SENATE OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regular Session 
) 
) 
SENATE 
Senate Bill No. 
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. 
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1130 
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO 
EXPLANATORY NOTE 
Education is the key to everyone's success in life. The right to 
education is guaranteed by our Constitution under ARTICLE XIV 
Section 1 which provides that the 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. However 
not all Filipinos are granted with the opportunity to attain education 
that will guarantee a better future, 
At present there are existing laws that promote and protect the 
right of our countrymen to education. Among these would include the 
Barangay (Village) Day Care Center Law, which establishes day care 
centers in Barangay; the Early Childhood Care and Development 
(ECCD) Act, which mandates all villages to have day care centers and 
early learning institutions for children; and the Governance of Basic 
Education Act of 2001, which promotes school-based management 
and de-concentration of authority and decision making from the 
national and regional levels of the education bureaucracy to the 
division and school levels. 
Statistics showed according to the results of the 2010 Annual 
Poverty Indicators Survey (APIS) Sixteen percent of the estimated 39 
million Filipinos 6 to 24 years old are Out-of-School-Youth (OSY), and 
for every ten 5-year-old children, only six have access to preschool 
education. Out of School Youth refers to family members 6 to 17 years 
old who are not attending formal school and family members 18 to 24 
years old who are currently out of school, not gainfully employed and 
have not finished college or post-secondary course. 
As reported, Autonomous Region in Muslim Mindanao has the 
highest percentage of OSYs of about 24 percent of the popUlation aged 
6 to 24 years, followed by Davao (19%) and Caraga and Central Luzon, 
with 18 percent each. Cordillera Administrative Region has the lowest 
percentage of OSYs (10%). The proportion of OSYs among females is 


higher than among males, 17% and 14%, respectively. The net 
enrolment in primary school is high at 85 percent as of school year 
2007 -2008, however this rate declines to 62 per cent in high school in 
the same school year. 
Drop-out rates are doubled as children reach 
secondary school and aroundl1.64 million out-of-school youth and 
others situated in impoverished urban cities and far-flung 
communities still need to be reached. 
This Bill seeks to implement a voluntary student loan in order 
to help those who are qualified to have access to education. There are 
scholarships granted by the Government and other private sectors 
however the same has not been extended to the grass root level. By 
the help of the "Lenders" covered in this bill, education will now be 
accessible to all. Amounts can be loaned to cover not only the 
expenses for tuition fees but all other expenses in finishing the course 
or program. 
In view of the foregoing, approval of this bill is earnestly sought. 
. C5 G-=- : 
JOSEPH VICTOR G. EJERCITO 
Senator 


SENATE OF 1'HE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regular Session 
) 
) 
SENATE 
Senate Bill No. 
1430 
Stl1iltr 
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'13 
AUG 29 P 4 :47 
Introdueed by SENATOR JOSEPH VICTOR G. EJERCITO 
AN ACT ESTABLISHING A VOLUNTARY STUDENT LOAN 
PROGRAM BY BANKS AND GOVERNMENT FINANCIAL 
INSTITUTIONS, PROVIDING INCENTIVES THEREFOR AND FOR 
OTHER PURPOSES 
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 
"Voluntary Student Loan Program Act". 
SECTION 2. Declaration of Policy. - It shall be a policy objective 
of the State to assist eligible students to obtain post-secondary 
technical-vocational certificates or diplomas from technical-vocational 
institutes and colleges and postgraduate degrees from higher 
education institutions by encouraging banks and government 
financial institutions to lend money to eligible students to be repaid in 
installments after the student graduates or leaves the educational 
institution. 
SECTION 3. Definition of Terms. - For purposes of this Act, the 
following terms shall mean: 
(a) CHED refers to the Commission on Higher Education. 
(b) Higher Education Institution (HEI) refers to an educational 
institution that is legally authorized to offer a program of education 
leading to the conferment of a degree. 
(c) 
TESDA refers to the Technical Education and Skills 
Development Authority as established under Republic Act No. 7796, 
otherwise known as the "TESDA Act of 1994". 


(d) Technical-Vocational Institute refers to a technical-vocational 
(tech-voc) education and training institution accredited by the TESDA 
which 
offer's 
any 
non-degree 
program 
at 
the post-
secondary educational level oriented towards skills proficiency leading 
to certificate or diploma in preparation for a particular occupation or 
group of middle-level occupations. 
(e) Lenderrefers to a bank or a government financial institution, 
which provides loans to student-borrowers pursuant to this Act. 
(1) Student-borrower refers to an eligible student with a loan 
under this Act. 
(g) Eligible student refers to a student who meets the admission 
requirements of a tech-voc institute or HEr and has been accepted for 
enrollment in a post-secondary tech-voc institute as a non-degree 
student or in an HEI as an undergraduate or postgraduate student. 
(h) Priority eligible student refers to an eligible student who is an 
immediate member of a family where no other immediate member of 
such family is enrolled in or has completed post-secondary or higher 
education at the time of the loan application. 
(i) Government financial institutions refer to financial institutions 
in which the government directly or indirectly owns majority of the 
capital stock and which are registered and directly supervised by the 
Bangko Sentral ng Pilipinas (BSP). 
(j) Higher Education refers to college and graduate education or 
training in an educational program leading to a degree offered in HEIs. 
It is also known as Tertiary Education. 
(k) Post .. secondary education refers to education and training in 
non-degree 
vocational and technical courses offered 
in post-
secondary tech-voc institutions. 
SECTION 4. Registration of Student Loan Progmm under this Act. 
- Banks, whether government or private, and government financial 
institutions participating in the student loan program may allot a 
portion of their loanable funds for loans to eligible students. Such 
banks and government financial institutions participating in the 
program may be entitled to avail themselves of the incentives under 
this Act by the registration of their student loan program with the 
BSP. 
In addition, the BSP shall provide other incentives, which may 
be nonmonetary, to banks and government financial institutions 
participating in the voluntary student loan program under this Act. 


SECTION 5. Loan Coverage. - The loan shall cover the cost of 
the entire program offered by the HEI or tech-voc institute including, 
but not limited to, tuition and miscellaneous fees: Provided, That 
adjustments shall be made in case of increase in tuition and 
miscellaneous fees. It shall likewise include an amount for the cost of 
attendance, covering necessary expenses of the student for books, 
food, transportation, board and lodging and a reasonable allowance 
for projects and other school requirements. 
SECTION 
6. Student-Borrower Number. 
For 
proper 
implementation of this Act and to better facilitate the collection of the 
loan, the Social Security System (SSS) and the Government Service 
Insurance System (GSIS) shall issue, upon application, an SSS or 
GSIS number to the student-borrower. The number so issued shall 
serve as the permanent SSS or GSIS number of the student-
borrower in case of future employment with the private or government 
sector. 
SECTION 7. Qualification Requirements of Student-Borrower. -
Any student-borrower eligible under this Act shall have the following 
entry requirements: 
(al General entry requirements: 
grant. 
(1) Must be a Filipino citizen; 
(2) Currently enrolled or intends to enroll or reenroll in 
any of the priority courses to be determined by the CHED 
or the TESDA; 
(3) Has parents or guardians who are SSS or GSIS 
members or SSS prior registrants; and 
(4) Does not currently enjoy any scholarship or study 
(b) Additional specific entry requirement for priority eligible 
student: 
(1) Barangay certification that no other immediate family 
member of the student is enrolled or has completed 
a post-secondary education at the time of the loan 
application; or 
(2) Notarized self-certification that no other immediate 
family-member of the student is enrolled or has completed 
a post- secondary education at the time of the loan 
application. 
(c) Other requirements as may be determined by the banks. 
SECTION 
8. Loan 
Application. 
Any 
eligible student-
borrower may file the loan application with a participating bank or 
government financial institution. A loan application shall include, 
among others: 


(a) The student SSS or GSIS number; 
(b) The taxpayer's identification number (TIN) in case the 
student is employed; 
(c) The list of expenses which shall include the total tuition fees 
for the entire period of attendance to complete the student's 
course or degree, with a necessary allowance for any increase 
that the tech-voc institute or HEI may rightfully make and the 
other miscellaneous expenses certified by the educational 
institution; 
(d) A reasonable approximation of the cost of attendance of the 
student in the chosen HEI or tech-voc institute which shall 
include, among others, the cost of books, board, lodging and 
transportation expenses; 
(e) A statement of the student-borrower on the preferred 
employer in the future, whether with the private or public 
sector; fmd 
(1) All other requirements that the participating bank or 
government financial institution may impose for the proper 
identification of the student. 
SECTION 9. Loan Disbursement. - Upon approval of the loan 
application, the loan shall be disbursed in tranches every semester or 
trimester, or any other term of attendance, depending on the 
academic calendar adopted by the HEI or tech-voc institute. Any 
succeeding tranche shall be disbursed on the condition that 
the student-borrower completes the term previously enrolled in as 
certified 
by 
the 
HEI 
or tech-voc institute. 
The 
tuition 
and 
miscellaneous fees payable to the educational institution shall be 
disbursed or be made payable directly to the HEI or tech-voc institute. 
SECTION 
10. Withholding 
of 
Second 
or 
SUbsequent 
Disbursement. - A lender who receives information that the student-
borrower has ceased to be enrolled before the disbursement of the 
second 
or any succeeding installment 
shall 
withhold 
such 
disbursement. Any disbursement, which is so withheld shall be 
credited to the student-borrower's loan and treated as a prepayment 
thereon. 
SECTION 11. Interest Rate and Tax Exemption. - For any loan 
procured under this Act, lenders shall charge an interest based on the 
prevailing ninety-one (9 I)-day Treasury Bill rate at the time of release 
of the loan to be paid by the student-borrower and an additional 
interest of three percent (3%) or, in case of loans to priority eligible 
students, an additional interest of five percent (5%) which shaH not be 
payable by the student, but may be claimed by the lender as a tax 
deduction against the total gross receipts tax due and payable by the 
banks for the taxable year: Provided, That the additional interest shall 
be allowed as a tax deduction against the total gross receipts tax for 


the same taxable year that the additional interest is due: Provided, 
further, That the total amount of the additional interest and the 
claimed tax deduction shall be subject to proper documentation and 
to the provisions of the National Internal Revenue Code, as 
amended: Provided, finally, That gross receipts of the lender derived 
from the imposition of the additional interest and the claimed tax 
deduction shall be exempted from gross receipts tax under Title V of 
the National Internal Revenue Code, as amended. 
In addition, such loans shall be exempted from payment of 
documentary stamp tax. 
SECTION 12. Tenns and Conditions of Loans. -
Any loan 
agreement shall: 
(a) Be evidenced by a note or other written instrument which 
provides for repayment of the principal amount of the loan, together 
with the interest thereon, in equal installments or when the borrower 
so requests, in graduated periodic installments, payable quarterly, 
bimonthly or monthly at the option of the student-borrower, over a 
period beginning not earlier than twenty-four (24) months after 
the student-borrower ceases attending the tech-voc institute or HEI, 
and ending eight (8) years after such date, except that such period 
may begin earlier than twenty-four (24) months upon the request of 
the student-borrower; 
(b) Include a provision for acceleration of repayment of the 
whole, or any part, of such loan, at the option of the student-
borrower; and 
(c) 
Include a 
provlslon for 
preferential employment of 
thestudent-borrower upon graduation. 
SECTION 13. Collection. - A lender shall file a request with the 
GSIS or the SSS to collect the repayment of the loan through its 
system of salary deduction and withholding. It may likewise enter into 
an 
arrangement 
with 
the 
Philippine 
Overseas 
Employment 
Administration 
(POEA) 
and 
the 
Overseas 
Workers 
Welfare 
Administration (OWWA) 
to ensure collection from the student-
borrower seeking employment abroad. 
SECTION 14. Program Administration. - An interagency team 
composed of the CHED, the TESDA, the BSP, the Bankers Association 
of the Philippines (BAP) , the Chamber of Thrift Banks (CTB) and the 
Rural Bankers Association of the Philippines (RBAP) shall jointly be 
responsible for policy guidance and direction, monitoring and 
evaluation of the student assistance program under this Act. The 
CHED and the TESDA shall chair and co-chair, respectively, the said 
team. 


SECTION 15. Implementing Rules and Regulations. - The CHED, 
the TESDA, the Department of Finance and the BSP, in consultation 
with the SSS, the GSIS, the Bureau of Internal Revenue (BIR) , the 
Central Credit Information Corporation (CcrC), the National Bureau of 
Investigation (NBI), the POEA, the Coordinating Council of Private 
Educational Associations (COCO PEA) .and the Philippine Association 
of State Universities and Colleges (PASUC), shall promulgate such 
rules and regulations necessary for the proper implementation of this 
Act within ninety (90) days from the effectivity of this Act. 
SECTION 16. Separability Clause. - If any provision of this Act 
is declared unconstitutional or invalid, the other sections or 
provisions not otherwise affected shall continue to be in full force and 
effect. 
SECTION 17. Repealing Clause. - All laws, executive orders, 
decrees, 
instructions, 
rules 
and 
regulations 
contrary 
to 
or 
inconsistent with any provision of this Act are hereby amended, 
repealed or modified accordingly. 
SECTION 18. Effectivity Clause. - This Act shall take effect 
fifteen (15) days after its publication in at least two (2) newspapers of 
general circulation. 
Approved,