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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No.__ 9058 _

Introduced by Representatives Sharon S. Garin and Stella Luz A. Quimbo

EXPLANATORY NOTE

During the worst of times when the COVID-19 pandemic in 2020 necessitated strict
lockdown protocols causing small businesses to close (leading to job losses) and the
remainder of the working population to work from home, investment scammers
recognized ideal conditions to perpetrate multiple types of scams ranging from the simple
pyramid sales schemes to complicated investments dealing with alleged bitcoins or other
forms of cryptocurrencies and forex trading.

Indeed, the massive reach of social media and other online platforms in the country today,
coupled with a population easily swayed to place their trust in an entity illegally soliciting
investments has heightened the risk of investment scams victimizing the public. The low
levels of savings and financial literacy to identify tell-tale signs of investment scams (most
of these schemes are being conducted online with a community of loyal and satisfied
followers and subscribers) underscores the need for a national response through financial
literacy and education

Published data from the Securities and Exchange Commission (SEC) revealed an
alarming surge in investment scams ranging from alleged cryptocurrency investments,
forex trading, Ponzi schemes, pyramid sales schemes, and many other get-rich-quick
schemes designed to entice and lure Filipinos to part with their hard-earned money in
exchange for promises of above-market monthly retums. The investment scams
advisories issued by the SEC to the public registered a 97% surge in 2020 compared to
2019, with metropolitan Cebu City registering a 400% increase in fraudulent entities
employing fraudulent schemes to defraud investors.

At the core of the issue is the financial literacy challenge in the Philippines. Based on the
BSP 2019 Financial Inclusion (Fl) Survey, only half (55%) of Filipino adults know the
effect of inflation on the prices of goods and services. Only a third (33%) of respondents
correctly answered questions on interest rates. The same percentage of respondents
said: they do not know how much their savings would be if interest rate is guaranteed at
2% and compounded annually for five years. “These concepts on time value of money
are crucial in understanding the principles of saving, getting credit and investing. Without
knowledge of these concepts, Filipinos would be unable to make informed decisions when
comparing financial products and selecting financial institutions that would best fit their
needs and capacities.

Studies show that money management habits formed in early life persist and last into
adulthood. College students who will soon be joining the work force will need to make


important financial decisions (e.g., allocating their salaries, accepting credit card offers,
evaluating investment options, etc.) that will directly impact their well-being. This can also
spell the difference between those who will later on have a retirement that is well-prepared
for or not—the latter having significant implications for the government and the society.

Finances are one of the major causes of stress for adults. Around 3 out of 10 employees
all over the world report to having money troubles that are negatively impacting their life.
Health and financial issues are interconnected and can impact employee productivity.
Financial worries are strongly linked to stress and anxiety, poor health, unhealthy
lifestyles, and reduced job effectiveness. These come in’ the form of lower job
engagement, higher levels of stress, anxiety, and depression as well as increased
instances of absenteeism or “presenteeism”—that is, physically reporting for work but not
fully functioning.

This bill seeks the inclusion of a savings and investment subject in the curriculum for
junior high school in order to equip them with the tools for long-term savings and long-
term investments prior to senior high school and college or university studies. From the
perspective of the government, educated investors are better equipped to recognize
frauds and scams and not fall prey to unscrupulous individuals offering “get-rich-quick
schemes" to hapless victims. Furthermore, as has been seen in our neighboring countries
in the ASEAN region, a population with a high level of financial education and literacy will
serve to stimulate the development of the domestic capital markets and ultimately reduce
the dependency of the population on government grants and subsidies especially during
times of crises and emergencies.

In sum, the passage of this bill will promote investor education, investor protection
and scam-proof the population and, more importantly, enable the young population to
understand the fundamental principles of finance and investments as they chart their
chosen strand and track for their senior high school years.

The common aspiration is to roll out an effective investor education program to
encourage a sustained retail participation in the capital markets paving the way to a
virtuous circle of financial literacy and capital market development that will effectively put
an end to the vicious cycle of investment scams and a financially illiterate population.

In view of the foregoing, immediate approval of this bill is requested.

‘SHAI . GARIN STELLALUZ A. QUIMBO
Party-list, AAMBIS-OWA 2r4 District, Marikina City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No.__ 9058

Introduced by Representatives Sharon S. Garin and Stella Luz A. Quimbo

AN ACT
TO FURTHER ENHANCE THE BASIC EDUCATION SYSTEM BY PROVIDING FOR
THE INCLUSION OF A SUBJECT ON SAVINGS AND INVESTMENTS IN THE
SECONDARY EDUCATION CURRICULUM AND FOR OTHER PURPOSES
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 “Savings and Investments

Act of 2021”.

Sec. 2. Policy of Investor Education. — The State shall adopt a national strategy to
enhance investor education by including the same among the priority programs to
encourage long-term savings and investment by the Filipinos. The goals of the investor
education include not just investor awareness of the alternative savings and investment
products, but also for the population to develop their long-term investing skills and
financial well-being through planning and actual investments. Finally, the national investor
education program seeks to foster financial inclusion for both existing and potential
investors towards enabling the development of the financial markets through
collaborations by the government with both public and private sector participants in the

finance and investments industry.


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SEC. 3. Savings and Investment Subject in Junior High School. - In furtherance of
the above State objective, a relevant, comprehensive, and globally -benchmarked national
investor education program shall be integrated within the enhanced basic education
program prescribed under Section 4 of Republic Act No. 10533 otherwise known as the
“Enhanced Basic Education Act of 2013.” The junior high school curriculum for all
students prior to their senior high school curriculum shall integrate a required subject on
the basics of savings and investment that will focus on providing an overview of long-term
investment instruments available to retail investors, the risks and rewards of savings and
investment, available investments in the domestic capital market, alternative investments,
investor protection safeguards provided under existing regulations, and how to recognize

and avoid financial fraud (e.g., Ponzi schemes and get-rich quick scams), among others.

Sec. 4. Content of the Savings and Investment Subject. - The savings and
investment subject shall introduce the theoretical underpinnings of financial education
principles and financial markets and shall provide clear and specific examples of actual
case studies of traditional and innovative investment products and financial instruments
to illustrate the features thereof, the risks and rewards of said financial instruments as
they have been actually launched in the Philippines or in global financial markets.

In the design and implementation of the Savings and Investment subject for junior
high school, the following are the minimum key core competencies that the students
should develop:

a.) Fundamental understanding of the benefits of long-term financial planning to

achieve financial goals at the individual and family levels;

b.) Suitability of financial products relative to one’s risk-reward profile and other

behavioral considerations;

©.) Understanding how different savings and investment products deliver returns

and the risks attendant to investing in these instruments; and

d.) Long-term financial planning with an understanding of the intermediaries who

distribute different alternative instruments, where to source relevant material


information and the financial market regulations and other legal and regulatory

requirements that protect investors against fraud and scams.

Sec. 5. Separability Clause. - If any provision of this Act is declared invalid by a
competent court, the remainder of this Act or any provision not affected by such

declaration of invalidity shall remain in force and effect.

Sec. 6. Repealing Clause. - All laws, presidential decrees, executive orders, other
executive issuances, rules and regulations or parts thereof, including the provisions of
Republic Act 10533, which are inconsistent with this Act are hereby repealed, amended

or modified accordingly.

Sec.7. Effectivity. - This Act shall take effect fifteen (15) days after its publication
in at least two (2) newspapers of general circulation.

Approved,