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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Third Regular Session

House Bill No. 5905

Introduced by Honorable Sherwin T. Gatchalian

Explanatory Note

In the 1987 Constitution, the sovereign people have audaciously
proclaimed “the right of all citizens to quality education at all levels!,”
mandating the State to “take appropriate steps to make such education
accessible to all.” In line with the State policy of accessible public education,
basic and secondary education are made available free-of-cost to every Filipino
child through the public education system. Thus, every Filipino is guaranteed
the right to education up to the high school level.

Tertiary education, however, is a completely different story altogether.
Glaring inequity in access to higher education continues to impede the
Filipino’s right to education at this pivotal level. In fact, according to the 2013
Annual Poverty and Indicator Survey (APIS), half of college-age youngsters were
unable to pursue higher education due to financial constraints or the need to
work and eam for the family. The financial difficulties of many families that
simply cannot afford to send their children to college deprives them of a
powerful tool to lift themselves out of poverty ~ a college degree.

‘The Family and Income Expenditure Survey (FIES) 2012 shows that a
family headed by a college graduate has an average family income more than
two times larger than a family headed by a high school graduate. This,
combined with studies showing more significant private returns on investment
in higher education compared to secondary education’, demonstrated the
singular power of higher education in improving economic outcomes for the
neediest segments of our population. With such limited access to higher

® Art, XIV, Sec. 1, 1987 Constitution, (Emphasis added)
2 Ibid,

® Psacharopoutos, G

"Returns to Investment in Education: A Global Update", 1994


education, a vicious cycle emerges in which those who would benefit the most
from a college education are prevented from obtaining one due to prohibitive
costs.

The benefits of higher education, however, are not limited to the
individual and his family. In terms of human capital formation, State
investment in human capital gives its citizens the knowledge and ability to
make the most of the limited resources available. This is what higher education
provides, giving countries an advantage in the current global shift toward
knowledge-based economies. In addition, higher education allows a country to
produce and train more engineers and scientists who play a vital role in the
uptake of new technology. By innovating or replicating technologies from more
advanced economies, such specialists will contribute toward stimulating
entrepreneurial activity and in turn help in job creation’, Thus, producing a
better-educated workforce has immense implications on collective social and
economic development, making inclusive growth a tangible reality.

Given the individual and social advantages of higher education, it would
be greatly beneficial to the Philippines if higher education would be given the
same level of importance as basic education and secondary education. This
would mean implementing a simple but revolutionary education reform ~ the
institutionalization of tuition-free tertiary education. Instituting tuition-free
tertiary education in state universities and colleges (SUCs) would increase
access to the Philippine higher education system to the level of developed
countries with firm commitments to public education, such as Denmark,
Finland, Germany, and Sweden, as well as strong emerging economies which
have followed in their footsteps, such as Brazil and Chile. :

This is a reform that our government can certainly afford due to
improvements in its tax collection efforts, registering a tax to GDP ratio of 14.1
percent as of November 2014, compared to 12.1 percent in 2010.56 This means
that the government has been able to collect more revenue through tax, given
the GDP growth experienced in the past few years. In 2014 the government fell
short of its spending target, meaning there are funds that have not been spent
accordingly. For infrastructure alone, the shortfall amounted to P89 billion.”
This is more than enough to have funded tuition-free education for students in

* Ceyda Ozsoy (2008) “The Contribution of Higher Education to Economic Development”
8 World Bank

sAmbanta, J., “Govt tax effort rises 10 14.196 of economy", The Standard, January 19, 2015.

http: //manilastandardtoday.com /2015/01 /19 /govt-taceffort-rises-to-14-1-of-economy/>

7 Pena, ZB.D., "Gov't infra spending falls below target in. 2014", The Philippine Star, May, 2015.

‘http. www. philstar.com /business/2015/05/01/1449761 /govt-infra-spending-falls-below-target-2014=


SUCs for the last eight years. For fiscal year 2014, the SUCs had an unutilized
budget amounting to P5.64 billion.8 These funds alone would make up 50
percent of the estimated funding needed for 2016. And for the said fiscal year
2016, the government is eyeing a budget of about P3 trillion.? The sum
required to make SUCs tuition-free in the country would amount to about 0.34
percent of the potential budget, which is a reasonable and easily justifiable
budget appropriation to make considering the program’s vast positive effects on
individual and collective development.

‘Therefore, this legislation seeks to provide for a full tuition subsidy for all
current and future enrollees in SUCs. Qualified Filipino citizens will be able to
avail of the full tuition subsidy, provided they maintain good academic and
moral standing. The tuition fees to be paid by the students will instead be paid
directly by the government to the SUCs. .

It is time for us to secure, once and for all, the Filipino’s right to higher
education through decisive action. It is time for us to institute a reform which
will ensure that millions of deserving but underprivileged young men and
women will be given their rightful opportunity to pursue a college degree. By
passing this legislation, we are making a genuine and tangible collective
commitment to building the world-class education system that our people
deserve.

Support for the passage and approval of this landmark legislation is
earnestly sought.

FY 2014 Annual Report on Appropriations, Allotments, Obligations and Disbursements
M.F..£, "Up to PQ trillion eyed for 2016 budget", Business World Online, April 26, 2015.

« hitp:/ /sww.bworldonline.com /content.php?sectionTop Storyastitle-p-to-p3-trillion-cyed-for-2016-

udgetdaid= 1068:



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Third Regular Session

House Bill No. 5905
Introduced by Honorable Sherwin T. Gatchalian .

AN ACT
PROVIDING FOR FULL TUITION SUBSIDY IN STATE UNIVERSITIES AND
COLLEGES, AND APPROPRIATING FUNDS THEREFOR

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

Congress assembled:

‘TION 1, Short Title. - This Act shall be known as the “Free Higher
Education Act.”

SEC. 2. Declaration of Policy. - It is hereby declared that accessible
and quality education is an inalienable right of the Filipino, Therefore, the
State shall renew its constitutionally mandated duty to make education its top
budgetary priority by providing tuition-free higher education courses in state
universities and colleges. ,

SEC. 3. Full Tuition Subsidy. ~ All Filipino citizens who are either
currently enrolled at the time of effectivity of this Act, or shall enroll at any
time thereafter, in courses in pursuance of a bachelors degree, certificate
degree, or any comparable undergraduate degree in any state university or
college shall be exempt from paying tuition fees for any units enrolled in any
state university or college, unless they are disqualified under the provisions of
this Act or by any other provision of law.

SEC. 4. Exceptions. ~ The provisions of the next preceding Section of
this Act notwithstanding, the following are hereby disqualified and deemed
ineligible for the full tuition subsidy:


a) Persons who have already attained a bachelors degree or
equivalent degree from any higher education institution, whether public or
private;

b) Persons who have been dishonourably discharged from any higher
education institution, whether public or private, for any reason other than
financial difficulty in paying tuition and other fees; t

©) Persons who have been convicted of any crime involving moral

turpitude;

d) Persons who fail to regain good academic standing within their
respective state universities and colleges after one (1) year upon being placed
on academic probation or delinquent status;

SEC. 5, Special Tuition Subsidy Fund - The Special Tuition Subsidy
Fund, hereinafter referred to as the Fund, is hereby established. The Fund
shall be used solely for the purposes of implementing the full tuition subsidy
under the provisions of this Act. Tuition fees for units enrolled by persons
eligible for the tuition benefit under the provisions of this Act, payable to state
universities and colleges, shall be paid from this Fund.

SEC, 6, Administration of the Fund. ~ The Fund shall be administered
by the Commission on Higher Education, with the following powers and
functions:

Manage and administer the Fund; .

Devise a reporting mechanism to be implemented by the state
universities and colleges which will detail the exact amount of tuition fee
subsidy availed of by persons eligible for the full tuition subsidy under this Act;

c) Formulate and implement an efficient and transparent mechanism
to ensure the payment of tuition fees to the respective state universities and
colleges, pursuant to the provisions of this Act, using money from the Fund;

d) Resolve and mediate disputes concerning the ineligibility or
disqualification of persons from the full tuition subsidy under the provisions of
this Act or any other provision of law; and

e) Any other powers or functions necessary for the implementation of
the provisions of this Act.

SEC. 7. Tuition Report. - The President of each state university or
college shall submit to the Commission on Higher Education (CHED), within
five (5) days after the last day of late registration for each semester, a report
detailing the number of units enrolled by persons eligible for the full ,tuition



subsidy in their institution, as well as the tuition fee amount due based on the
number of units enrolled.

SEC. 8. Payment from Fund. - The CHED shal! ensure the full payment
of tuition fees due to the state university or college, as reported under the next
preceding section of this Act, no later than thirty (30) days after the submission
of the report to the CHED: Provided, That the CHED shall reserve the right to
disallow the payment of any reported fees which are anomalous or irregular,
until further investigation has been conducted.

SEC, 9, Accountability Report. - At the end of each academic sefnester,
the President of each state university or college shall submit to the CHED a
report reconciling the funds received from the Fund. Any unused or improperly
disbursed amount shall be returned immediately to the Fund.

SEC. 10, Midterm Report. - Starting during the first school year upon
effectivity of this Act, the CHED shall conduct a mandatory review and submit
a midterm report to Congress as to the status of implementation of this Act.

The CHED shall include among others, in this midterm report, the
following key metrics of access to and quality of public tertiary education:

(a) Enrollment rate;
(b) Student demographics;

(c) Graduation rate;

(d) Gross tuition receipts;

(ec) Disqualification and ineligibility;

() Teachers’ welfare and training profiles; .

(2) Adequacy of funding requirements; and

(h) Other educational quality indicators, including but not limited to
physical learning infrastructure, teacher-to-student ratio, and student
housing.

SEC. 11. Appropriations. - The amount of Ten Billion Five Hundred
Million Pesos (P10,500,000,000) is hereby initially appropriated from the
Presidential Social Fund to implement the provisions of this Act. Thereafter,
such amount necessary to effectively carry out the provisions of this Act shall
be included in the annual General Appropriations Act.

SEC. 12. Implementing Rules and Regulations. — Within (60) days
from the effectivity of this Act, the CHED shall promulgate the implementing


rules and regulations necessary to ensure the efficient and effective
implementation of this Act.

SEC. 13. Separability Clause. - Should any part of this Act be declared
unconstitutional, the rest of the provisions of this Act shall continue to be in
effect and subsisting.

SEC. 14, Repealing Clause. ~ The provisions of other laws, decrees,
executive orders, rules and regulations inconsistent with this Act are hereby
repealed, amended, or modified accordingly.

SEC. 15. Effectivity, - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette and/or in at least two (2) national
newspapers in general circulation