THIRTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
First Regular Session 
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Introduced by Senator Edgardo J. Angara 
EXPLANATORY NOTE 
The era of globalization has placed extreme pressure on our government 
to produce highly specialized and technical personnel in a relatively short period 
of timg. Given the rapid changes and developments in the field of Information 
Techdology and emergence of knowledge-based society, the Philippines has to 
reorieht the thrusts of its educational system to meet the growing needs and 
demands of a highly competitive world market. 
To achieve this arduous task, there is a need to formulate a viable, 
comprehensive and sustainable long-term modernization plan for schools 
primarily at the elementary and secondary levels. 
At present, the students in public schools have been left behind by their 
counterparts in the private schools. Based on preliminary report of Department 
of Education (DepEd), only 50% of the 4336 high schools nationwide have 
computer laboratories. But most of them need to be repaired or upgraded 
because after these computers have been delivered to schools, they have not 
been properly maintained. A computer laboratory consists of a minimum of 10 
computers. 
Given the scarce resources of the national government, there is a need to 
be more cost-effective and innovative in our approach to finance school 
modernization programs. This can be achieved through active partnership with 
local government units and private sector such as foundations private 
corporations and business groups. 
The School Modernization and Innovation bill aims to: 
a) Provide a broad framework for the institutionalisation of a 
comprehensive and sustainable modernization program for the public 
schools; 
b) Encourage the schools to become more innovative and resourceful in 
developing 
and 
implementing 
programs 
geared 
towards 
modernization; 
c) 
Develop mechanisms that will define the roles and responsibilities of 
the officials from the regional, division down to the school levels in the 
implementation of school modernization programs; 
d) Provide mechanism on how the private sector can participate in the 
program; 
e) Define regional and school modernization plans responsive to the 
needs of the students in the area. 


The bill also seeks to establish the School Modernization and Innovation 
Trust Fund which will augment the regular appropriations that will be provided 
under the annual General Appropriations Act to finance the priority programs for 
school modernization and improvement of public elementary and secondary 
schools. 
This is the opportune time for the government to seriously consider ways 
of increasing the share of budget devoted to computerization of schools, 
upgrading of libraries and science laboratories. Moreover the application of 
information technology in classroom instruction would increase efficiency in 
teaching and learning process and enhance competencies of students. 
In view of the foregoing, the immediate passage of this bill is earnestly 
sought. 
EDGARDO J. ANGARA 


THIRTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
First Regular Session 
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S E N A T E  
S. No. l Q 5  
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Introduced by Senator Edgardo J. Angara 
AN ACT 
INSTITUTIONALIZING A SCHOOL MODERNIZATION AND INNOVATION 
PROGRAM FOR PUBLIC ELEMENTARY AND SECONDARY SCHOOLS, 
PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives in Congress 
assembled: 
SECTION I. Tifle. - This Act shall be known as the “School 
Modernization and Innovation Act of 2004”. 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the 
State to promote a comprehensive and sustainable modernization program for all 
public elementary and secondary schools aimed at improving the effectiveness 
and efficiency of delivery of basic education. The State shall likewise take into 
account the regional and sectoral needs and conditions in developing a viable 
long-term modernization plan. The State shall also encourage the participation 
of the private sector and local government units in strepgthening programs which 
provide relevant and adequate skills for public school children necessary for 
them to be global competitive. 
SEC. 3. Statement of Purpose. - This Act seeks to attain the following 
objectives: 
a) To provide a broad framework for the institutionalisation of a 
comprehensive, and sustainable modernization program for the public 
schools. 


b) To encourage the schools to become inore innovative and resourceful in 
deve oping and implementing programs geared towards modernization 
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c) To develop mechanisms which will define the roles and responsibilities of 
the o ficials froin the regional, division down to the school levels in the 
imp1 mentation of the school modernization programs 
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d) To p ovide mechanisms on how tlze private sector can participate in the 
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prog am. 
e) To d 1 
fine a regional, division and school modernization and innovation 
plan esponsive to the needs of the students in tlze area. 
SECTIO 
4. 
Implementing Agency. - 
The Department of Education, 
hereinafter teferred to as tlze "Department", shall be the main implementing 
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School Modernization and Innovation Act. The Secretary of 
be responsible of ensuring the smooth implementation of the 
for schools. 
- The School Modernizatioiz and Innovation 
and high schools. At least one 
10 computers shall be established 
The Science high schools in every 
in the allocation of funds for the 
the public high schools have 
been computerized, the public elementary schools shall start its own 
massive computerization program. 
b) Upgrading of Libraries in public elementary and secondary schools. A 
well-equipped library shall be established in every public elementary and 
secondary high school. The library should, Ve provided with at least 2 


computers wliich have Internet access to assist the students in their 
research ork. 
Promotion of an integrated distance-learning program. Tl-re distance 
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enable the students from local and foreign 
knowledge and expertise in the areas of 
Mathematics, English and Communication to 
public schools through modern system of instructional and 
tion technology. It may adopt an interactive system of 
through television, modern satellite coinmunication or cable 
is appropriate and feasible in the area. Tl-re students as 
public schools shall be provided with opportunities to 
avail of the latest trends and developments in the field of educational, 
science, technology and communication even from abroad through 
distance learning programs. 
Upgrading of Science Laboratories. Each public elementary and high 
syl-rool will be provided with a well-equipped science laboratories with 
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modern science equipment, which is essential in improving the 
competencies of the students in the area of science and technology. 
SECTION 6. Phased Implementation of the Progranz. - Tl-re Department 
shall implement the program in phases to ensure continuity and sustainability of 
the projects. The phases of implementation will be determined according to the 
priorities set by the Department as well as the absorptive capacity of the schools. 
SECTION 7. Financing of the Program. The Department of Budget and 
Management shall allocate 10% of the total appropriations of the annual budget 
of DECS for the financing of the School Modernization and Innovation Program, 
SECTION 8. Formulation of School Modernization and Innovation Plan at 
Sclzool and Regional Level. 


a) National Modernization and Innovation Plan. The Secretary of 
Education in consultation with regional directors and schools division 
superintendents shall develop a comprehensive and sustainable 
modernization and innovation plan for public elementary and secondary 
schools nationwide which will be implemented within a period of 10 
years. The plan shall be divided into short, medium and long term period 
of implementation. It shall take into account the rapid changes in the field 
of information technology, communication and instructional delivery in 
various part of the world. It shall also identify souices of funding both 
from local and international financial institutions as well as the role of 
private sector, local government units and other members of the civil 
society. It shall likewise define the national standards and framework, 
which will be adopted in developing the individual plans. 
b) Regional Modernization and Innovation Plan. The Regional Director in 
coordination with the Schools Division Superintendents shall formulate a 
9ode;nization framework consistent with national standards which will 
sqrve as the basis for the plan taking into consideration the specific needs, 
and requirements of the region. The regional plan shall highlight the 
peculiarities and unique needs of the various schools within its 
jurisdiction. 
c) School Modernization and Innovation Plan. Each school shall formulate 
its own 10-year modernization plan which reflects the aspirations and 
goals of the school based on the regional plan of action. The plan shall 
consist of an assessment of the existing needs of the school as well as an 
inventory of existing educational facilities, priority programs for the 
allocation of funds, strategies to mobilize finincia1 resources to augment 
regular budget and strategies to manage the use of personnel, physical 
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and fiscal resources. The individual plans of the schools shall be 
submitted to the regional offices for consolidation. 
SECTION 9. School Modernization and Innovation Trust Fund. - A 
School Modernization and Innovation Fund, hereinafter referred to as the Fund, 
is hereby established, exclusively to augment the regular appropriations 
provided under Section 7 to finance the priority programs for school 
modernization and improvement of public elementary and secondary schools. 
a) The government’s contribution to the Fund shall be the following: 
1) The amount of Fifteen billion pesos (P15,000,000,000) as seed 
capital; 
2) The equivalent of twenty percent (20%) of the annual gross 
earnings of the Philippine Amusement Gaming Corporation 
(PAGCOR) 
3) The equivalent of 10% annual share on the Total gross collections 
of the travel tax 
4) The equivalent of 20 %of any additional increase annually in the 
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fees for vehicle registration; 
5) The equivalent of 2% of the additional increase annually in 
revenue collections. 
6) The equivalent of 10% of the sales of the lotto operations of the 
Philippine Charity Sweepstakes Offices 
The fund shall have a private portion to be raised from donations and gifts 
and other coiiveyaizces including materials, equipment, properties and services 
by gratuitous title. 
b) The fund shall be distinct and separate from the schools regular 
allotment for maintenance and other operating expenses ( MOOE). 


c) The Department shall be authorized to use the annual igterest 
income of the Trust Fund provided that the expenditures will be 
used directly for the impleinentation of the modernization 
programs and not on the regular programs of the Department. 
Provided further that 50% of the entire annual income shall be 
retained in the Bureau of the Special Treasury. 
SECTION 10. Management and Administration of the Fund. - The Fund 
shall be administered by the Department of Education. For sound and judicious 
management of the Fund, the Commission shall appoint a reputable government 
financial institution as portfolio manager of the Fund, subject to the following 
conditions. 
As administrator of the Fund, the Department shall prepare the necessary 
guidelines for its use, subject to the following conditions: 
a) No part of the seed capital of the Fund, including earnings thereof 
shall be used to underwrite overhead expenses of the administration; 
p), Uhess otherwise stipulated by the private donor, only earnings of 
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private contributions shall be used for administrative expenses; 
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c) The Department shall appoint and organize a separate staff that will 
be independent administratively from the Department. It shall also 
enjoy fiscal autonomy from the Department. 
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SECTION 11. Mandatory Allocation. - Each local government unit is 
hereby directed to allocate at least 5% of their Special Education Fund to 
augment the appropriations for the financing of programs in line with the thrusts 
of the school modernization and innovation program. 
SECTION 12. Uses of the Fund. - The School Modernization and 
Innovation Fund shall be used to finance the followirtg: 


a) 
Projects, which have been approved and certified as priority by the 
National Executive Committee and Regional Modernization 
Committees created under Section 9 based on the guidelines and 
criteria formulated by the Department. 
In service training of the teachers in the area of computer literacy 
and instructional communication technology. 
Procurement of 'computer equipments including maintenance of 
computer laboratories, audio visual and multimedia facilities, and 
appropriate education technology softwares 
Procurement of science equipments for science laboratories in 
b) 
c) 
d) 
schools 
SECTION 13. Order ofPriority in the allocation of funds. In order for the 
sclzool to given priority in the allocation of funds from the School Modernization 
Innovation Trust Fund, The following criteria should be met: 
a) The programs, which will be funded, should be in line with the 
foimulated regional and school modernization plans. 
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b), The sclzool should have mobilized additional 40% counterpart 
funding from either the local government unit, private corporations, 
foundations, business groups or private individuals for every 
program which will be implemented. 
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c) 
The programs have been approved by either the Regional 
Modernization Coinmit tee, and the National Executive Coinmittee or 
both depending on the fu .ding required. 
SECTION 14. Selection Proccss. - The individual schools nationwide are 
directed to develop project proposals in line with the modernization thrusts of 
their region and submit to their espective regional offices to determine its 


feasibility and contribution to the overall thrusts of school modernization in the 
country. 
A National Executive Modernization Committee shall be established. It 
shall be headed by the Secretary of the Department of Education, the 
Undersecretary for Programs and Directors of Elementary and Secondary 
Education and 2 representatives from the private sector. It shall be in- charge in 
evaluating projects with national application and coverage. 
A Regional Modernization Committee headed by the Regional Director 
and composed of 3 Division Superintendents and 2 Representatives from Parent 
Teachers Association in the region shall be established to evaluate all project 
proposals at the regional level. The Regional Modernization Committee shall 
have the authority to approve and recommend release of funding for projects 
with a funding requirement of P500,OOO.OO and less. 
However, the approved project proposals with a funding requirement of 
more than P500,OOO.OO 
will be forwarded to the National Executive 
Modernization Committee chaired by the Secretary of Department of Education 
or his duly designated representative for final review and approval. 
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The Department shall promulgate guidelines for the selection of the 
project proposals, which will be funded by the School Modernization and 
Innovation Fund. 
SECTION 15. Private Sector Participation. - The members of the private 
sector are hereby encouraged to provide technical and/ or financial support to 
the schools as they pursue their modernization plans. The private corporations, 
foundations, business groups or i iidividuals who shall provide support to 
modernization programs shall be zllowed to deduct from their gross income 
100% of the expenses directly used t ) finance the implementation of the program 
in the sclzools. 


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The schools wliicli would be able to seek at least 40% counterpart funding 
support from private corporations, foundations, business groups individuals as 
well as local governinent in their respective local communities shall be given tlie 
prioli 1 ity the provision of direct grants and funding from the Scliool Improvement 
and Innovation Fund particularly in programs which are mentioned in Section 9. 
SECTION 16. Inzpleineiztiizg Rules aid Regulations. - The Secretary of 
Education shall promulgate tlie implementing rules and regulatioiis within (90) 
ninety days after the approval of this Act. 
SECTION 17. Separability Clause. - If any portion or provision of this 
Act shall be declared unconstitutional, such declaration shall not i validate other 
parts thereof, wliicli shall remain in full force and effect. 
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SECTION 18. RepeaEilzg Clause. - All laws and rules and regulations or 
parts thereof incoiisistent with the provisions of this Act are hereby repealed or 
modified accordingly. 
SECTION 19. Effectivity. - This Act shall take effect fiiteen (15) days 
following the >ubIication in at least two (2) newspapers of general circulation. 
Approved, 
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