Republic of the Philippines
House of Representatives
Quezon City
SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NGQ97O

INTRODUCED BY REPRESENTATIVES ANN K. HOFER & EVELINA G. ESCUDERO

EXPLANATORY NOTE

The State recognizes the role of the youth in nation building. Thus, there is a need to
provide new graduates of tertiary education with more opportunities for growth and
development, especially to jumpstart their careers, increase their chances of being employed, and
eventually become significant contributors to the country’s growth and progress.

This measure, which is basically a bill of right for new graduates, aims to provide each
new graduate with the said opportunities. It also aims to respond to the need to create policies
which protect their welfare, increase their chances of immediate employment and provide
employment benefits equal to that of regular employees.

While parents dream of their children graduating from college and expect them to
immediately be employed after graduation, we know that the actual situation is that fresh
graduates have a hard time getting employment. Based on the Labor Force Survey conducted in
October 2015, 48% of the unemployed sector is made up of the 15-24 year-old age bracket,
while 32% is made up of 25-34 year olds. The report states that 22.5% of the unemployed were
college graduates.

As a response to the dire situation, this measure will hopefully provide incentives to new
graduates, encouraging students to stay in school, finish their courses of learning, whether it be a
technical-vocational course, or a bachelor’s degree, and envision a productive and meaningful
life after school.

For the abovementioned reasons, the passage of this bill is earnestly sought.

EVELINA G. ESCUDERO
2" Djptrict, Zamboanga Sibugay Ist District, Sorsogon


Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 6970

‘RODUCED BY REPRESENTATIVES ANN K. HOFER & EVELINA G. ESCUDERO

AN ACT PROVIDING:
INCENTIVES FOR NEW GRADUATES OF COLLEGES, UNIVERSITIES AND
ACCREDITED INSTITUTIONS OFFERING TECHNICAL-VOCATIONAL COURSES,
OTHERWISE KNOWN AS THE “BILL OF RIGHTS FOR NEW GRADUATES”

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 “Bill of Rights for New
Graduates.”

SEC. 2. Coverage. This Bill of Rights shall apply to new graduates from all colleges and
universities, and from accredited institutions offering technical-vocational courses. A new
graduate is a Filipino who just finished a bachelor’s degree from any college or university, or
completed a technical-vocational course from any accredited institution in the Philippines. He
shall be considered as such for a period of one (1) year from the date of graduation or
completion, as evidenced by the date indicated on his diploma or certificate.

SEC. 3. Declaration of Policy. The State recognizes the role of the youth in nation-
building. As such, it shall promote and protect their rights, interests and well
will, thus, endeavor to provide new graduates of higher learning with opportunities for growth
and development by creating policies that protect their welfare.

SEC. 4. New Graduate’s Incentive Card. Upon showing proof of graduation, the Public
Employment Service Office (PESO) of the Department of Labor and Employment shall issue to
the new graduate a “New Graduate’s Incentive Card,” which shall be used to avail of all the
privileges enumerated in the succeeding provisions of this Act.

SEC. 5. Basic Rights of New Graduates. In consonance with the above-stated policy,
the State shall provide the necessary requirements, conditions and opportunities to ensure proper
adherence to the following basic rights of a new graduate:


5.1 Right to a good start.

a) The State shall provide each new graduate with health, housing and social security
benefits upon graduation. Thus, a new graduate shall be allowed to enroll himself as a sponsored
member of the Philippine Health Insurance Corporation, Pag-ibig and Social Security System.
As such, he shall be exempted from paying monthly
contributions that fall within one (1) year of the graduate’s date of graduation.

1) Every new graduate who is a sponsored member of the Social Security System
under this law may, within one year from the date of his graduation, avail of a salary loan
equivalent to one (1) month’s salary upon presentation of proof of employment.

2) Every new graduate who is a sponsored member of the Philippine Health
Insurance Corporation under this law may, within one year from the date of his
graduation, avail of the same benefits of an individually paying member to cover the
graduate’s health and medical needs

3) Every new graduate who is a sponsored member of the Pag-Ibig Fund under
this law may, within one year from the date of his graduation, avail of a home loan upon
(1) complete advanced payment of two years’ voluntary contribution, and (2)
presentation of proof of employment. The contribution payments for the first year shall
be advanced by the government.

b) A new graduate who is securing government-issued documents usually required in the
course of his employment application shall likewise be exempted from payment of fees and
charges in connection with such documents, provided it is secured within one (1) year from his
date of graduation. This includes, but is not limited to: (a) one copy of his birth certificate from
the National Statistics Office, (b) tax identification number (TIN) from the Bureau of Internal
Revenue (BIR), (¢) clearance from the National Bureau of Investigation (NBI), (d) passport from
the Department of Foreign Affairs (DFA), and (e) barangay clearance or certificate of residency
from the local government units.

This exemption from payment of fees and charges shall likewise apply to a new graduate
who will venture into business or self-employment, in relation to securing business or self-
employment permits from the Department of Trade and Industry (DTI), the Securities and
Exchange Commission (SEC), the BIR, and the City or Municipal Hall

c) The State shall establish new programs that provide funding and technical support to
business ventures of a new graduate, while strengthening existing programs. Awarding of such
assistance to a new graduate shall be based on the innovative features of a product or service, and
its business viability and economic contribution to the country:


1) Each new graduate who ventures into a technology-based enterprise shall be
able to avail of the programs under the Department of Science and Technology's
Technology Application and Promotion Institute, including financial and technical
assistance in the areas of setting-up and operation of pilot ventures for micro, small and
medium enterprises (MSMES), upon submission of a feasibility study. Any loan granted
under this program shall not be charged any interest.

2) Each new graduate who ventures into the production, processing or
manufacturing of products or commodities shall be able to avail of the benefit sunder
Republic Act 9178, or the Barangay Micro Business Enterprises (BMBEs) Act of 2002,
including exemption from income tax and coverage of the minimum wage law.

3) Each new Agriculture-related graduate who ventures into an agribusiness
enterprise shall be granted a loan not exceeding one hundred thousand pesos
(P100,000.00) upon submission of a feasibility study. Provided that such funding is
secured by a chattel mortgage of assets acquired from the loan and that the said graduate
does not possess a negative credit information. He will be given priority in the granting of
loans by the Land Bank of the Philippines, Development Bank of the Philippines, other
government banks, rural and cooperative banks. To promote agricultural development in
the country and encourage youth involvement in advancing agriculture-based enterprises,
income derived from such ventures shall be exempt from income tax payment,

4) The State shall likewise provide each new graduate the opportunity to participate in
low-cost housing programs. Upon presentation of proof of employment, each new graduate shall
be eligible to apply under the different programs of the National Housing Authority (NHA),
particularly Core Housing and Medium Rise Housing Programs.

5.2 Right to a choice of opportunities.

) To assist a new graduate in selecting and securing employment, all government
agencies that are mandated to generate employment and protect workers’ rights, such as DOLE,
POEA, PESO, and other attached government agencies, shall provide listing of job openings
within the country and abroad on their websites and offices. To effectively implement this, the
said agencies shall closely coordinate with private and public higher education institutions
(HEIs) to provide updated and relevant information on job opportunities. The HEIs shall post in
conspicuous places inside their school campuses a listing of such job opportunities. The DOLE,
POEA, PESO, and other attached agencies shall also facilitate the scheduling of job interviews
with prospective employers

b) To expand the employment opportunities of new graduates, those belonging to the top
10% of their school/college shall (1) be exempted from taking the Civil Service Eligibility Exam,
should they opt to join the government sector, or (2) be qualified to undergo internship or on-

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the-job training in private institutions that have registered with the PESO, should they choose to
be employed in the private sector.

©) Any allowance or wage received by new graduates from employers who allow on-the-
job-training or internship shall be an allowable deduction from the employer's gross income.

4.3 Right to a fair assessment.

a) It shall be unlawful for any employer to discriminate against a new graduate in the
hiring process, as well as in the terms and conditions of his employment, solely on the account of
his lack of work experience and perceived inability to perform tasks satisfactorily. Hiring should
be focused in his capability, creativity, and potential contribution to the company and industry
based on his academic and extra-curricular records, as well as his performance in a company’s
qualifying examinations and interviews. Employers shall take into consideration the unique
perspective and fresh ideas that a new graduate will bring into the company.

b) A new graduate shall have equal chance to promotion, as with other employees of a
company or institution, giving emphasis on skills, merit and potential, and not merely on length
of tenure.

©) A new graduate shall have the right to be informed of his career path within the
‘company he is employed in. Thus, the employer must inform the new graduate upon hiring of its
company policies and plans for potential advancement and promotion of the new graduate.

5.4 Right to a truly supportive wage.

a) The State shall ensure that a new graduate shall be properly compensated based on his
skills, workload and output. Payment of a lesser compensation to a new graduate as against a
more senior employee, for work that is of equal value and with the same output, shall be a
violation of this Act. This is without prejudice to company benefits relating to length of tenure of
existing employees, such as, but not limited to, longevity pay.

b) A new graduate earning purely compensation income shall be given additional
P10,000.00 personal exemption on his income tax, over and above the amount provided under
RA 8424 or the National Internal Revenue Code of 1997, as amended.

) Employers of a new graduate employed in a public or private institution who opt to

establish and contribute to a personal equity and retirement account must match the graduate’s
contribution. Such contribution shall form part of the graduate’s employment benefits.

5.5 Right to a secure tenure.


a) In consonance with the provision of the Labor Code, newly-hired employees have a
right to a permanent position after six (6) months of satisfactory performance. Extension of
probationary status of a new graduate shall be deemed as a violation of this provision. Moreover,
employers are mandated to inform a new graduate hired of this right upon start of his
employment. Thus, an employee who continues to be employed by his employer after a period of
six (6) months shall automatically become a permanent employee.

b) The DOLE and Civil Service Commission shall make a random audit of employee's
tenure in both private and public institutions, respectively. Any employee who has been
employed by his employer after a period of six (6) months shall be entitled to become a
permanent employee.

5.6 Right to further training.

a) It shall be the State’s policy to encourage a new graduate’s further training in the field
of study he has specialized in. In the event that a new graduate employed in a private or public
institution is offered further training, by way of continuing education, seminar or conference or
on-the-job training, which would necessitate taking a leave of absence, he shall be allowed to
attend such without loss of seniority rights.

b) A new graduate shall be given equal opportunity and access to further training within
the institution. A new graduate’s status in any public or private institution (whether temporary,
contractual, casual or probationary) shall not be a bar to his participation in any offered course or
training within the institution. An employer is prohibited from limiting participation of courses
or training to regular or tenured employees.

©) A new graduate from disciplines crucial to national development, such as agriculture,
science and technology, education, including promotion of culture and the arts, shall be given
priority in further training, provided, that said graduates commit to stay and serve the country for
a minimum of 5 years. Such training will be facilitated by DOLE, TESDA, and NCCA.

4d) To assist a new graduate, employed or unemployed, gain the necessary skills and
training to be more competitive with experienced employees, DOLE, and PESO are mandated to
strengthen their programs on employment and occupational counselling, career guidance and
training.

5.7 Right to fair credit.

1a) It shall be the State’s policy to ensure that every new graduate is given the opportunity
to build his credit. A new graduate who does not possess negative credit information shall be
eligible to apply for a short-term, multi-purpose or car loan from any financial institution despite
the lack of a long credit history.


1) A new graduate who is applying for a credit line or a loan in any financial
institution may use two (2) current consecutive pay slips as proof of income, which shall
be prima facie evidence that the new graduate has the capacity to repay or make good on
the financial obligation he or she is applying for.

b) The new graduate shall also be allowed to defer payment of any outstanding student
loan obligation without interest within six (6) months of his graduation date in order to allow him
time to seek employment. Thereafter, the new graduate may apply with the financial institution
for an extension of deferment of his student loan obligation for another six (6) months on
account of hardship. During the extension, the graduate must be allowed to pay only the interest
on his outstanding loan obligation.

1) The graduate may apply for forbearance on his student loan obligation at any
time until full payment of the loan, provided that he or she informs the financial
institution within 30 days from the first month he intends to ask for forbearance. The
forbearance may be for a period of up to one year. The graduate must continue to pay
interest on the loan during the period of forbearance.

c) The State shall encourage commercial and government banks to appropriate a portion
of their loans, with lower interest rates, to new graduates who need capital to start-up a business,
without prejudice to non-new graduates’ loan applications. To encourage participation, the “lost
amount” arising from the granting of lower interest rates on loans given to new graduates shall
be considered as an allowable deduction from the participating banks’ gross income in the
‘computation of its income tax.

5.8 Right to recognition, _A new graduate, as with other employees, shall be
recognized as an important part of the Philippine workforce. They should be valued
and given proper recognition for their vital contribution to the country’s economy.
The DOLE shall initiate a New Graduates’ Rewards Program to provide discounts
and incentives to new graduates.

a) A new graduate shall be able to continue to avail of the student discount on
transportation fees within one (1) year from his graduation date.

b) A new graduate who will be travelling outside of the country within one (1) year from
his date of graduation shall also be exempt from payment of travel tax and airport terminal fee.

©) A new graduate who will be travelling within the country within one (1) year from his
date of graduation shall likewise be exempt from payment of airport terminal fees.

SEC. 6. One Stop Shop ~ The Public Employment Service Office (PESO) in different
cities and municipalities shall serve as a One Stop Shop for a new graduate to secure any or all

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documents necessary for employment application. The PESO shall provide the step by step
procedure in applying for the different documents needed. It shall likewise be responsible for his
registration and/or enrolment in the government agencies mentioned in Section 5.1.b.

Upon application for a New Graduate’s Incentive Card, PESO shall encourage the new
graduate to:

(a) Submit a curriculum vitae in order for the PESO to include his name in a database and
enable them to link him with the appropriate companies or employers, as well as facilitate easier
tracking of the number of new graduates in every industry.

(b) Attend an orientation seminar/workshop on basic labor laws and rights, and other
useful information on public and private employment.

SEC. 7. Implementation. The DOLE, Civil Service Commission and concerned attached
agencies shall be responsible for the administration and monitoring of the implementation of the
provisions of this act, and shall promulgate the necessary implementing rules and regulations
within thirty (30) days from its effectivity.

SEC. 8. Appropriations. To carry out the provisions of this Act, such sum as may be
necessary is hereby authorized to be appropriated from the National Treasury. Thereafter, the
sum necessary for the continuous operation of this Act shall be included in the annual
appropriation of DOLE.

SEC. 9. Separablity Clause. If any provision, or part hereof, is held invalid or
unconstitutional, the remainder of the law or the provision shall remain valid and subsisting

SEC. 10. Repealing Clause. Any law, presidential decree or issuance, executive order, letter
of instruction, administrative order, rule or regulation contrary to or inconsistent with, the
provision of this Act is hereby repealed, modified or amended accordingly.

SEC. 11. Effectivity Clause. This Act shall take effect fifteen (15) days after its publication
in at least two (2) newspaper of general circulation.

Approved,