Republic of the Philippines

16" CONGRESS,
First Regular Session

HOUSE BILL NO. 11 09

Introduced by REP. EVELINA G. ESCUDERO-

EXPLANATORY NOTE

Article II, Section 17 of the Constitution also declares that the State shall give priority to
education, science and technology. arts, culture and sports to foster patriotism and rationalism,
accelerate social progress and promote total human liberation and development.

Further, it is also a Constitutional declaration that the State shall protect and promote the
right of all citizens to quality education at all levels and shall take appropriate steps to make
education accessible to all.

Pursuant to these declarations, the State should provide the mechanisms to broaden
‘opportunities to higher education in addition to what is already provided for in RA 7722. “The
Higher Education Act of 1994,” RA 6728 “The Government Assistance to Students and Teachers
in Private Education Act,” and RA 8392 “The Higher Education Modernization Act of 1998.”

However, due to our financial capability as a nation, our government alone cannot
address the issue of providing education for all. Therefore, there is a need to broaden
opportunities and promote education as an accessible equalizer through the partnership of
Government and the private sector.

Thus, passage of this bill is earnestly sought.

EVELINA G. ESCUDERO


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16" CONGRI
First Regular Session

1109

HOUSE BILL NO.

Introduced by REP. EVELINA G. ESCUDERO-

AN ACT
ESTABLISHING AN EDUCATION TRUST FUND FOR GRANTEES OF GSIS AND SSS.
MEMBERS AND FOR OTHER PURPOS!

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

SECTION 1. Short Title. — This Act shall be known as the “Education Trust Fund Act.”

SECTION 2. Declaration of Policy. ~ The Constitution provides that the State shall protect
and promote the rights of all citizens to quality education at all levels and shall take appropriate
steps to make education accessible to all. Towards this end, the State shall endeavor to extend
social security protection to provide the opportunity of making education accessible commodity
to realize the right of all citizens, particularly the under privileged, the equal opportunity to
quality education for them to contribute in a more productive and active role in social life

specially in the economic and political spheres.

SECTION 3. Definition of Terms. ~ The following terms shall be understood in this Act to

mean:

(1) ETF ~ refers to the Education Trust Fund created by this Act.

(2) Government Service Insurance System (GSIS) refers to the agency entrusted to take
charge of all matters pertaining to the officials and employees, as created and
established under Commonwealth Act No. 186, as amended by Presidential Decree No.
1146, and further amended by Republic Act No. 8291.

(3) Social Security System (SSS) refers to the agency entrusted to take charge of all matters
pertaining to the benefits and insurance claims of all private employees, embodied in
republic Act No. 1161 and amended by republic Act No. 8282.

(4) Optional means the voluntary act of qualified members of GSIS or SSS to be included

in the pre-need education trust fund coverage for their grantee, deductible to their

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(5) Education Trust Fund (ETF) refers to the accumulated amount of money deducted from
GSIS and SSS members and / or paid by the members to the system concerned for the

use in the educ

jon of their grantee to be paid directly to universities or colleges for a
baccalaureate degree and / or institutions for a vocational / technical program to be
determined as provided for in the policy contract.

(6) Planholder refers to a member of the GSIS and the SSS who avails of ETF Plans for the
education of this grantee according to his desired vocational / technical and / or
baccalaureate education program.

(7) Plan agreement refers to the policy contract issued by either the GSIS or the SSS to the
provisions of the planholders’ benefits and responsibilities.

(8) Grantee refers to the child designated by the planholder regardless of relationship to
avail of the ETF benefits according to the education program determined in the policy
contract,

(9) Monthly contributions refer to the amount of money to be deducted out of the salaries
of the qualified member and / or paid directly to the system concerned as specified in
the policy contract to be determined by the Education Trust Fund Board.

(10) Education Trust Fund (ETF Board refers to the governing body which shall
formulate policies, implementing, rules and regulations, guidelines, and other related
matter pertaining to the operation and management of the ETF created under this Act.

SECTION 4. Education Trust Fund (ETF) Plans. — There is hereby established in the GSIS
and the S:

a special education trust fund to be known as the “GSIS/SSS Education Trust
Fund (ETF) Plans” through enrollment in any desired education program to ensure the

education of the grantee of members for both systems respectively.

SECTION 5. Management and Supervision. ~ (a) To carry out the purposes of this Act,
the ETF Board is created, hereinafter referred to as the “ETF Board”, a governing body
which shall formulate policies, implementing rules and regulations, guidelines and other
related matter to oversee, manage and supervise the operation of ETF with principal place

of business in Metro Manila, Philippines.

(b) The ETF Board composed of nine (9) members shall be comprised of one (1) member
for the Government Service Insurance System (GSIS): one (1) member from the Social
Security System (SSS); one (1) member from the Senate Committee on Government
Corporations and Public Enterprises; one (1) member from the House of Representatives
Committee on Higher and Technical Education; one (1) member from the House of
Representatives Committee on higher and Technical Education and Skills (TESDA); and

one (1) Independent Pre-need Resource Person with adequate knowledge and a minimum of


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appointed upon recommendation by the majority members of the proposed Board. The term
of the appointive members shall be six (6) years. The members of the Board shall receive
atleast Two Thousand Five Hundred Pesos (P2,500.00) per diem for each meeting actually
attended by them, but not to exceed Ten Thousand Pesos (P10,000.00) a month: Provided,
further, That said members of the Board shall also receive reasonable transportation and
representation allowances as may be fixed by the ETF Board, but not to exceed Ten

Thousand Pesos (P10,000.00) a month.

(©) The ETF Board upon the recommendation of the GSIS and the SSS, shall appoint an
actuary and such other personnel as may be deemed necessary; fix their reasonable
compensation, allowance and other benefits; prescribe their duties and establish such

guidelines and procedures as may be nec

ry to ensure the efficient, honest and

economical administration of the provision and purposes of this Act.

(d) The G and the

respectively, to manage the general conduct of the operation and management functions:

shall create an Education Trust Fund (ETF) Department

Provided, however, That all personnel of the ETF Department shall be appointed by the
President of the GSIS / SSS, as the case may be, subject to the confirmation of the ETF
Board: Provided, further, That the personnel of the ETF Department in both the GSIS and
the SSS shall be selected only from Civil Service eligible and be subjected to civil service

rules and regulations.

(c) The ETF Board shall be responsible for the formulation and implementation of the
Implementing Rules and Regulations (IRR) of this Act, to ensure the effectiveness and
viability of the ETF for a self sustaining operation, including its budgetary support,
operating capital and other related expenditures, monitoring and categorizing of schools
according to the cost of its existing tuition fees and other related school fees and charges,
monitoring of rate schedules according to the age, terms of payment, number of years
before availment and other related matters to safeguard the implementation and operation of
this Act.

SECTION 6. Education Trust Fund (ETF) Plans Agreement. - For the attainment of its
main objectives, the general provisions of a plan agreement shall be issued by both the GSIS and
the SSS, respectively, to all availing members as planholders which shall govern the terms and
conditions in the implementation of premium payments and benefits inclusive of the plan cash
value which shall be determined by the ETF Board.

SECTION 7. Trust Fund Management. - The ETF must be separated from the general

funds of the system concerned and must be self sustaining to be invested according to the


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Funds in the case of the GSIS, except on members loans for a greater yield investment. No
amount of money from the ETF Plans shall be loaned to the members and/or planholders of

system concerned

SECTION 8 Grantee. - For purposes of this Act the term “grantee” shall include

legitimate, legitimated, legally adopted or illegitimate child: grandchild and/or whoever be the

child to be assigned by the member regardless of relationship. A grantee is a duly appointed and
registered grantee on or before enrollment to avail of the ETF benefits. A member may apply for

a deferred plan if he does not have a child and or grantee,

SECTION 9. Optional Coverage. - Subject to the rules and regulations prescribed by the
ETF Board, all GSIS and SSS members, regardless of civil status, with or without a child and/or

grantee, may opt to participate under this ETF plans program.

SECTION 10. Premium Payments. - The amount of premiums to be paid to the ETF by
the member shall be in accordance with the schedule of payments to be prescribed by the ETF

Board taking into consideration the fallowing criteria:

(a) The interval of the time between the effectivity of the coverage and the estimated time of
enrollment of the grantee in any desired education level for a vocational/ technical or a
baccalaureate program;

(b) The number of monthly contributions to be made to complete the contracted price
stipulated in the plan agreement or policy contract:

(©) ‘The benefits to be availed of, as provided in Section 12 of this Act;

(4) the amount of tuition and the other standard fees charged by the institutions, colleges, and
J or universities according to the school category for a vocation/technical or a
baccalaureate education level; and

(e) Such other factors as may be determined by the ETF Board.

SECTION 11. Reinsurance. - The GSIS or the SSS may reinsure any of its interest wholly or
in part thereof with any private company or reinsurer whether domestic or foreign: Provided,
That the

yystem concerned shall submit an annual report on its reinsurance operation to, the

Insurance Commission through the ETF Board.

SECTION 12. Education Benefits. - only members who have completed the payment of
the contract price stipulated in the plan agreement or policy contract before enrollment of the

grantee shall be entitled to avail of the benefits provided for under this Act.

The benefits shall include the payment of ETF by the System concemed of:


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(a) Such school fees as may be required for enrollment, for completion of a vocational /
technical or a baccalaureate program which shall include tuition fees for all subjects
officially prescribed by the institution, colleges and/or universities and part of a regular
curriculum as requisite for graduation and other standard fees such as science and speech
laboratory, audio-visual. medical and dental, library# athletics, counseling, registration,
matriculation, official school publication and other fees may further be approved by the
CHED and the TESDA; and

(b) Any other benefits to be provided form as stipulated in the policy contract as determined

and approved by the ETF Board.

The payment shall be made by the ETF of the System concerned directly to the institution,
college and/or university prior or upon enrollment as the case may be, an open-ended education

trust fund benefit that pays all Schools expenses

s stipulated in the policy contract regardless of
whatever cost of a designated education program during the availment period, for a
vocational/technical and/or a baccalaureate education program on a semestral or trimestral basis.
The ETF Board shall provide for safeguards to ensure the prompt payment of benefits.

SECTION 13. Incenti

- In appreciation of excellent performance of the grantee and for
future use of the planholder, an incentive is hereby provided

(a) Should the grantee earn any acceleration or scholarship award in any education program
desired, all amounts due and payable to the institution, college and/or university or its

equivalent amount, shall be awarded to the availing grantee of the phanholder; and

(b) Any other incentives and/or benefits to be determined by the ETF Board as provided for

in the plan agreement or policy contract issued by the System concerned.

SECTION 14. Transferability of Benefits. ~ The benefits for in this Act may be transferred
to any active member of both System and may be assigned to another grantee at the option of the
planholder.

SECTION 15. Cash Value. — In cases of inability of the planholder to continue the payment
of his/her premium due to financial reasons and/or any other reasons as the case may be, the ETF
Board shall determine the cash value of the Education ‘Trust Fund Plans which shall form part of

the general responsibility of the solvency of the ETP.

SECTION 16. Death or Diability of the Planholder. — The death or total and permanent
disability of the planholder shall not preclude the grantee from availment of the benefits

provided, in application of Section 11 as stipulated in this Act.


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SECTION 17. Government Guarantee. - The benefits prescribed in this Act shall not be

diminished and to guarantee said benefits, the Government of the Republic of the Philippines

accepts general responsibility for the solvency of the ETF.

SECTION 18.
funds for the ET

Exemption from Tax, Legal Process and Lien. ~ The actuarial solvency of
shall be preserved and maintained at all times and that contribution rates
necessary to sustain the benefits under this Act shall be kept as low as possible in order not to
burden the member of both the GSIS and the S:
ETF, its

therefrom, all supplies, papers or documents, all accruals thereto and benefits paid shall be

S. Notwithstanding any laws to the contrary, the

ssets and properties, all proceeds from collections, income or investment earnings

exempt from all taxes, assessments, fees, charges, or duties of all kinds such as customs or
import duties, these exemptions shall be irrevocable and any assessment against the ETF as of
the approval of this Act are hereby considered paid. Consequently, all laws, ordinances,
regulations, issuances, opinions or jurisprudence contrary to or in derogation to this provision are

hereby deemed repealed, superseded and rendered ineflective and without legal force and effect.

Moreover, these exemptions shall not be affected by subsequent laws to the contrary unless
this section is expressly, specifically and categorically revoked or repealed by law and a
provision is enacted to substitute or replace the exemption referred to herein as an essential
factor to maintain or protect the solvency of the fund, notwithstanding and independently of the
guarantee of the national Government to secure such solvency of the liability: Provided, That all
securities of the ETF must be registered with the Securities and Exchange Commission (SEC)
and transaction tax must be imposed hereto to safeguard the viability and transparency of

investment for a self-sustaining ETF.

‘The funds and / or properties referred to herein as well as the benefits, sums or monies
corresponding to the benefits under this Act shall be exempt from attachment, garnishment,

execution, levy or other process issued by the courts, quasi-judicial agencies, or administrative

bodies including the Commission on Audit (COA) disallowances and from all financial

obligations of both the and the SSS members, including his pecuniary accountabilities
arising from or caused or occasioned by his exercise or performance of his official functions or
duties, or incurred relative to or in connection with his position or work except when his

monetary liability, contractual or otherwise. is in favor of the Education Trust Fund (ETF).

SECTION 19. Supplementary Clause. — In case of insufficiency of a provision of this Act,
ETF Board Resolutions shall apply in a suppletory manner to safeguard the interest of the ETF

operations towards a self-sustaining implementation of this Act.

SECTION 20. Implementing Rules and Regulation (IRR). — The ETF Board shall


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Regulations (IRR) duly confirmed and approved by the majority members of the ETF Board,

which should prescribe under the active participation of the Senate committee on Education, Arts
and Culture; the Senate Committee on Government Corporations and Public Enterprises; the
House of Representatives Committee on Higher and Technical Education; the House of
Representatives Committee on Government Enterprises and Privatization; the Commission on

Higher Education (CHED) and an Independent Private Pre-need Resource Person.

SE

to be unconstitutional or invalid, the other sections or provisions of this Act shall not be affected

“TION 21. Separability Clause. ~ If, for any reason, any section of this Act shall be held

thereby as they are separable from the invalid ones and shall remain in force and effect.

SECTION 22. Repealing Clause. ~ All laws, executive orders, decrees, instructions, rules
and regulations in contrary or inconsistent with any provision of this Act are hereby repealed or

modified accordingly.

SECTION 23. Effectivity Clause. — This Act shall take effect fifteen (15) days after its
publication in the Official G

whichever comes earlier.

ze or in two (2) national newspaper of general circulation

Approved,