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Republic of the Philippines
HOUSE OF REPRESENTATIVES

* TIME
NINETEENTH CONGRESS 3
First Regular Session

HOUSE BILL NO. 4437

Introduced by Representative Rex Gatchalian

AN ACT
PROHIBITING ALL PUBLIC TELECOMMUNICATIONS ENTITIES AND
INFORMATION AND COMMUNICATIONS TECHNOLOGY PROVIDERS
FROM IMPOSING AN EXPIRATION PERIOD ON THE VALIDITY OF
PREPAID LOAD CREDITS AND THEIR FORFEITURE

EXPLANATORY NOTE

In this digital age, mobile phones became a necessary daily tool. This became
very evident especially during the COVID-19 pandemic. The lockdown and
physical distancing measures imposed forced different sectors to shift into a
digital platform. In 2021, a study in Nueva Ecija University of Science and
Technology showed that 55.68% students used mobile data to attend their
virtual classes.’ Because broadband is yet to become more accessible and
affordable for Filipinos, Philippine internet use is highly mobile.?

NTC-DICT-DTI Joint Memorandum Circular No. 05-12-2017 was issued
prescribing a one (1) year expiration period for prepaid loads of whatever
amount,’ but, excluded from its coverage are: (1) prepaid loads purchased for
promos; and (2) bucket of services with specific period of use duly approved
by the DTI and/or the NTC.*

1A. Esteban, Jr. and M. Cruz, Digital Divide in Times of Pandemic among Teacher Education Students (2021). See
ttps:/ /www.scirp.org/journal/ paperinformation.aspx?paperid~1084234ref.34.
® Anna Bueno and Jessamine Pacis, As COVID-19 forces me to move online, who is left behind? (2020). See
ttps:/ /wwurw.ennphikppines.con ife/culture/ 2020// 20/internet-access pandemic.him
» Section 3, NTC-DICT-DTI Joint Memorandum Circular No. 05-12-2017.
* Section 4, Id.

IZ DATE September s, 2022%p]


In this day and time when telecommunications has been revolutionized by
technology to a higher new level, every person wants to stay connected. A
scheme that imposes the expiration of prepaid credits and its forfeiture is
anti-poor, unfair and discriminating to those whose hard-earned money
matters the most. The amount that you load up, you expect of course to
consume, but a system that is devised to forfeit the value of the loaded amount
upon the expiration of a certain period only further enriches the service
providers and puts the consumer at their mercy.

This bill proposes to make it a prohibited act to impose an expiration period
on the validity of prepaid load credits and their eventual forfeiture, however
purchased and in whatever denomination. This should give the consumer his
money’s full worth. It is important that the government find a balance between
protecting the rights of a consumer where it does not also unduly hinder the

industry from its gainful market or a return of their investment.

In this wise, the telecommunications industry has at present an approximated
153 million prepaid subscribers’, a faithful legion, a giant leap from the mere
nine (9) million in 2009. These 142 million who clearly believe in the benefits
of this digital revolution and who has now found the prepaid load credit an
essential commodity in their everyday life and to whom this legislation we
believe should largely be afforded.

In view of the foregoing considerations, approval of this bill is earnestly

sought.
MGs

Representative
f District, Valenzuela City

® Combination of Globe and PLDT Mobile Subscribers Data as per their submitted SEC Form 17 1922


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Republic of the Philippines
HOUSE OF REPRESENTATIVES

NINETEENTH CONGRESS
First Regular Session
HOUSE BILL No.4437
<=
Introduced by Representative Rex Gatchalian
enemies

AN ACT
PROHIBITING ALL PUBLIC TELECOMMUNICATIONS ENTITIES AND
INFORMATION AND COMMUNICATIONS TECHNOLOGY PROVIDERS FROM
IMPOSING AN EXPIRATION PERIOD ON THE VALIDITY OF PREPAID LOAD
CREDITS AND THEIR FORFEITURE

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

SECTION 1. Short Title. - This Act shall be known as the “Prepaid Load
Forever Act of 2022”.

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to
recognize the vital role of information and communications technology in nation-
building. It likewise recognizes the primary role of the private sector as an engine of
economic growth and guarantees the right of individuals and private entities to own,
establish, and operate economic enterprises. However, as the Constitution provides
that the use of property bears a social function, the right of private entities is subject
to the duty of the State to intervene when the common good so requires - including
protecting the interests of consumers, promoting their general welfare, and
establishing standards of conduct of business and industry. Towards this end, the
State shall implement measures to protect the consumer against unfair and
unconscionable sales acts and practices, and provide information and education to

facilitate sound choice and proper exercise of consumer rights.

SEC. 3. Definition of Terms. - As used in this Act:
a. Active Prepaid Account refers to a number with any activity involving voice,
short messaging system (SMS) or text, mobile data, value added services

(VAS), or any other telecommunications service;


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b. Dormant Prepaid Account refers to a number without any activity involving
voice, short messaging system (SMS) or text, mobile data, value added
services (VAS), or any other telecommunications service within a period of
one year;

¢. Information and Communications Technology or ICT refers to the totality of
electronic means to access, create, collect, store, process, receive, transmit,
present, and disseminate information;

d. Information and Communications Technology or ICT Provider refers to any
entity in the ICT sector, which includes telecommunications and broadcast
information operators, ICT equipment manufacturers, multimedia content
developers and providers, ICT solution providers, internet service providers,
ICT training institutions, software developers, and ICT-ES providers;

€. Prepaid refers to the type of account that requires its owners to purchase
load credits before telecommunications services can be used;

f. Prepaid Load Credits refers to the monetary value or the consumable
amount loaded via prepaid card or electronic load to a device that enables a
subscriber to use telecommunications services;

8. Prepaid Subscriber refers to any person, natural or juridical, who avails of
telecommunications services from a public telecommunications service from
a public telecommunications entity and/or information and communication
technology provider by purchasing credit in advance of service use. The
purchased credit is used to pay for telecommunications services at the point
the service is accessed or consumed;

h. Public Telecommunications Entity or PTE refers to any duly authorized public
telecommunications entity that offers voice, short messaging system (SMS)
or text, mobile data, value added services (VAS), or any other
telecommunications services to the public for a fee; and

i, Telecommunications refers to any process which enables a
telecommunications entity to relay and receive voice, data, electronic
messages, written or printed matter, fixed or moving pictures, words, music
or visible or audible signals, or any control signals of any design and for any
purpose by wire, radio, or other electromagnetic, spectral, optical or
technological means,

SEC. 4. Prohibited Acts. — The following shall constitute prohibited acts of any

PTE or ICT provider and are hereby declared to be unlawful:



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a. Imposition of an expiration period on the validity of unused prepaid load
credits, whether purchased via prepaid cards or electronic load;
b. Forfeiture of such prepaid load credits on an active prepaid account, save
for the purpose of availing of the mobile number portability service; and
c. Refusal to give a refund to any prepaid subscriber whose load credits were
forfeited without any valid cause.
In view of paragraph b, a prepaid account that has become dormant shall be
deducted one peso for every day of inactivity from its remaining load credits until
such credits are fully consumed.

SEC. 5. Penal Provision. - Any director, officer, employee, or agent of a PTE or
ICT provider providing prepaid telecommunications services who shall violate any of
the acts mentioned under Sec. 4 hereof shall, upon conviction, be subject to the
penalty of a fine of not less than One Hundred Thousand Pesos (PhP 100,000.00)
but not to exceed One Million Pesos (PhP 1,000,000.00) 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 penalties shall be
imposed:

a. First offense ~a fine of Five Hundred Thousand Pesos (PhP 500,000.00);

b. Second offense - a fine of One Million Pesos (PhP 1,000,000.00) plus

suspension of license to engage in business for a period of thirty (30) days;
and

¢. Third offense - a fine of Two Million Pesos (PhP 2,000,000.00) plus

immediate revocation of license to engage in business.

SEC. 6. Implementing Rules and Regulations (IRR). - Within ninety (90) days
from the effectivity of this Act, the National Telecommunications Commission shall
coordinate with the Department of Information and Communications Technology
and the Department of Trade and Industry to promulgate rules and regulations and
other issuances as may be necessary to ensure the effective implementation of this
Act, including the issuance of proper and adequate information dissemination of its
contents and benefits to the general public.

The IRR issued pursuant to this Act shall take effect fifteen (15) days after its
publication in a newspaper of general circulation.


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SEC. 7. Separability Clause. - If any provision of this Act is held invalid or
unconstitutional, the other provisions not affected thereby shall remain in full force

and effect.
SEC. 8, Repealing Clause. - All laws, decrees, executive orders, proclamations,
rules and regulations, and issuances, or parts thereof which are inconsistent with

the provisions of this Act, are hereby repealed, amended or modified accordingly.

SEC. 9. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in any newspaper of general circulation.

Approved,