Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. _________ 
Introduced by Representative Paolo Henry M. Marcoleta 
EXPLANATORY NOTE 
Article XIV, Section 1 of the 1987 Constitution mandates that “[t]he State 
shall protect and promote the right of all citizens to quality education at all levels 
and shall take appropriate steps to make such education accessible to all.” Thus, 
there is a clear need to take vital steps to address the limitation set by the existing 
provisions of Republic Act No. 7160 or the Local Government Code (LGC) of 
1991 on the utilization of the Special Education Fund (SEF). 
Section 235 of LGC of 1991 states that “[a] province or city, or a 
municipality within the Metropolitan Manila Area, may levy and collect an 
annual tax of one percent (1%) on the assessed value of real property which shall 
be in addition to the basic real property tax.” It also declares that the proceeds of 
the same shall exclusively accrue to the SEF. According to existing law, the said 
expenses will be determined and approved by the local school board. 
In a report released by the Second Congressional Commission on 
Education (EDCOM 2), the SEF across the country remains underutilized, 
despite an increase in income.1 Corollary, the Department of Education 
continues to be challenged with perennial issues on learning environments, 
learning outcomes, teacher welfare and resource gaps – areas that require 
substantive resources. Hence, the need for the expansion of the purpose and 
application of SEF in order to tap the capability of local government units 
(LGUs) in addressing these issues within their respective jurisdiction. 
1 EDCOM2, “LGU Special Education Fund underutilized, inequitable – EDCOM 2”, March 11, 2024, available 
at https://edcom2.gov.ph/lgu-special-education-fund-underutilized/ (last accessed on July 07, 2025). 
August 5, 2025
11:54 am
3033


This measure ensures that SEF is maximized, in response to our LGUs’ 
need for additional support to achieve the quality education for our youth. 
In view of the foregoing, the passage of this bill is earnestly sought. 
PAOLO HENRY M. MARCOLETA 
Representative, SAGIP Party-List


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. _________ 
Introduced by Representative Paolo Henry M. Marcoleta 
AN ACT 
EXPANDING THE PURPOSE AND APPLICATION OF THE SPECIAL 
EDUCATION FUND, AMENDING FOR THE PURPOSE SECTION 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 and House of Representatives of the Philippines in 
Congress assembled: 
Section 1. Section 272 of Republic Act No. 7160 is hereby amended to 
1 
read as follows: 
2 
3 
 
“Sec. 272. Application of Proceeds of the Additional One Percent 
4 
SEF Tax. – The proceeds from the additional one percent (1%) tax on 
5 
real property accruing to the Special Education Fund (SEF) shall be 
6 
automatically released to the local school boards: Provided, That, in 
7 
case of provinces, the proceeds shall be divided equally between the 
8 
provincial and municipal school boards: Provided, however, That the 
9 
proceeds shall be allocated, [for the operation and maintenance of 
10 
public schools, construction and repair of school buildings, 
11 
facilities and equipment, educational research, purchase of books 
12 
and periodicals, and sports development] AS DETERMINED 
13 
AND APPROVED BY THE LOCAL SCHOOL BOARD, FOR 
14 
THE FOLLOWING: 
15 
1. OPERATION 
AND 
MAINTENANCE 
OF 
PUBLIC
16 
SCHOOLS;
17 
3033


 
2. ACQUISITION OF SCHOOL SITES OR LANDS; 
1 
3. CONSTRUCTION 
AND 
REPAIR 
OF 
SCHOOL 
2 
BUILDINGS, LEARNING CENTERS, LIBRARIES, AND 
3 
SCHOOL DORMITORIES;  
4 
4. FACILITIES AND EQUIPMENT INCLUDING BUT NOT 
5 
LIMITED 
TO 
INFORMATION 
TECHNOLOGY 
6 
EQUIPMENT 
AND 
COROLLARY 
SUPPORT 
7 
SERVICES, SCHOOL FURNITURE AND FIXTURES, 
8 
MEDICAL 
AND 
DENTAL 
SUPPLIES, 
AND 
9 
INSTALLATION 
OF 
RADIO 
FREQUENCY 
10 
IDENTIFICATION (RFID) SYSTEM AND CLOSED-
11 
CIRCUIT TELEVISION (CCTV); 
12 
5. PURCHASE AND MAINTENANCE OF SERVICE 
13 
VEHICLES;  
14 
6. PAYMENT 
OF 
VOLUNTARY 
CONTRIBUTIONS 
15 
AUTHORIZED UNDER EXISTING LAWS;  
16 
7. PAYMENT OF COMPENSATION AND AUTHORIZED 
17 
ALLOWANCES, 
COMPETENCY 
TRAININGS, 
18 
BENCHMARKING, 
AND 
OTHER 
BENEFITS 
OF 
19 
LOCALLY-HIRED TEACHING AND NON-TEACHING 
20 
PERSONNEL: PROVIDED , THAT THE RATES OF 
21 
COMPENSATION AND AUTHORIZED ALLOWANCES 
22 
OF 
LOCALLY-HIRED 
TEACHING 
AND 
NON-
23 
TEACHING PERSONNEL SHALL BE DETERMINED 
24 
BY THE LSB, BASED ON FUNDS AVAILABLE, BUT AT 
25 
RATES NOT TO EXCEED THE SALARY SCHEDULE 
26 
BEING IMPLEMENTED BY THE LGU CONCERNED;  
27 
8. ANY ADDITIONAL AUTHORIZED ALLOWANCES 
28 
GRANTED 
BY 
LGUS 
TO 
NATIONALLY-HIRED 
29 
TEACHING 
AND 
NON-TEACHING 
PERSONNEL 
30 
CHARGEABLE AGAINST THE SEF AS OF 31 
31 
DECEMBER 
1997: 
PROVIDED, 
THAT 
SUCH 
32 
ADDITIONAL 
AUTHORIZED 
ALLOWANCES 
33 
GRANTED THEREAFTER SHALL BE CHARGED TO 
34 
THE GENERAL FUND: PROVIDED, FURTHER, THAT 
35 


 
IN 
CASE 
OF 
FOURTH 
TO 
SIXTH 
CLASS 
1 
MUNICIPALITIES, 
SUCH 
ADDITIONAL 
2 
AUTHORIZED 
ALLOWANCES 
MAY 
STILL 
BE 
3 
CHARGED TO SEF SO LONG AS THE SAME DOES 
4 
NOT 
EXCEED 
10% 
THEREOF, 
SUBJECT 
TO 
5 
EXISTING BUDGETING RULES AND REGULATIONS;  
6 
9. OPERATION OF (I) NON-FORMAL EDUCATION 
7 
PROGRAMS, (II) EARLY CHILDHOOD EDUCATION, 
8 
(III) SPECIAL EDUCATION, (IV) SENIOR HIGH 
9 
SCHOOL, (V) OPEN HIGH SCHOOL PROGRAM, (VI) 
10 
MADRASAH 
CLASSES, 
AND 
(VII) 
REMEDIAL 
11 
CLASSES, INCLUDING THE PAYMENT OF SALARIES, 
12 
AUTHORIZED 
ALLOWANCES, 
AND 
OTHER 
13 
BENEFITS OF LOCALLY-HIRED TEACHING AND 
14 
NON- TEACHING PERSONNEL OF THE PROGRAM, 
15 
AND THE CONDUCT OF TEACHERS’ COMPETENCY 
16 
TRAININGS; 
17 
10. OPERATION OF ALTERNATIVE LEARNING SYSTEM 
18 
(ALS) 
INCLUDING 
PAYMENT 
OF 
SALARIES, 
19 
AUTHORIZED 
ALLOWANCES 
AND 
OTHER 
20 
BENEFITS OF THE LOCALLY-HIRED ALS LEARNING 
21 
FACILITATORS; 
22 
11. EDUCATIONAL RESEARCH AND STUDY TRIPS, 
23 
INCLUDING PARTICIPATION IN ACADEMIC AND 
24 
ATHLETIC COMPETITIONS; 
25 
12. PURCHASE OF BOOKS AND PERIODICALS; AND 
26 
13. SPORTS DEVELOPMENT. 
27 
 
28 
NOTWITHSTANDING 
ANY 
PROVISION 
TO 
THE 
29 
CONTRARY, ALL EXPENSES ENUMERATED UNDER THIS 
30 
SECTION SHALL BE SUBJECT TO THE PREVAILING 
31 
POLICIES AND GUIDELINES OF THE DEPARTMENT OF 
32 
EDUCATION (DEPED). ALL LOCAL SCHOOL BOARDS 
33 
SHALL 
SUBMIT 
AN 
ANNUAL 
REPORT 
ON 
THE 
34 
COLLECTION, ALLOCATION, AND UTILIZATION OF THE 
35 


 
SEF TO THE BUREAU OF LOCAL GOVERNMENT FINANCE 
1 
UNDER THE DEPARTMENT OF FINANCE (DOF-BLGF), 
2 
COPY 
FURNISHED 
THE 
LOCAL 
SANGGUNIAN 
3 
CONCERNED, 
REGIONAL 
OFFICES 
OF 
THE 
4 
DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT 
5 
(DILG), DEPED AND THE DEPARTMENT OF BUDGET AND 
6 
MANAGEMENT ON OR BEFORE THE END OF THE FIRST 
7 
QUARTER OF EVERY FISCAL YEAR THE DOF-BLGF 
8 
SHALL THEN SUBMIT TO THE SENATE COMMITTEES ON 
9 
LOCAL GOVERNMENT AND BASIC EDUCATION AND 
10 
HOUSE COMMITTEES ON LOCAL GOVERNMENT AND 
11 
BASIC EDUCATION AND CULTURE, A CONSOLIDATED 
12 
REPORT ON THE COLLECTION AND UTILIZATION OF 
13 
THE SEF WITHIN NINETY (90) DAYS FROM RECEIPT OF 
14 
REPORTS FROM THE LGUS. ALL REPORTS ON THE SEF 
15 
SHALL BE POSTED IN AT LEAST THREE CONSPICUOUS 
16 
PUBLIC 
PLACES, 
WEBSITES 
OF 
ALL 
LOCAL 
17 
GOVERNMENT UNITS, AND THE FULL DISCLOSURE 
18 
POLICY PORTAL BEING ADMINISTERED BY DILG.” 
19 
 
20 
 
Sec. 2. Implementing Rules and Regulations. –  Within sixty (60) days from 
21 
the effectivity of this Act, the DILG, DepEd and DBM, shall jointly promulgate 
22 
the rules and regulations to effectively implement the provisions of this Act. 
23 
 
24 
 
Sec. 3. Repealing Clause. – All laws, presidential decrees, executive 
25 
orders, letters of instructions, proclamations or administrative regulations that are 
26 
inconsistent with the provisions of this Act are hereby repealed, amended, or 
27 
modified accordingly. 
28 
 
29 
 
Sec. 4. Effectivity. – This Act shall take effect fifteen (15) days following 
30 
its publication in the Official Gazette or in a newspaper of general circulation. 
31 
 
32 
 
Approved,  
33