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

Eighteenth Congress
First Regular Session

9006

HOUSE BILL NO.

Introduced by HON. HENRY S. OAMINAL

EXPLANATORY NOTE

During the worst of times when the COVID-19 pandemic in 2020 necessitated
strict lockdown protocols causing small businesses to close (leading to job losses) and
the remainder of the working population to work from home, investment scammers
recognized ideal conditions to perpetrate multiple types of scams ranging from the
simple pyramid sales schemes to complicated investments dealing with alleged bitcoins
or other forms of cryptocurrencies and forex trading.

Indeed, the massive reach of social media and other online platforms in the
country today, coupled with a population easily swayed to place their trust in an entity
illegally soliciting investments has heightened the risk of investment scams victimizing
the public. The low levels of savings and financial literacy to identify tell-tale signs of
investment scams (most of these schemes are being conducted online with a community
of loyal and satisfied followers and subscribers) underscores the need for a national
response through financial literacy and education

Published data from the Securities and Exchange Commission (SEC) revealed
an alarming surge in investment scams ranging from alleged cryptocurrency
investments, forex trading, Ponzi schemes, pyramid sales schemes, and many other get-
rich-quick schemes designed to entice and lure Filipinos to part with their hard-earned
money in exchange for promises of above-market monthly returns. The investment
scams advisories issued by the SEC to the public registered a 97% surge in 2020
compared to 2019, with metropolitan Cebu City registering a 400% increase in
fraudulent entities employing fraudulent schemes to defraud investors.

At the core of the issue is the financial literacy challenge in the Philippines.
Based on the BSP 2019 Financial Inclusion (FI) Survey, only half (55%) of Filipino
adults know the effect of inflation on the prices of goods and services. Only a third


(33%) of respondents correctly answered questions on interest rates. The same
percentage of respondents said: they do not know how much their savings would be if
interest rate is guaranteed at 2% and compounded annually for five years. These
concepts on time value of money are crucial in understanding the principies of saving,
getting credit and investing. Without knowledge of these concepts, Filipinos would be
unable to make informed decisions when comparing financial products and selecting
financial institutions that would best fit their needs and capacities.

Studies show that money management habits formed in early life persist and last
into adulthood." College students who will soon be joining the work force will need to
make important financial decisions (c.g., allocating their salaries, accepting credit card
offers, evaluating investment options, etc.) that will directly impact their well-being.
This can also spell the difference between those who will later on have a retirement that
is well-prepared for or not—the latter having significant implications for the
government and the society.

Finances are one of the major causes of stress for adults. Around 3 out of 10
employees all over the world report to having money troubles that are negatively
impacting their life.” Health and financial issues are interconnected and can impact
employee productivity. Financial worries are strongly linked to stress and anxiety, poor
health, unhealthy lifestyles, and reduced job effectiveness. These come in the form of
lower job engagement, higher levels of stress, anxiety, and depression as well as
increased instances of absenteeism or “presenteeism”—that is, physically reporting for
work but not fully functioning.

This bill seeks the inclusion of a savings and investment subject in the
curriculum for junior high school in order to equip them with the tools for long-term
savings and long-term investments prior to senior high school and college or university
studies. From the perspective of the government, educated investors are better equipped
to recognize frauds and scams and not fall prey to unscrupulous individuals offering
“get-rich-quick schemes” to hapless victims. Furthermore, as has been seen in our
neighboring countries in the ASEAN region, a population with a high level of financial
education and literacy will serve to stimulate the development of the domestic capital
markets and ultimately reduce the dependency of the population on government grants
and subsidies especially during times of crises and emergencies.

In sum, the passage of this bill will promote investor education, investor
protection and scam-proof the population and, more importantly, enable the young
population to understand the fundamental principles of finance and investments as they
chart their chosen strand and track for their senior high school years.

* Source: World Bank 2015 Study: Enhancing Financial Capability and Inclusion in the Philippines
2 Source: hitps://www.willisowerswatson.comven-PH/Insighis/2020/02/global-benefits-attitudes-survey-report.


The common aspiration is to roll out an effective investor education program to
encourage a sustained retail participation in the capital markets paving the way to a
virtuous circle of financial literacy and capital market development that will effectively
put an end to the vicious cycle of investment scams and a financially illiterate
population,

In view of the foregoing, immediate approval of this bill is requested.

ATTY. tY S, O. |AL
Representative
2" District, Misamis Occidental


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

Eighteenth Congress
First Regular Session

HOUSE BILL NO. 9006

Introduced by HON. HENRY S. OAMINAL

AN ACT
TO FURTHER ENHANCE THE BASIC EDUCATION SYSTEM BY PROVIDING FOR
THE INCLUSION OF A SUBJECT ON SAVINGS AND INVESTMENTS IN THE
SECONDARY EDUCATION CURRICULUM AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Short Title. - This Act shall be known as the “Savings and Investments Act of

2021”.

Sec. 2. Policy of Investor Education. — The State shall adopt a national strategy to enhance
investor education by including the same among the priority programs to encourage long-term
savings and investment by the Filipinos. The goals of the investor education include not just
investor awareness of the alternative savings and investment products, but also for the population
to develop their long-term investing skills and financial well-being through planning and actual
investments. Finally, the national investor education program seeks to foster financial inclusion
for both existing and potential investors towards enabling the development of the financial markets
through collaborations by the government with both public and private sector participants in the

finance and investments industry.

SEC. 3. Savings and Investment Subject in Junior High School. - In furtherance of the above
State objective, a relevant, comprehensive, and globally-benchmarked national investor education
program shall be integrated within the enhanced basic education program prescribed under Section
4 of Republic Act No. 10533 otherwise known as the “Enhanced Basic Education Act of 2013.”
The junior high school curriculum for all students prior to their senior high school curriculum shall

integrate a required subject on the basics of savings and investment that will focus on providing


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an overview of long-term investment instruments available to retail investors, the risks and rewards
of savings and investment, available investments in the domestic capital market, alternative
investments, investor protection safeguards provided under existing regulations, and how to

recognize and avoid financial fraud (e.g., Ponzi schemes and get-rich quick scams), among others.

Sec. 4. Content of the Savings and Investment Subject. ~ The savings and investment subject
shall introduce the theoretical underpinnings of financial education principles and financial
markets and shall provide clear and specific examples of actual case studies of traditional and
innovative investment products and financial instruments to illustrate the features thereof, the risks
and rewards of said financial instruments as they have been actually launched in the Philippines
or in global financial markets.

In the design and implementation of the Savings and Investment subject for junior high
school, the following are the minimum key core competencies that the students should develop:

a.) Fundamental understanding of the benefits of long-term financial planning to achieve

financial goals at the individual and family levels;
b.) Suitability of financial products relative to one’s risk-reward profile and other
behavioral considerations;

c.) Understanding how different savings and investment products deliver returns and the
risks attendant to investing in these instruments; and

d.) Long-term financial planning with an understanding of the intermediaries who
distribute different alternative instruments, where to source relevant material
information and the financial market regulations and other legal and regulatory

requirements that protect investors against fraud and scams.

Sec. 5. Penalty Clause. — An educational institution who fails or refuses to comply with the
provisions of this Act shall be penalized by a fine of fifty thousand pesos (Php 50,000.00) and

suspension of permit to operate.


SEC. 6. Implementing Rules and Regulations. ~ the Department of Education shall
promulgate the necessary rules and regulations within one hundred eighty (180) days from the

approval of this Act for its effective implementation.

Sec. 7. Separability Clause. - If any provision of this Act is declared invalid by a
competent court, the remainder of this Act or any provision not affected by such declaration of

invalidity shall remain in force and effect.

Sec. 8. Repealing Clause. - All laws, presidential decrees, executive orders, other
executive issuances, rules and regulations or parts thereof, including the provisions of Republic
Act 10533, which are inconsistent with this Act are hereby repealed, amended or modified

accordingly.

Sec. 9. Effectivity.— This Act shall take effect fifteen (15) days after its publication in at

least two (2) newspapers of general circulation.

Approved,