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Republic of the Philippines !

House of Representatives
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

5446

House Bill No.

Introduced by Honorable ERLPE JOHN “PING” M. AMANTE

EXPLANATORY NOTE

Financial literacy is an important tool in achieving financial
inclusion, financial stability, economic growth and development.!
There is a growing consensus that financial literacy programs can
“play an important role in reducing economic inequalities as well as
empowering citizens and decreasing information asymmetries between
financial intermediaries and their customers.”?

Financial literacy is also seen to be helpful in preparing
consumers “for tough financial times, by promoting strategies that
mitigate risk such as accumulating savings, diversifying assets, and
purchasing insurance.” Moreover, it reinforces positive behaviors
such as timely payment of bills and avoidance of over-indebtedness.

Unfortunately, financial literacy is considerably low in the
Philippines. In the Financial Literacy Index released by MasterCard
last 2016, the country ranked 11" out of the 17 Asia-Pacific countries
included in the study; with the poor placing attributed to the
significant decline in basic money management.‘ In addition, the
country’s overall score of 62 was below the regional mark of 64.

\ Central Bank of Nigeria. (2015). National Financial Literacy Framework (Publication). Nigeria. Retrieved
March 22, 2017, from https: //www.cbn.gov.ng/out/2016 /efpd /GnanciaM20iiteracy. pat

2 Bel, S.'(n.d.). Why financial literacy matters for development. Retrieved March 22, 2017, from
hutp://ocedobserver.org/news/fullstory.php/aid 4967 /Why financial hteracy matters for-development.
hunt

The International Bank for Reconstruction and Development/The World Bank. (2009). The Case for
Financial Literacy in Developing Countries (Publication). Washington DC: The International Bank for
Reconstruction and Development/The World Bank. Retrieved March 22, 2017, from
hutps:/ /www.globalbrigades.org/media/ Financial_Literacy.paf

+ Mastercard. (n.d.). Singapore Tops Financial Literacy Index in Asia Pacific. Retrieved March 22, 2017,
from hitp://newsroom.mastercard.com /asia-pacifc/press-releases/ singapore-tops-financial-literacy”
index-in-asia-pacific/


According to the National Baseline Survey on Financial
Inclusion conducted by the Bangko Sentral ng Pilipinas, only 4 out of
10 Filipino adults (43.2%) have savings, while 32.3% used to save in
the past but have stopped saving money and the remaining 24.5%
have never experienced saving money at all.5 It also reported that
most Filipinos have or had debt (47.1% of adults borrow money, while
33.8% did so in the past and do not borrow anymore); with many of
them borrowing through informal means (61.9% from families,
relatives, and friends and 10.1% from informal lenders).

It is within this context that this bill, which seeks to declare a
national policy promoting financial literacy as a tool for poverty
alleviation and national development, is filed. This bill includes
provisions that take guidance from the policy handbook "National
Strategies for Financial Education” released by the Organization for
Economic Co-operation and Development - International Network on
Financial Education. Among these is the constitution of the National
Financial Literacy Council and the Financial Literacy Promotions
Office to recognize the importance of having dedicated public
institutions that will ensure the effective implementation of national
Strategies that are sustainable and better suited to achieving
behavioral changes.° These bodies shall also advance greater
accountability and visibility to the public, as well as whole-of-
government recognition.

The bill also pushes for the application of various approaches to
financial education, such as harnessing the schools and workplaces
as learning environments, integration in anti-poverty programs, and
multi-channel delivery of learning tools and information.

In view of the importance of promoting financial literacy among

Filipinos in the achievement of inclusive and sustainable development,
the passage of this bill is earnestly sought.

winter dete

punaneko Sentral ng Pilipinas. (2015). National Baseline Survey on Financial Inclusion (Publication).
Philippines: | Bangko Sentral ng Pilipinas. Retrieved March 22,2017, "fron
hhttp:/ /www.bsp.gov.ph /downloads publications /2015 /NBSFI rt.pat

‘Organization for Economic Co-operation and Development. (2015). National Strategies for Financial
‘Education OBCD/INFE Policy Handbook (Publication). Organization for Economic ration and
Development. Retrieved March 22, 2017, from http://www gpfi.org/sites default files /documents/06-
(OBCD-INFE%20Policy%420Handbook%200n%20the%20 Implementation.,.O.pdf


Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

5446

House Bill No.

Introduced by Honorable ERLPE JOHN “PING” M. AMANTE.

AN ACT
DECLARING A NATIONAL POLICY THE PROMOTION OF
FINANCIAL LITERACY AS A TOOL FOR POVERTY ALLEVIATION
AND NATIONAL DEVELOPMENT

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

SECTION 1. Short Title. - This Act shall be known as the
“Financial Literacy Promotions Act of 2017.”

SECTION 2. Declaration of Policy. - The State declares financial
literacy as a vital tool in improving the socio-economic welfare of all
Filipinos, which must be harnessed in developing a robust, inclusive,
and sustainable national economy.

Towards this end, the State shall seek to:

a. Instil financial literacy in young Filipinos by incorporating its
modules to the basic education system;

b. Integrate financial literacy in the implementation of poverty
alleviation programs to ensure their effectivity and
sustainability;

c. Promote financial literacy in all government and private
workplaces; and,

d. Disseminate financial education materials to a wide audience
through various media platform.


SECTION 3. Definition of Terms. For purposes of this Act, the
following terms are hereby defined:

a. Financial literacy - the combination of one’s understanding of
financial products and concepts; and ability and confidence to
appreciate financial risks and opportunities, to make informed
choices, to know where to go for help, and to take other effective
actions to improve financial well-being;

b. Financial education materials — include all materials that can be
used as study or reference materials to enhance financial
literacy;

c. Financial literacy module - a module used in schools that is
used to teach financial literacy to learners;

d. Poverty alleviation program - a program initiated by the national
or local government that helps the poor gain access to economic
opportunities that promote sustainable livelihood, as well as
social services, such as education and healthcare.

SECTION 4. Creation of the National Financial Literacy Council. -
There shall be created a National Financial Literacy Council (NFLC)
composed of the following:

Ex-officio members:

. Secretary of Finance or a representative;

. Secretary of Education or a representative;

. Secretary of Labor and Employment or a representative;

- Chairperson of the Civil Service Commission or a
representative;

e. Director General of the Philippine Information Agency or a

representative;

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Appointive members:
a. Two (2) representatives from the private sector;
b. A representative from civil society organizations; and,
c. A representative from the academe.

The Secretary of Finance shall serve as Chairperson
of the NFLC while the Secretary of Education shall serve as Vice
Chairperson. The selection, appointment, and term of office of the
appointive members shall be in accordance with the pertinent
provisions of Republic Act No. 10149, otherwise known as the GOCC
Governance Act of 2011.

SECTION 5. Duties of the NFLC. - The NFLC shall perform the
following duties:

a. Formulate a national plan of action for the implementation of
this Act, which will include:


1. Crafting of financial literacy modules and_ their
integration in the curriculum of all levels of basic
education;

2. Mandating the conduct of financial literacy sessions for
all beneficiaries of state-sponsored poverty alleviation
programs, particularly those that provide grants or
subsidies;

3. Setting of guidelines to encourage public and private
employers to implement financial literacy programs for
their employees; and,

4. Disseminating, at least once (1) monthly, of financial
education materials in all media platforms, such as,
but not limited to, television, radio, print media, online
media, and social media;

b. Recommend to the President and the Congress all policy
matters related to the promotion of financial literacy;

c. Coordinate and integrate various government and private
sector activities relating to financial literacy;

d. Promote the exchange of information on financial literacy
between public and private sectors;

e. Perform monitoring and regular impact evaluations of
financial literacy programs; and,

f. Exercise such other powers as may be necessary to carry out
the purposes of this Act.

SECTION 6. Creation of the Financial Literacy Promotions Office.
~ There shall be a Financial Literacy Promotions Office (FLPO) to be
attached to the Department of Finance.

The FLPO shall perform the following functions:

a. Coordinate the preparation of position papers and
background materials for discussion or approval during
NFLC meetings;

b. Assist the NFLC in coordinating and monitoring financial
literacy programs and activities of all government agencies
and the private sector;

¢. Submit periodic reports to the NFLC on the progress and
accomplishment of its work programs;

d. Prepare a yearly report on the status of financial literacy in
the country; and,

e. Perform ad hoc functions as authorized by the NFLC.

SECTION 7. Implementing Rules and Regulations. - Within sixty
(60) days from the approval of this Act, the Secretary of Finance, in
consultation with the heads of the DepEd, DOLE, CSC, and PIA, shall
formulate the rules and regulations implementing the provisions of
this Act.


SECTION 8. Appropriation. - The amount necessary for the
initial implementation of this Act shall be charged against the
appropriations of the Department of Finance under the current
General Appropriations Act (GAA). Thereafter, the amount for its full
implementation shall be included in the GAA as a distinct and
separate item.

SECTION 9. Repealing Clause. - All laws, decrees, executive
orders, proclamations, rules and regulations, or parts thereof
inconsistent herewith are hereby repealed or modified accordingly.

SECTION 10. —_Separability Clause. - If any provision of this Act is
held invalid or unconstitutional, the other provisions not affected
hereby shall remain valid and subsisting.

SECTION 11. Effectivity. - This Act shall take effect fifteen (15)

days after its publication in at least two (2) national newspapers of
general circulation.

Approved,