NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Third Regular Session
GCT
:V
SENATE
S. B. No.
345
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
EXPANDING THE PURPOSE AND APPLICATION OF THE SPECIAL 
EDUCATION FUND, AMENDING FOR THE PURPOSE SECTION 272 
OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE “LOCAL 
GOVERNMENT CODE OF 1991” AND FOR OTHER PURPOSES
EXPLANATORY NOTE
In 2018, 81% of students scored below minimum proficiency levels 
in reading and math, and 78% in science in the Programme for 
International Student Assessment (PISA).1 Furthermore, in the 2019 
Trends in International Mathematics and Science Study (TIMMS), the 
Philippines scored the lowest among all 58 participating countries for math 
and science.2
Additionally, the World Bank’s Learning Poverty Brief on the 
Philippines in 2022 noted that 91% of children are not proficient in reading 
and that large-scale learning assessments of students revealed that 90% 
do not achieve the minimum proficiency level at the end of primary 
school.3
These results show indications of the challenges faced by the 
Philippine education sector, thus, necessitating the need to tackle the 
constraints hindering learners from achieving their potential. One of the
1 World Bank Philippines Country Report on the Programme for International Student Assessment (PISA 2018), June 2020,
Available at httDs://documents1 .worldbank.org/curated/en/184251593328815913/pdf/Main-Report.pdf.
2 TIMSS 2019. International Results in Mathematics in Science. Available at https://www.iea.nl/sites/default/files/2021- 
01/TIMSS %202019-lnternational-Results-in-Mathematics-and-Science.pdf.
3 
World Bank Philippines Learning Poverty Brief, June 2022. Available at 
httPs://documents1. wo rldbank.ora/curated/en/099000207152223103/pdf/IDU002b5536c0db4104ec3087d809906ec2eae56.pdf.


ways to address this is by increasing education spending to ensure better 
education outcomes.
The United Nations Educational, Scientific, and Cultural 
Organization’s (UNESCO) Education 2023 Framework for Action4 
proposes the allocation of at least 4% to 6% of Gross Domestic Product 
(GDP) to education, and/or at least 15% to 20% of public expenditure to 
education. From 2019 to 2023, there has been an increase in the 
percentage of the budget of the Department of Education (DepEd) vis-a- 
vis the GDP from 2.7% to 3.6%.
As an additional support, at the local level. Republic Act No. 5447, 
which was passed in 1968, established the Special Education Fund (SEF) 
as a means for local government units (LGUs), through the Local School 
Boards, “to contribute to the financial support of the goals of education.”
At present, under the Local Government Code, the SEF is derived 
from the proceeds of the one percent (1%) tax on real property, which 
shall be allocated to the “operation and maintenance of public schools, 
construction, and repair of school buildings, facilities, and equipment, 
educational research, purchase of books and periodicals, and sports 
development.”5
Over the years, the utilization of the SEF has been expanded to 
cover other expenditures relevant to the education sector, particularly 
through the passage of laws, such as the Republic Act No. 10410 (“Early 
Years Act of 2013”) for the implementation of the Early Childhood Care 
and Development Program, Republic Act No. 11037 (“Masustansyang 
Pagkain para sa Batang Pilipino Act”) for the National Feeding Program, 
and Republic Act No. 11510 (“Alternative Learning System (ALS) Act”) for 
the implementation of the ALS at the local level.
It is of utmost importance that continuous innovation and reforms be 
introduced given the various disruptions that affect learners. The 
expansion of the use of the SEF will allow the government to invest more 
in the education of future generations. Given the foregoing, the immediate 
passage of this bill is earnestly sought.
JOEL VILLANUEVA^
4 Global Education Monitoring Report. UNESCO. Avaiiabie at https://qem-report-2016.unesco.org/en/chapter/tarqet-4-8-
finance/#:~:text=The%20Education%202030%20Framework%20for.of%20public%20expenditure%20to%20education.
5 Section 272 of Republic Act No. 7160, or the Local Government Code of 1991


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Third Regular Session
nr 1
6--T
SENATE
O C ST
S. B. NO.
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
EXPANDING THE PURPOSE AND APPLICATION OF THE SPECIAL 
EDUCATION FUND, AMENDING FOR THE PURPOSE SECTION 272 
OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE “LOCAL 
GOVERNMENT CODE OF 1991” AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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SECTION 1. Section 272 of Republic Act No. 7160 is hereby amended to read as
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follows:
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“Sec. 272. Application of the Proceeds of the Additional One Percent
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SEP Tax. - The proceeds from the additional one percent (1%) tax
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on real property accruing to the Special Education Fund (SEF) shall
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be automatically released to the local school boards: Provided, That
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in case of provinces, the proceeds shall be divided equally between
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the provincial and municipal school boards: Provided, however, That
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the proceeds shall be allocated, [for the operation and maintenance
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of public schools, construction and repair of school building&r
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facilities and equipment, educational research, purchase of books
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and periodicals, and sports development as dotormined and
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approved by the Local School BoarcF] AS DETERMINED AND
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APPROVED BY THE LOCAL SCHOOL BOARD, FOR THE
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FOLLOWING EXPENSES:
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1. OPERATION OF (I) PUBLIC ELEMENTARY AND
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SECONDARY SCHOOLS, (II) INFORMAL AND NON-
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FORMAL EDUCATION PROGRAMS, INCLUDING THE
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ALTERNATIVE LEARNING SYSTEM (ALS), (III) EARLY
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CHILDHOOD EDUCATION, (IV) SPECIAL EDUCATION,
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(V) SENIOR HIGH SCHOOL, (VI) OPEN HIGH SCHOOL


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PROGRAM, (VII) MADRASAH CLASSES, AND (VIII) 
REMEDIAL CLASSES;
2. 
PAYMENT OF COMPENSATION AND AUTHORIZED 
ALLOWANCES, COMPETENCY TRAINING, 
BENCHMARKING, AND OTHER BENEFITS OF 
LOCALLY-HIRED TEACHING AND NON-TEACHING 
PERSONNEL: PROVIDED, THAT THE RATES OF 
COMPENSATION AND AUTHORIZED ALLOWANCES 
OF LOCALLY-HIRED TEACHING AND NON-TEACHING 
PERSONNEL SHALL BE DETERMINED BY THE LOCAL 
SCHOOL BOARD BASED ON FUNDS AVAILABLE, BUT 
AT RATES NOT TO EXCEED THE SALARY SCHEDULE 
BEING IMPLEMENTED BY THE LGU CONCERNED;
3. 
ANY ADDITIONAL AUTHORIZED ALLOWANCES 
GRANTED BY LGUS TO NATIONALLY-HIRED 
TEACHING AND NON-TEACHING PERSONNEL 
CHARGEABLE AGAINST THE SEF AS OF 31 
DECEMBER 1997: PROVIDED, THAT SUCH 
ADDITIONAL AUTHORIZED ALLOWANCES GRANTED 
THEREAFTER SHALL BE CHARGED TO THE GENERAL 
FUND: PROVIDED, FURTHER, THAT IN CASE OF 
FOURTH TO SIXTH CLASS MUNICIPALITIES, SUCH 
ADDITIONAL AUTHORIZED ALLOWANCES MAY STILL 
BE CHARGED TO SEF SO LONG AS THE SAME DOES 
NOT EXCEED 10% THEREOF, SUBJECT TO EXISTING 
BUDGETING RULES AND REGULATIONS;
4. 
ACQUISITION OF SCHOOL SITES OR LANDS;
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CONSTRUCTION, REPAIR, AND MAINTENANCE OF 
SCHOOL BUILDINGS, CHILD DEVELOPMENT 
CENTERS/LEARNING CENTERS, AND OTHER 
FACILITIES, INCLUDING, BUT NOT LIMITED TO, 
WORKSHOPS, LIBRARIES, DORMITORIES, AND 
LABORATORIES;
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PURCHASE AND MAINTENANCE OF EQUIPMENT, 
INCLUDING BUT NOT LIMITED TO, INFORMATION 
TECHNOLOGY EQUIPMENT AND COROLLARY 
SUPPORT SERVICES, SCHOOL FURNITURE AND 
FIXTURES, MEDICAL AND DENTAL SUPPLIES, AND 
INSTALLATION OF RADIO FREQUENCY 
IDENTIFICATION (RFID) SYSTEM AND CLOSED- 
CIRCUIT TELEVISION (CCTV);
7. 
PURCHASE AND MAINTENANCE OF SERVICE 
VEHICLES FOR SCHOOL SUPERVISION;


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8. 
PAYMENT OF VOLUNTARY CONTRIBUTIONS 
AUTHORIZED UNDER EXISTING LAWS;
9. 
EDUCATIONAL RESEARCH, SUMMITS, STUDY TRIPS, 
AND OTHER CONSULTATIONS ON INFORMATION, 
ISSUES, AND CONCERNS RELATED TO EDUCATION;
10. PURCHASE OF BOOKS, INSTRUCTIONAL, AND OTHER 
LEARNING MATERIALS;
11. SPORTS ACTIVITIES, YOUTH FORMATION, AND 
LEADERSHIP DEVELOPMENT PROGRAMS, AND 
OTHER CO-CURRICULAR ACTIVITIES; AND
12. MAINTENANCE AND OTHER OPERATING EXPENSES 
OF THE LOCAL SCHOOL BOARD, INCLUDING 
SUPPLIES, MATERIALS, EQUIPMENT, AND OTHER 
RELATED EXPENSES.
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY, ALL 
EXPENSES ENUMERATED UNDER THIS SECTION SHALL BE SUBJECT 
TO THE PREVAILING POLICIES AND GUIDELINES OF THE DEPARTMENT 
OF EDUCATION (DEPED).
ALL LOCAL SCHOOL BOARDS SHALL SUBMIT AN ANNUAL 
REPORT ON THE COLLECTION, ALLOCATION, AND UTILIZATION OF 
THE SEF TO THE BUREAU OF LOCAL GOVERNMENT FINANCE UNDER 
THE DEPARTMENT OF FINANCE (DOF-BLGF), COPY FURNISHED TO 
THE LOCAL SANGGUNIAN CONCERNED, REGIONAL OFFICES OF THE 
DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT (DILG), DEPED, 
AND THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM) ON OR 
BEFORE MARCH 31 OF THE SUCCEEDING YEAR.
THE DOF-BLGF SHALL THEN SUBMIT TO THE SENATE 
COMMITTEES ON LOCAL GOVERNMENT AND BASIC EDUCATION, AND 
THE HOUSE COMMITTEES ON LOCAL GOVERNMENT AND BASIC 
EDUCATION AND CULTURE, A CONSOLIDATED REPORT ON THE 
COLLECTION AND UTILIZATION OF THE SEF WITHIN NINETY (90) DAYS 
FROM RECEIPT OF REPORTS FROM THE LGUS.
ALL REPORTS ON THE SEF SHALL BE POSTED IN AT LEAST 
THREE CONSPICUOUS PUBLIC PLACES, WEBSITES OF ALL LOCAL 
GOVERNMENT UNITS, AND THE FULL DISCLOSURE POLICY PORTAL 
BEING ADMINISTERED BY DILG.
SEC. 2. Implementing Rules and Regulations. - Within ninety (90) 
days from the date of its effectivity of this Act, the DILG, DepEd, and DBM shall 
jointly promulgate the necessary rules and regulations for the effective 
implementation of the provisions of this Act.


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SEC. 3. Repealing Clause. -All laws, decrees, orders, rules, and 
regulations or parts thereof inconsistent with this Act are hereby repealed or 
modified accordingly.
SEC. 4. Separability Clause. - If any provision of this Act is held invalid 
or unconstitutional, the same shall not affect the validity and effectivity of the 
other provisions hereof.
SEC. 5. Effectivity. - This Act shall take effect after fifteen (15) days 
following its publication in the Official Gazette or a newspaper of general 
circulation.