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Republic of the Philippines DATE:

HOUSE OF REPRESENTATIVKS
Quezon City |

SEVENTEENTH CONGRESS
First Regular Session

House Bill No, 1068 _

REGISTRATION UNIT
BILLS AND INDEX SERVICE

Introduced by HONORABLE SCOTT DAVIES S. LANETE, M.D.

EXPLANATORY NOTE

Financial literacy is the ability 10 use knowledge and skills to make effective and informed
money management decisions. Personal financial literacy encompasses a range of money
topics, from everyday skills such as balancing a checkbook to long-term planning for
retirement, While literacy - the ability to read and write - is a fundamental part of the
education system, financial literacy is often left out of the equation.'

AL present, countries in the world are beginning to recognize the value of financial literacy, In
the United States, a significant number of states have introduced financial literacy
requirements for their K-12 education systems, and four states require high school students to
take personal finance classes.” Financial literacy is thus becoming a nec

While there is a movement to include more finance-related coursework in elementary, middle
and high school settings, parents and guardians are the primary educators when it comes to
teaching children the skills they need to develop a strong foundation for life-long financial
competence. Many adults, however, avoid talking to kids about money, because they lack
confidence in how they've handled their own finances, This is unfortunate, because adults
have two things that children do not when it comes to finances: experience and perspective.*

Like other provocative topics, money is something that the youth will hear about outside the
home. While this may sound harmless (what could they possibly hear that could be that
bad?), children can get the wrong message about money by getting information from their
peers. For example, a child might hear a classmate say that rich people are lucky. If that child
believes that wealth is a result of luck, what motivation will he or she have to handle money
responsibly? It is important to clarify at a young age that most wealth is not a result of luck -
that most people work hard and make smart decisions to "get rich." Even if a child does not
and is not yet capable of absorbing knowledge about the intricacies of finance, teachers can
provide them with accurate information, introduce ideas, spark interest and awareness, and
help empower children (o take control of their financial lives.

Despite all these, the Philippines has yet to introduce reforms in its educational structure in

' See http://www.investopedia.com/university /teaching-financial-literacy-kids/
2 Id.
31d.

HOUSE OF REPRESENTATIVES


terms of financial literacy, especially among children, Thus, this bill seeks to reform the
country’s education system by making financial literacy a vital part of every school’s
curriculum. By teaching the youth about money, the State can help them discover the
relationships between earning, spending and saving. In doing this, children also begin to
understand the value of money. This financial literacy can begin at a young age with simple
money concepts such as counting coins and making change for purchases. Older children can
Jearn about savings accounts, balancing a check book and creating a personal budget. The key
is to teach a concept and let them try, even if it means a little extra time in the (oy store while
your little one painstakingly counts out coins from his or her piggy bank.'

Hence, the passage of this law is urgently sought.

SCOTT DAVIES S. LANETE, M.D.
fepresentative
‘Third District, Province of Masbate


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

1068

House Bill No.

Introduced by HONORABLE SCOTT DAVIES S. LANETE, M.D.

AN ACT TO ADVANCE THE UNDERSTANDING OF PERSONAL FINANCE
AMONG ELEMENTARY AND HIGH SCHOOL STUDENTS, 10 ADD 4 COURSE
ON PERSONAL FINANCE IN SCHOOL CURRICULUM, ESTABLISHING A
MECHANISM THEREFOR AND FOR OTHER PURPOSES

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

Sec. 1. Short Title, This Act shall be known as “Financial Literacy Act of 2016.”

Sec. 2. Declaration of Policy. It is the policy of the State to recognize the vital role of the
youth in nation-building and shall promote and protect their physical, moral, spiritual,
intellectual, and social well-being. It is also the policy of the State to give priority to
education, science and technology, arts, culture, and sports to foster patriotism and
nationalism, accelerate social progress, and promote total human liberation and development.

Sec. 3. Mandatory Financial Literacy Course - It shall be mandatory for all elementary and
high school students to undergo financial literacy classes. Depending on a student's capacity
for higher learning, financial literacy classes shall include among others, lessons on
familiarity with the country’s bills and coins, how to save and invest, manage debt, contest a
billing statement, apply for a loan, handle an inheritance, buy insurance, figure income taxes,
compute interest rates and analyze a simple contract.

Sec. 4. Implementing Agency. ~ The Department of Education, in consultation with
stakeholders, shall ensure the implementation and enforcement of this Act. 1t shall also
develop economic and personal course content guidelines and recommend textbooks to be
used in a personal finance course.

Sec 5. Implementing Rules and Regulations. The Department of Education shall have the
power o promulgate the implementing rules and regulations as may be necessary to fully
implement the objectives and purposes of this Act within one (1) year from the approval
hereof

Sec. 6, Separability Clause. If any part or provision of this Act shall be held unconstitutional
or invalid, other provisions which are not affected thereby shall continue to be in full force
and effect,


Sec. 7. Repealing Clause. All laws, issuances or parts thereof inconsistent with this Act are
hereby repealed or modified accordingly.

Sec. 8. Effectivity. This Act shall take effect fifleen (15) days after its publication in the
Official Gazette ot in at least two (2) newspapers of general circulation.

Approved,