Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

15™ CONGRESS
First Regular Session

3054

HOUSE BILL NO.

Introduced by REP. SALVADOR H. ESCUDERO IIL

EXPLANATORY NOTE,

To achieve social justice, social stability, economic development, peace and
prosperity, one of the most compelling concerns that we must address is the total
development of the person as a functional and productive member of the society.

It is in this light that our Government has long recognized that Education should be
given the highest priority in terns of State support and State resources. Consequently with this
prioritization, education has been consistently given the biggest slice of the budgetary pie.

Article XIV, Section | of the Constitution declares:

“The State shall protect and promote the right of all citizens to quality

education at all levels and shall take appropriate steps to make education
accessible to all.”

Likewise, Article II, Section 17 of the Constitution also declares:

“The State shall give priority to education, science and technology,
arts, culture and sports to foster patriotism and rationalism, accelerate social
progress and promote total human liberation and development.”

To achieve our concerns and implement this Constitutional mandate, the State shall
provide the mechanisms to broaden opportunities to higher education in addition to what is
already provided for in RA 7722. “The Higher Education Act of 1994,” RA 6728 “The
Government Assistance to Students and Teachers in Private Education Act,” and RA 8392
“The Higher Education Modernization Act of 1998.”

Considering that our financial capability as a nation does not permit us to subsidize
every Filipino child’s education from pre-school all the way to college, it is therefore a fact
that government alone can not address the issue of providing education for all.

This bill therefore proposes’ to broaden opportunities and promote education as an
accessible equalizer through the partnership of Government and the private sector thus,


ensuring the education shall become an effective instrument in improving the life of the
majority of the Filipino people.

In fact in our hierarchy of values, most consider education over and above clothing
and shelter. This bill ‘shall strengthen education as a means of an upward mobility; thus
passage of this bill is hereby urged.

oe
Pee
SALVADOR H. ESCUDERO II

Representative
1* District, Sorsogon


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

15™ CONGRESS
First Regular Session
~ 3054

HOUSE BILL NO.

Introduced by REP. SALVADOR H. ESCUDERO IIL

AN ACT
ESTABLISHING AN EDUCATION TRUST FUND FOR GRANTEES OF GSIS AND
SSS MEMBERS AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. ~ This Act shall be known as the “Education Trust Fund Act.”

SEC. 2. Declaration of Policy.
and promote the rights of all citizens to quality education at all levels and shall take

‘The Constitution provides that the State shall protect

appropriate steps to make education accessible to all. Towards this end, the State shall
endeavor to extend social security protection to provide the opportunity of making education
accessible commodity to realize the right of all citizens, particularly the under privileged, the
equal opportunity to quality education for them to contribute in a more productive and active

role in social life specially in the economic and political spheres.

SEC. 3. Definition of Terms. — The following terms shall be understood in this Act to

mean:

(1) ETF — refers to the Education Trust Fund created by this Act.

(2) Government Service Insurance System (GSIS) refers to the agency entrusted to take
charge of all matters pertaining to the officials and employees, as created and
established under Commonwealth Act No. 186, as amended by Presidential Decree
No. 1146, and further amended by Republic Act No. 8291.


(3) Social Security System (SSS) refers to the agency entrusted to take charge of all
matters pertaining to the benefits and insurance claims of all private employees,
‘embodied in republic Act No. 1161 and amended by republic Act No. 8282,

(4) Optional means the voluntary act of qualified members of GSIS or SSS to be
included in the pre-need education trust fund coverage for their grantee, deductible
to their salaries and / or payable to the system concerned in a form of equal number
of monthly contributions as determined in the policy contract.

(5) Education Trust Fund (ETF) refers to the accumulated amoynt of money deducted
from GSIS and SSS members and / or paid by the members to the system concerned
for the use in the education of their grantee to be paid directly to universities or
colleges for a baccalaureate degree and / or institutions for a vocational / technical
program to be determined as provided for in the policy contract.

(6) Planholder refers to a member of the GSIS and the SSS who avails of ETF Plans for
the education of this grantee according to his desired vocational / technical and / or
baccalaureate education program.

(7) Plan agreement refers to the policy contract issued by either the GSIS or the SSS to

the provisions of the planholders’ benefits and responsibilities.

(8) Grantee refers to the child designated by the planholder regardless of relatio

hip to
avail of the ETF benefits according to the education program determined in the
policy contract.

(9) Monthly contributions refer to the amount of money to be deducted out of the
salaries of the qualified member and / or paid directly to the system concerned as

specified in the policy contract to be determined by the Education Trust Fund Board.

(10) Education Trust Fund (ETF Board refers to the governing body which shall
formulate policies, implementing, rules and regulations, guidelines, and other related

matter pertaining to the operation and management of the ETF created under this Act.

SEC. 4. Education Trust Fund (ETF) Plans. — There is hereby established in the
GSIS and the SSS a special education trust fund to be known as the “GSIS/SSS Education
‘Trust Fund (ETF) Plans” through enrollment in any desired education program to ensure the

education of the grantee of members for both systems respectively.

SEC. 5. Management and Supervision. — (a) To carry out the purposes of this Act,
the ETF Board is created, hereinafter referred to as the “ETF Board”, a governing body


which shall formulate policies, implementing rules and regulations, guidelines and other
related matter to oversee, manage and supervise the operation of ETF with principal

place of business in Metro Manila, Philippines.

(b) The ETF Board composed of nine (9) members shall be comprised of one (1)
member for the Government Service Insurance System (GSIS); one (1) member from
the Social Security System (SSS); one (1) member from the Senate Committee on
Government Corporations and Public Enterprises; one (1) member from the House of
Representatives Committee on Higher and Technical Education; one (1) member from
the House of Representatives Committee on higher and Technical Education and Skills
(TESDA); and one (1) Independent Pre-need Resource Person with adequate knowledge
and a minimum of ten (10) years experience in pre-need marketing and industry
‘exposure which shall be appointed upon recommendation by the majority members of
the proposed Board. The term of the appointive members shall be six (6) years. The
members of the Board shall receive atleast Two Thousand Five Hundred Pesos
(2,500.00) per diem for each meeting actually attended by them, but not to exceed Ten
‘Thousand Pesos (P10,000.00) a month: Provided, further, That said members of the
Board shall also receive reasonable transportation and representation allowances as may
be fixed by the ETF Board, but not to exceed Ten Thousand Pesos (P10,000.00) a
month. ,

(©) The ETF Board upon the recommendation of the GSIS and the SSS, shall appoint
an actuary and such other personnel as may be deemed necessary; fix their reasonable

compensation, allowance and other benefits; prescribe their duties and establish such

guid
‘economical administration of the provision and purposes of this Act.

es and procedures as may be necessary to ensure the efficient, honest and

(d) The GSIS and the SSS shall create an Education Trust Fund (ETF) Department
respectively, to manage the general conduct of the operation and management functions:
Provided, however, That all personnel of the ETF Department shall be appointed by the
President of the GSIS / SSS, as the case may be, subject to'the confirmation of the ETF
Board: Provided, further, That the personnel of the ETF Department in both the GSIS
and the SSS shall be selected only from Civil Service eligible and be subjected to civil

service rules and regulations.


(©) The ETF Board shall be responsible for the formulation and implementation of the
Implementing Rules and Regulations (IRR) of this Act, to ensure the effectiveness and
viability of the ETF for a self sustaining operation, including its budgetary support,
operating capital and other related expenditures, monitoring and categorizing of schools
according to the cost of its existing tuition fees and other related school fees and
charges, monitoring of rate schedules according to the age, terms of payment, number of
years before availment and other related matters to safeguard the implementation and
‘operation of this Act.

SEC. 6. Education Trust Fund (ETE) Plans Agreement. - For the attainment of its
main objectives, the general provisions of a plan agreement shall be issued by both the GSIS
and the SSS, respectively, to all availing members as planholders which shall govern the
terms and conditions in the implementation of premium payments and benefits inclusive of
the plan cash value which shall be determined by the ETF Board.

SEC. 7. Trust Fund Management. - ‘The EVE must be separated from the general
funds of the system concemed and must be self sustaining to be invested according to the
provisions and guidelines of the Social Security Fund in the case of the SSS; Investment of
Funds in the case of the GSIS, except on members loans for a greater yield investment. No
amount of money from the ETF Plans shall be loaned to the members and/or planholders of

system concerned

>. 8 Grantee. - For purposes of this Act the term “grantee” shall include
legitimate, legitimated, legally adopted or illegitimate child: grandchild and/or whoever be
"the child to be assigned by the member regardless of relationship. A grantee is a duly
of the ETF benefits. A

member may apply for a deferred plan if he does not have a child and or grantee.

appointed and registered grantee on or before enrollment to ay

SEC. 9. Optional Coverage. - Subject to the rules and regulations prescribed by the
ETF Board, all GSIS and SSS members, regardless of civil status, with or without a child
and/or grantee, may opt to participate under this ETF plans program.

SEC. 10. Premium Payments. - The amount of premiums to be paid to the ETF by the
member shail be in accordance with the schedule of payments to be prescribed by the ETF

Board taking into consideration the fallowing criteria:


(@) The interval of the time between the effectivity of the coverage and the estimated time
of enrollment of the grantee in any desired education level for a vocational/ technical
or a baccalaureate program;

(b) The number of monthly contributions to be made to complete the contracted price
stipulated in the plan agreement or policy contract;

(©) ‘The benefits to be availed of, as provided in Section 12 of this Act;

(@) the amount of tuition and the other standard fees charged by the institutions, colleges,

and / or universities according to the school category for a vocation/technical or a

baccalaureate education level; and
(6) Such other factors as may be determined by the ETF Board.

SEC. 11. Reinsurance. - The GSIS or the SSS may reinsure any of its interest wholly
or in part thereof with any private company or reinsurer whether domestic or foreign:
Provided, That the System concerned shall submit an annual report on its reinsurance
operation to, the Insurance Commission through the ETF Board.

SEC. |
contract price stipulated in the plan agreement or policy contract before enrollment of the
grantee shall be entitled to avail of the benefits provided for under this Act.

Education Benefits. - only members who have completed the payment of the

‘The benefits shall include the payment of ETF by the System concerned of:

(a) Such school fees as may be required for enrollment, for completion of a vocational /
technical or a baccalaureate program which shall include tuition fees for all subjects
officially prescribed by the institution, colleges and/or universities and part of a

regular curriculum as requisite for graduation and other standard fees such as science
and speech laboratory, audio-visual, medical and dental, library# athletics, counseling,
registration, matriculation, official school publication and other fees may further be
approved by the CHED and the TESDA; and

(b) Any other benefits to be provided form as stipulated in the policy contract as

determined and approved by the ETF Board,

The payment shall be made by the ETF of the System concerned directly to the
* institution, college and/or university prior or upon enrollment as the case may be, an open-
ended education trust fund benefit that pays all Schools expenses as stipulated in the policy


contract regardless of whatever cost of a designated education program during the availment
period, for a vocational/technical and/or a baccalaureate education program on a semestral or
trimestral basis. The ETF Board shall provide for safeguards to ensure the prompt payment of
benefits.

SEC. 13. Incentives. - In appreciation of excellent performance of the grantee and for

future use of the planholder, an incentive is hereby provided

(a) Should the grantee eam any acceleration or scholarship award in any education
program desired, all amounts due and payable to the institution, college and/or
university or its equivalent amount, shall be awarded to the availing grantee of the

phanholder; and

(b) Any other incentives and/or benefits to be determined by the ETF Board as provided
for in the plan agreement or policy contract issued by the System concerned,

SEC. 14. Transferability of Benefits. ~ The benefits for in this Act may be transferred
to any active member of both System and may be assigned to another grantee at the option of
the planholder.

SEC. 15. Cash Value. ~ In cases of inability of the planholder to continue the payment
of his/her premium due to financial reasons and/or any other reasons as the case may be, the
ETF Board shall determine the cash value of the Education Trust Fund Plans which shall
form part of the general responsibility of the solvency of the ETF.

SEC. 16. Death or Diability of the Planholder. ~The death or total and permanent
disability of the planholder shall not preclude the grantee from availment of the benefits

provided, in application of Section 111 as stipulated in this Act.

SEC. 17. Government Guarantee. ~ The benefits prescribed in this Act shall not be
di

ished and to guarantee said benefits, the Government of the Republic of the Philippines

accepts general responsibility for the solvency of the ETP.

SEC. 18. Exemption from Tax, Legal Process and Lien. — The actuarial solvency of
funds for the ETF shall be preserved and maintained at all times and that contribution rates
necessary to sustain the benefits under this Act shall be kept as low as possible in order not to
burden the member of both the GSIS and the SSS. Notwithstanding any laws to the contrary,


the

STF, its assets and properties, all proceeds from collections, income or investment
earnings therefrom, all supplies, papers or documents, all accruals thereto and benefits paid
shall be exempt from all taxes, assessments, fees, charges, or duties of all kinds such as

customs or import duties, these exemptions shall be irrevocable and any assessment against

the ETF as of the approval of this Act are hereby considered paid. Consequently, all laws,
ordinances, regulations, issuances, opinions or jurisprudence contrary to or in derogation to
this provision are hereby deemed repealed, superseded and rendered ineffective and without

legal force and effect.

Moreover, these exemptions shall not be affected by subsequent laws to the contrary
unless this section is expressly, specifically and categorically revoked or repealed by law and

a provision is enacted to substitute or replace the exemption referred to herein as an essential

factor to maintain or protect the solvency of the fund, notwithstanding and independently of
the guarantee of the national Government to secure such solvency of the liability: Provided,

That all securities of the ETF must be registered

the Securities and Exchange

Commission (SEC) and transaction tax must be imposed hereto to safeguard the viability and

transparency of investment for a self-sustaining E’

‘The funds and / or properties referred to herein as well as the benefits, sums or monies
corresponding to the benefits under this Act shall be exempt from attachment, garnishment,
execution, levy or other process issued by the courts, quasi-judicial agencies, or
administrative bodies including the Commission on Audit (COA) disallowances and from all
financial obligations of both the GSIS and the SSS members, including his pecuniary
accountabilities arising from or caused or occasioned by his exercise or performance of his
official functions or duties, or incurred relative to or in connection with his position or work
except when his,monetary liability, contractual or otherwise,
‘Trust Fund (ETF).

favor of the Education

SEC. 19. Supplementary Clause. ~ In case of insufficiency of a provision of this Act,
ETF Board Resolutions shall apply in a suppletory manner to safeguard the interest of the

ETF operations towards a self-sustaining implementation of this Act.

SEC. 20. Implementing Rules and Regulation (IRR). ~ The ETF Board shall
promulgate the necessary rules and regulations for the effective implementation of this Act
within ninety (90) days following its approval, to be embodied in the Implementing Rules


and Regulations (IRR) duly confirmed and approved by the majority members of the ETF
Board, which should prescribe under the active participation of the Senate committee on
“Education, Arts and Culture; the Senate Committee on Government Corporations and Public
Enterprises; the House of Representatives Committee on Higher and Technical Education;
the House of Representatives Committee on Government Enterprises and Privatization; the
Commission on Higher Education (CHED) and an Independent Private Pre-need Resource
Person.

SEC. 21. Separability Clause. ~ If, for any reason, any section of this Act shall be
held to be unconstitutional or invalid, the other sections or provisions of this Act shall not be
affected thereby as they are separable from the invalid ones and shall remain in force and

effect.

22. Repealing Clause. ~ All laws, executive orders, decrees, instructions, rules
and regulations in contrary or inconsistent with any provision of this Act are hereby repealed
‘or modified accordingly.

SEC. 23. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) national newspaper of general circulation
whichever comes earlier.

Approved,

10