Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

ae 698

HOUSE BILL No.

Introduced by Reps. NERI J. COLMENARES, CARLOS ISAGANI T. ZARATE,
ANTONIO L. TINIO and TERRY RIDON

AN ACT REGULATING TUITION AND OTHER FEES OF PRIVATE EDUCATION
INSTITUTIONS, THEREBY AMENDING BATAS PAMBANSA BLG 232 AS
AMENDED, CREATING A PRIVATE SCHOOL FEE REGULATORY BOARD, AND
FOR OTHER PURPOSES

EXPLANATORY NOTE

An estimated 13% to 30% of higher educational institutions (HEIs) apply for tuition fee increase
, based on figures from the Commission on Higher Education (CHED). The figure is
staggering especially in the face of unabated sky-rocketing prices of basic commodities and
considering that a number of private schools are consistently listed among the country’s top 1,000
corporations.

Private educational institutions have become so profitable that in a span of 17 years, from 1991 to
2008, a total of 886 private HEIs were established — more than twice its original number of 637 in
1991. In the last several years, the top five HEIs included in the Top 1,000 Corporations of the
country earned P15.43 billion in gross revenues and P3.45 billion in net income. The country’s
biggest names in the corporate world, such as Lucio Tan and the Yuchengco group, have gone out
of their main line of business to invest in private education.

In the Philippines, schools in the National Capital Region (NCR) have the biggest tuition rates
averaging P980.54 per unit in 2010, as compared to P439.59 per unit in 2001. This year, NCR
schools increased their tuition at an average of P64.04 or 6.79% per unit. On top of this are
various miscellaneous and other school fees ranging from hundreds to thousands of peso:
include exorbitant, redundant fees like power charges, installment fee, copier fees and
infrastructure maintenance fees.

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Because of the rising fees in private schools, official records show an exodus of students from.
private to public schools. In 1980, only 10% of college students were enrolled in state colleges and
universities. By 1994, the number went up to 21% and later 40% in 2007. The same trend has
been observed in the elementary and high schoo! levels.


Unfortunately, both CHED and the Department of Education (DepEd) have miserably failed to
curb the meteoric rise in tuition and other school fees. Their issuances and memorandum orders
are inherently full of loopholes and appear merely to give the illusion that these agencies are
actually doing something about the problem when the opposite is true.

‘The last few years have also revealed the highly deceptive and unfair practice of jacking up
miscellaneous fees in lieu of a tuition hike. Unlike tuition fees, miscellaneous fees and other sorts
of extra fees have proliferated but remain unchecked, Most of these fees are superfluous and are
‘meant to milk as much money from the students, allowing schools to gain tremendous profits.

The Legislative branch cannot sit idly as the cost of education rises dramatically beyond the reach
of the ordinary Filipino. Capitalist educators must not be allowed to turn education from a right to
a privilege.

At the heart of the problem lies the policy of deregulating tuition and other school fees that was
enshrined in Section 42 of the Education Act of 1982 (BP 232). This provision has been
misinterpreted to mean allowing the unbridled, unhampered and arbitrary increase in school fees at
the expense of the people's Constitutional right to an accessible and quality education,

‘These Constitutional guarantees are found in Article XIV which states: “The State shall protect and
promote the right of all citizens to quality education at all levels and shall take appropriate steps to make such
education accessible to all:” and under Section 4 which provides that "The state recognizes the complementary roles
of public and private institutions in the educational system and shall exercise reasonable supervision and
regulation of all educational institutions.”

The time has come for the State to exercise its regulatory powers to curtail the unabated increase
in tuition and other school fees.

‘This Act, therefore, amends BP 232, specifically Section 42, and creates a Private School Fee
Regulatory Board for this purpose.

In view of the foregoing, immediate approval is sought.

Rep. CARLOS ISAGANI'T. ZARATE,

Bayan Muna Parbylist

Rm. Mae aie

ACT Teachers Partylist



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session
} 698

HOUSE BILL No.

Introduced by Reps. NERIJ. COLMENARES, CARLOS ISAGANI T. ZARATE,
ANTONIO L. TINIO and TERRY RIDON

AN ACT
REGULATING TUITION AND OTHER FEES OF PRIVATE EDUCATION
INSTITUTIONS, THEREBY AMENDING BATAS PAMBANSA BLG 232 AS
AMENDED, CREATING A PRIVATE SCHOOL FEE REGULATORY BOARD, AND
FOR OTHER PURPOSES

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

SECTION 1. Title, — This Act shall be known as the “Private School Fee Regulation Act of
2013.”

SECTION 2. Declaration of Policy. — Section 1 of Anticle 14 of the Constitution states that the
State shall protect and promote the tight of all citizens to quality education at all levels, and
further mandates the State to take appropriate steps to make such education accessible to all.
‘While the Constitution recognizes the complementary role of private schools in attaining this goal,
it mandates the State to take steps to ensure that the people are protected from unjust and
unreasonable school fee increases.

SECTION 3. Private Education Institutions. — as used in this Act, Private Education
Jnstitutions, hereinafter referred to as “institutions” shall refer to any school, college,
university, company of corporation authorized by the state to grant education, either formal or
informal; technical or non-technical; vocational or non-vocational; and whose subsistence relies
significantly in it gaining profits, dividends or stocks from giving such. Private Schools and Private
Education Institutions are used in this Act interchangeably

SECTION 4. Sections 42 and 68 of Batas Pambansa Bilang 232, other known as the “Education
Ad of 1982” ase hereby amended to read as follows:

“Sec. 42. Tuition and Other Fees. — [Each private school shall determine its rate of tuition
and other school fees or charges.] TUITION AND OTHER SCHOOL FEES MAY BE
CHARGED BY PRIVATE SCHOOLS SUBJECT TO THE FOLLOWING REGULATIONS:

(1) TUITION — EACH PRIVATE SCHOOL SHALL DETERMINE ITS RATE OF TUITION
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BASED ON A REASONABLE RETURN OF INVESTMENT OF NOT MORE THAN SIX
PERCENT (6%).

ANY INCREASE IN TUITION FEES SHOULD BE APPORTIONED AS SUCH:

a. ATLEAST SEVENTY PERCENT (70%) SHALL GO TO SALARIES, WAGES,
ALLOWANCES AND OTHER BENEFITS OF FACULTY AND/OR
NON-ACADEMIC PERSONNEL EXCEPT ADMINISTRATORS WHO ARE,
PRINCIPAL STOCKHOLDERS OF THE SCHOOL; AND

(b) AT LEAST TWENTY PERCENT (20%) SHALL GO TO THE IMPROVEMENT
OR MODERNIZATION OF BUILDINGS, EQUIPMENT, LIBRARIES,
LABORATORIES, GYMNASIA AND SIMILAR FACILITIES AND TO THE.
PAYMENT OF OTHER COSTS OF OPERATION.

(2) MISCELLANEOUS FEES ~ EACH PRIVATE SCHOOL MAY CHARGE, ASIDE FROM
TUITION, A REASONABLE AMOUNT OF REQUIRED MISCALLANEOUS FEES TO
PROVIDE FOR ACTUAL COSTS INCURRED FOR STUDENT SERVICES BASED ON A
REASONABLE RETURN OF INVESTMENT OF NOT MORE THAN SIX PERCENT (6%);
PROVIDED THAT THE PURPOSE FOR EACH AND EVERY SUB-ITEM UNDER THE
CATEGORY OF MISCELLANEOUS FEES SHALL BE CLEARLY INDICATED,

(3) VOLUNTARY FEES - EACH PRIVATE SCHOOL MAY CHARGE, ASIDE FROM TUITION
AND MISCALLANEOUS FEES, OTHER EXTRANEOUS FEES PROVIDED THAT THESE,
ARE VOLUNTARY, THE NON-PAYMENT OF WHICH SHALL NOT AFFECT A
PERSON'S STATUS AS A BONAFIDE STUDENT.

(4) NO INCREASES IN EITHER TUITION OR MISCELLANEOUS FEES SHOULD BE
GRANTED IN THE ABSENCE OF AN AGREEMENT, MADE THROUGH PUBLIC
HEARING, BETWEEN A SCHOOL’S COMPETENT AUTHORITY AND ITS STUDENTS,
PARENTS, NON-ACADEMIC PERSONNEL AND FACULTY EQUALLY
REPRESENTED.FURTHERMORE, THERE SHALL BE NO OTHER SCHOOL FEES
WHICH MAY BE REQUIRED ASIDE FROM TUITION AND MISCELLANEOUS FEES.

(5) The rates and charges adopted by schools pursuant to this provision shall be collectible, and their
application or use authorized, subject to the rules and regulations promulgated by the PRIVATE
SCHOOL FEE REGULATORY BOARD (PSFRB). (Ministry of Education, Culture and Sports.]

xxx.

ection 68, Penalty Clause. — Any person upon conviction for an act in violation of Section

28, Chapter 3, Title III above OR SECTION 42, CHAPTER 5 TITLE B OF THIS ACT, shall be
punished with a fine of not less than ONE HUNDRED THOUSAND PESOS (P100,000.00)
{ewo thousand pesos (P2,000.00)] nor more than THREE HUNDRED THOUSAND PESOS
(300,000.00) {ten thousand pesos (P10,000.00)] or imprisonment {for a maximum period] OF


NOT MORE THAN SIX (6) YEARS {two (2) years}, or both, in the discretion of the court,

MISREPRESENTATION OR MISDECLARATION OF ASSETS, INCOMES AND
LIABILITIES SHALL BE PRIMA FACIE EVIDENCE AS VIOLATING SECTION 42,
CHAPTER 5, TITLE B OF THIS ACT.

If the act is committed by a school corporation, the school head, together with the person or
persons responsible for the offense or violation shall be equally liable.”

SECTION 5. Creating the Private School Fee Regulatory Board ~ It is hercby created a
quasi-judicial regulatory body named the Private School Fee Regulatory Board (PSFRB) which
shall be attached to the Office of the President.

‘The PSFRB shall monitor and ensure the correct determination, collection and use of all fees
charged by educational institutions from their students as well as any other issue relating to the
proper allocation and disbursement of such fees.

‘The PSFRB's mandate does not include the regulation of curricula and other academic or
administrative matters within the competent jurisdiction of the Department of Education
(DepEd), Commission on Higher Education (CHE¢) or the Technological Education and Skills
Development Authority (TESDA).

SECTION 6. Composition of the Private School Fee Regulatory Board -'The PSERB shall
consist of one (1) chairperson, one (1) vice chairperson, and six (6) members of the board of
directors including two (2) youth representatives, all of which shall be appointed by the President.

‘The Chairperson and the Directors of the Board, except the youth representatives, shall be natural
bom citizens residing in the Philippines with recognized competence in at least one of the
following fields: law, education, finance, commerce, accounting, economics, and social sciences; or
a member of the academe of a reputable state university for at least five (5) years.

‘The youth representatives shall be not be less than eighteen (18) years of age but not more than
thirty-five (35) years of age upon their appointment, should be natural born citizens residing in the
Philippines and should fulfill at least one of the following: a ranking officer of a youth student
onganization of national scope, officer of a university student council of a reputable university or
an officer of a non-government organization with education as its primary advocacy. If, before the
term expires, a youth representative has reached the maximum allowable age, the youth
representative shall remain in the Board until his or her term expires,

At least one of the members of the board should be a certified public accountant, while another
should be a member of the Philippine bar with at least five (5) years of experience in the chosen
field of expertise. Likewise, at least wo (2) directors of the board should be women,

No policy, recommendation, fee increase or program may be approved and implemented by the
Board unless by a majority vote of all its members and with at least one (1) youth representative
having voted in favor of said measure.

SECTION 7. Terms of Office. — The chairperson, vice-chairperson and the directors of the board

5


shall serve a term of six years.

SECTION 8. Compensation and Emoluments for the Board. ~The chairperson shall enjoy the
same benefits, privileges and emoluments equivalent to the rank of Secretary while the
vice-chairman and the directors of the Board shall enjoy the benefits, privileges and emoluments
equivalent to the rank of Undersecretary.

SECTION 9.. Director-General of the Secretariat. ~The authority and responsibility for the
implementation of the board of directors’ mandate shall be vested on the Director-General of the
Board, which shall be appointed by the President from a list of three names that will be submitted
by the Board’s directors. Under no circumstance shall the Director-General be a member or
stockholder of any private educational institution,

‘The Director-General shall sit as a member of the board of directors and hence, shall enjoy the
same benefits, privileges and emoluments equivalent to the rank of Undersecretary.

SECTION 10. Duties and Functions of the Board. ~ The PSERB shall promulgate, within
sixty-days after this Act is in effect, the guidelines, rules and regulations for the implementation of
this Act subject o its duties and functions as follows:

(1) To issue, after conducting appropriate hearings with the concemed sectors, policies, plans,
programs and guidelines as may be necessary for the effective implementation of this Act;

(2) To conduct public hearings on any fee increase petition applied by private public institutions;

(3) To conduct hearings regarding any complaint filed before it regarding improper allocation of
school fees;

(4) To institute regional and/or provincial boards and to promulgate rules and regulations
regarding the conduct of hearings in exercise of its regulatory powers to its provincial and regional
offices;

(5) To issue rules and regulations governing proceedings before the Board;
(© To revise, amend or cancel License to Operate or Certificates of Accreditation granted either
by CHED, DepEd or TESDA to an institution found violating any of the rules and regulations

promulgated by it in accordance with this Act;

(7) To fix, impose and collect, and periodically review and adjust, reasonable fees and other related
charges for services rendered;

(8) To issue either a prohibitory or mandatory injunction, whether preliminary or permanent, in all
cases in which it has jurisdiction, and in which cases the pertinent provisions of the Rules of Court
shall apply;

(9) To punish for contempt of the Board, both direct and indirect, in accordance with the pertinent
provisions of, and the penalties prescribed by, the Rules of Court;


(10) To administer oaths and affirmations, issue subpoena and subpoena duces team and summon
witnesses to appear in any proceedings of the Board; and

(11) To perform such other functions and duties as may be provided by law.

SECTION 11. Budget of the Board. — Initially, the amount of one hundred million pesos
(P100,000,000.00) shall be charged against the following for the immediate implementation of this
Act: (1) Fifty million (P30,000,000) from the President’s contingency fund; and (2) Fifty million
(50,000,000) from the unprogrammed fund allocation.

‘Thereafter, such funds as may be necessary for the continued implementation of this Act shall be
included in the Annual General Appropriations Act.

SECTION 12. Transitory Provision. To give time for the institutionalization of the Board,
there shall be no fee increases, whether tuition or miscellancous, in the immediately following
academic year after this Act takes effect.

‘Thereafter, all tuition and miscellaneous fee increases intended by private schools will be referred
to the Board for appropriate action,

SECTION 13, Repealing Clause. — All laws, presidential decrees, executive orders, rules and
regulations ot parts thereof which are inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SECTION 14. Separability Clause. — If any part or provision of this Act shall be held
unconstitutional or invalid, other provisions hereof which are not affected shall continue to be in
full force and effect.

SECTION 15. Effectivity. — This Act shall take effect fifteen (15) days after its publication to two
(2) national newspapers of general circulation.

Approved,