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SEVENTEENTH CONGRESS f tuney oo
First Regular Session

House Bitt No, 0416

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO-

EXPLANATORY NOTE

Investments in children's education, homeownership, and small business development and
entrepreneurship can be made possible through family savings. However, family savings is, at
the most part, unpopular in the country.

In the Philippines, households that have a checking account are not so common, and few have a
savings account. The rising cost of tertiary education decreases access to higher education for
low-income and moderate-income families.

Increasing the number of families saving for their children's tertiary education will increase the
number of youths who will attain higher education. An increased educational attainment levels
can definitely generate a more competitive workforce, more jobs and innovation, more savings
and investment, stronger communities, and a thriving economy.

This bill provides for a savings program, tied to financial education, that aims to improve family
financial responsibility and encourage saving for education, homeownership, small business, and
entrepreneurship.

In light of promoting financial literacy and increasing asset-building opportunities for all
residents of the country, the immediate approval of this bill is earnestly sought.

.

~ ALEJANO



REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bit! No, 5416

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT
ESTABLISHING CHILDREN'S SAVINGS ACCOUNT PROGRAM, AND FOR OTHER
PURPOSES

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

SECTION 1. Title. - This Act shall be known as the "Children's Savings Accounts Act”.

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to encourage
families’ savings, to increase families’ financial knowledge, to promote higher educational
aspiration and attainment, to encourage homeownership, to assist small business development, to
promote job creation, to strengthen communities, and to increase asset building opportunities for
all people.

SEC. 3. Program Goals. - Goals of the program shall include increasing the levels of
financial literacy and savings in the country, increasing the number of children who own assets
and who attend tertiary education or training, purchase a home, or open a small business.

SEC. 4. Children's Savings Account Task Force. - There is hereby created a Children's
Savings Account Task Force to review and make recommendations about children's savings
account program options and to create a strategic implementation plan to create savings accounts
at birth for every child born. The Task Force shall consist of a maximum of thirty (30) members,
to be appointed within sixty (60) days after the effectivity of this Act. One (1) member shall be
appointed by the President of the Senate, one (1) member appointed by the Senate Minority
Leader, one (1) member appointed by the Speaker of the House, one (1) member appointed by
the House Minority Leader, and one (1) member representing the Department of Finance
appointed by its Secretary. All other members shall be appointed by the President as follows:

a) amember of the Presidential staff, and

b) public members with an interest in asset-building in the country, including a
representative from each of the following types of organizations or entities:

1) an operator of an individual development account or matched savings and
financial education program or both;

2) a grassroots organizing entity;
3) a service-based human rights provider organization;

4)

a business organization;

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a bankers’ professional association;


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6) a child advocacy organization;
7) arural economic development entity;
8) an organized labor;

9) abank;

10)a credit union; and

11) an investment services provider.

In addition, the following officials shall serve as ex-officio members of the task force: i)
Department of Finance Secretary of his/her designee; ii) Department of Education Secretary or
his/her designee; iii) the Secretary of Department of Budget and Management or his/her designee;
iv) the Secretary of Department of Trade and Commerce or his/her designee; v) the Secretary of
Department of Social Welfare and Development or his/her designee; vi) the Chairman of the
Commission on Higher Education or his/her designee. Representatives of the Office of the
President and the Department of Finance shall serve as co-chairpersons of the task force. The
President shall designate one of the public members to serve as a third co-chairperson.

The Department of Finance shall be responsible for administrative and logistical support
of the task force, including coordination of task force member appointments, distribution of
meeting notices and minutes, coordination of meeting logistics, providing a staff liaison to the
task force, facilitation of public meetings, and drafting and filing of the final report. Task force
members, or the staff liaison, or both may confer and collaborate with national organizations
with expertise in asset building, financial education, college savings, investing, homeownership,
and small business development.

‘The task force shall hold at least four (4) public meetings at a variety of geographic
locations throughout the country at times and places established by the task force. The purpose of
the public meetings is to gather information from community residents and institutions, families
with children, financial education providers, schools, and local financial services providers. The
initial meeting of the task force shall be called by the co-chairs and held no later than thirty (30)
days after the task force members are appointed. The activities of the task force shall conclude
not later than September Ist of the year this Act was approved.

SEC. 5. Recommendations for the Design of the Program. - The task force shall
consider the following factors in its recommendations for the design of the program:
a) return on investment, safety of the investment and insurance for the account, ease of
managing the account, and ease of making various forms of deposits,

b)

the impact on eligibility for student financial aid, public assistance, and other public
benefits, and taxation of the account earnings and distributions;

©) the provision of financial education to children and families, and access to additional
financial services;

restrictions on the withdrawal or distribution prior to the child reaching age eighteen (18),
portability of the account, and limits on permissible uses of the account;

d)

revenue sources for the initial deposit and any savings match for deposits for children in
low-income families;

@)

f) mechanisms for data collection and tracking; and

all other factors that the task force deems important to the program design.

8


SEC. 6. Report and Implementation Plan. - The task force shall make a written report of
its findings and recommendations, including a strategic implementation plan for children's
savings account program, as well as make any additional reports deemed necessary and
appropriate to the Department of Finance not later than September Ist of the year this Act was
approved. On or before the year this Act was approved, the Department of Finance shall present
all reports issued by the task force to the President and members of the Congress. The reports
shall be made available to the public

SEC. 7. Separability Clause. - If any provision of this Act shall at any time be found to
be unconstitutional or invalid, the remainder thereof not affected by such declaration shall
remain in full force and effect.

SEC. 8. Repealing Clause. - All laws, decrees, rules or regulations inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SEC. 9. Effectivity Clause. - This Act shall take effect after fifteen (15) days following
its complete publication in two (2) newspapers of general circulation

Approved,