Republic of the Philippines
Aouse of Representatives
Quezon City, Meteo Manis

EIGHTEENTH CONGRESS
Second Regular Session

7118

House Bill No.

INTRODUCED BY
REP. ALFRED VARGAS

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

EXPLANATORY NOTE

Recent data provided by big telecommunications companies reveal
that prepaid account holders in the Philippines account for 134.59 million
subscribers in 2018.! According to the Philippine Statistics Authority, only
100.97 million comprise the Filipino population in the 2015 census. This
relatively high number of prepaid users exceeding the Philippine population
implies multiple subscription per individual, and equates to an evolving
landscape in the prepaid call card industry.

Nowadays, prepaid cards can be purchased in small amounts unlike
before when it can only be sold in large denominations. The existence of
electronic loads made it readily available and suited to the particular needs
and budget of any consumer.

The 1987 Constitution, in its Article Il, Section 9, provides that:

“The State shall promote a just and dynamic social order that will ensure
the prosperity and independence of the nation, free the people from
poverty through policies that provide adequate social services, promote full
employment, a rising standard of living, and an improved quality of life for
all.”

| The Global Economy. 2018. “Philippines: Mobile Phone Subscribers”.
https: / /www.theglobaleconomy.com/Philippines/Mobile_phone_subscribers/ (Accessed 12
July 2020)



In their efforts to uphold this State principle, the National
Telecommunications Commission (NTC), Department of Information and
Communications Technology (DICT), and the Department of Trade and
Industry (DTI) issued a joint memorandum circular (MC 05-12-2017) in
2018, mandating telecommunications companies to extend the expiration
period of all prepaid loads as part of government efforts to protect the rights
of consumers in the telecommunications industry.

However, there are still numerous complaints from the consuming
public of load expirations and forfeiture of unutilized load credits.

Thus, it is the intention of this bill to make the telecommunications
companies liable if there be an imposition of expiration period in prepaid call
cards as well as unutilized load credits.

In view of the foregoing, the immediate passage of this measure is
earnestly sought.

FRED VARGAS


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

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No. 7118

INTRODUCED BY
REP. ALFRED VARGAS

AN ACT
PROHIBITING TELECOMMUNICATIONS 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. Short Title. - This Act shall be known as the “Prepaid Load
Protection Act”.

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

SECTION 3. Definition 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 transfer that enable a consumer to
use telecommunications 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.


(c) 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 telecommunications services.

SECTION 4. Prohibited Acts. — The following shall constitute prohibited
acts of any telecommunications 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
(c) Refusal to give a refund to any prepaid subscriber whose load
credits were forfeited without any valid cause.

SECTION 5. Penal Provisions. - Any director, officer, employee or agent
of a telecommunications 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) year, 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) 1st Offense - a fine of Five Hundred Thousand Pesos
(P500,000.00)
(b) 24 Offense — suspension of license to engage in business for a
period of thirty (30) days; and
(c) 3 Offense — immediate revocation of license to engage in
business.

SECTION 6. Information Dissemination. - The Philippines 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.

SECTION 7. Implementing Rules and Regulations (IRR). ~ The National
Telecommunications Commission 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.

SECTION 8. Separability Clause. - If any provision or part thereof is held
invalid or unconstitutional, the remainder of the law or the provision not
otherwise affected shall remain valid and subsisting.

SECTION 9. Repealing Clause. - All laws, presidential decree or issuance,
executive orders, letter of instruction, administrative order, rule and
regulation contrary to or inconsistent with the provisions of this Act are
hereby repealed, modified, or amended accordingly.

SECTION 10. Effectivity. - This Act shall take effect fifteen (15) days
following its publication in at least two (2) newspapers of general circulation.

Approved,