIF. 
SECTIQM 18. Exemption porn Tax, Legd Proms mrl Lib. - The?. actuarial 
solvency of funds for the Fl[7; shall be preserved and mahkained at dl tima and 
that contribution rates necessary to sustain the benetits tmdm this Act shafl be kept 
as low as possible in order not to burden the nimber of both the GSE and the SSS. 
Notwithstanding ,any laws to the contrary, the ETF, its assets and proper€ies, all 
proceeds from collections, income or investment earnings ulerefron, aU supplies, 
papers or documents, all accruals thereto and benefits paid shall be exempt i~om 
all 
taxes, assessments, fees, charges, or duties od 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 Act are hereby considered paid. Consqueney, all lam, 
ordinances, regulations, issuances, opinions or jwispmd-ence contrary to or in 
derogation to this provision are hereby deemed repealed, s
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and rendered 
ineffective and without legal force and effect. 


Moreover, these exempftb~~ 
shall not be &e&& 
by subsequent laws to the 
contrary unless this section is expressly, Speddicdly and categorically revoked IX 
repealed by law and a provision is enacted to substihxte or replace the exemption 
referred to herein as an essential factor to maintain or protest the solveney of the 
fund, notwithstanding and independently of the guariuiec: of the national 
Government to secure such solvency of the liability: Prmided, That all sesplrities of 
the ETI: must be registered with the se6larities and Exchange Commission (5232) 
and 
Wansaction tax must be imposed hereto to safeguard the viability and ~
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of investment for a self-sustainbg ETF. 
The funds and/or properties referred to herein as well as the benefits, sums 
or monies corresponding to the benefits under tRis Act shall be exempt &om 
attachment, garnishment, execution, levy or other process b u d  by the csurts, 
quasi-judicial agencies, or administrative bodies including the Commission on Audit 
(COA) disallowances and from all financial obligations of both the GSiS and the S 
members, including his pecuniary accountabilities arising €rom or caused or 
occasioned by his exercise or performance of his official hrnaions or dutis, or 
incurred relative to or in connection with his. podtion or work except when 16s 
monetary liability, contractual or otherwise, is in favor of the Education Trust Fund 
(Ern). 
SECTION 39. Supplementary Clmrx. - In case of insufficiency of a provision of 
this Act, ETF Board Resolutions shall apply in a suppletory manner t~ safeguard the 
interest of the ETF operations towards a seE-sus~-ning 
~ p l e ~ ~ n t ~ ~ ~ n  
of this Act. 
SECTION 2Q. hplenzentbzg Rules and 
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(IRR). - "he ETF Board shall 
promulgate the necessary rules and reegulations for the & d e  inzplmmtation of 
this Act within ninety (90) days followkg its approval, to be tanbodied in the 
Implementing Rules and Regwlations (IRR) duly confirmed and approved by the 
majority members of the ETJ? Soar$, which should prescribe under the active 
participation o€ the Senate collpmittee on Education, Arts and Culture; the Senate 
Committee on Government Corporations and Public Enterprises; the Noam of 
Representatives Committee on Higher and Tcehnfcal Education; the House of 
Representatives Committee on Higher and Techtical Edacatiow the €€ouse of 
Representatives Committee on Government En**= 
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Commission on Higher Edumtion (CHlZD) and an Indepdent plivafe Reneed 
Resource Person. 
SECTION n. Separability Clause. - If, for any reason, any section at this Ad 
shall be held to be unconstitutional or invalid, the othcr sections or provisions of this 
Act shall not be affected thereby as they are separable from the invalid ones and 
shall remain in force and effect. 
SECTION 22 Repealing Clause. - All laws# exeathe orders, decrees, 
instructions, rules and regulations in contray or inconsistent with any provision of 
this Act are hereby repealed or niodified accordingly. 
SECTION 2.3. €ficfivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in the Oficitzl Gu&e 
or in two (2) naaiolllpl newspaper of general 
circulation whichever comes earlier. 
Approved, 
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