TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
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SENATE
S. No. 1316
Senate
of 11)0 ^cc. ftarp
25 SEPH P2:04
RECEIVED 3Y;
Introduced by Senator Bam Aquino
AN ACT
EXPANDING THE APPLICATION OF THE PROCEEDS OF THE SPECIAL 
EDUCATION FUND, AMENDING FOR THE PURPOSE SECTIONS 235 AND 
272 OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE "LOCAL 
GOVERNMENT CODE OF 1991", AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The Special Education Fund (SEF), established under the Local Government 
Code of 1991, was intended to support the delivery of basic education at the local 
level. The SEF is meant to finance key education-related expenditures such as the 
operation and maintenance of public schools, construction and repair of school 
buildings, educational research, procurement of books, and sports development, as 
determined by the local school board. However, more than three decades since the 
law's enactment, the allowable uses of the SEF remain narrowly defined under Section 
272, limiting its potential to respond to the evolving and increasingly complex needs 
of the education sector.
Local government units (LGUs) are at the frontline of delivering education 
support services. Their responsibilities have expanded beyond the operation and 
maintenance of public schools to include urgent needs such as early childhood care, 
feeding programs, learning continuity, digital education, inclusive programs for 
learners with disabilities, and mental health services. These demands were made even 
more evident during the COVID-19 pandemic and in its aftermath, revealing critical 
service gaps and rigidities in the current law.
This bill seeks to expand the application of the SEF to align it with current 
education priorities, bridge service delivery gaps, and ensure a more responsive, 
inclusive, and holistic approach to local education governance. The bill proposes to:
Enumerate an updated and comprehensive list of allowable SEF expenditures, 
including support for early childhood care and development, flexible learning.


digital tools, Alternative Learning System (ALS), learners with disabilities, sports 
development, and academic recovery programs;
Institutionalize a six-year SEF Investment Program aligned with local and 
education sector plans;
Strengthen transparency through mandatory annual reporting and public 
disclosure of SEF utilization;
Encourage the establishment of Local Education Offices to professionalize 
education governance at the local level;
Promote inter-LGU cooperation for more efficient, equitable, and cost-effective 
delivery of education services; and
Introduce a system of performance-based incentives for LGUs that demonstrate 
good fiscal governance and effective use of the SEF.
This measure enables the SEF to become more responsive to the evolving needs 
of learners and communities, by enhancing planning, strengthening accountability, 
and ensuring alignment with both local development priorities and national education 
goals. Available data from the Bureau of Local Government Finance and the 
Commission on Audit indicate that a significant portion of SEF collections remain 
unutilized each year due to outdated guidelines, unclear expenditure authority, and 
fragmented planning processes. This reform seeks to unlock these idle resources and 
direct them toward programs and services that directly support learners, teachers, 
and schools.
In expanding the SEF's application while ensuring transparency and efficiency, 
this measure empowers local school boards to become proactive agents of education 
reform and supports the shared goal of delivering accessible, inclusive, and quality 
education for all Filipino learners.
In view of the foregoing, the of this bill is earnestly sought.


TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
SENATE
S. No. 1316
(©ffltP of liir £>ra PM!'J>
25 SEP-1 P2:04
RECEIVED BY:
Introduced by Senator Bam Aquino
AN ACT
EXPANDING THE APPLICATION OF THE PROCEEDS OF THE SPECIAL 
EDUCATION FUND, AMENDING FOR THE PURPOSE SECTIONS 235 AND 
272 OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE "LOCAL 
GOVERNMENT CODE OF 1991", AND FOR OTHER PURPOSES
Be it enacted by the Senate/House of Representatives of the Philippines in Congress 
assembled:
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Section 1. Section 272 of Republic Act (RA) No. 7160 is hereby amended to
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read as follows:
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"Section 272. Application of the Proceeds of the Additional [Gfie] TWO 
Percent SEF Tax. - The proceeds from the additional [one percent (1%)] 
TWO PERCENT (2%) tax on real property accruing to the Sfiecial 
Education Fund (SEF) shall be automatically released to the local school 
boards: Provided, That, in case of provinces, the proceeds shall be 
divided equally between the provincial and municipal school boards: 
Provided, however, That the proceeds shall be allocated [for the 
operation and maintenance of public schools, construction and repoir-ef
school buildings, facilities and equipment, and-educational research,
purchase of books and periodicals,-and-sports-development os
determined and ■ approved by-the -local school board.], FOR THE 
FOLLOWING EXPENSES, AS DETERMINED AND APPROVED BY 
THE LOCAL SCHOOL BOARD:


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1. OPERATION AND MAINTENANCE OF PUBLIC SCHOOLS, 
INCLUDING BUT NOT LIMITED TO THE FOLLOWING:
a. PAYMENT OF COMPENSATION/ALLOWANCES OF 
LOCALLY-HIRED TEACHERS;
b. PAYMENT OF SALARIES/WAGES OF UTILITY 
WORKERS AND SECURITY GUARDS HIRED BUT HAVE 
NOT BEEN PROVIDED SUCH POSITION IN THE DEPED 
BUDGET;
C. PAYMENT OF HONORARIA AND ALLOWANCES OF 
LOCALLY-HIRED PERSONNEL, TRAINED AND 
QUALIFIED TUTORS AND LEARNING FACILITATORS;
d. ANY ADDITIONAL AUTHORIZED ALLOWANCES
GRANTED BY LOCAL GOVERNMENT UNITS TO 
NATIONALLY-HIRED TEACHING AND NON-TEACHING 
PERSONNEL CHARGEABLE AGAINST THE SEF AS OF 31 
DECEMBER 1997: 
PROVIDED, THAT, SUCH
ADDITIONAL AUTHORIZED ALLOWANCES GRANTED 
THEREAFTER SHALL BE CHARGED TO THE GENERAL 
FUND: PROVIDED FURTHER, THAT, IN CASE OF 
FOURTH (4TH) AND FIFTH (5TH) CLASS 
MUNICIPALITIES, SUCH ADDITIONAL AUTHORIZED 
ALLOWANCES MAY STILL BE CHARGED TO SEF AS 
LONG AS THE SAME DOES NOT EXCEED TEN PERCENT 
(10%) OF THEIR SEF, SUBJECT TO EXISTING 
BUDGETING RULES AND REGULATIONS;
e. PAYMENT OF EXPENSES PERTAINING TO THE 
OPERATION OF SCHOOLS, WHICH MAY INCLUDE, BUT 
NOT LIMITED TO UTILITIES;


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f. COMMUNICATION EXPENSES SUCH AS BUT NOT 
LIMITED TO LANDLINE PHONE COMMUNICATION; 
LOAD FOR CALL, TEXT, AND DATA; MOBILE PHONE 
COMMUNICATION AND INTERNET CONNECTION;
g. PAYMENT OF SUBSCRIPTION FEES FOR 
VIDEOCONFERENCING OR REMOTE COMMUNICATION 
TOOLS/APPLICATIONS OR PLATFORMS;
h. PAYMENT OF EXPENSES RELATED TO THE CONDUCT 
OF CO-CURRICULAR AND OTHER LEARNER SUPPORT 
ACTIVITIES THAT PROMOTE HOLISTIC LEARNER 
DEVELOPMENT AND WELL-BEING, LEADERSHIP, AND 
VALUES AS MAY BE PROVIDED UNDER THE 
CORRESPONDING DEPARTMENT OF EDUCATION 
ISSUANCES;
i. ACQUISITION, PRODUCTION, REPRODUCTION, AND 
PRINTING OF LEARNING MATERIALS FOR LEARNERS 
SUCH AS ACTIVITY SHEETS, SELF-LEARNING 
MODULES, STUDY GUIDES, MANUALS, AND 
TEXTBOOKS APPROVED BY THE DEPARTMENT OF 
EDUCATION;
j. PURCHASE OF EXTERNAL STORAGE DEVICES;
k. PAYMENT OF VOLUNTARY CONTRIBUTIONS 
AUTHORIZED BY EXISTING LAWS;
l. PAYMENT OF COMPENSATION AND AUTHORIZED 
ALLOWANCES, COMPETENCY TRAININGS, 
BENCHMARKING, AND OTHER BENEFITS OF LOCALLY


HIRED TEACHING AND NON-TEACHING PERSONNEL; 
AND
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m. PAYMENT OF COST AND EXPENSES IN THE 
DISTRIBUTION AND RETRIEVAL OF LEARNING 
MATERIALS FOR THE LEARNERS SUCH AS, BUT NOT 
LIMITED TO, TRANSPORTATION EXPENSES OF DEPED 
PERSONNEL AND EXPENSES IN THE DISTRIBUTION 
ON THE RETRIEVAL OF SELF-LEARNING MODULES, 
AND SHIPMENT, DELIVERY, AND COURIER SERVICES;
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2. OPERATION OF THE FOLLOWING EDUCATION PROGRAMS: 
(I) SPECIAL EDUCATION, (II) OPEN HIGH SCHOOL CLASSES, 
(III) MADRASAH CLASSES, (IV) INDIGENOUS PEOPLES 
EDUCATION CLASSES, AND (V) FLEXIBLE LEARNING 
DELIVERY;
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3. ACQUISITION AND TITLING OF SCHOOL SITES AND LANDS, 
AND, CONSTRUCTION, REPAIR, AND MAINTENANCE OF 
SCHOOL BUILDINGS, INCLUDING BUT NOT LIMITED TO, 
CONSTRUCTION, REPAIR AND MAINTENANCE OF LEARNING 
CENTERS, LIBRARIES, SCHOOL DORMITORIES, AND 
CENTRAL KITCHENS.
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4. ACQUISITION AND MAINTENANCE OF FACILITIES AND 
EQUIPMENT, INCLUDING BUT NOT LIMITED TO,
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a. LABORATORY, TECHNICAL AND SIMILAR APPARATUS, 
INFORMATION TECHNOLOGY EQUIPMENT, AND 
COROLLARY SUPPORT SERVICES, PROVIDED, IT IS 
SUBJECT TO PREVAILING REQUIREMENTS AND 
SPECIFICATIONS OF THE DEPARTMENT OF 
EDUCATION, SUCH AS


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i. PERSONAL COMPUTERS, LAPTOP COMPUTERS, 
TABLETS, NOTEBOOKS, AND SMARTPHONES;
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ii. PRINTER, SCANNER, PHOTOCOPYING 
MACHINE, AND OTHER PRINTING OR 
PHOTOCOPYING EQUIPMENT AND THEIR 
CONSUMABLES;
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iii. TELEVISION SET, ANTENNA OR CABLE 
SATELLITE CONNECTION, RADIO WITH AM/ FM 
CHANNEL, TWO-WAY RADIO FOR REMOTE OR 
OFF-GRID AREAS;
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iv. RADIO FREQUENCY IDENTIFICATION (RFID) 
SYSTEM;
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V. CLOSED-CIRCUIT TELEVISION (CCTV); AND
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Vi. PRIMARY AND SECONDARY BATTERIES, CAR 
BATTERIES AND SOLAR PANELS;
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b. SCHOOL FURNITURE AND FIXTURES;
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C. SERVICE VEHICLES; AND
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d. PAYMENT OF EXPENSES PERTAINING TO THE 
OPERATION AND MAINTENANCE OF HEALTH 
FACILITIES.
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5. EDUCATIONAL RESEARCH OTHER THAN RESEARCH 
SUBJECT AREAS FUNDED IN THE BUDGET OF THE 
DEPARTMENT OF EDUCATION, AND PRINTING OF 
INFORMATION, EDUCATION AND COMMUNICATION 
MATERIALS OF SOCIAL BEHAVIORAL CHANGE MATERIALS;


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6. PURCHASE OF BOOKS AND PERIODICALS FOR THE 
LIBRARIES, INSTRUCTIONAL MATERIALS, WORKBOOKS 
AND TEXTBOOKS, AND ONLINE SUBSCRIPTIONS OF BOOKS, 
PERIODICALS AND JOURNALS, AND SOFTWARE;
7. SPORTS DEVELOPMENT, INCLUDING BUT NOT LIMITED TO,
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a. EXPENSES FOR SCHOOL SPORTS ACTIVITIES AT THE 
NATIONAL, REGIONAL, DIVISION, DISTRICT, 
MUNICIPAL AND BARANGAY LEVELS, AS WELL AS FOR 
OTHER DEPARTMENT OF EDUCATION-RELATED 
ACTIVITIES;
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b. CONSTRUCTION, REPAIR, AND MAINTENANCE OF 
SPORTS FACILITIES SUCH AS GYMNASIUMS AND 
SPORTS AREAS AND OTHER SIMILAR FACILITIES; 
AND
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c. EXPENSES FOR SPORTS SUPPLIES AND EQUIPMENT 
UNDER THE APPROVED SPORTS SUPPLIES AND 
EQUIPMENT PROGRAM OF THE DEPARTMENT OF 
EDUCATION;
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8. FUNDING FOR THE EARLY CHILDHOOD CARE AND 
DEVELOPMENT (ECCD) PROGRAM, INCLUDING BUT NOT 
LIMITED TO,
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a. SALARIES/ ALLOWANCES OF LOCALLY-HIRED CHILD 
DEVELOPMENT TEACHERS AND WORKERS;
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b. ORGANIZATION AND SUPPORT OF PARENT 
COOPERATIVES TO ESTABLISH COMMUNITY-BASED 
ECCD PROGRAMS;


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c. CONTINUING PROFESSIONAL DEVELOPMENT OF 
ECCD PUBLIC SERVICE PROVIDERS;
d. PROVISION OF FACILITIES FOR THE CONDUCT OF THE 
ECCD PROGRAM;
e. PAYMENT OF EXPENSES PERTAINING TO THE 
ESTABLISHMENT, CONVERSION, AND OPERATIONS 
OF THE NATIONAL CHILD DEVELOPMENT CENTERS 
(NCDCS), INCLUDING BUT NOT LIMITED TO 
UTILITIES AND COMMUNICATION; AND
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f. IMPLEMENTATION OF OTHER DELIVERY MODES FOR 
EARLY CHILDHOOD CARE WHICH INCLUDE: (2) 
CENTER-BASED APPROACH; AND (2) HOME-BASED 
APPROACH;
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9. FUNDING FOR THE IMPLEMENTATION OF THE NATIONAL 
FEEDING PROGRAM, INCLUDING BUT NOT LIMITED TO THE 
FOLLOWING:
a. SUPPLEMENTAL FEEDING PROGRAM FOR CHILDREN 
IN CDCS AND DAYCARE CENTERS, AND THOSE IN 
SUPERVISED NEIGHBORHOOD PLAY (SNP);
b. SCHOOL-BASED FEEDING PROGRAM;
C. MILK FEEDING PROGRAM;
d. MICRONUTRIENT SUPPLEMENTS;
e. HEALTH EXAMINATION, VACCINATION, AND 
DEWORMING;


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f. GULAYAN SA PAARALAN;
g. WATER, SANITATION, AND HYGIENE (WASH); AND
h. INTEGRATED NUTRITION EDUCATION, BEHAVIORAL 
TRANSFORMATION, AND SOCIAL MOBILIZATION;
10. FUNDING FOR THE IMPLEMENTATION OF THE 
ALTERNATIVE LEARNING SYSTEM (ALS), INCLUDING BUT 
NOT LIMITED TO, THE FOLLOWING:
a. ENHANCEMENT OF LITERACY MAPPING;
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b. IDENTIFICATION AND MOBILIZATION AND 
PROSPECTIVE ALS LEARNERS;
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C. DEVELOPMENT AND MAINTENANCE OF CONDUCIVE 
LEARNING ENVIRONMENT SUCH AS COMMUNITY 
LEARNING CENTERS;
d. PROVISION OF SUPPORT SERVICES TO ALS 
LEARNERS SUCH AS TRANSPORTATION, MEALS, AND 
ALLOWANCES;
e. CAPACITY-BUILDING ACTIVITIES FOR ALS TEACHERS 
AND LEARNERS;
f. PROVISION OF TEACHING AND LEARNING SUPPLIES 
AND EQUIPMENT;
g. PRINTING AND REPRODUCTION OF ALS LEARNING 
RESOURCES;
h. HIRING OF COMMUNITY ALS IMPLEMENTERS;


i. SUPPORT FOR POST-PROGRAM ACTIVITIES; AND
j. INTRODUCTION OF LOCAL INNOVATIONS.
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11. FUNDING FOR DELIVERY OF SUPPORT AND RELATED 
SERVICES FOR LEARNERS WITH DISABILITIES, INCLUDING 
BUT NOT LIMITED TO THE FOLLOWING:
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a. PROVISION OF SITES, BUILDINGS, OR CENTERS 
WHERE THERE ARE NO EXISTING SCHOOL 
FACILITIES;
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b. PROVISION OF ASSISTIVE DEVICES, INSTRUCTIONAL 
MATERIALS, AND TEACHER'S TRAINING;
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C. DELIVERY OF HEALTH AND NUTRITION SERVICES 
AND INTERVENTIONS AND EDUCATIONAL 
ASSESSMENT PROGRAMS FOR LEARNERS WITH 
DISABILITIES IN THEIR RESPECTIVE LOCALITIES 
THAT SHALL BE INITIATED BY THE DEPARTMENT OF 
HEALTH AND DEPARTMENT OF EDUCATION; AND
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d. PROVISION OF TRAINING ON LIVELIHOOD AND 
ENTREPRENEURIAL SKILLS, IN COORDINATION 
WITH DEPARTMENT OF LABOR AND EMPLOYMENT 
AND TECHNICAL EDUCATION AND SKILLS 
DEVELOPMENT AUTHORITY;
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12. FUNDING FOR THE IMPLEMENTATION OF THE PARENTS 
EFFECTIVENESS SERVICE (PES) PROGRAM, INCLUDING BUT 
NOT LIMITED TO, CONDUCT OF PARENT EFFECTIVENESS 
SESSIONS, AND PRODUCTION AND DISTRIBUTION OF PES


MODULE MANUALS AND lEC MATERIALS TO PARENTS AND 
GUARDIANS;
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13. FUNDING FOR THE IMPLEMENTATION OF THE ACADEMIC 
RECOVERY AND ACCESSIBLE LEARNING (ARAL) PROGRAM, 
INCLUDING BUT NOT LIMITED TO, REMUNERATION OF 
PARA-TEACHERS WHO SERVE AS TUTORS, AND PAYMENT OF 
EXPENSES ON DATA PLANS AND COMMUNICATION 
EXPENSES TO PARA-TEACHERS AND PRE-SERVICE 
TEACHERS;
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14. FUNDING FOR LEARNER SUPPORT PROGRAMS, 
INCLUDING BUT NOT LIMITED TO, MENTAL HEALTH 
PROGRAMS AND CHILD PROTECTION PROGRAMS;
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AS LOAN COLLATERAL FOR ANY OF THE 
AFOREMENTIONED PURPOSES: PROVIDED, THAT THE 
PROJECT TO BE FINANCED IS APPROVED BY THE LOCAL 
SCHOOL BOARD: PROVIDED, FURTHER, THAT THE LOCAL 
GOVERNMENT UNIT INCLUDES THE LOAN IN ITS BUDGET 
AND HAS PROVIDED THE PROPER APPROPRIATIONS 
THEREFOR; AND
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ALL SUCH OTHER EXPENSES THAT MAY BE PROVIDED BY 
LAW, RULES AND REGULATIONS.
NOTWITHSTANDING ANY PROVISION TO THE 
CONTRARY, ALL EXPENSES ENUMERATED UNDER THIS 
SECTION SHALL BE SUBJECT TO THE PREVAILING POLICIES 
AND GUIDELINES OF THE DEPARTMENT OF EDUCATION AND 
RELEVANT GOVERNMENT AGENCIES."
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Sec. 2. Special Education Fund Investment Program. - A new Section 272-A is
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hereby inserted after Section 111 of RA No. 7160, to read as follows:
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"SEC. 272-A. SPECIAL EDUCATION FUND INVESTMENT 
PROGRAM. - THE LOCAL SCHOOL BOARD IN EACH PROVINCE, 
CITY, OR MUNICIPALITY SHALL FORMULATE A SIX (6)-YEAR 
SEF INVESTMENT PROGRAM WHICH SHALL BE ALIGNED AND 
COMPLEMENTARY WITH THE LOCAL DEVELOPMENT 
INVESTMENT PROGRAM, IN ITS RESPECTIVE PROVINCE, CITY, 
OR MUNICIPALITY, AND THE SCHOOL IMPROVEMENT PLAN 
AND THE DIVISION EDUCATION DEVELOPMENT PLAN, IN ITS 
RESPECTIVE SCHOOL LEVEL AND DIVISION LEVEL WITHIN THE 
DEPARTMENT OF EDUCATION."
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Sec. 3. Reporting and Transparency. - A new Section 272-B is hereby inserted
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after Section 272-A of RA No. 7160, to read as follows:
"SEC. 272-B. REPORTING AND TRANSPARENCY. - ALL LOCAL 
SCHOOL BOARDS SHALL SUBMIT AN ANNUAL REPORT ON THE 
COLLECTION, ALLOCATION, AND UTILIZATION OF THE SEF TO 
THE BUREAU OF LOCAL GOVERNMENT FINANCE UNDER THE 
DEPARTMENT OF FINANCE, COPY FURNISHED THE LOCAL 
SANGGUNIAN CONCERNED, REGIONAL OFFICES OF THE 
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, 
DEPARTMENT OF EDUCATION, AND THE DEPARTMENT OF 
BUDGET AND MANAGEMENT ON OR BEFORE 31 MARCH OF THE 
SUCCEEDING YEAR.
THE BUREAU OF LOCAL GOVERNMENT FINANCE SHALL 
THEN SUBMIT TO THE SENATE COMMITTEES ON LOCAL 
GOVERNMENT AND BASIC EDUCATION AND THE HOUSE 
COMMITTEES ON LOCAL GOVERNMENT AND BASIC EDUCATION 
AND CULTURE A CONSOLIDATED REPORT ON THE COLLECTION
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AND UTILIZATION OF THE SEF WITHIN NINETY (90) DAYS 
FROM RECEIPT OF REPORTS FROM THE LOCAL GOVERNMENT 
UNITS.
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ALL REPORTS ON THE SEF SHALL BE POSTED IN AT LEAST 
THREE (3) CONSPICUOUS PUBLIC PLACES, THE WEBSITES OF 
ALL LOCAL GOVERNMENT UNITS, AND THE FULL DISCLOSURE 
POLICY PORTAL BEING ADMINISTERED BY THE DEPARTMENT 
OF INTERIOR AND LOCAL GOVERNMENT."
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Sec. 4. Local Education Office. - A new Section 272-C is hereby inserted after
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"SEC. 272-C. LOCAL EDUCATION OFFICE - EVERY LOCAL 
GOVERNMENT UNIT IS ENCOURAGED TO ESTABLISH A LOCAL 
EDUCATION OFFICE THAT SHALL BE RESPONSIBLE FOR 
MONITORING, COORDINATING, AND IMPLEMENTING 
EDUCATION PROGRAMS AND INITIATIVES WHICH ARE 
SPECIFICALLY FUNDED THROUGH THE SEF. THE 
ORGANIZATIONAL STRUCTURE AND STAFFING PATTERN OF 
THE LOCAL EDUCATION OFFICE SHALL TAKE INTO 
CONSIDERATION ITS SERVICE REQUIREMENTS AND THE 
LOCAL GOVERNMENT UNIT'S FINANCIAL CAPABILITY, 
SUBJECT TO THE MINIMUM STANDARDS AND GUIDELINES 
PRESCRIBED BY THE CIVIL SERVICE COMMISSION."
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Sec. 5. Inter-Local Cooperation. - A new Section 272-D is hereby inserted after
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Section 272-C of RA No. 7160, to read as follows:
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"SEC. 272-D. INTER-LOCAL COOPERATION. - LOCAL 
GOVERNMENT UNITS, THROUGH APPROPRIATE ORDINANCES, 
MAY ENTER INTO INTER-LOCAL COOPERATION AGREEMENTS 
FOR THE POOLING, SHARING, OR JOINT IMPLEMENTATION OF
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PROGRAMS FUNDED THROUGH THE SEF: PROVIDED, THAT 
COLLABORATION RESULTS IN ECONOMIES OF SCALE, 
EFFICIENCY IN RESOURCE USE, EQUITABLE DISTRIBUTION OF 
LEARNING OPPORTUNITIES AND OVERALL IMPROVEMENT OF 
THE EDUCATIONAL SYSTEM WITHIN THEIR REGION: 
PROVIDED, FURTHER, THAT COLLABORATION PROVIDES 
IMPROVED ACCESS TO EDUCATION SERVICES AND SUPPORT 
TO EARLY CHILDHOOD DEVELOPMENT, NUTRITION 
INTERVENTIONS, AND ALTERNATIVE LEARNING SYSTEMS."
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Sec. 6. Incentives For Compliant And Efficient Local Government Units. 
- A new Section 272-E is hereby inserted after Section 272-D of RA No. 
7160, to read as follows:
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"SEC. 272-E. INCENTIVES FOR COMPLIANT AND EFFICIENT 
LOCAL GOVERNMENT UNITS. - TO PROMOTE FISCAL 
DISCIPLINE AND EFFECTIVE UTILIZATION OF THE SPECIAL 
EDUCATION FUND (SEF), LOCAL GOVERNMENT UNITS (LGUs) 
THAT DEMONSTRATE COMPLIANCE WITH THE REQUIREMENTS 
OF THIS ACT MAY BE ELIGIBLE FOR PERFORMANCE-BASED 
INCENTIVES, SUBJECT TO THE AVAILABILITY OF FUNDS AND 
GUIDELINES TO BE JOINTLY ISSUED BY THE DEPARTMENT OF 
FINANCE (DOF), DEPARTMENT OF EDUCATION (DEPED), 
DEPARTMENT OF BUDGET AND MANAGEMENT (DBM), AND 
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT 
(DILG), IN CONSULTATION WITH STAKEHOLDERS.
ELIGIBILITY FOR INCENTIVES SHALL BE BASED ON THE 
FOLLOWING CRITERIA:
1. SUBMISSION OF THE ANNUAL REPORT ON SEF 
COLLECTION, ALLOCATION, AND UTILIZATION IN 
ACCORDANCE WITH SECTION 272-B OF THIS ACT;
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2. ALIGNMENT OF THE SEF INVESTMENT PROGRAM WITH THE 
LOCAL DEVELOPMENT INVESTMENT PROGRAM, SCHOOL 
IMPROVEMENT PLAN, AND DIVISION EDUCATION 
DEVELOPMENT PLAN, PURSUANT TO SECTION 272-A OF 
THIS ACT;
3. UTILIZATION RATE OF AT LEAST SEVENTY-FIVE PERCENT 
(75%) OF THE ANNUAL SEF BUDGET FOR EDUCATION 
PROGRAMS AND PROJECTS IN ACCORDANCE WITH THIS 
ACT;
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4. ADHERENCE TO AUDIT AND PROCUREMENT RULES, AND 
ABSENCE OF ADVERSE FINDINGS IN COA REPORTS 
RELATING TO THE SEF; AND
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5. COMPLIANCE WITH TRANSPARENCY REQUIREMENTS 
INCLUDING POSTING IN PUBLIC PLACES, WEBSITES, AND 
THE FULL DISCLOSURE POLICY PORTAL.
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THE INCENTIVES MAY INCLUDE, BUT SHALL NOT BE LIMITED 
TO, THE FOLLOWING:
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1. TECHNICAL ASSISTANCE AND PRIORITY ACCESS TO 
NATIONAL CAPACITY BUILDING PROGRAMS;
2. PREFERENCE IN GRANTING OF SUPPLEMENTAL OR 
EQUALIZATION FUNDS FOR EDUCATION-RELATED 
PROJECTS;
3. PRIORITIZATION IN NATIONAL GOVERNMENT-SUPPORTED 
INFRASTRUCTURE OR RESOURCE AUGMENTATION 
PROGRAMS; AND
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4. CERTIFICATES OF GOOD FISCAL GOVERNANCE IN 
EDUCATION ISSUED JOINTLY BY DOF, DEPED, DBM, AND 
DILG, TO BE USED IN NATIONAL AWARDS OR SEALING 
PROGRAMS."
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Sec. 7. Implementing Rules and Regulations. - The DILG, DEPED, DOF, and
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DBM, shall jointly promulgate the necessary rules and regulations for the effective
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implementation of the provisions of this Act within one hundred eighty (180) days
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from the effectivity of this Act.
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Sec. 8. Separability Clause. - If any part or provision of this Act is held
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unconstitutional or invalid, the other parts or provisions hereof which are not affected
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thereby, shall continue to be in full force and effect.
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Sec. 9. Repealing Clause. - Any provision of laws, orders, agreements, rules or
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regulations contrary to and inconsistent with this Act is hereby repealed, amended or
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modified accordingly.
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Sec. 10. Effectivity. - This Act shall take effect fifteen (15) days after its
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complete publication either in the Official Gazette, or in a newspaper of general
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circulation.
Approved,
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