Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS.
First Regular Session

4793

House Bill No.

INTRODUCED BY HONORABLE LIANDA B. BOLILIA

EXPLANATORY NOTE

The Philippines has a financial literacy problem. According to the 2015 survey on financial
capability and inclusion conducted by the World Bank in collaboration with the Bangko Sentral ng
Pilipinas (BSP), Filipinos lack specific knowledge to make informed financial decisions. The
survey aims to assess people's financial literacy or capability in managing their day-to-day
finances, as well as their access to formal financial institutions like banks. Some of the highlights
of the study are:

1.
2:
3.

Only 22.6% or 15.8 million of total adult population have formal accounts;

(One in five adults (17.9%) has insurance;

Nearly a fourth of adults (22.5%) have some form of investment. The most common
types are contributions to SSS (18.3%) and Pag-IBIG (68%). Only three percent of
adults invest in stocks, bonds, Unit Investment Trust Funds or UITFs, mutual funds,
and other managed investment schemes?

. Filipinos are more likely to use informal credit and saving services than formal

financial services. Only 4 percent of respondents report having a mortgage, 5 percent
have a credit card and 10 percent availed credit product from a formal financial
institution. At the same time, more than a third rely on informal savings and credit;$
and

. Those who are knowledgeable about financial matters (those who are “financially

literate”) are more likely to report that they have money left after paying for basic
necessities and less likely to say that they have borrowed beyond their means. Higher
financial literacy scores are strongly correlated with the level of education.

It is evident that financial literacy of the Filipinos is lacking, and it should be a cause for
great concern. In another survey ~ the 2014 MasterCard Financial Literacy Index - the Philippines
scored the lowest in Southeast Asia in terms of basic money management. Moreover, investment
scams have been proliferating in the country. One in every 100 Filipinos has fallen prey to various

+ https://www.worldbank.org/en/news/press-release/2015/10/21/philippines-knowledge-about-money-can-boost-



investment scams that lure people with hefty returns in a short period of time.> That's 1M
Filipinos who lost P25B worth of hard-earned money. There have been no court convictions yet of
fraudulent acts in the country to date.

Financial literacy is a necessary life skill to prepare us for the future and any event of
economic/financial shocks. If Filipinos will be able to take better charge of their financial well-
being, we will also improve our country’s financial health. Thus, the government must have a
program to boost financial literacy among Filipinos.

In view of the foregoing, the immediate enactment and a coral of this bill i earnestly
sought.

Ve

LIA! ALIA
Representativy
4% District, Batangas

° https://business.inquirer.net/202001/1m-filipinos-lost-p25b-to-investment-scams


2
22
23
24
25
26
27
28

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. Ges

INTRODUCED BY HONORABLE LIANDA B. BOLILIA

AN ACT
ESTABLISHING THE NATIONAL FINANCIAL LITERACY COUNCIL AND
APPROPRIATING FUNDS THEREFOR

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

SECTION. 1. Title. - This Act shall be known as the “National Financial Literacy Act
of 2019.”

SEC. 2. Declaration of Policy. ~ The State declares financial literacy as a vital tool in
improving the socio-economic welfare of all Filipinos, which must be harnessed in
developing a robust, inclusive, and sustainable economy.

Toward this end, the State shall seek to:

a. Instill financial literacy in young Filipinos by incorporating its modules to the
basic education system. The mandatory module shall include budgeting,
financial basics such as the effect of compound interest in debt, savings, and
investments, and time value of money;

b. Integrate financial literacy in the implementation of poverty alleviation
programs to ensure their effectivity and sustainability;

¢. Promote financial literacy in all government and private workplaces; and

d. Disseminate financial education materials to a wide audience through various
media platform

SEC. 3. Definition of Terms. - For purposes of this Act, the following terms are
hereby defined:

a. Financial literacy - the education and understanding of various financial
areas including topics related to managing personal finance, money and
investing. It involves proficiency of financial principles and concepts such as
financial planning, compound interest, managing debt, profitable savings
techniques, and the time value of money.

b. Financial education materials - include all materials that can be used as study
or reference materials to enhance financial literacy and education;

1


c. Financial literacy module - a module used in schools that is used to teach
financial literacy and education to learners;

d. Poverty alleviation programs - programs initiated by the national or local
government that help the poor gain access to economic opportunities that
promote sustainable livelihood, as well as social services, such as education
and healthcare.

SEC. 4. Creation of the National Financial Literacy Council- There shall be created
a National Financial Literacy Council and shall exercise the following powers and
functions:

(a) Crafting of financial literacy modules and their integration in the
curriculum of all levels of basic education;

(b) Mandating the conduct of financial literacy sessions for all beneficiaries of
government poverty alleviation programs, particularly those that provide
grants or subsidies;

(©) Setting of guidelines to encourage public and private employers to
implement financial literacy programs for their employees;

(d) Disseminating financial education materials in all media platform;

(c) Recommend to the President and the Congress all policy matters related to
the promotion of financial literacy and education;

( Perform monitoring and regular impact evaluations of financial literacy
programs; and

(g) Exercise such other powers as may be necessary to carry out the purposes
of this Act.

SEC. 5. Composition. - The National Financial Literacy Council (NFLC) shall be
composed of the following:

Ex-officio members:
a. Secretary of Finance;
b. Secretary of Education;
c. Secretary of Labor and Employment;
d. Governor of the Bangko Sentral ng Pilipinas;
e, Commissioner of the Civil Service Commission;
f. Commissioner of the Insurance Commission; and
g. Director General of the Philippine Information Agency

Appointive members;
a. Two (2) representatives from the private sector; and
b. One (1) representative from the academe.

‘The Secretary of Finance shall serve as Chairperson of the NELC while the
Secretary of Education shall serve as Vice Chairperson. The selection, appointment,
and term of office of the appointive members shall be in accordance with the
pertinent provisions of Republic Act No. 10149, otherwise known as the GOCC
Governance Act of 2011.


SEC. 6. Creation of the Financial Literacy Promotions Office. - There shall be a
Financial Literacy Promotions Office (FLPO) to be attached to the Department of
Finance.

The FLPO shall perform the following functions:

(a) Coordinate the preparation of position papers and background materials
for discussion or approval during NFLC meetings;

(b) Assist the NFLC in coordinating and monitoring financial literacy
programs and activities of all government agencies and the private sector;

() Submit periodic reports to the NFLC on the progress and accomplishment
of its work programs;

(d) Prepare a yearly report on the status of financial literacy in the country;
and

(€) Perform ad hoc functions as authorized by the NFLC.

SEC. 7. Implementing Rules and Regulations. - Within sixty (60) days from the
effectivity of this Act, the Secretary of Finance, in consultation with the heads of the
DepEd, DOLE, BSP, CSC, IC, and PIA shall issue such rules, regulations, and other
issuances as may be necessary to ensure the effective implementation of the
provisions of this Act.

SEC. 8. Appropriations. - The amount needed for the initial implementation of this
Act shall be charged against the appropriations of the Department of Finance under
the current General Appropriations Act (GAA). Thereafter, the amount needed for
the full operation and maintenance of the Department shall be included in the GAA
as a distinct and separate item.

SEC. 9. Separability Clause.- Should any provision herein be declared
unconstitutional, the same shall not affect the validity of the other provisions of this
Act.

SEC. 10. Repealing Clause. - All laws, decrees, orders, rules, and regulations or other
issuances or parts inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation.

Approved,