HOUSE WF REPRESENTAMIVES

SEVENTEENTH CONGRESS OF THE ) RECEIVED
REPUBLIC OF THE PHILIPPINES — ) pore, 08 AUG 2016
First Regular Session ) 4 7:
INE 5
HOUSE OF REPRESENTATIV! EY:

H.No. 2604

LEST VION UNIT

Introduced by Representative Vilma Santos-Recto
6th District of Batangas

AN ACT
PROHIBITING TELECOMMUNICATION COMPANIES FROM IMPOSING AN
EXPIRATION PERIOD ON THE VALIDITY OF PREPAID CALL AND TEXT CARDS
AND THE FORFEITURE OF LOAD CREDITS THEREOF

Explanatory Note!

In 2013, the National Telecommunications Commission (NTC) reported that there are
approximately 100 million mobile phone subscriptions in the country; around 80% or 80 million
of which are prepaid.” Moreover, fixed telephone line, better known as landline, can now come
in prepaid. The large number of prepaid subscriptions has earned the Philippines the top spot on
the world-wide list of countries with the most prepaid users. Another report projected that mobile
subscriptions in the country will reach 117 million this year

Indeed, the prepaid call and text industry in the country has evolved tremendously. From
an era when prepaid load credit can only be purchased through large-denomination prepaid
cards, small-value prepaid cards and electronic loads are now readily available. Anyone can now
purchase load credit that suits ones’ budget at any given time. This development in the prepaid
industry has certainly benefited millions of Filipinos. By making prepaid load credits affordable,
our fellowmen are able to connect easily with their loved ones here and abroad.

In the recent past, however, there have been rampant complaints that prepaid subscribers
do not get the full value of the load credits that they paid for because of the expiration of prepaid
call and text cards and forfeiture of unutilized load credits. Currently, the expiration period of
prepaid call and text cards is two years while load credit’s expiry ranges from 3 days to 120 days
depending on the denomination. This means that unused prepaid cards will no longer work after
two years and that unutilized load credits will be forfeited after their corresponding expiration
period; hence, a waste of prepaid subscriber’s money and additional income for the
telecommunication company.

Its therefore the intent of this bill entitled the “Prepaid Load Protection Act of 2016” to
make the imposition of expiration period on the validity of prepaid call and text cards and
forfeiture of load credits prohibited acts with corresponding penalties. This will ensure that every
peso spent to purchase load credits are saved and usable until the day the-credits are
consumed. we

In the light of the foregoing, immediate passage of the ill is e:

' SBN 3322 filed by Sen. Miriam Defensor-Santiago during the 14% Congress was used as reference for this bill
2 The total number of prepaid subscribers was approximated from the reports of two (2) leading telecommunication
‘companies: Smart and Globe, published at www.abs-cbn.com.

>See “Mobile phone subscribers to hit 117M by 2016”. Accessed at _http://news.abs-
cbn.com/business/04/09/12/ph-mobile-phone-subscribers-hit-117m-2016 on June 20, 2016.



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SEVENTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES — )

First Regular Session )
HOUSE OF REPRESENTATIVES

H.No, 2604

Introduced by Representative Vilma Santos-Recto
6th District of Batangas

AN ACT
PROHIBITING TELECOMMUNICATION COMPANIES FROM IMPOSING AN
EXPIRATION PERIOD ON THE VALIDITY OF PREPAID CALL AND TEXT CARDS
AND THE FORFEITURE OF LOAD CREDITS THEREOF

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

SECTION 1. Title. — This Act shall be known as the “Prepaid Load Protection Act of
2016”.

SEC. 2. Declaration of Policy. ~ It is hereby declared the policy of the State to protect
the interest of the consumer, promote his general welfare and to establish standards of conduct
for business and industry. Towards this end, the state shall implement measures to achieve
among others, the protection of consumers against deceptive, unfair and unconscionable sales act
and practices.

SEC. 3.

efinition of Terms. ~ For the purpose of this Act, the term:
a) Load credits shall refer to the monetary value or the consumable amount loaded to a
mobile or landline phone via prepaid cards or electronic transfers that enable a
consumer to use telecommunication services.
b) Prepaid shall refer to the type of mobile or landline phone account that requires its
owners to purchase load credits before services are used.
©) Prepaid call and text card shall refer to a card with corresponding peso value that has
to be purchased to enable a subscriber to use telecommunication services.
SEC. 4. Prohibited Acts. — The following shall constitute prohibited acts of any
telecommunication company providing prepaid services and are hereby declared to be unlawful:
a) Imposition of an expiration period on the validity of unused prepaid call and text
cards;
b) Forfeiture of load credits stored on an active prepaid phone account via prepaid call
and text card or electronic transfer; and
©) Refusal to give a refund to any prepaid subscriber whose load credits were forfeited

without any valid cause.

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SEC.5. Penal Provision. — Any director, officer, employee or agent of a

telecommunication company providing prepaid services who shall violate any of the acts
mentioned under Section 4 hereof, shall, upon conviction, be subject to the penalty of a fine of
not less than One hundred thousand pesos (P100,000.00) but not to exceed One million pesos
(P1,000,000.00) or imprisonment of not less than two (2) years but not more than six (6) years,
or both, upon the discretion of the court.
If the violation was committed by or in the interest of a juridical person duly licensed to

engage in business in the Philippines, the following penalty shall be imposed:

a) First offense ~a fine of Five hundred thousand pesos (500,000.00);

b) Second offense - suspension of license to engage in business for a period of thirty (30)

days; and

©). Third offense ~ immediate revocation of license to engage in business.

SEC. 6. Information Dissemination. — The Philippine Information Agency (PIA) in
coordination with the National Telecommunications Commission (NTC) shall ensure the proper
and adequate information dissemination of the contents and benefits of this Act to the general
public especially to its intended beneficiaries.

SEC. 7. Implementing Rules and Regulation. ~ The NTC shall formulate the necessary
rules and regulations to implement the provisions of this Act within ninety (90) days after its
effectivity. The rules and regulations issued pursuant to this Act shall take effect fifteen (15)
days after its publication in a newspaper of general circulation.

SEC. 8. Separability Clause. - If any provision of this Act shall be held
unconstitutional, the remainder of the Act not otherwise affected shall remain in full force and
effect.

SEC. 9. Repealing Clause. — Any law, presidential decrees, executive orders,
proclamations or administrative regulations that are inconsistent with the provisions of this Act
are hereby amended, modified, superseded, or repealed accordingly.

SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,

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