The Lawphil Project - Arellano Law FoundationREPUBLIC ACT No. 6713CODE OF CONDUCT AND ETHICAL STANDARDS FOR PUBLIC OFFICIALS AND EMPLOYEES

REPUBLIC ACT No. 6713AN ACT ESTABLISHING A CODE OF CONDUCT AND ETHICAL STANDARDS FOR PUBLIC OFFICIALS AND EMPLOYEES, TO

UPHOLD THE TIME-HONORED PRINCIPLE OF PUBLIC OFFICE BEING A PUBLIC TRUST, GRANTING INCENTIVES AND REWARDS FOR EXEMPLARY SERVICE, ENUMERATING PROHIBITED ACTS AND TRANSACTIONS AND PROVIDING

PENALTIES FOR VIOLATIONS THEREOF AND FOR OTHER PURPOSES

Section 1. Title. - This Act shall be known as the "Code of Conduct and Ethical Standards for Public Officials and Employees."

Section 2. Declaration of Policies. - It is the policy of the State to promote a high standard of ethics in public service. Public officials and employees shall at all times be accountable to the people and shall discharge their duties with utmost responsibility, integrity, competence, and loyalty, act with patriotism and justice, lead modest lives, and uphold public interest over personal interest.

Section 3. Definition of Terms. - As used in this Act, the term: (a) "Government" includes the National Government, the local governments, and all other instrumentalities, agencies or branches of the Republic of the Philippines including government-owned or controlled corporations, and their subsidiaries.lawphi1.net(b) "Public Officials" includes elective and appointive officials and employees, permanent or temporary, whether in the career or non-career service, including military and police personnel, whether or not they receive compensation, regardless of amount.(c) "Gift" refers to a thing or a right to dispose of gratuitously, or any act or liberality, in favor of another who accepts it, and shall include a simulated sale or an ostensibly onerous disposition thereof. It shall not include an unsolicited gift of nominal or insignificant value not given in anticipation of, or in exchange for, a favor from a public official or employee. (d) "Receiving any gift" includes the act of accepting directly or indirectly, a gift from a person other than a member of his family or relative as defined in this Act, even on the occasion of a family celebration or national festivity like Christmas, if the value of the gift is neither nominal nor insignificant, or the gift is given in anticipation of, or in exchange for, a favor. (e) "Loan" covers both simple loan and commodatum as well as guarantees, financing arrangements or accommodations intended to ensure its approval. (f) "Substantial stockholder" means any person who owns, directly or indirectly, shares of stock sufficient to elect a director of a corporation. This term shall also apply to the parties to a voting trust. (g) "Family of public officials or employees" means their spouses and unmarried children under eighteen (18) years of age. (h) "Person" includes natural and juridical persons unless the context indicates otherwise. (i) "Conflict of interest" arises when a public official or employee is a member of a board, an officer, or a substantial stockholder of a private corporation or owner or has a substantial interest in a business, and the interest of such corporation or business, or his rights or duties therein, may be opposed to or affected by the faithful performance of official duty.(j) "Divestment" is the transfer of title or disposal of interest in property by voluntarily, completely and actually depriving or dispossessing oneself of his right or title to it in favor of a person or persons other than his spouse and relatives as defined in this Act. (k) "Relatives" refers to any and all persons related to a public official or employee within the fourth civil degree of consanguinity or affinity, including bilas, inso and balae.

Section 4. Norms of Conduct of Public Officials and Employees. - (A) Every public official and employee shall observe the following as standards of personal conduct in the discharge and execution of official duties:

(a) Commitment to public interest. - Public officials and employees shall always uphold the public interest over and above personal interest. All government resources and powers of their respective offices must be employed and used efficiently, effectively, honestly and economically, particularly to avoid wastage in public funds and revenues. (b) Professionalism. - Public officials and employees shall perform and discharge their duties with the highest degree of excellence, professionalism, intelligence and skill. They shall enter public service with utmost devotion and dedication to duty. They shall endeavor to discourage wrong perceptions of their roles as dispensers or peddlers of undue patronage.(c) Justness and sincerity. - Public officials and employees shall remain true to the people at all times. They must act with justness and sincerity and shall not discriminate against anyone, especially the poor and the underprivileged. They shall at all times respect the rights of others, and shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order, public safety and public interest. They shall not dispense or extend undue favors on account of their office to their relatives whether by consanguinity or affinity except with respect to appointments of such relatives to positions considered strictly confidential or as members of their personal staff whose terms are coterminous with theirs. (d) Political neutrality. - Public officials and employees shall provide service to everyone without unfair discrimination and regardless of party affiliation or preference. (e) Responsiveness to the public. - Public officials and employees shall extend prompt, courteous, and adequate service to the public. Unless otherwise provided by law or when required by the public interest, public officials and employees shall provide information of their policies and procedures in clear and understandable language, ensure openness of information, public consultations and hearings whenever appropriate, encourage suggestions, simplify and systematize policy, rules and procedures, avoid red tape and develop an understanding and appreciation of the socio-economic conditions prevailing in the country, especially in the depressed rural and urban areas. (f) Nationalism and patriotism. - Public officials and employees shall at all times be loyal to the Republic and to the Filipino people, promote the use of locally produced goods, resources and technology and encourage appreciation and pride of country and people. They shall endeavor to maintain and defend Philippine sovereignty against foreign intrusion. (g) Commitment to democracy. - Public officials and employees shall commit themselves to the democratic way of life and values, maintain the principle of public accountability, and manifest by deeds the supremacy of civilian authority over the military. They shall at all times uphold the Constitution and put loyalty to country above loyalty to persons or party.

(h) Simple living. - Public officials and employees and their families shall lead modest lives appropriate to their positions and income. They shall not indulge in extravagant or ostentatious display of wealth in any form.

(B) The Civil Service Commission shall adopt positive measures to promote (1) observance of these standards including the dissemination of information programs and workshops authorizing merit increases beyond regular progression steps, to a limited number of employees recognized by their office colleagues to be outstanding in their observance of ethical standards; and (2) continuing research and experimentation on measures which provide positive motivation to public officials and employees in raising the general level of observance of these standards.

Section 5. Duties of Public Officials and Employees. - In the performance of their duties, all public officials and employees are under obligation to:lawphi1.net

(a) Act promptly on letters and requests. - All public officials and employees shall, within fifteen (15) working days from receipt thereof, respond to letters, telegrams or other means of communications sent by the public. The reply must contain the action taken on the request. (b) Submit annual performance reports. - All heads or other responsible officers of offices and agencies of the government and of government-owned or controlled corporations shall, within forty-five (45) working days from the end of the year, render a performance report of the agency or office or corporation concerned. Such report shall be open and available to the public within regular office hours. (c) Process documents and papers expeditiously. - All official papers and documents must be processed and completed within a reasonable time from the preparation thereof and must contain, as far as practicable, not more than three (3) signatories therein. In the absence of duly authorized signatories, the official next-in-rank or officer in charge shall sign for and in their behalf. (d) Act immediately on the public's personal transactions. - All public officials and employees must attend to anyone who wants to avail himself of the services of their offices and must, at all times, act promptly and expeditiously. (e) Make documents accessible to the public. - All public documents must be made accessible to, and readily available for inspection by, the public within reasonable working hours.

Section 6. System of Incentives and Rewards. - A system of annual incentives and rewards is hereby established in order to motivate and inspire public servants to uphold the highest standards of ethics. For this purpose, a Committee on Awards to Outstanding Public Officials and Employees is hereby created composed of the following: the Ombudsman and Chairman of the Civil Service Commission as Co-Chairmen, and the Chairman of the Commission on Audit, and two government employees to be appointed by the President, as members. It shall be the task of this Committee to conduct a periodic, continuing review of the performance of public officials and employees, in all the branches and agencies of Government and establish a system of annual incentives and rewards to the end that due recognition is given to public officials and employees of outstanding merit on the basis of the standards set forth in this Act. The conferment of awards shall take into account, among other things, the following: the years of service and the quality and consistency of performance, the obscurity of the position, the level of salary, the unique and exemplary quality of a certain achievement, and the risks or temptations inherent in the work. Incentives and rewards to government officials and employees of the year to be announced in public ceremonies honoring them may take the form of bonuses, citations, directorships in government-owned or controlled corporations, local and foreign scholarship grants, paid vacations and the like. They shall likewise be automatically promoted to the next higher position with the commensurate salary suitable to their qualifications. In case there is no next higher position or it is not vacant, said position shall be included in the budget of the office in the next General Appropriations Act. The Committee on Awards shall adopt its own rules to govern the conduct of its activities.

Section 7. Prohibited Acts and Transactions. - In addition to acts and omissions of public officials and employees now prescribed in the Constitution and existing laws, the following shall constitute prohibited acts and transactions of any public official and employee and are hereby declared to be unlawful:

(a) Financial and material interest. - Public officials and employees shall not, directly or indirectly, have any financial or material interest in any transaction requiring the approval of their office. (b) Outside employment and other activities related thereto. - Public officials and employees during their incumbency shall not:

(1) Own, control, manage or accept employment as officer, employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law; (2) Engage in the private practice of their profession unless authorized by the Constitution or law, provided, that such practice will not conflict or tend to conflict with their official functions; or (3) Recommend any person to any position in a private enterprise which has a regular or pending official transaction with their office.

These prohibitions shall continue to apply for a period of one (1) year after resignation, retirement, or separation from public office, except in the case of subparagraph (b) (2) above, but the professional concerned cannot practice his profession in connection with any matter before the office he used to be with, in which case the one-year prohibition shall likewise apply. (c) Disclosure and/or misuse of confidential information. - Public officials and employees shall not use or divulge, confidential or classified information officially known to them by reason of their office and not made available to the public, either:

(1) To further their private interests, or give undue advantage to anyone; or (2) To prejudice the public interest.

(d) Solicitation or acceptance of gifts. - Public officials and employees shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the course of their official duties or in connection with any operation being regulated by, or any transaction which may be affected by the functions of their office. As to gifts or grants from foreign governments, the Congress consents to:

(i) The acceptance and retention by a public official or employee of a gift of nominal value tendered and received as a souvenir or mark of courtesy; (ii) The acceptance by a public official or employee of a gift in the nature of a scholarship or fellowship grant or medical treatment; or (iii) The acceptance by a public official or employee of travel grants or expenses for travel taking place entirely outside the Philippine (such as allowances, transportation, food, and lodging) of more than nominal value if such acceptance is appropriate or consistent with the interests of the Philippines, and permitted by the head of office, branch or agency to which he belongs.

The Ombudsman shall prescribe such regulations as may be necessary to carry out the purpose of this subsection, including pertinent reporting and disclosure requirements. Nothing in this Act shall be construed to restrict or prohibit any educational, scientific or cultural exchange programs subject to national security requirements.

Section 8. Statements and Disclosure. - Public officials and employees have an obligation to accomplish and submit declarations under oath of, and the public has the right to know, their assets, liabilities, net worth and financial and business interests including those of their spouses and of unmarried children under eighteen (18) years of age living in their households.

(A) Statements of Assets and Liabilities and Financial Disclosure. - All public officials and employees, except those who serve in an honorary capacity, laborers and casual or temporary workers, shall file under oath their Statement of Assets, Liabilities and Net Worth and a Disclosure of Business Interests and Financial Connections and those of their spouses and unmarried children under eighteen (18) years of age living in their households. The two documents shall contain information on the following:

(a) real property, its improvements, acquisition costs, assessed value and current fair market value; (b) personal property and acquisition cost; (c) all other assets such as investments, cash on hand or in banks, stocks, bonds, and the like; (d) liabilities, and; (e) all business interests and financial connections.

The documents must be filed: (a) within thirty (30) days after assumption of office; (b) on or before April 30, of every year thereafter; and (c) within thirty (30) days after separation from the service.

All public officials and employees required under this section to file the aforestated documents shall also execute, within thirty (30) days from the date of their assumption of office, the necessary authority in favor of the Ombudsman to obtain from all appropriate government agencies, including the Bureau of Internal Revenue, such documents as may show their assets, liabilities, net worth, and also their business interests and financial connections in previous years, including, if possible, the year when they first assumed any office in the Government. Husband and wife who are both public officials or employees may file the required statements jointly or separately. The Statements of Assets, Liabilities and Net Worth and the Disclosure of Business Interests and Financial Connections shall be filed by:

(1) Constitutional and national elective officials, with the national office of the Ombudsman; (2) Senators and Congressmen, with the Secretaries of the Senate and the House of Representatives, respectively; Justices, with the Clerk of Court of the Supreme Court; Judges, with the Court Administrator; and all national executive officials with the Office of the President. (3) Regional and local officials and employees, with the Deputy Ombudsman in their respective regions; (4) Officers of the armed forces from the rank of colonel or naval captain, with the Office of the President, and those below said ranks, with the Deputy Ombudsman in their respective regions; and (5) All other public officials and employees, defined in Republic Act No. 3019, as amended, with the Civil Service Commission.

(B) Identification and disclosure of relatives. - It shall be the duty of every public official or employee to identify and disclose, to the best of his knowledge and information, his relatives in the Government in the form, manner and frequency prescribed by the Civil Service Commission. (C) Accessibility of documents. - (1) Any and all statements filed under this Act, shall be made available for inspection at reasonable hours.

(2) Such statements shall be made available for copying or reproduction after ten (10) working days from the time they are filed as required by law. (3) Any person requesting a copy of a statement shall be required to pay a reasonable fee to cover the cost of reproduction and mailing of such statement, as well as the cost of certification. (4) Any statement filed under this Act shall be available to the public for a period of ten (10) years after receipt of the statement. After such period, the statement may be destroyed unless needed in an ongoing investigation.

(D) Prohibited acts. - It shall be unlawful for any person to obtain or use any statement filed under this Act for: (a) any purpose contrary to morals or public policy; or(b) any commercial purpose other than by news and communications media for dissemination to the general public.

Section 9. Divestment. - A public official or employee shall avoid conflicts of interest at all times. When a conflict of interest arises, he shall resign from his position in any private business enterprise within thirty (30) days from his assumption of office and/or divest himself of his shareholdings or interest within sixty (60) days from such assumption. The same rule shall apply where the public official or employee is a partner in a partnership. The requirement of divestment shall not apply to those who serve the Government in an honorary capacity nor to laborers and casual or temporary workers.

Section 10. Review and Compliance Procedure. - (a) The designated Committees of both Houses of the Congress shall establish procedures for the review of statements to determine whether said statements which have been submitted on time, are complete, and are in proper form. In the event a determination is made that a statement is not so filed, the appropriate Committee shall so inform the reporting individual and direct him to take the necessary corrective action.

(b) In order to carry out their responsibilities under this Act, the designated Committees of both Houses of Congress shall have the power within their respective jurisdictions, to render any opinion interpreting this Act, in writing, to persons covered by this Act, subject in each instance to the approval by affirmative vote of the majority of the particular House concerned. The individual to whom an opinion is rendered, and any other individual involved in a similar factual situation, and who, after issuance of the opinion acts in good faith in accordance with it shall not be subject to any sanction provided in this Act. (c) The heads of other offices shall perform the duties stated in subsections (a) and (b) hereof insofar as their respective offices are concerned, subject to the approval of the Secretary of Justice, in the case of the Executive Department and the Chief Justice of the Supreme Court, in the case of the Judicial Department.

Section 11. Penalties. - (a) Any public official or employee, regardless of whether or not he holds office or employment in a casual, temporary, holdover, permanent or regular capacity, committing any violation of this Act shall be punished with a fine not exceeding the equivalent of six (6) months' salary or suspension not exceeding one (1) year, or removal depending on the gravity of the offense after due notice and hearing by the appropriate body or agency. If the violation is punishable by a heavier penalty under another law, he shall be prosecuted under the latter statute. Violations of Sections 7, 8 or 9 of this Act shall be punishable with imprisonment not exceeding five (5) years, or a fine not exceeding five thousand pesos (P5,000), or both, and, in the discretion of the court of competent jurisdiction, disqualification to hold public office.

(b) Any violation hereof proven in a proper administrative proceeding shall be sufficient cause for removal or dismissal of a public official or employee, even if no criminal prosecution is instituted against him. (c) Private individuals who participate in conspiracy as co-principals, accomplices or accessories, with public officials or employees, in violation of this Act, shall be subject to the same penal liabilities as the public officials or employees and shall be tried jointly with them. (d) The official or employee concerned may bring an action against any person who obtains or uses a report for any purpose prohibited by Section 8 (D) of this Act. The Court in which such action is brought may assess against such person a penalty in any amount not to exceed twenty-five thousand pesos (P25,000). If another sanction hereunder or under any other law is heavier, the latter shall apply.

Section 12. Promulgation of Rules and Regulations, Administration and Enforcement of this Act. - The Civil Service Commission shall have the primary responsibility for the administration and enforcement of this Act. It shall transmit all cases for prosecution arising from violations of this Act to the proper authorities for appropriate action: Provided, however, That it may institute such administrative actions and disciplinary measures as may be warranted in accordance with law. Nothing in this provision shall be construed as a deprivation of the right of each House of Congress to discipline its Members for disorderly behavior. The Civil Service Commission is hereby authorized to promulgate rules and regulations necessary to carry out the provisions of this Act, including guidelines for individuals who render free voluntary service to the Government. The Ombudsman shall likewise take steps to protect citizens who denounce acts or omissions of public officials and employees which are in violation of this Act.

Section 13. Provisions for More Stringent Standards. - Nothing in this Act shall be construed to derogate from any law, or any regulation prescribed by any body or agency, which provides for more stringent standards for its official and employees.

Section 14. Appropriations. - The sum necessary for the effective implementation of this Act shall be taken from the appropriations of the Civil Service Commission. Thereafter, such sum as may be needed for its continued implementation shall be included in the annual General Appropriations Act.

Section 15. Separability Clause. - If any provision of this Act or the application of such provision to any person or circumstance is declared invalid, the remainder of the Act or the application of such provision to other persons or circumstances shall not be affected by such declaration.

Section 16. Repealing Clause. - All laws, decrees and orders or parts thereof inconsistent herewith, are deemed repealed or modified accordingly, unless the same provide for a heavier penalty.

Section 17. Effectivity. - This Act shall take effect after thirty (30) days following the completion of its publication in the Official Gazette or in two (2) national newspapers of general circulation. Approved, February 20, 1989.

REPUBLIC ACT NO. 4670 June 18, 1966THE MAGNA CARTA FOR PUBLIC SCHOOL TEACHERS

I. DECLARATION OF POLICY COVERAGE Sec. 1. Declaration of Policy. It is hereby declared to be the policy of this Act to promote and improve the social and economic status of public school teachers, their living and working conditions, their terms of employment and career prospects in order that they may compare favorably with existing opportunities in other walks of life, attract and retain in the teaching profession more people with the proper qualifications, it being recognized that advance in education depends on the qualifications and ability of the teaching staff and that education is an essential factor in the economic growth of the nation as a productive investment of vital importance.

Sec. 2. Title Definition. This Act shall be known as the "Magna Carta for Public School Teachers" and shall apply to all public school teachers except those in the professorial staff of state colleges and universities. As used in this Act, the term "teacher" shall mean all persons engaged in classroom teaching, in any level of instruction, on full-time basis, including guidance counselors, school librarians, industrial arts or vocational instructors, and all other persons performing supervisory and/or administrative functions in all schools, colleges and universities operated by the Government or its political subdivisions; but shall not include school nurses, school physicians, school dentists, and other school employees.

II. RECRUITMENT AND CAREER Sec. 3. Recruitment and Qualification. Recruitment policy with respect to the selection and appointment of teachers shall be clearly defined by the Department of Education: Provided, however, That effective upon the approval of this Act, the following shall constitute the minimum educational qualifications for teacher-applicants: (a) For teachers in the kindergarten and elementary grades, Bachelor's degree in Elementary Education (B.S.E.ED.); (b) For teachers of the secondary schools, Bachelor's degree in Education or its equivalent with a major and a minor; or a Bachelor's degree in Arts or Science with at least eighteen professional units in Education. (c) For teachers of secondary vocational and two years technical courses, Bachelor's degree in the field of specialization with at least eighteen professional units in education; (d) For teachers of courses on the collegiate level, other than vocational, master's degree with a specific area of specialization; Provided, further, That in the absence of applicants who possess the minimum educational qualifications as hereinabove provided, the school superintendent may appoint, under a temporary status, applicants who do not meet the minimum qualifications: Provided, further, That should teacher-applicants, whether they possess the minimum educational qualifications or not, be required to take competitive examinations, preference in making appointments shall be in the order of their respective ranks in said competitive examinations: And provided, finally, That the results of the examinations shall be made public and every applicant shall be furnished with his score and rank in said examinations.

Sec. 4. Probationary Period. When recruitment takes place after adequate training and professional preparation in any school recognized by the Government, no probationary period preceding regular appointment shall be imposed if the teacher possesses the appropriate civil service eligibility: Provided, however, That where, due to the exigencies of the service, it is necessary to employ as teacher a person who possesses the minimum educational qualifications herein above set forth but lacks the appropriate civil service eligibility, such person shall be appointed on a provisional status and shall undergo a period of probation for not less than one year from and after the date of his provisional appointment.

Sec. 5. Tenure of Office. Stability on employment and security of tenure shall be assured the teachers as provided under existing laws. Subject to the provisions of Section three hereof, teachers appointed on a provisional status for lack of necessary civil service eligibility shall be extended permanent appointment for the position he is holding after having rendered at least ten years of continuous, efficient and faithful service in such position.

Sec. 6. Consent for Transfer Transportation Expenses. Except for cause and as herein otherwise provided, no teacher shall be transferred without his consent from one station to another. Where the exigencies of the service require the transfer of a teacher from one station to another, such transfer may be effected by the school superintendent who shall previously notify the teacher concerned of the transfer and the reason or reasons therefor. If the teacher believes there is no justification for the transfer, he may appeal his case to the Director of Public Schools or the Director of Vocational Education, as the case may be. Pending his appeal and the decision thereon, his transfer shall be held in abeyance: Provided, however, That no transfers whatever shall be made three months before any local or national election. Necessary transfer expenses of the teacher and his family shall be paid for by the Government if his transfer is finally approved.

Sec. 7. Code of Professional Conduct for Teachers. Within six months from the approval of this Act, the Secretary of Education shall formulate and prepare a Code of Professional Conduct for Public School Teachers. A copy of the Code shall be furnished each teacher: Provided, however, That where this is not possible by reason of inadequate fiscal resources of the Department of Education, at least three copies of the same Code shall be deposited with the office of the school principal or head teacher where they may be accessible for use by the teachers.

Sec. 8. Safeguards in Disciplinary Procedure. Every teacher shall enjoy equitable safeguards at each stage of any disciplinary procedure and shall have: a. the right to be informed, in writing, of the charges; b. the right to full access to the evidence in the case; c. the right to defend himself and to be defended by a representative of his choice and/or by his organization, adequate time being given to the teacher for the preparation of his defense; and d. the right to appeal to clearly designated authorities. No publicity shall be given to any disciplinary action being taken against a teacher during the pendency of his case.

Sec. 9. Administrative Charges. Administrative charges against a teacher shall be heard initially by a committee composed of the corresponding School Superintendent of the Division or a duly authorized representative who should at least have the rank of a division supervisor, where the teacher belongs, as chairman, a representative of the local or, in its absence, any existing provincial or national teacher's organization and a supervisor of the Division, the last two to be designated by the Director of Public Schools. The committee shall submit its findings and recommendations to the Director of Public Schools within thirty days from the termination of the hearings: Provided, however, That where the school superintendent is the complainant or an interested party, all the members of the committee shall be appointed by the Secretary of Education.

Sec. 10. No Discrimination. There shall be no discrimination whatsoever in entrance to the teaching profession, or during its exercise, or in the termination of services, based on other than professional consideration.

Sec. 11. Married Teachers. Whenever possible, the proper authorities shall take all steps to enable married couples, both of whom are public school teachers, to be employed in the same locality.

Sec. 12. Academic Freedom. Teachers shall enjoy academic freedom in the discharge of their professional duties, particularly with regard to teaching and classroom methods.

III. HOURS OF WORK AND REMUNERATION Sec. 13. Teaching Hours. Any teacher engaged in actual classroom instruction shall not be required to render more than six hours of actual classroom teaching a day, which shall be so scheduled as to give him time for the preparation and correction of exercises and other work incidental to his normal teaching duties: Provided, however, That where the exigencies of the service so require, any teacher may be required to render more than six hours but not exceeding eight hours of actual classroom teaching a day upon payment of additional compensation at the same rate as his regular remuneration plus at least twenty-five per cent of his basic pay.

Sec. 14. Additional Compensation. Notwithstanding any provision of existing law to the contrary, co-curricula and out of school activities and any other activities outside of what is defined as normal duties of any teacher shall be paid an additional compensation of at least twenty-five per cent of his regular remuneration after the teacher has completed at least six hours of actual classroom teaching a day. In the case of other teachers or school officials not engaged in actual classroom instruction, any work performed in excess of eight hours a day shall be paid an additional compensation of at least twenty-five per cent of their regular remuneration. The agencies utilizing the services of teachers shall pay the additional compensation required under this section. Education authorities shall refuse to allow the rendition of services of teachers for other government agencies without the assurance that the teachers shall be paid the remuneration provided for under this section.

Sec. 15. Criteria for Salaries. Teacher's salaries shall correspond to the following criteria: (a) they shall compare favorably with those paid in other occupations requiring equivalent or similar qualifications, training and abilities; (b) they shall be such as to insure teachers a reasonable standard of life for themselves and their families; and (c) they shall be properly graded so as to recognize the fact that certain positions require higher qualifications and greater responsibility than others: Provided, however, That the general salary scale shall be such that the relation between the lowest and highest salaries paid in the profession will be of reasonable order. Narrowing of the salary scale shall be achieved by raising the lower end of the salary scales relative to the upper end.

Sec. 16. Salary Scale. Salary scales of teachers shall provide for a gradual progression from a minimum to a maximum salary by means of regular increments, granted automatically after three years: Provided, That the efficiency rating of the teacher concerned is at least satisfactory. The progression from the minimum to the maximum of the salary scale shall not extend over a period of ten years.

Sec. 17. Equality in Salary Scales. The salary scales of teachers whose salaries are appropriated by a city, municipal, municipal district, or provincial government, shall not be less than those provided for teachers of the National Government.

Sec. 18. Cost of Living Allowance. Teacher's salaries shall, at the very least, keep pace with the rise in the cost of living by the payment of a cost-of-living allowance which shall automatically follow changes in a cost-of-living index. The Secretary of Education shall, in consultation with the proper government entities, recommend to Congress, at least annually, the appropriation of the necessary funds for the cost-of-living allowances of teachers employed by the National Government. The determination of the cost-of-living allowances by the Secretary of Education shall, upon approval of the President of the Philippines, be binding on the city, municipal or provincial government, for the purposes of calculating the cost-of-living allowances of teachers under its employ.

Sec. 19. Special Hardship Allowances. In areas in which teachers are exposed to hardship such as difficulty in commuting to the place of work or other hazards peculiar to the place of employment, as determined by the Secretary of Education, they shall be compensated special hardship allowances equivalent to at least twenty-five per cent of their monthly salary.

Sec. 20. Salaries to be Paid in Legal Tender. Salaries of teachers shall be paid in legal tender of the Philippines or its equivalent in checks or treasury warrants. Provided, however, That such checks or treasury warrants shall be cashable in any national, provincial, city or municipal treasurer's office or any banking institutions operating under the laws of the Republic of the Philippines.

Sec. 21. Deductions Prohibited. No person shall make any deduction whatsoever from the salaries of teachers except under specific authority of law authorizing such deductions: Provided, however, That upon written authority executed by the teacher concerned, (1) lawful dues and fees owing to the Philippine Public School Teachers Association, and (2) premiums properly due on insurance policies, shall be considered deductible.

IV. HEALTH MEASURES AND INJURY BENEFITS Sec. 22. Medical Examination and Treatment. Compulsory medical examination shall be provided free of charge for all teachers before they take up teaching, and shall be repeated not less than once a year during the teacher's professional life. Where medical examination show that medical treatment and/or hospitalization is necessary, same shall be provided free by the government entity paying the salary of the teachers.

In regions where there is scarcity of medical facilities, teachers may obtain elsewhere the necessary medical care with the right to be reimbursed for their traveling expenses by the government entity concerned in the first paragraph of this Section.

Sec. 23. Compensation For Injuries. Teachers shall be protected against the consequences of employment injuries in accordance with existing laws. The effects of the physical and nervous strain on the teacher's health shall be recognized as a compensable occupational disease in accordance with existing laws.

V. LEAVE AND RETIREMENT BENEFITS Sec. 24. Study Leave. In addition to the leave privileges now enjoyed by teachers in the public schools, they shall be entitled to study leave not exceeding one school year after seven years of service. Such leave shall be granted in accordance with a schedule set by the Department of Education. During the period of such leave, the teachers shall be entitled to at least sixty per cent of their monthly salary: Provided, however, That no teacher shall be allowed to accumulate more than one year study leave, unless he needs an additional semester to finish his thesis for a graduate study in education or allied courses: Provided, further, That no compensation shall be due the teacher after the first year of such leave. In all cases, the study leave period shall be counted for seniority and pension purposes. The compensation allowed for one year study leave as herein provided shall be subject to the condition that the teacher takes the regular study load and passes at least seventy-five per cent of his courses. Study leave of more than one year may be permitted by the Secretary of Education but without compensation.

Sec. 25. Indefinite Leave. An indefinite sick leave of absence shall be granted to teachers when the nature of the illness demands a long treatment that will exceed one year at the least.

Sec. 26. Salary Increase upon Retirement. Public school teachers having fulfilled the age and service requirements of the applicable retirement laws shall be given one range salary raise upon retirement, which shall be the basis of the computation of the lump sum of the retirement pay and the monthly benefits thereafter.

VI. TEACHER'S ORGANIZATION Sec. 27. Freedom to Organize. Public school teachers shall have the right to freely and without previous authorization both to establish and to join organizations of their choosing, whether local or national to further and defend their interests.

Sec. 28. Discrimination Against Teachers Prohibited. The rights established in the immediately preceding Section shall be exercised without any interference or coercion. It shall be unlawful for any person to commit any acts of discrimination against teachers which are calculated to (a) make the employment of a teacher subject to the condition that he shall not join an organization, or shall relinquish membership in an organization, (b) to cause the dismissal of or otherwise prejudice a teacher by reason of his membership in an organization or because of participation in organization activities outside school hours, or with the consent of the proper school authorities, within school hours, and (c) to prevent him from carrying out the duties laid upon him by his position in the organization, or to penalize him for an action undertaken in that capacity.

Sec. 29. National Teacher's Organizations. National teachers' organizations shall be consulted in the formulation of national educational policies and professional standards, and in the formulation of national policies governing the social security of the teachers.

VII. ADMINISTRATION AND ENFORCEMENT Sec. 30. Rules and Regulations. The Secretary of Education shall formulate and prepare the necessary rules and regulations to implement the provisions of this Act. Rules and regulations issued pursuant to this Section shall take effect thirty days after publication in a newspaper of general circulation and by such other means as the Secretary of Education deems reasonably sufficient to give interested parties general notice of such issuance.

Sec. 31. Budgetary Estimates. The Secretary of Education shall submit to Congress annually the necessary budgetary estimates to implement the provisions of the Act concerning the benefits herein granted to public school teachers under the employ of the National Government.

Sec. 32. Penal Provision. A person who shall willfully interfere with, restrain or coerce any teacher in the exercise of his rights guaranteed by this Act or who shall in any other manner commit any act to defeat any of the provisions of this Act shall, upon conviction, be punished by a fine of not less than one hundred pesos nor more than one thousand pesos, or by imprisonment, in the discretion of the court. If the offender is a public official, the court shall order his dismissal from the Government service.

Sec. 33. Repealing Clause. All Acts or parts of Acts, executive orders and their implementing rules inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

Sec. 34. Separability Clause. If any provision of this Act is declared invalid, the remainder of this Act or any provisions not affected thereby shall remain in force and in effect.

Sec. 35. This Act shall take effect upon its approval.Approved: June 18, 1966

    Republic Act No. 7836 Philippine Teachers Professionalization Act of 1994

AN ACT TO STRENGTHEN THE REGULATION AND SUPERVISION OF THE PRACTICE OF TEACHING IN THE PHILIPPINES AND PRESCRIBING A LICENSURE EXAMINATION FOR TEACHERS AND FOR OTHER PURPOSES.

ARTICLE I TITLE

SECTION 1. Short Title. — This Act shall be known as the "Philippine Teachers Professionalization Act of 1994."

Sec. 2. Statement of Policy. — The State recognizes the vital role of teachers in nation-building and development through a responsible and literate citizenry.Towards this end, the State shall ensure and promote quality education by proper supervision and regulation of the licensure examination and professionalization of the practice of the teaching profession.

Sec. 3. Objectives. — This Act has the herein objectives: (a) The promotion, development and professionalization of teachers and the teaching profession; and (b) The supervision and regulation of the licensure examination.

Sec. 4. Definition of Terms. — For purposes of this Act, the following terms shall mean:(a) "Teaching" — refers to the profession concerned primarily with classroom instruction, at the elementary and secondary

levels in accordance with the curriculum prescribed by the Department of Education, Culture and Sports, whether on part-time or full-time basis in the private or public schools.

(b) "Teachers" — refers to all persons engaged in teaching at the elementary and secondary levels, whether on full-time or part-time basis, including industrial arts or vocational teachers and all other persons performing supervisory and/or administrative functions in all schools in the aforesaid levels and qualified to practice teaching under this Act.(c) "Board" — refers to the Board for Professional Teachers duly established and constituted under this Act. (d) "Commission" — refers to the Professional Regulation Commission.

ARTICLE II BOARD FOR PROFESSIONAL TEACHERS

Sec. 5. Creation and Composition of the Board. — There is hereby created under this Act a Board for Professional Teachers, hereinafter called the Board, a collegial body under the general supervision and administrative control of the Professional Regulation Commission, hereinafter referred to as the Commission, composed of five (5) members who shall be appointed by the President of the Philippines from among the recommendees chosen by the Commission.The recommendees shall be chosen from the list of nominees selected by the accredited association of teachers, who duly possess all the qualifications prescribed in Section 8 of this Act. The chairman and the voice-chairman of the Board shall be appointed from these five (5) members by the President: Provided, That the members of the first Board appointed under this Act shall be automatically registered as professional teachers and issued with the certificate of registration and professional license upon payment of the fees for examination, registration, and other fees prescribed by the Commission.

Sec. 6. Duties and Function of the Board. — The Board shall have the following duties and functions: (a) Promulgate, administer and enforce rules and regulations necessary for carrying out the provisions of this Act in accordance with the charter of the Professional Regulation Commission; (b) Determine and fix the frequency, dates, and places of examination, appoint supervisors, proctors, and other personnel as needed who shall be entitled to a daily allowance to be fixed by the Board for every examination day actually attended, use buildings and facilities of public or private schools for examination purposes;(c) Issue, suspend, or revoke the certificate of registration for the practice of the teaching profession; (d) Prescribe and collect examination and other fees as it may deem proper; (e) Prescribe and/or adopt a code of ethical and professional standards for the practice of the teaching profession. Such ethical standards, rules and regulations to take effect sixty (60) days after its publication in the Official Gazette or in any newspaper of general circulation; (f) Administer oaths in connection with the administration of this Act; (g) Supervise and regulate the registration, licensure and practice of professional teachers in the Philippines; (h) Adopt an official seal of the Board; (i) Look into the conditions affecting the practice of the teaching profession and whenever necessary, adopt such measures as may be deemed proper for the enhancement and maintenance of high professional and ethical standards of the profession; (j) Ensure that all educational institutions offering elementary and secondary education comply with the essential requirements for curricula, faculty and facilities for the elementary and secondary levels; (k) Investigate such violations of this Act, the rules and the code of ethical and professional standards for professional teachers as it may come to the knowledge of the Board, and for this purpose, to issue subpoena and subpoena duces tecum to secure the appearance of witnesses and the production of documents in connection therewith; and (l) Discharge such other powers, duties and functions as the Board may deem necessary for the practice of the teaching profession and the upgrading, enhancement, development and growth of education in the Philippines.

Sec. 7. Term of Office. — The members of the Board shall hold office for a term of three (3) years from the date they assume office: Provided, That the first appointees to the Board under this Act shall hold office according to the following terms:  one (1) member shall serve for one (1) year; one (1) member for two (2) years; the chairman, vice-chairman, and one (1) member for three (3) years. Vacancies shall be served for the unexpired term only. No person who has served for two (2) consecutive terms shall be eligible for reappointment. Appointment to fill an unexpired term shall be considered an appointment to a complete term.

The chairman or any member shall take his oath of office prior to the performance of his duties.

Sec. 8. Qualification of Board Members. — Each Board member must at the time of his appointment: (a) Be a citizen and resident of the Philippines;(b) Be at least thirty-five (35) years of age, of proven integrity, and possessed of high moral values in his personal as well as professional conduct and has not been convicted of any offense involving moral turpitude;(c) Be a holder of the degree of Bachelor of Arts or Bachelor of Science in Education and preferably a holder of a master's or doctorate degree in education, or their equivalents, from a university, school, college, academy or institute duly constituted, recognized and/or accredited by the Philippine government; (d) Be a professional teacher with a valid certificate of registration and valid professional license, save those members who shall compose the first Board for Professional Teachers; (e) Has been a professional teacher in the active practice of the teaching profession for at least ten (10) years in the elementary and secondary level; and (f) Not be an official or member of the faculty of, nor have pecuniary interest in any university, college, school, or institution conferring a bachelor's degree in education or its equivalents for at least three (3) years prior to his appointment, and neither connected with a review center or with any group or association where review classes or lectures in preparation for the licensure examination are offered or conducted.

Provided, however, that, the membership to the Board shall be evenly distributed to cover all levels of education, including equitable representation of the different fields of specialization.

Sec. 9. Compensation of the Board. — The chairman, vice-chairman, and members of the Board shall receive compensation comparable to the compensation received by existing regulatory boards under the Professional Regulation Commission, computed on the basis of the number of examinees/candidates.

Sec. 10. Supervision of the Board and Custodian of its Records. — The Board shall be under the supervision and control of the Commission.  All records, including applications for examination, examination papers and results, minutes of deliberation, administrative cases and investigative cases and investigations involving professional teachers shall be kept by the Commission.

Sec. 11. Secretariat and Support Services. — The Professional Regulation Commission, through its chairman, shall provide the secretariat and other support services to implement effectively the provisions of this Act.

Sec. 12. Removal of a Board Member. — The chairman or any member of the Board may be removed by the President of the Philippines upon recommendation of the Commission for neglect of duty, incompetence, unprofessional, unethical, immoral or dishonorable conduct, commission or toleration of irregularities in the examination, after having been given the opportunity to defend himself in a proper administrative investigation. In the course of investigation, the President may preventively suspend the respondent.

ARTICLE III EXAMINATION AND REGISTRATION

Sec. 13. Examination, Registration and License Required. — Except as otherwise specifically allowed under the provisions of this Act, all applicants for registration as professional teachers shall be required to undergo a written examination which shall be given at least once a year in such places and dates as the Board may determine upon approval by the Commission. A valid certificate of registration and a valid professional license from the Commission are required before any person is allowed to practice as a professional teacher in the Philippines, except as otherwise allowed under this Act.

Sec. 14. Scope of Examination. — The examinations for the elementary and secondary school teachers shall be separate. The examination for teachers in the elementary level shall consist of two (2) parts, namely: professional education and general education. The examination for teachers in the secondary level shall consist of three (3) parts, namely: professional education, general education, and field of specialization.

Sec. 15. Qualification Requirements of Applicants. — No applicant shall be admitted to take the examination unless, on the date of filing of the application, he shall have complied with the following requirements:

(a) A citizen of the Philippines or an alien whose country has reciprocity with the Philippines in the practice of the teaching profession;(b) At least eighteen (18) years of age;(c) In good health and of good reputation with high moral values; (d) Has not been convicted by final judgment by a court for an offense involving moral turpitude; (e) A graduate of a school, college or university recognized by the government and possesses the minimum educational qualifications, as follows:

(1) For teachers in preschool, a bachelor's degree in early childhood education (BECED) or its equivalent;(2) For teachers in the elementary grades, a bachelor's degree in elementary education (BSEED) or its equivalent;(3) For teachers in the secondary grades, a bachelor's degree in education or its equivalent with a major and minor, or a bachelor's degree in arts and sciences with at least ten (10) units in professional education; and (4) For teachers of vocational and two-year technical courses, a bachelor's degree in the field of specialization or its equivalent, with at least eighteen (18) units in professional education.

Sec. 16. Report of the Results of the Examination. — The Board shall, within one hundred twenty (120) days after the examination, report the ratings obtained by each candidate to the Professional Regulation Commission for approval and appropriate action.

Sec. 17. Issuance of Certificate of Registration and Professional License. — The registration of a professional teacher commences from the date his name is enrolled in the roster of professional teachers.Every registrant who has satisfactorily met all the requirements specified in this Act shall, upon payment of the registration fee, be issued a certificate of registration as a professional teacher bearing the full name of the registrant with serial number and date of issuance signed by the chairman of the Commission and the chairman, vice-chairman, and members of the Board, stamped with the official seal, as evidence that the person named therein is entitled to practice the profession with all the rights and privileges appurtenant thereto.  The certificate shall remain in full force and effect until withdrawn, suspended and/or revoked in accordance with law. A professional license signed by the chairman of the Commission and bearing the registration number and date of issuance thereof and the month of expiry or renewability shall likewise be issued to every registrant who has paid the annual registration fees for three (3) consecutive years.  This license shall serve as evidence that the licensee can lawfully practice his profession until the expiration of its validity.

Sec. 18. Oath Before Practice. — Every registrant shall be required to take his professional oath before practicing as a professional teacher.

Sec. 19. Periodic Merit Examination of Teachers. — To encourage continuing professional growth and development and to provide additional basis for merit promotion, in addition to their performance rating, teachers may take an oral and written examination at least once in five (5) years as basis for merit promotion. In taking this examination, no fee shall be required.

Sec. 20. Failure to Pass the Merit Examination. — If a teacher fails to pass the merit examination, he or she shall be allowed to take the examination for a second time. Should he or she fail to pass the merit examination for the second time, then he or she shall be required to take a DECS accredited refresher course or program before being allowed to retake the examination. Failure of any permanent teacher to pass the merit examination shall not, however, be used as a ground for his/her dismissal or demotion.

Sec. 21. Incentives. — Teachers who pass the merit examination shall: (a) Be awarded a diploma of merit by the Board;(b) Earn merit points for purposes of promotion in salary or to a higher position or grade level;(c) Be placed in the priority list for government scholarship; and (d) Enjoy such other benefits as may be promulgated by the Board.

Similar incentives shall be given to teachers who make inventions, develop new methods of teaching, write a book or books and create works of artistic merit.

Sec. 22. Integration of the Teaching Profession. — The teaching profession shall be integrated into one national organization which shall be recognized by the Board and the Commission as the one and only integrated and accredited association of professional teachers.  Upon registration with the Board, every professional teacher shall be encouraged to become a member of the integrated national organization. Those who have been registered with the Board but are not members of the said integrated organization shall be allowed to register as members of the said integrated organization within three (3) years after the effectivity of this Act. Membership in the integrated organization shall not be a bar to membership in other associations of the teaching profession. The professional teachers shall receive the benefits and privileges appurtenant to their membership in the said integrated and accredited organization of professional teachers only upon payment of the required membership fees and dues.

Sec. 23. Revocation of the Certificate of Registration, Suspension from the Practice of the Teaching Profession, and Cancellation of Temporary or Special Permit. — The Board shall have the power, after due notice and hearing, to suspend or revoke the certificate of registration of any registrant, to reprimand or to cancel the temporary/special permit of a holder thereof who is exempt from registration, for any of the following causes:

(a) Conviction for any criminal offense by a court of competent jurisdiction;(b) Immoral, unprofessional or dishonorable conduct;(c) Declaration by a court of competent jurisdiction for being mentally unsound or insane; (d) Malpractice, gross incompetence, gross negligence or serious ignorance of the practice of the teaching profession; (e) The use of or perpetration of any fraud or deceit in obtaining a certificate of registration, professional license or special/temporary permit; (f) Chronic inebriety or habitual use of drugs; (g) Violation of any of the provisions of this Act, the rules and regulations and other policies of the Board and the Commission, and the code of ethical and professional standards for professional teachers; and (h) Unjustified or willful failure to attend seminars, workshops, conferences and the like or the continuing education program prescribed by the Board and the Commission.

The decision of the Board to revoke or suspend a certificate may be appealed to the regional trial court of the place where the Board holds office within fifteen (15) days from receipt of the said decision or of the denial of the motion for reconsideration filed in due time.

Sec. 24. Registration by Reciprocity. — No teacher of a foreign nationality shall be admitted to the examination, or be given a certificate of registration or be entitled to any of the rights and privileges provided under this Act; unless the country or state of which he is a subject permits Filipino professional teachers to practice within its territorial limits on the same basis as subjects or citizens of said country or state: Provided, that the requirements of certification of teachers with said foreign state or country are substantially the same as those required and contemplated under this Act: Provided, further, That the laws of such state or country grant the same privilege to Filipino professional teachers on the same basis as the subject or citizens of such foreign country or state.

Sec. 25. Roster of Professional Teachers. — A roster of professional teachers containing the names and addresses of professional teachers, date of registration or issuance of certificate, and other data which in the opinion of the Board may appear pertinent shall be maintained.  Copies of the roster shall be provided by the Commission to the Board, the Department of Education, Culture and Sports, and the integrated and accredited organization of professional teachers.

Sec. 26. Registration and Exception. — Two (2) years after the effectivity of this Act, no person shall engage in teaching and/or act as a professional teacher as defined in this Act, whether in the preschool, elementary or secondary level, unless he is a duly registered professional teacher, and a holder of a valid certificate of registration and a valid professional license or a holder of a valid special/temporary permit. Upon approval of the application and payment of the prescribed fees, the certificate of registration and professional license as a professional teacher shall be issued without examination as required in this Act to a qualified applicant, who at the time of the approval of this Act, is:

(a) A holder of a certificate of eligibility as a teacher issued by the Civil Service Commission and the Department of Education, Culture and Sports; or (b) A registered professional teacher with the National Board for Teachers under the Department of Education, Culture and Sports (DECS) pursuant to Presidential Decree No. 1006; or(c) Not qualified under paragraphs one and two but with any of the following qualifications. to wit:

(1) An elementary or secondary teacher for five (5) years in good standing and a holder of Bachelor of Science in Education or its equivalent; or (2) An elementary or secondary teacher for three (3) years in good standing and a holder of a master's degree in education or its equivalent.

Provided, That they shall be given two (2) years from the organization of the Board for professional teachers within which to register and be included in the roster of professional teachers: Provided, further, That those incumbent teachers who are not qualified to register without examination under this Act or who, albeit qualified, were unable to register within the two-year period shall be issued a five-year temporary or special permit from the time the Board is organized within which to register after passing the examination and complying with the requirements provided this Act and be included in the roster of professional teachers: Provided, furthermore, That those who have failed the licensure examination for professional teachers shall be eligible as para-teachers and as such, shall be issued by the Board a special or temporary permit, and shall be assigned by the Department of Education, Culture and Sports (DECS) to schools as it may determine under the circumstances.

ARTICLE IV PROVISIONS RELATIVE TO THE PRACTICE OF THE TEACHING PROFESSION

Sec. 27. Inhibition Against the Practice of the Teaching Profession. — Except as otherwise allowed under this Act, no person shall practice or offer to practice the teaching profession in the Philippines or be appointed as teacher to any position calling for a teaching position without having previously obtained a valid certificate of registration and a valid professional license from the Commission.

Sec. 28. Penal Provisions. — The following shall be punishable by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) or imprisonment of nor less than six (6) months nor more than five (5) years, or both, at the discretion of the court:

(a) Any person who practices the teaching profession in the Philippines without being certified in accordance with the provisions of this Act;(b) Any person who represents or attempts to use as his own certificate of registration that of another;(c) Any person who gives any false, or fraudulent evidence of any kind to the Board or any member thereof in obtaining a certificate of registration as teacher; (d) Any person who impersonates any registrant of the same or different name; (e) Any person who uses a revoked or suspended certificate of registration; (f) Any person who, in connection with his name, otherwise assumes, uses or advertises any title or description tending to convey or conveys the impression that he is a teacher without holding a valid certificate; and (g) Any person who violates or who abets the violation of any of the provisions of this Act.

The penalty of fine or imprisonment or both, as provided in this section, shall also apply to any school official who shall cause or be responsible for the commission of any of the above-enumerated acts.

Sec. 29. Appropriations. — Such sums as may be necessary to carry out the provisions of this Act shall be included in the 1996 General Appropriations Act and thereafter.

Sec. 30. Implementing Guidelines. — The Board shall formulate and adopt the necessary guidelines for the effective implementation of the provisions of this Act within sixty (60) days of its approval. The Board shall submit to both Committees on Education, Arts, and Culture; and the Committees on Civil Service and Professional Regulation of the Senate and House of Representatives, copies of the implementing rules and guidelines within thirty (30) days after its promulgation. Any violation of this section shall render the official/s concerned liable under Republic Act No. 6713, otherwise known as the "Code of Conduct and Ethical Standards for Public Officials and Employees" and other pertinent administrative and/or penal laws.

Sec. 31. Transitory Provision. — All incumbent teachers in both the public and private sector not otherwise certified as professional teachers by virtue of this Act, shall be given (5) years temporary certificates from the time the Board for Professional Teachers is organized within which to qualify as required by this Act and be included in the roster of professionals. Provided, however, That the Professional Board Examination for Teachers (PBET) shall still be administered by the Civil Service Commission and the Department of Education, Culture and Sports for the year 1995.cralaw

Sec. 32. Separability Clause. — If, for any reason, any section or provision of this Act or the application of such section or provision to any person or circumstance is declared unconstitutional or invalid, no other section or provision of this Act shall be affected thereby.

Sec. 33. Repealing Clause. — All laws, presidential decrees, executive orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

Sec. 34. Effectivity Clause. — This Act shall take effect after fifteen (15) days following its complete publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved: December 16, 1994

CENTREXRepublic Act No. 7784

AN ACT TO STRENGTHEN TEACHER EDUCATION IN THE PHILIPPINES BY ESTABLISHING CENTERS OF EXCELLENCE, CREATING A TEACHER EDUCATION COUNCIL FOR THE PURPOSE, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER

PURPOSES.

SECTION 1. Declaration of Policy. — It is the declared policy of the State to protect and 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. It is likewise universally recognized that the teacher is the key to the effectiveness of the teaching-learning process by drawing out and nurturing the best in the learner as a human being and a worthy member of society. Thus, this Act aims to provide and ensure quality education by strengthening the education and training of teachers nationwide through a national system of excellence for teacher education.

Our vision is a teacher education system whose mission is to educate and train teachers of unquestionable integrity and competence, and who are committed to their continuing professional growth and obligation to help their students grow as responsible individuals and citizens of the Philippines and of the world.

Sec. 2. Definition of Terms. — As used in this Act: (a) "Teacher" shall mean all persons engaged in the classroom teaching of any subject, including practical/vocational arts, at the elementary and secondary levels of instruction including persons performing guidance and counseling, instructional supervision in all public or private education institutions, but shall not include school nurses, school physicians, school dentists, school administrators, and other school administrative support employees. Graduates of education who have passed the government examination for teachers although not actually employed as such, are hereby included in this definition.

(b) "Teacher education" shall mean the pre-service education, in-service education, and graduate education of teachers, in various areas of specialization.

(c) "Excellence" pertains to the efficient, effective and innovative delivery of relevant, functional, and quality programs in teacher education, training, research and community service.

(d) "Center of excellence" shall be a public or private college, institute, school or agency, engaged in the pre-service and continuing education, formal and non-formal, of teachers and top-notch educators, that has established and continues to maintain a good record in teacher education (in terms of number of graduates and their performance in the government examination for teachers and their professional achievement), research, and community service; whose graduates are models of integrity, commitment and dedication in education. The centers of excellence may exist by themselves or within a university or college.

Sec. 3. Teacher Education Centers of Excellence. — There shall be identified, designated, established and developed in strategic places in each of the regions of the country, one or more centers of excellence for teacher education based on criteria listed hereunder, assessed and adjudged by the Council. These centers of excellence shall be initially chosen from among existing public and private educational institutions by the Teacher Education Council created under this Act. Should the need arise, certain centers of excellence for teacher education at the provincial level may later be identified and developed.

The criteria for identifying schools and colleges as centers of excellence shall include the following: (a) highly educated, professionally qualified and experienced faculty dedicated to the Philosophy, mission, vision and goals of the institution and education; (b) well-settled students; (c) adequate library, research and study facilities; (d) competent administrative and support staff; (e) well-planned and relevant instructional programs; (f) adequate student development programs; (g) adequate student services; (h) relevant extension service and outreach programs; (i) percentage of graduates who become teachers; and (j) such other criteria as may be established and operationalized by the Teacher Education Council.

The Teacher Education Centers of Excellence shall form a national network which in turn shall network with elementary schools, high schools and/or parts thereof for laboratory purposes. Any center of excellence that is established shall be maintained for at least five (5) years before any proposal or review is made to transfer it elsewhere.

Sec. 4. Objectives and Functions of a Center of Excellence. — The objectives and functions of a center of excellence shall be to: (a) Experiment and try out relevant and innovative pre-service teacher education/training programs; (b) Organize and coordinate collaborative research on identified areas for systematic investigation in teacher education as basis for improving teacher education/training programs;(c) Serve as teacher resource center for curricular/instructional materials development; (d) Serve as the center mode for networking specific data; (e) Provide professional assistance to Teacher Education Institutions (TEIs) that have expressed the need for such assistance; (f) Encourage mutual support among TEIs in the region for upgrading their programs; and (g) Facilitate and help expedite accreditation among TEIs.

Sec. 5. Creation of the Teacher Education Council. — There shall be a Teacher Education Council composed of eleven (11) members with the Secretary of Education, Culture and Sports as ex officio chairman, and three (3) other ex officio members, namely: a Commissioner of the Commission on Higher Education (CHED), a representative of the National Commission on Culture and Arts (NCAA), and the Chairman of the Professional Regulations Commission (PRC).

The seven (7) regular members of the Council who shall be appointed by the President of the Republic of the Philippines are:(a) Three (3) representatives of centers of teacher education: one (1) from Luzon, one (1) from the Visayas, and one (1) from Mindanao who shall take into account the views of the parents-teachers and community associations, student associations, nongovernmental organizations, and people organizations concerned with basic education; (b) One (1) representative of science teachers;(c) One (1) representative of mathematics teachers; (d) One (1) representative of social studies teachers; and (e) One (1) representative of language teachers.

The other officers of the Council shall be elected by the members from among the regular members. The members of the Council shall be serve without any compensation but shall be reimbursed for actual and necessary expenses incurred by them in carrying out their duties under this Act.

The Council shall meet at least four (4) times a year and hold such other meetings at the call of the chairman or a majority of its members. All regular members of the Council shall hold office for a period of three (3) years.

Sec. 6. Criteria for the Selection of Regular Council Members. — The criteria for the selection of the regular Council members are as follows: (a) Integrity;(b) Expertise and experience in teacher education;(c) Recognized as an expert, nationally or internationally; and (d) Willingness to serve.

Sec. 7. Powers and Functions of the Council. — The Council shall have the following powers and functions:(a) To identify and designate among existing private and public schools, teacher education institutions as Centers of Excellence for Teacher Education, at the national, regional, and provincial levels; (b) To formulate policies and standards that shall strengthen and improve the system of teacher education in all existing public and private schools;(c) Initiate a periodic review of curricula and programs for teacher education and training through participatory methods, such as self-assessment by institutions; (d) To adopt an adequate and effective system of incentives such as scholarship grants, loan programs, subsidies, stipends and other similar benefits and incentives, in order to attract and encourage outstanding high school graduates whether from public or private schools, to pursue teacher education;

(e) To encourage the establishment of consortia and other cooperative arrangements among teacher education schools, public or private, for greater efficiency and economy in the use of resources; (f) Design collaborative programs or projects that will enhance pre-service teacher training, in-service training, re-training orientation and teacher development; (g) To direct the conduct of relevant studies as may be needed in the formulation of policies and in the planning and successful implementation of plans, programs and projects required in attaining the purposes of this Act;

(h) To review existing and recommend new legislation and policies of the government in order to improve teacher education and promote the welfare of teachers;

(i) To recommend appropriate measures to the President, Congress, and heads of other government offices and agencies to improve, enhance and strengthen teacher education; and

(j) To call upon any department, bureau, office, or government corporation, local government unit and other concerned agencies for assistance in areas falling within their mandate.

Sec. 8. Secretariat. — The Council shall organize and appoint a secretariat headed by an executive director, that shall assist the Council in executing its policies and programs and provide the necessary administrative support therefore.

Sec. 9. Active Participation of Local Government Units. — Local government units shall include in their plans, programs, and projects the development and improvement of teacher education through the centers of excellence in their respective regions.

Sec. 10. Appropriation. — The sum of One hundred million pesos (P100,000,000) is hereby authorized to be appropriated from the income of duty-free shops or otherwise known as the Trust Liability Account of the Department of Tourism, for the initial organizational and developmental activities of the Centers and the Council: Provided, however, That not more than five percent (5%) shall be devoted to Council's expenses. Thereafter, such amount as may be included in the annual budget of the Department of Education, Culture and Sports.

Sec. 11. Implementing Rules and Guidelines. — The Teacher Education Council created under this Act shall promulgate the implementing rules and regulations sixty (60) days from the approval of this Act.chan robles virtual law library

Sec. 12. Repealing Clause. — All laws, presidential decrees, rules or regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

Sec. 13. Effectivity Clause. — This Act shall take effect upon its approval.

  Approved: August 4, 1994

REPUBLIC ACT NO. 8491AN ACT PRESCRIBING THE CODE OF THE NATIONAL FLAG, ANTHEM, MOTTO, COAT-OF-ARMS AND OTHER HERALDIC

ITEMS AND DEVICES OF THE PHILIPPINES

SECTION 1. Short title. - This Act shall be known as the "Flag and Heraldic Code of the Philippines."

SECTION 2. Declaration of policy. - Reverence and respect shall at all times be accorded the flag, the anthem, and other national symbols which embody the national ideals and traditions and which express the principles of sovereignty and national solidarity. The heraldic items and devices shall seek to manifest the national virtues and to inculcate in the minds and hearts of our people a just pride in their native land, fitting respect and affection for the national flag and anthem, and the proper use of the national motto, coat-of-arms and other heraldic items and devices.

SECTION 3. Definition of terms. - Whenever used in this Act, the term: a) "Military" shall mean all branches of the Armed Forces of the Philippines including the Philippine National Police, the Bureau of Jail Management and Penology, and the Bureau of Fire Protection; b) "Festoon" shall mean to hang in a curved shape between two points as a decoration; c) "Flag" shall mean the Philippine National Flag, unless stated otherwise; d) "Fly" shall mean the part of the flag outside the hoist or length; e) "Symbol" shall mean any conventional sign which reveals man's achievement and heroism (for orders and decorations), identification, authority and a sign of dignity (for coat-of-arms, logo and insignia); f) "Half-Mast" shall mean lowering the flag to one-half the distance between the top and bottom of the staff; g) "Hoist" shall mean the part of the flag nearest the staff or the canvass to which the halyard is attached; h) "Inclement Weather" shall mean that a typhoon signal is raised in the locality; i) "National Anthem" shall mean the Philippine National Anthem; j) "Official Residences" shall mean Malacañang, and other government-owned structures where the President resides, and other structures occupied by the Philippine Consulate or Embassies abroad; k) "Places of Frivolity" shall mean places of hilarity marked by or providing boisterous merriment or recreation; and l) "Institute" shall mean the National Historical Institute.

CHAPTER I THE NATIONAL FLAG

A. Design of the National Flag

SECTION 4. The flag of the Philippines shall be blue, white and red with an eight-rayed golden-yellow sun and three five-pointed stars, as consecrated and honored by the people.

B. Hoisting and Display of the National Flag

SECTION 5. The flag shall be displayed in all public buildings, official residences, public plazas, and institutions of learning every day throughout the year.

SECTION 6. The flag shall be permanently hoisted, day and night throughout the year, in front of the following: at Malacañang Palace; the Congress of the Philippines building; Supreme Court building; the Rizal Monument in Luneta, Manila; Aguinaldo Shrine in Kawit, Cavite; Barasoain Shrine in Malolos, Bulacan; the Tomb of the Unknown Soldier, Libingan ng mga Bayani; Musoleo de los Beteranos dela Revolucion; all International Ports of Entry and all other places as may be designated by the Institute.

The flag shall be properly illuminated at night.

SECTION 7. The flag shall also be displayed in private buildings and residences or raised in the open on flag-staffs in front of said buildings every April 9 (Araw ng Kagitingan); May 1 (Labor Day); May 28 (National Flag Day) to June 12 (Independence Day); last Sunday of August (National Heroes Day); November 30 (Bonifacio Day); and December 30 (Rizal Day); and on such other days as may be declared by the President and/or local chief executives.

The flag may also be displayed throughout the year in private buildings or offices or raised in the open on flag-staffs in front of private buildings: Provided, That they observe flag-raising ceremonies in accordance with the rules and regulations to be issued by the Office of the President.

SECTION 8. All government agencies and instrumentalities, and local government offices, government-owned corporations and local government units are enjoined to observe flag day with appropriate ceremonies. Socio-civic groups, non-government organizations and the private sector are exhorted to cooperate in making the celebrations a success.

SECTION 9. The flag shall be flown on merchant ships of Philippine registry of more than one thousand (1000) gross tons and on all naval vessels.

On board naval vessels, the flag shall be displayed on the flag-staff at the stern when the ship is at anchor. The flag shall be hoisted to the gaff at the aftermast when the ship is at sea.

SECTION 10. The flag, if flown from a flagpole, shall have its blue field on top in time of peace and the red field on top in time of war; if in a hanging position, the blue field shall be to the right (left of the observer) in time of peace, and the red field to the right (left of the observer) in time of war.

The flagpole staff must be straight and slightly tapering at the top.

SECTION 11. If planted on the ground, the flagpole shall be at a prominent place and shall be of such height as would give the flag commanding position in relation to the buildings in the vicinity.

If attached to a building, the flagpole shall be on top of its roof or anchored on a sill projecting at an angle upward.

If on a stage or platform or government office, the flag shall be at the left (facing the stage) or the left of the office upon entering.

SECTION 12. When the Philippine flag is flown with another flag, the flags, if both are national flags, must be flown on separate staffs of the same height and shall be of equal size. The Philippine flag shall be hoisted first and lowered last.

If the other flag is not a national flag, it may be flown in the same lineyard as the Philippine flag but below the latter and it cannot be of greater size than the Philippine flag.

SECTION 13. When displayed with another flag, the Philippine flag shall be on the right of the other flag. If there is a line of other flags, the Philippine flag shall be in the middle of the line.

When carried in a parade with flags which are not national flags, the Philippine flag shall be in front of the center of the line.

SECTION 14. A flag worn out through wear and tear, shall not be thrown away. It shall be solemnly burned to avoid misuse or desecration. The flag shall be replaced immediately when it begins to show signs of wear and tear.

SECTION 15. The flag shall be raised at sunrise and lowered at sunset. It shall be on the mast at the start of official office hours, shall remain flying throughout the day.

SECTION 16. The flag may be displayed: a) Inside or outside a building or on stationary flagpoles. If the flag is displayed indoors on a flagpole, it shall be placed at the left of the observer as one enters the room;

b) From the top of a flagpole, which shall be at a prominent place or a commanding position in relation to the surrounding buildings;

c) From a staff projecting upward from the window sill, canopy, balcony or facade of a building;

d) In a suspended position from a rope extending from a building to pole erected away from the building;

e) Flat against the wall vertically with the sun and stars on top; and

f) Hanging in a vertical position across a street, with the blue field pointing east, if the road is heading south or north, or pointing north if the road is heading east or west. The flag shall not be raised when the weather is inclement. If already raised, the flag shall not be lowered.

SECTION 17. The flag shall be hoisted to the top briskly and lowered ceremoniously.

The flag shall never touch anything beneath it, such as the ground, flood, water or other objects.

After being lowered, the flag shall be handled and folded solemnly as part of the ceremony.

C. Conduct of Flag Raising Ceremony

SECTION 18. All government offices and educational institutions shall henceforth observe the flag-raising ceremony every Monday morning and the flag lowering ceremony every Friday afternoon. The ceremony shall be simple and dignified and shall include the playing or singing of the Philippine National Anthem.

SECTION 19. The Office of the President upon the recommendation of the Institute shall issue rules and regulations for the proper conduct of the flag ceremony.

SECTION 20. The observance of the flag ceremony in official or civic gatherings shall be simple and dignified and shall include the playing or singing of the anthem in its original Filipino lyrics and march tempo.

SECTION 21. During the flag-raising ceremony, the assembly shall stand in formation facing the flag. At the moment the first note of the anthem is heard, everyone in the premises shall come to attention; moving vehicles shall stop. All persons present shall place their right palms over their chests, those with hats shall uncover; while those in military, scouting, security guard, and citizens military training uniforms shall give the salute prescribed by their regulations, which salute shall be completed upon the last note of the anthem.

The assembly shall sing the Philippine national anthem, accompanied by a band, if available, and at the first note, the flag shall be raised briskly.

The same procedure shall be observed when the flag is passing in review or in parade.

SECTION 22. During the flag lowering, the flag shall be lowered solemnly and slowly so that the flag shall be down the mast at the sound of the

last note of the anthem. Those in the assembly shall observe the same deportment or shall observe the same behavior as for the flag-raising ceremony.

D. Half-Mast

SECTION 23. The flag shall be flown at half-mast as a sign of mourning on all the buildings and places where it is displayed, as provided for in this Act, on the day of official announcement of the death of any of the following officials:

a) The President or a former President, for ten (10) days;b) The Vice-President, the Chief Justice, the President of the Senate and the Speaker of the House of Representatives, for seven (7) days; and c) Other persons to be determined by the Institute, for any period less than seven (7) days. The flag shall be flown at half-mast on all the buildings and places where the decedent was holding office, on the day of death until the day of interment of an incumbent member of the Supreme Court, the Cabinet, the Senate or the House of Representatives, and such other persons as may be determined by the Institute. The flag when flown at half-mast shall be first hoisted to the peak for a moment then lowered to the half-mast position. The flag shall again be raised to the peak before it is lowered for the day.

E. Casket

SECTION 24. The flag may be used to cover the caskets of the honored dead of the military, veterans of previous wars, national artists, and of civilians who have rendered distinguished service to the nation, as may be determined by the local government unit concerned. In such cases, the flag shall be placed such that the white triangle shall be at the head and the blue portion shall cover the right side of the caskets. The flag shall not be lowered to the grave or allowed to touch the ground, but shall be folded solemnly and handed over to the heirs of the deceased.

F. Pledge to the Flag

SECTION 25. The following shall be the Pledge of Allegiance to the Philippine flag:

Ako ay Pilipino Buong katapatang nanunumpa

Sa watawat ng Pilipinas At sa bansang kanyang sinasagisag

Na may dangal, katarungan at kalayaan Na pinakikilos ng sambayanang

Maka-Diyos Maka-tao

Makakalikasan at Makabansa.

Such pledge shall be recited while standing with the right hand with palm open raised shoulder high. Individuals whose faith or religious beliefs prohibit them from making such pledge must nonetheless show full respect when the pledge is being rendered by standing at attention.

G. Flag Days

SECTION 26. The period from May 28 to June 12 of each year is declared as Flag Days, during which period all offices, agencies and instrumentalities of government, business establishments, institutions of learning and private homes are enjoined to display the flag.

H. Specifications of the National Flag

SECTION 27. The flag shall have the following proportions. The width of the flag, 1; the length of the flag, 2; and the sides of the white triangle, 1.

SECTION 28. The technical specifications shall be as follows: The blue color shall bear Cable No. 80173; the white color, Cable No. 80001; the red color, Cable No. 80108; and the golden yellow, Cable No. 80068.

SECTION 29. In order to establish uniform criteria in the making of our national flag and to guarantee its durability by the use of quality materials, the following standards and procedures shall be observed: a) All requisitions for the purchase of the Philippine National Flag must be based on strict compliance with the design, color, craftsmanship and material requirements of the Government;

b) All submitted samples of flags by accredited suppliers offered for purchase for government use shall be evaluated as to design, color and craftsmanship specifications by the Institute, through its Heraldry and Display Section, which shall stamp its approval or disapproval on the canvass reinforcement of the flag sample submitted. The samples shall be sent to the Institute by the requisitioning office, not by the flag supplier; and

c) The Industrial Technology Development Institute (ITDI) or the Philippine Textile Research Institute (PTRI) of the Department of Science and Technology (DOST) shall evaluate the quality of material of all flag samples and certify whether the fabric for the blue, white, red and golden yellow colors, including the canvas submitted, conforms to government requirement as to quality of the material. The samples shall be sent annually to the ITDI/PTRI by the manufacturer. The laboratory test results shall be submitted by the said office to the Institute.

SECTION 30. All deliveries of the flags requisitioned by the government shall be inspected by the requisitioning agency's internal inspector and by the Commission on Audit (COA) using the flag stamped approved by the Institute as reference.

SECTION 31. In carrying out its responsibilities under Section 4 hereof, the Institute, COA, the ITDI/PTRI shall prepare guidelines to be approved by the Office of the President.

SECTION 32. All government agencies and instrumentalities shall ensure that the requirements under this Act with respect to the standards, requisitions and delivery of the national flag are strictly complied with.

SECTION 33. All departments, agencies, offices, and instrumentalities of the government, government-owned or controlled corporations, local government units, including barangays, shall include in their annual budgets the necessary outlay for the purchase of the national flag.

I. Prohibited Acts

SECTION 34. It shall be prohibited: a) To mutilate, deface, defile, trample on or cast contempt or commit any act or omission casting dishonor or ridicule upon the flag or over its surface;

b) To dip the flag to any person or object by way of compliment or salute;

c) To use the flag: 1. As a drapery, festoon, tablecloth; 2. As covering for ceilings, walls, statues or other objects; 3. As a pennant in the hood, side, back and top of motor vehicles; 4. As a staff or whip; 5. For unveiling monuments or statues; and 6. As trademarks, or for industrial, commercial or agricultural labels or designs.

d) To display the flag: 1. Under any painting or picture; 2. Horizontally face-up. It shall always be hoisted aloft and be allowed to fall freely; 3. Below any platform; or 4. In discotheques, cockpits, night and day clubs, casinos, gambling joints and places of vice or where frivolity prevails.

e) To wear the flag in whole or in part as a costume or uniform; f) To add any word, figure, mark, picture, design, drawings, advertisement, or imprint of any nature on the flag; g) To print, paint or attach representation of the flag on handkerchiefs, napkins, cushions, and other articles of merchandise; h) To display in public any foreign flag, except in embassies and other diplomatic establishments, and in offices of international organizations; i) To use, display or be part of any advertisement or infomercial; and j) To display the flag in front of buildings or offices occupied by aliens.

CHAPTER II THE NATIONAL ANTHEM

SECTION 35. The National Anthem is entitled Lupang Hinirang.

SECTION 36. The National Anthem shall always be sung in the national language within or without the country. The following shall be the lyrics of the National Anthem:

Bayang magiliw, Perlas ng Silanganan

Alab ng puso, Sa Dibdib mo'y buhay.

Lupang Hinirang, Duyan ka ng magiting,

Sa manlulupig, Di ka pasisiil.

Sa dagat at bundok, Sa simoy at sa langit mong bughaw,

May dilag ang tula, At awit sa paglayang minamahal.

Ang kislap ng watawat mo'y Tagumpay na nagniningning,

Ang bituin at araw niya, Kailan pa ma'y di magdidilim,

Lupa ng araw ng luwalhati't pagsinta, Buhay ay langit sa piling mo,

Aming ligaya na pag may mang-aapi, Ang mamatay ng dahil sa iyo.

SECTION 37. The rendition of the National Anthem, whether played or sung, shall be in accordance with the musical arrangement and composition of Julian Felipe.

SECTION 38. When the National Anthem is played at a public gathering, whether by a band or by singing or both, or reproduced by any means, the attending public shall sing the anthem. The singing must be done with fervor.

As a sign of respect, all persons shall stand at attention and face the Philippine flag, if there is one displayed, and if there is none, they shall face the band or the conductor. At the first note, all persons shall execute a salute by placing their right palms over their left chests. Those in military, scouting, citizens military training and security guard uniforms shall give the salute prescribed by their regulations. The salute shall be completed upon the last note of the anthem. The anthem shall not be played and sung for mere recreation, amusement or entertainment purposes except on the following occasions:

a) International competitions where the Philippines is the host or has a representative; b) Local competitions; c) During the "signing off" and "signing on" of radio broadcasting and television stations; d) Before the initial and last screening of films and before the opening of theater performances; and e) Other occasions as may be allowed by the Institute.

SECTION 39. All officials and employees of the national and local government, and any agency or instrumentality thereof, including government-owned or controlled corporations, privately-owned entities or offices displaying the national flag and government institutions of learning are hereby directed to comply strictly with the rules prescribed for the rendition of the anthem. Failure to observe the rules shall be a ground for administrative discipline.

CHAPTER III THE NATIONAL MOTTO

SECTION 40. The National Motto shall be "MAKA-DIYOS, MAKA-TAO, MAKAKALIKASAN AT MAKABANSA." CHAPTER IV THE NATIONAL COAT-OF-ARMS

SECTION 41. The National Coat-of-Arms shall have: Paleways of two (2) pieces, azure and gules; a chief argent studded with three (3) mullets equidistant from each other; and, in point of honor, ovoid argent over all the sun rayonnant with eight minor and lesser rays. Beneath shall be the scroll with the words "REPUBLIKA NG PILIPINAS," inscribed thereon.

CHAPTER V THE GREAT SEAL

SECTION 42. The Great Seal shall be circular in form, with the arms as described in the preceding section, but without the scroll and the inscription thereon. Surrounding the whole shall be a double marginal circle within which shall appear the words "Republika ng Pilipinas." For the purpose of placing The Great Seal, the color of the arms shall not be deemed essential but tincture representation must be used.

The Great Seal shall also bear the National Motto.

SECTION 43. The Great Seal shall be affixed to or placed upon all commissions signed by the President and upon such other official documents and papers of the Republic of the Philippines as may be provided by law, or as may be required by custom and usage. The President shall have custody of the Great Seal.

CHAPTER VI OFFICIAL SEAL AND OTHER HERALDIC ITEMS AND DEVICES

SECTION 44. Any government entity, including the military, may adopt appropriate coat-of-arms, administrative seals, logo, insignia, badges, patches, and banners; and initiate awards, citations, orders or decorations; as may be authorized by Congress or the Office of the President.

SECTION 45. Such heraldic devices and items shall be filed with the Institute for recording and evaluation as to precedence, design, customs and traditions. The Institute shall promulgate the corresponding rules and regulations which shall be submitted for approval to the Office of the President or to Congress.

SECTION 46. All government offices including the military are hereby ordered to purchase all heraldic items and devices from manufacturers accredited and authorized by the Institute. Such items and devices shall be subject to inspection by the purchasing agency's internal inspector and the COA representative using the design and specifications approved by the Office of the President or by the Congress, through the Institute.

SECTION 47. No government official or employee shall accept any order or decoration from any foreign government without the consent of Congress, and without the prior evaluation and documentation of such order or decoration by the Institute.

CHAPTER VII PENALTIES

SECTION 48. Failure or refusal to observe the provisions of this Act; and any violation of the corresponding rules and regulations issued by the Office of the President, shall after proper notice and hearing, shall be penalized by public censure which shall be published at least once in a newspaper of general circulation.

The Department of Education, Culture and Sports and the Commission on Higher Education, upon the recommendation of the Institute and after proper notice and hearing, shall cause the cancellation of the recognition or permit of any private educational institution which fails or refuses to observe the provisions of this Act for the second time.

SECTION 49. The Department of Education, Culture and Sports (DECS) and the Commission on Higher Education shall ensure that the National Anthem, as adopted by law, shall be committed to memory by all students of both public and private educational institutions, and performed during the flag ceremony conducted in accordance with the rules and regulations issued by the Office of the President. In addition, they shall make available the vocal, piano or band scores of the National Anthem, as adopted by law, to all private and public schools, as well as the general public.

SECTION 50. Any person or juridical entity which violates any of the provisions of this Act shall, upon conviction, be punished by a fine of not less than Five thousand pesos (P5,000) nor more than Twenty thousand pesos (P20,000), or by imprisonment for not more than one (1) year, or both such fine and imprisonment, at the discretion of the court: Provided, That for any second and additional offenses, both fine and imprisonment shall always be imposed: Provided, further, That in case the violation is committed by a juridical person, its President or Chief Executive Officer thereof shall be liable.

CHAPTER VIII COMMON PROVISIONS

SECTION 51. The Institute shall issue the necessary rules and regulations to implement the provisions of this Act within ninety (90) days after effectivity. The Institute shall submit its rules and regulations to the Office of the President and the Congress of the Philippines.

SECTION 52. The Institute shall also be responsible for the strict enforcement of the provisions of this Act. It may call upon any government department, agency, office, or government instrumentality, including government corporations, and local government units, for such assistance as it may deem necessary for the effective discharge of its functions under this Act.

SECTION 53. Separability clause. - If any provision, or part hereof, is held invalid or unconstitutional, the remainder of this Act not otherwise affected shall be valid and subsisting.

SECTION 54. Repealing clause. - Any law, presidential decree or issuance, executive order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent with, the provisions of this Act is hereby repealed, modified, or amended accordingly.

SECTION 55. Effectivity. - This Act shall take effect fifteen (15) days from the date of its publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved: February 12, 1998

SOCIAL SECURITY ACT OF 1997 

REPUBLIC ACT NO. 8282 

AN ACT FURTHER STRENGTHENING THE SOCIAL SECURITY SYSTEM THEREBY AMENDING FOR THIS PURPOSE, REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE SOCIAL SECURITY LAW.

SECTION 1. Republic Act No. 1161, as amended, otherwise known as the "Social Security Law", is hereby further amended to read as follows: SECTION 1. Short Title. - This Act shall be known as the "Social Security Act of 1997."

SEC. 2. Declaration of Policy. - It is the policy of the Republic of the Philippines to establish, develop, promote and perfect a sound and viable tax-exempt social security service suitable to the needs of the people throughout the Philippines which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden. Towards this end, the State shall endeavor to extend social security protection to workers and their beneficiaries.

SEC. 3. Social Security System. - (a) To carry out the purposes of this Act, the Social Security System, hereinafter referred to as ‘SSS’, a corporate body, with principal place of business in Metro Manila, Philippines is hereby created. The SSS shall be directed and controlled by a Social Security Commission, hereinafter referred to as ‘Commission’, composed of the Secretary of Labor and Employment or his duly designated undersecretary, the SSS president and seven (7) appointive members, three (3) of whom shall represent the workers’ group, at least one of whom shall be a woman; three (3), the employers’ group, at least one (1) of whom shall be a woman; and one (1), the general public whose representative shall have adequate knowledge and experience regarding social security, to be appointed by the President of the Philippines. The six (6) members representing workers and employers shall be chosen from among the nominees of workers’ and employers’ organizations, respectively. The Chairman of the Commission shall be designated by the President of the Philippines from among its members. The term of the appointive members shall be three (3) years: Provided, That the terms of the first six (6) appointive members shall be one (1), two (2) and three (3) years for every two members, respectively: Provided, further, That they shall continue to hold office until their successors shall have been appointed and duly qualified. All vacancies, prior to the expiration of the term, shall be filled for the unexpired term only. The appointive members of the Commission shall receive at least two thousand five hundred pesos (P2,500.00) per diem for each meeting actually attended by them but not to exceed Ten thousand pesos (P10,000.00) a month:: Provided, That members of the Commission shall also receive a per diem of at least Two thousand five hundred pesos (P2,500.00) but not to exceed Fifteen thousand pesos (P15,000.00) a month: Provided , further, That said members of the Commission shall also receive reasonable transportation and representation allowances as may be fixed by the Commission, but not to exceed Ten thousand pesos (P10,000.00) a month. "(b) The general conduct of the operations and management functions of the SSS shall be vested in the SSS President who shall serve as the chief executive officer immediately responsible for carrying out the program of the SSS and the policies of the Commission. The SSS President shall be a person who has had previous experience in the technical and administrative fields related to the purposes of this Act. He shall be appointed by the President of the Philippines and shall receive salary to be fixed by the Commission with the approval of the President of the Philippines, payable from the funds of the SSS. "(c) The Commission, upon the recommendation of the SSS President, shall appoint an actuary, and such other personnel as may be deemed necessary, fix their reasonable compensation, allowances and other benefits, prescribe their duties and establish such methods and procedures as may be necessary to insure the efficient, honest and economical administration of the provisions and purposes of this Act: Provided, however, That the personnel of the SSS below the rank of Vice-President shall be appointed by the SSS President: Provided, further, That the personnel appointed by the SSS President, except those below the rank of assistant manager, shall be subject to the confirmation by the Commission: Provided, further, That

the personnel of the SSS shall be selected only from civil service eligibles and be subject to civil service rules and regulations: Provided, finally, That the SSS shall be exempt from the provisions of Republic Act No. 6758 and Republic Act No. 7430.

SEC. 4. Powers and Duties of the Commission and SSS. - (a) The Commission. - For the attainment of its main objectives as set forth in Section 2 hereof, the Commission shall have the following powers and duties: "(1) To adopt, amend and rescind, subject to the approval of the President of the Philippines, such rules and regulations as may be necessary to carry out the provisions and purposes of this Act; "(2) To establish a provident fund for the members which will consist of voluntary contributions of employers and/or employees, self-employed and voluntary members and their earnings, for the payment of benefits to such members or their beneficiaries, subject to such rules and regulations as it may promulgate and approved by the President of the Philippines; "(3) To maintain a provident fund which consists of contributions made by both the SSS and its officials and employees and their earnings, for the payment of benefits to such officials and employees or their heirs under such terms and conditions as it may prescribe; "(4) To approve restructuring proposals for the payment of due but unremitted contributions and unpaid loan amortizations under such terms and conditions as it may prescribe; "(5) To authorize cooperatives registered with the cooperative development authority or associations registered with the appropriate government agency to act as collecting agents of the SSS with respect to their members: Provided, That the SSS shall accredit the cooperative or association: Provided, further, That the persons authorized to collect are bonded; "(6) To compromise or release, in whole or in part, any interest, penalty or any civil liability to SSS in connection with the investments authorized under Section 26 hereof, under such terms and conditions as it may prescribe and approved by the President of the Philippines; and "(7) To approve, confirm, pass upon or review any and all actions of the SSS in the proper and necessary exercise of its powers and duties hereinafter enumerated. "(b) The Social Security System. - Subject to the provision of Section four (4), paragraph seven (7) hereof, the SSS shall have the following powers and duties: "(1) To submit annually not later than April 30, a public report to the President of the Philippines and to the Congress of the Philippines covering its activities in the administration and enforcement of this Act during the preceding year including information and recommendations on broad policies for the development and perfection of the program of the SSS; "(2) To require the actuary to submit a valuation report on the SSS benefit program every four (4) years, or more frequently as may be necessary, to undertake the necessary actuarial studies and calculations concerning increases in benefits taking into account inflation and the financial stability of the SSS, and to provide for feasible increases in benefits every four (4) years, including the addition of new ones, under such rules and regulations as the Commission may adopt, subject to the approval of the President of the Philippines: Provided, That the actuarial soundness of the reserve fund shall be guaranteed: Provided, further, That such increases in benefits shall not require any increase in the rate of contribution; "(3) To establish offices of the SSS to cover as many provinces, cities and congressional districts, whenever and wherever it may be expedient, necessary and feasible, and to inspect or cause to be inspected periodically such offices; "(4) To enter into agreements or contracts for such service and aid, as may be needed for the proper, efficient and stable administration of the SSS; "(5) To adopt, from time to time, a budget of expenditures including salaries of personnel, against all funds available to the SSS under this Act; "(6) To set up its accounting system and provide the necessary personnel therefor; "(7) To require reports, compilations and analyses of statistical and economic data and to make investigation as may be needed for the proper administration and development of the SSS; "(8) To acquire and dispose of property, real or personal, which may be necessary or expedient for the attainment of the purposes of this Act; "(9) To acquire, receive, or hold, by way of purchase, expropriation or otherwise, public or private property for the purpose of undertaking housing projects preferably for the benefit of low-income members and for the maintenance of hospitals and institutions for the sick, aged and disabled, as well as schools for the members and their immediate families; "(10) To sue and be sued in court; and "(11) To perform such other corporate acts as it may deem appropriate for the proper enforcement of this Act.

SEC. 5. Settlement of Disputes. - (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its members, or by hearing officers duly authorized by the Commission and decided within twenty (20) days after the submission of the evidence. The filing, determination and settlement of disputes shall be governed by the rules and regulations promulgated by the Commission. "(b) Appeal to Courts. - Any decision of the Commission, in the absence of an appeal therefrom as herein provided, shall become final and executory fifteen (15) days after the date of notification, and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby has exhausted his remedies before the Commission. The Commission shall be deemed to be a party to any judicial action involving any such decision, and may be represented by an attorney employed by the Commission, or when requested by the Commission, by the Solicitor General or any public prosecutors. "(c) Court Review. - The decision of the Commission upon any disputed matter may be reviewed both upon the law and the facts by the Court of Appeals. For the purpose of such review, the procedure concerning appeals from the Regional Trial Court shall be followed as far as practicable and consistent with the purposes of this Act. Appeal from a decision of the Commission must be taken within fifteen (15) days from notification of such decision. If the decision of the Commission involves only questions of law, the same shall be reviewed by the Supreme Court. No appeal bond shall be required. The case shall be heard in a summary manner, and shall take precedence over all cases, except that in the Supreme Court, criminal cases wherein life imprisonment or death has been imposed by the trial court shall take precedence. No appeal shall act as a supersedeas or a stay of the order of the Commission unless the Commission itself, or the Court of Appeals or the Supreme Court, shall so order. "(d) Execution of Decisions. - The Commission may, motu proprio or on motion of any interested party, issue a writ of execution to enforce any of its decisions or awards, after it has become final and executory, in the same manner as the decision of the Regional Trial Court by directing the city or provincial sheriff or the sheriff whom it may appoint to enforce such final decision or execute such writ; and any person who shall fail or refuse to comply with such decision, award or writ, after being required to do so shall, upon application by the Commission pursuant to Rule 71 of the Rules of Court, be punished for contempt.

SEC. 6. Auditor and Counsel. - (a) The Chairman of the Commission on Audit shall be the ex-officio Auditor of the SSS. He or his representative shall check and audit all the accounts, funds and properties of the SSS in the same manner and as frequently as the accounts, funds and properties of the government are checked and audited under existing laws, and he shall have, as far as practicable, the same powers and duties as he has with respect to the checking and auditing of public accounts, funds and properties in general. "(b) The Secretary of Justice shall be the ex-officio counsel of the SSS. He or his representative shall act as legal adviser and counsel thereof.

SEC. 7. Oaths, Witnesses, and Production of Records. - When authorized by the Commission, an official or employee thereof shall have the power to administer oath and affirmation, take depositions, certify to official acts, and issue subpoena and subpoena duces tecum to compel the attendance of witnesses and the production of books, papers, correspondence and other records deemed necessary as evidence in connection with any question arising under this Act. Any case of contumacy shall be dealt with by the Commission in accordance with law.

SEC. 8. Terms Defined. - For purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: "(a) SSS - The Social Security System created by this Act. "(b) Commission - The Social Security Commission as herein created. "(c) Employer- Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed person shall be both employee and employer at the same time. "(d) Employee - Any person who performs services for an employer in which either or both mental or physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship: Provided, That a self-employed person shall be both employee and employer at the same time. "(e) Dependents - The dependents shall be the following: "(1) The legal spouse entitled by law to receive support from the member; "(2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally; and "(3) The parent who is receiving regular support from the member. "(f) Compensation - All actual remuneration for employment, including the mandated cost-of-living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration in excess of the maximum salary credit as provided under Section Eighteen of this Act. "(g) Monthly salary credit - The compensation base for contributions and benefits as indicated in the schedule in Section Eighteen of this Act. "(h) Monthly - The period from one end of the last payroll period of the preceding month to the end of the last payroll period of the current month if compensation is on hourly, daily or weekly basis; if on any other basis, ‘monthly’ shall mean a period of one (1) month. "(i) Contribution - The amount paid to the SSS by and on behalf of the members in accordance with Section Eighteen of this Act. "(j) Employment - Any service performed by an employee for his employer except:

"(1) Employment purely casual and not for the purpose of occupation or business of the employer; "(2) Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines; "(3) Service performed in the employ of the Philippine Government or instrumentality or agency thereof; "(4) Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentality: Provided, however, That this exemption notwithstanding, any foreign government, international organization or their wholly-owned instrumentality employing workers in the Philippines or employing Filipinos outside of the Philippines, may enter into an agreement with the Philippine Government for the inclusion of such employees in the SSS except those already covered by their respective civil service retirement systems: Provided, further, That the terms of such agreement shall conform with the provisions of this Act on coverage and amount of payment of contributions and benefits: Provided, finally, That the provisions of this Act shall be supplementary to any such agreement; and "(5) Such other services performed by temporary and other employees which may be excluded by regulation of the Commission. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the service of said contractors.

"(k) Beneficiaries - The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be the secondary beneficiaries of the member. In the absence of all the foregoing, any other person designated by the member as his/her secondary beneficiary. "(l) Contingency - The retirement, death, disability, injury or sickness and maternity of the member. "(m) Average monthly salary credit - The result obtained by dividing the sum of the last sixty (60) monthly salary credits immediately preceding the semester of contingency by sixty (60), or the result obtained by dividing the sum of all the monthly salary credits paid prior to the semester of contingency by the number of monthly contributions paid in the same period, whichever is greater: Provided, That the injury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit. "(n) Average daily salary credit- The result obtained by dividing the sum of the six (6) highest monthly salary credits in the twelve-month period immediately preceding the semester of contingency by one hundred eighty (180). "(o) Semester - A period of two (2) consecutive quarters ending in the quarter of contingency. "(p) Quarter - A period of three (3) consecutive calendar months ending on the last day of March, June, September and December. "(q) Credited years of service - For a member covered prior to January nineteen hundred and eighty five (1985) minus the calendar year of coverage plus the number of calendar years in which six (6) or more contributions have been paid from January nineteen hundred and eighty five (1985) up to the calendar year containing the semester prior to the contingency. For a member covered in or after January nineteen hundred and eighty five (1985), the number of calendar years in which six (6) or more contributions have been paid from the year of coverage up to the calendar year containing the

semester prior to the contingency: Provided, That the Commission may provide for a different number of contributions in a calendar year for it to be considered as a credited year of service. "(r) Member - The worker who is covered under Section Nine and Section Nine-A of this Act. "(s) Self-employed - Any person whose income is not derived from employment, as defined under this Act, as well as those workers enumerated in Section Nine-A hereof. "(t) Net earnings - Net income before income taxes plus non-cash charges such as depreciation and depletion appearing in the regular financial statement of the issuing or assuming institution. "(u) Fixed charges - Recurring expense such as amortization of debt discount or rentals for leased properties, including interest on funded and unfunded debt.

SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory upon all employees not over sixty (60) years of age and their employers: Provided, That in the case of domestic helpers, their monthly income shall not be less than One thousand pesos (P1,000.00) a month: Provided, further, That any benefit already earned by the employees under private benefit plans existing at the time of the approval of this Act shall not be discontinued, reduced or otherwise impaired: Provided, further, That private plans which are existing and in force at the time of compulsory coverage shall be integrated with the plan of the SSS in such a way where the employer’s contribution to his private plan is more than that required of him in this Act, he shall pay to the SSS only the contribution required of him and he shall continue his contribution to such private plan less his contribution to the SSS so that the employer’s total contribution to his benefit plan and to the SSS shall be the same as his contribution to his private benefit plan before the compulsory coverage: Provided, further, That any changes, adjustments, modifications, eliminations or improvements in the benefits to be available under the remaining private plan, which may be necessary to adopt by reason of the reduced contributions thereto as a result of the integration, shall be subject to agreements between the employers and employees concerned: Provided, further, That the private benefit plan which the employer shall continue for his employees shall remain under the employer’s management and control unless there is an existing agreement to the contrary: Provided, finally, That nothing in this Act shall be construed as a limitation on the right of employers and employees to agree on and adopt benefits which are over and above those provided under this Act. "(b) Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage, may be covered by the SSS on a voluntary basis. "(c) Filipinos recruited by foreign-based employers for employment abroad may be covered by the SSS on a voluntary basis.

SEC. 9-A. Compulsory Coverage of the Self-Employed. - Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the Commission under such rules and regulations as it may prescribe, including but not limited to the following: "1. All self-employed professionals; "2. Partners and single proprietors of businesses; "3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term "employee" in Section 8 (d) of this Act; "4. Professional athletes, coaches, trainers and jockeys; and "5. Individual farmers and fishermen. "Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons.

SEC. 10. Effective Date of Coverage. - Compulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the day of his employment: Provided, That the compulsory coverage of the self-employed person shall take effect upon his registration with the SSS. "SEC. 11. Effect of Separation from Employment. - When an employee under compulsory coverage is separated from employment, his employer’s contribution on his account and his obligation to pay contributions arising from that employment shall cease at the end of the month of separation, but said employee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of this Act. He may, however, continue to pay the total contributions to maintain his right to full benefit.

SEC. 11-A. Effect of Interruption of Business or Professional Income. - If the self-employed realizes no income in any given month, he shall not be required to pay contributions for that month. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated employee member: Provided, That no retroactive payment of contributions shall be allowed other than as prescribed under Section Twenty-two-A hereof.

SEC. 12. Monthly Pension. - (a) The monthly pension shall be the highest of the following amounts: "(1) The sum of the following: "(i) Three hundred pesos (P300.00; plus "(ii) Twenty percent (20%) of the average monthly salary credit; plus "(iii) Two percent (2%) of the average monthly salary credit for each credited year of service in excess of ten (10) years; or "(2) Forth percent (40%) of the average monthly salary credit; or "(3) One thousand pesos (P1,000.00): Provided, That the monthly pension shall in no case be paid for an aggregate amount of less than sixty (60) months. "(b) Notwithstanding the preceding paragraph, the minimum pension shall be One thousand two hundred pesos (P1,200.00) for members with at least ten (10) credited years of service and Two thousand four hundred pesos (P2,400.00) for those with twenty (20) credited years of service.

SEC. 12-A. Dependents’ Pension. - Where monthly pension is payable on account of death, permanent total disability or retirement, dependents’ pension equivalent to ten percent (10%) of the monthly pension or Two hundred fifty pesos (P250.00), whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding five (5), beginning with the youngest and without substitution: Provided, That where there are legitimate or illegitimate children, the former shall be preferred.

SEC. 12-B. Retirement Benefits. - (a) A member who has paid at least one hundred twenty (120) monthly contributions prior to the semester of retirement and who: (1) has reached the age of sixty (60) years and is already separated from employment or has ceased to be self-employed; or (2)

has reached the age of sixty-five (65) years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS. "(b) A covered member who is sixty (60) years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own. "(c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act. "(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period, excluding the dependents’ pension. "(e) The monthly pension of a member who retires after reaching age sixty (60) shall be the higher of either: (1) the monthly pension computed at the earliest time he could have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires. "SEC. 13. Death Benefits. - Upon the death of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36) times the monthly pension. If he has not paid the required thirty-six (36) monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher.

SEC. 13-A. Permanent Disability Benefits. - (a) Upon the permanent total disability of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided, That if he has not paid the required thirty-six (36) monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. A member who (1) has received a lump sum benefit; and (2) is reemployed or has resumed self-employment not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member. "(b) The monthly pension and dependents’ pension shall be suspended upon the reemployment or resumption of self-employment or the recovery of the disabled member from his permanent total disability or his failure to present himself for examination at least once a year upon notice by the SSS. "(c) Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period excluding the dependents’ pension. "(d) The following disabilities shall be deemed permanent total:

"1. Complete loss of sight of both eyes; "2. Loss of two limbs at or above the ankle or wrists; "3. Permanent complete paralysis of two limbs; "4. Brain injury resulting to incurable imbecility or insanity; and "5. Such cases as determined and approved by the SSS.

"(e) If the disability is permanent partial, and such disability occurs before thirty-six (36) monthly contributions have been paid prior to the semester of disability, the benefit shall be such percentage of the lump sum benefit described in the preceding paragraph with due regard to the degree of disability as the Commission may determine. "(f) If the disability is permanent total and such disability occurs after thirty-six (36) monthly contributions have been paid prior to the semester of disability, the benefit shall be the monthly pension for permanent total disability payable not longer than the period designated in the following schedule:

COMPLETE AND PERMANENT             NUMBER OF LOSS OF USE OF                 MONTHS One thumb                                     10 One index finger                             8 One middle finger                           6 One ring finger                                 5 One little finger                                3 One big toe                                        6 One hand                                         39 One arm                                           50 One foot                                            31 One leg                                              46 One ear                                              10 Both ears                                          20 Hearing of one ear                         10 Hearing of both ears                     50 Sight of one eye                               25

"(g) The percentage degree of disability which is equivalent to the ratio that the designated number of months of compensability bears to seventy-five (75), rounded to the next higher integer, shall not be additive for distinct, separate and unrelated permanent partial disabilities, but shall be additive for deteriorating and related permanent partial disabilities to a maximum of one hundred percent (100%), in which case, the member shall be deemed as permanently totally disabled. "(h) In case of permanent partial disability, the monthly pension benefit shall be given in lump sum if it is payable for less than twelve (12) months.

"(i) For the purpose of adjudicating retirement, death and permanent total disability pension benefits, contributions shall be deemed paid for the months during which the member received partial disability pension: Provided, That such contributions shall be based on his last contribution prior to his disability. "(j) Should a member who is on partial disability pension retire or die, his disability pension shall cease upon his retirement or death.

SEC. 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve thousand pesos (P12,000.00) shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree.

SEC. 14. Sickness Benefit. - (a) A member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of sickness or injury and is confined therefor for more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to ninety percent (90%) of his average daily salary credit, subject to the following conditions: "(1) In no case shall the daily sickness benefit be paid longer than one hundred twenty (120) days in one (1) calendar year, nor shall any unused portion of the one hundred twenty (120) days of sickness benefit granted under this section be carried forward and added to the total number of compensable days allowable in the subsequent year; "(2) The daily sickness benefit shall not be paid for more than two hundred forty (240) days on account of the same confinement; and "(3) The employee member shall notify his employer of the fact of his sickness or injury within five (5) calendar days after the start of his confinement unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case, notification to the employer is necessary: Provided, That if the member is unemployed or self-employed, he shall directly notify the SSS of his confinement within five (5) calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confinement shall be deemed to have started not earlier than the fifth day immediately preceding the date of notification. "(b) The compensable confinement shall begin on the first day of sickness, and the payment of such allowances shall be promptly made by the employer every regular payday or on the fifteenth and last day of each month, and similarly in the case of direct payment by the SSS, for as long as such allowances are due and payable: Provided, That such allowance shall begin only after all sick leaves of absence with full pay to the credit of the employee member shall have been exhausted. "(c) One hundred percent (100%) of the daily benefits provided in the preceding paragraph shall be reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality thereof: Provided, That the employer has notified the SSS of the confinement within five (5) calendar days after receipt of the notification from the employee member: Provided, further, That if the notification to the SSS is made by the employer beyond five (5) calendar days after receipt of the notification from the employee member, said employer shall be reimbursed only for each day of confinement starting from the tenth calendar day immediately preceding the date of notification to the SSS: Provided, finally, That the SSS shall reimburse the employer or pay the unemployed member only for confinement within the one-year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS, except confinement in a hospital in which case the claim for benefit or reimbursement must be filed within one (1) year from the last day of confinement. "(d) Where the employee member has given the required notification but the employer fails to notify the SSS of the confinement or to file the claim for reimbursement within the period prescribed in this section resulting in the reduction of the benefit or denial of the claim, such employer shall have no right to recover the corresponding daily allowance he advanced to the employee member as required in this section. "(e)The claim of reimbursement shall be adjudicated by the SSS within a period of two (2) months from receipt thereof: Provided, That should no payment be received by the employer within one (1) month after the period prescribed herein for adjudication, the reimbursement shall thereafter earn simple interest of one percent (1%) per month until paid. "(f) The provisions regarding the notification required of the member and the employer as well as the period within which the claim for benefit or reimbursement may be filed shall apply to all claims filed with the SSS.

SEC. 14-A. Maternity Leave Benefit. - A female member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventy-eight (78) days in case of caesarian delivery, subject to the following conditions: "(a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide; "(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity leave application; "(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same period for which daily maternity benefits have been received; "(d) That the maternity benefits provided under this section shall be paid only for the first four (4) deliveries or miscarriages; "(e) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and "(f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.

SEC. 15. Non-Transferability of Benefits. - The SSS shall promptly pay the benefits provided in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act: Provided, That the SSS shall pay the retirement benefits on the day of contingency to qualified members who have submitted the necessary documents at least six (6) months before: Provided, further, That the beneficiary who is a national of a foreign country which does not extend benefits to a Filipino beneficiary residing in the Philippines, or which is not recognized by the Philippines, shall not be entitled to receive any benefit under this Act: Provided, further, That notwithstanding the foregoing, where the best interest of the SSS will be served, the Commission may direct payments without regard to nationality or country of residence: Provided, further, That if the recipient is a minor or a person incapable of administering his own affairs, the Commission shall appoint a representative under such terms and conditions as it may deem proper: Provided, further, That such appointment shall not be necessary in case the recipient is under the custody of or living with the parents or spouse of the member in which case the benefits shall be paid to such parents or spouse, as representative payee of the recipient. Such benefits are not transferable and no power of attorney or other document executed by those entitled thereto in favor of any agent, attorney or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits: Provided, further,

That in case of death benefits, if no beneficiary qualifies under this Act, said benefits shall be paid to the legal heirs in accordance with the law of succession.

SEC. 16. Exemption from Tax, Legal Process and Lien. -- All laws to the contrary notwithstanding, the SSS and all its assets and properties, all contributions collected and all accruals thereto and income or investment earnings therefrom as well as all supplies, equipment, papers or documents shall be exempt from any tax, assessment, fee, charge, or customs or import duty; and all benefit payments made by the SSS shall likewise be exempt from all kinds of taxes, fees or charges, and shall not liable to attachments, garnishments, levy or seizure by or under any legal or equitable process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the member to the SSS. No tax measure of whatever nature enacted shall apply to the SSS, unless it expressly revokes the declared policy of the State in Section 2 hereof granting tax-exemption to the SSS. Any tax assessment imposed against the SSS shall be null and void. (As amended by Sec. 9, P. D. No. 24, S. 1972; and Sec. 14, P. D. No. 735, S. 1975).

SEC. 17. Fee of Agents, Attorneys, Etc. - No agent, attorney or other person in charge of the preparation, filing or pursuing any claim for benefit under this Act shall demand or charge for his services any fee, and any stipulation to the contrary shall be null and void. The retention or deduction of any amount from any benefit granted under this Act for the payment of fees for such services is prohibited: Provided, however, That any member of the Philippine Bar who appears as counsel in any case heard by the Commission shall be entitled to attorneys’ fees not exceeding ten percent (10%) of the benefits awarded by the Commission, which fees shall not be payable before the actual payment of the benefits, and any stipulation to the contrary shall be null and void. "Any violation of the provisions of this Section shall be punished by a fine of not less than Five hundred pesos (P500.00) nor more than Five thousand pesos (P5,000.00), or imprisonment for not less than six (6) months nor more than one (1) year, or both, at the discretion of the court.

SEC. 18. Employee’s Contributions. - (a) Beginning as of the last day of the calendar month when an employee’s compulsory coverage takes effect and every month thereafter during his employment, the employer shall deduct and withhold from such employee’s monthly salary, wage, compensation or earnings, the employee’s contribution in an amount corresponding to his salary, wage, compensation or earnings during the month in accordance with the following schedule:

SALARY                 RANGE OF       MONTHLY       MONTHLY CONTRIBUTION     BRACKET         COMPENSATION    SALARY

                                                           CREDIT         EMPLOYER EMPLOYEE TOTALI                  1,000.00 - 1,249.99     1000                 50.70             33.30     84.00

        II                 1,250.00 - 1,749.99     1500                 76.00             50.00   126.00         III              1,750.00 - 2,249.99     2000               101.30              66.70   168.00         IV               2,250.00 - 2,749.99     2500               126.70              83.30   210.00         V                2,750.00 - 3,249.99     3000               152.00            100.00   252.00         VI              3,250.00 - 3,749.99     3500               177.30            116.70   294.00         VII            3,750.00 - 4,249.99     4000               202.70            133.30   336.00         VIII           4,250.00 - 4,749.99     4500               228.00            150.00   378.00         IX              4,750.00 - 5,249.99     5000               253.30            166.70   420.00         X                 5,250.00 - 5,749.99     5500               278.70            183.70   462.40         XI                5,750.00 - 6,249.99     6000               304.00            200.00   504.00         XII               6,250.00 - 6,749.99     6500               329.30            216.78   546.00         XIII              6,750.00 - 7,249.99     7000               354.70            233.30   588.00         XIV             7,250.00 - 7,749.99     7500               380.00            250.00   630.00         XV              7,750.00 - 8.249.99     8000               403.30            266.70   672.00         XVI             8,250.00 - 8,749.99     8500               430.70            283.30   714.00         XVII            8,750.00 - OVER         9000               456.00            300.00  756.00

"The foregoing schedule of contribution shall also apply to self-employed and voluntary members. "The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00) effective January Nineteen hundred and ninety six (1996); Provided, That it shall be increased by One thousand pesos (P1,000.00) every year thereafter until it shall have reached Twelve thousand pesos (P12,000.00) by Nineteen hundred and ninety nine (1999): Provided, further, That the minimum and maximum monthly salary credits as well as the rate of contributions may be fixed from time to time by the Commission through rules and regulations taking into consideration actuarial calculations and rate of benefits, subject to the approval of the President of the Philippines.

SEC. 19. Employer’s Contributions. - (a) Beginning as of the last day of the month when an employee’s compulsory coverage takes effect and every month thereafter during his employment, his employer shall pay, with respect to such covered employee, the employer’s contribution in accordance with the schedule indicated in Section Eighteen of this Act. Notwithstanding any contract to the contrary, an employer shall not deduct, directly or indirectly, from the compensation of his employees covered by the SSS or otherwise recover from them the employer’s contributions with respect to such employees. "(b) The remittance of such contributions by the employer shall be supported by a quarterly collection list to be submitted to the SSS at the end of each calendar quarter indicating the correct ID number of the employer, the correct names and the SSS numbers of the employees and the total contributions paid for their account during the quarter.

SEC. 19-A. Contributions of the Self-Employed Member. - The contributions to the SSS of the self-employed member shall be determined in accordance with Section Eighteen of this Act: Provided, That the monthly earnings declared by the self-employed member at the time of his registration with the SSS shall be considered as his monthly compensation and he shall pay both the employer and the employee contributions: Provided, further, That the contributions of self-employed persons earning One thousand pesos (P1,000.00) monthly or below may be reduced by the Commission. "The monthly earnings declared by the self-employed member at the time of his registration shall remain the basis of his monthly salary credit, unless he makes another declaration of his monthly earnings, in which case such latest declaration becomes the new basis of his monthly salary credit.

SEC. 20. Government Contribution. - As the contribution of the Government to the operation of the SSS, Congress shall annually appropriate out of any funds in the National Treasury not otherwise appropriated, the necessary sum or sums to meet the estimated expenses of the SSS for each ensuing year. In addition to this contribution, Congress shall appropriate from time to time such sum or sums as may be needed to assure the maintenance of an adequate working balance of the funds of the SSS as disclosed by suitable periodic actuarial studies to be made of the operations of the SSS.

SEC. 21. Government Guarantee. -- The benefits prescribed in this Act shall not be diminished and to guarantee said benefits the Government of the Republic of the Philippines accepts general responsibility for the solvency of the SSS.

SEC. 22. Remittance of Contributions. -- (a) The contributions imposed in the preceding Section shall be remitted to the SSS within the first ten (10) days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. Every employer required to deduct and to remit such contributions shall be liable for their payment and if any contribution is not paid to the SSS as herein prescribed, he shall pay besides the contribution a penalty thereon of three percent (3%) per month from the date the contribution falls due until paid. If deemed expedient and advisable by the Commission, the collection and remittance of contributions shall be made quarterly or semi-annually in advance, the contributions payable by the employees to be advanced by their respective employers: Provided, That upon separation of an employee, any contribution so paid in advance but not due shall be credited or refunded to his employer. "(b) The contributions payable under this Act in cases where an employer refuses or neglects to pay the same shall be collected by the SSS in the same manner as taxes are made collectible under the National Internal Revenue Code, as amended. Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudice the right of the covered employee to the benefits of the coverage. "The right to institute the necessary action against the employer may be commenced within twenty (20) years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be. "(c) Should any person, natural or juridical, default in any payment of contributions, the Commission may also collect the same in either of the following ways: "1. By an action in court, which shall hear and dispose of the case in preference to any other civil action; or "2. By issuing a warrant to the Sheriff of any province or city commanding him to levy upon and sell any real and personal property of the debtor. The Sheriff’s sale by virtue of said warrant shall be governed by the same procedure prescribed for executions against property upon judgments by a court of record. "(d) The last complete record of monthly contributions paid by the employer or the average of the monthly contributions paid during the past three (3) years as of the date of filing of the action for collection shall be presumed to be the monthly contributions payable by and due from the employer to the SSS for each of the unpaid month, unless contradicted and overcome by other evidence: Provided, That the SSS shall not be barred from determining and collecting the true and correct contributions due the SSS even after full payment pursuant to this paragraph, nor shall the employer be relieved of his liability under Section Twenty-eight of this Act.

SEC. 22-A. Remittance of Contributions of Self-Employed Member. - Self-employed members shall remit their monthly contributions quarterly on such dates and schedules as the Commission may specify through rules and regulations: Provided, That no retroactive payment of contributions shall be allowed, except as provided in this Section.

SEC. 23. Method of Collection and Payment. - The SSS shall require a complete and proper collection and payment of contributions and proper identification of the employer and the employee. Payment may be made in cash, checks, stamps, coupons, tickets, or other reasonable devices that the Commission may adopt.

SEC. 24. Employment Records and Reports. - (a) Each employer shall immediately report to the SSS the names, ages, civil status, occupations, salaries and dependents of all his employees who are subject to compulsory coverage: Provided, That if an employee subject to compulsory coverage should die or become sick or disabled or reach the age of sixty (60) without the SSS having previously received any report or written communication about him from his employer, the said employer shall pay to the SSS damages equivalent to the benefits to which said employee member would have been entitled had his name been reported on time by the employer to the SSS, except that in case of pension benefits, the employer shall be liable to pay the SSS damages equivalent to the accumulated pension due as of the date of settlement of the claim or to the five (5) years’ pension, including dependents’ pension: Provided, further, That if the contingency occurs within thirty (30) days from the date of employment, the employer shall be relieved of his liability for damages: Provided, further, That any person or entity engaging the services of an independent contractor shall be subsidiarily liable with such contractor for any civil liability incurred by the latter under this Act: Provided, finally, That the same person or entity engaging the services of an independent contractor shall require such contractor to post a surety bond to guarantee the payment of the worker’s benefits. "(b) Should the employer misrepresent the true date of employment of the employee member or remit to the SSS contributions which are less than those required in this Act or fail to remit any contribution due prior to the date of contingency, resulting in a reduction of benefits, the employer shall pay to the SSS damages equivalent to the difference between the amount of benefit to which the employee member or his beneficiary is entitled had the proper contributions been remitted to the SSS and the amount payable on the basis of contributions actually remitted: Provided, That if the employee member or his beneficiary is entitled to pension benefits, damages shall be equivalent to the accumulated pension due as of the date of settlement of the claim or to the five (5) years’ pension, whichever is higher, including dependents’ pension. "In addition to the liability mentioned in the preceding paragraphs (a) and (b) hereof, the employer shall also be liable for the corresponding unremitted contributions and penalties thereon. "(c) The records and reports duly accomplished and submitted to the SSS by the employer or the member, as the case may be, shall be kept confidential by the SSS except in compliance with a subpoena duces tecum issued by the Court, shall not be divulged without the consent of the SSS President or any official of the SSS duly authorized by him, shall be presumed correct as to the data and other matters stated therein, unless the necessary corrections to such records and reports have been properly made by the parties concerned before the right to the benefit being claimed accrues, and shall be made the basis for the adjudication of the claim. If as a result of such adjudication the SSS in good faith pays a monthly pension to a beneficiary who is inferior in right to another beneficiary or with whom another beneficiary is entitled to share, such payments shall discharge the SSS from liability unless and until such other beneficiary notifies the SSS of his claim prior to the payments. "(d) Every employer shall keep true and accurate work records for such period and containing such information as the Commission may prescribe, in addition to an "Annual Register of New and Separated Employees" which shall be secured from the SSS wherein the employer shall enter on the first

day of employment or on the effective date of separation, the names of the persons employed or separated from employment, their SSS numbers, and such other data that the Commission may require and said annual register shall be submitted to the SSS in the month of January of each year. Such records shall be open for inspection by the SSS or its authorized representatives quarterly or as often as the SSS may require. "The SSS may also require each employer to submit, with respect to the persons in his employ, reports needed for the effective administration of this Act. "(e) Each employer shall require, as a condition to employment, the presentation of a registration number secured by the prospective employee from the SSS in accordance with such procedure as the SSS may adopt: Provided, That in case of employees who have been assigned registration numbers by virtue of a previous employment, such numbers originally assigned to them should be used for purposes of this Section: Provided, further, That the issuance of such registration numbers by the SSS shall not exempt the employer from complying with the provisions of paragraph (a) of this Section. "(f) Notwithstanding any law to the contrary, microfilm, or non-erasable optical disk and other similar archival media copies of original SSS records and reports, duly certified by the official custodian thereof, shall have the same evidentiary value as the originals and be admissible as evidence in all legal proceedings. "(g) Notwithstanding any law to the contrary, local government units shall, prior to issuing any annual business license or permit, require submission of certificate of SSS coverage and compliance with the provisions of this Act: Provided, That the certification or clearance shall be issued by the SSS within five (5) working days from receipt of the request.

SEC. 24-A. Report and Registration of the Self-Employed Member. - Each covered self-employed person shall, within thirty (30) days from the first day he started the practice of his profession or business operations register and report to the SSS his name, age, civil status, and occupation, average monthly net income and his dependents.

SEC. 25. Deposits and Disbursements. - All money paid to or collected by the SSS every year under this Act, and all accruals thereto shall be deposited, administered and disbursed in the same manner and under the same conditions and requirements as provided by law for other public special funds: Provided, That not more than twelve percent (12%) of the total yearly contributions plus three percent (3%) of other revenues shall be disbursed for operational expenses such as salaries and wages, supplies and materials, depreciation and the maintenance of offices of the SSS: Provided, further, That if the expenses in any year are less than the maximum amount permissible, the difference shall not be availed of as additional expenses in the following years.

SEC. 26. Investment of Reserve Funds. - All revenues of the SSS that are not needed to meet the current administrative and operational expenses incidental to the carrying out of this Act shall be accumulated in a fund to be known as the "Reserve Fund." Such portions of the Reserve Fund as are not needed to meet the current benefit obligations thereof shall be known as the "Investment Reserve Fund" which the Commission shall manage and invest with the skill, care, prudence and diligence necessary under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would exercise in the conduct of an enterprise of a like character and with similar aims. Pursuant thereto, and in line with the basic principles of safety, good yield and liquidity, the Commission shall invest the funds to earn an annual income not less than the average rates of treasury bills or any other acceptable market yield indicator in any or in all of the following: "(a) In bonds, securities, promissory notes or other evidence of indebtedness of the Government of the Philippines, or in bonds, securities, promissory notes or other evidence of indebtedness to which the full faith, credit and unconditional guarantee of the Government of the Philippines is pledged; "(b) In bonds, securities, promissory notes or other evidence of indebtedness of the Government of the Philippines, or any agencies or instrumentalities to finance domestic infrastructure projects such as roads, bridges, ports, telecommunications, and other similar projects: Provided, That the instruments issued by an agency or instrumentality of the government shall be guaranteed by the Government of the Philippines or any government financial institution or acceptable multilateral agency: Provided, further, That the SSS shall have priority over the revenues of the projects: Provided, finally, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund; "(c) In bonds, securities, promissory notes or other evidence of indebtedness of government financial institutions or government corporations with acceptable credit or guarantee: Provided, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund; "(d) In bonds, securities, promissory notes or other evidence of indebtedness of any bank doing business in the Philippines and in good standing with the Bangko Sentral ng Pilipinas to finance loans to private corporations doing business in the Philippines, including schools, hospitals, small-and-medium scale industries, cooperatives and non-governmental organizations, in which case the collaterals or securities shall be assigned to the SSS under such terms and conditions as the Commission may prescribe: Provided, That in the case of bank deposits, they shall not exceed at any time the unimpaired capital and surplus or total private deposits of the depository bank, whichever is smaller: Provided, further, That said bank shall first have been designated as a depository for this purpose by the Monetary Board of the Bangko Sentral ng Pilipinas: Provided, finally, That such investments shall not exceed forty percent (40%) of the Investment Reserve Fund; "(e) In bonds, securities, promissory notes or other evidence of indebtedness of shelter agencies of the National Government or financial intermediaries to finance housing loans of members; and in long-term direct individual or group housing loans giving priority to the low-income groups, up to a maximum of ninety percent (90%) of the appraised value of the properties to be mortgaged by the borrowers; and "In short and medium term loans to members such as salary, educational, livelihood, marital, calamity and emergency loans: Provided, That not more than thirty five percent (35%) of the Investment Reserve Fund at any time shall be invested for housing purposes: Provided, further, That not more than ten percent (10%) of the Investment Reserve Fund shall be invested in short and medium term loans; "(f) In bonds, securities, promissory notes or other evidence of indebtedness of educational or medical institutions to finance the construction, improvement and maintenance of schools and hospitals and their equipment and facilities: Provided, That such investments shall not exceed ten percent (10%) of the Investment Reserve Fund; "(g) In real estate property, including shares of stocks involving real estate property, and investment secured by first mortgages on real estate or other collaterals acceptable to the SSS: Provided, That such projects and investments shall, in the determination of the Commission, redound to the benefit of the SSS, its members, as well as the general public: Provided, further, That investment in real estate property, including shares of stocks involving real estate property shall not exceed five percent (5%) of the Investment Reserve Fund: Provided, finally, That investments in other income earning projects and investments secured by first mortgages or other collaterals shall not exceed twenty five percent (25%) of the Investment Reserve Fund; "(h) In bonds, debentures, securities, promissory notes or other evidence of indebtedness of any prime corporation or multilateral institutions to finance domestic projects: Provided, That the issuing or assuming entity or its predecessors shall not have defaulted in the payment of interest on any of its securities and that during each of any three (3) including the last two (2) of the five (5) fiscal years next preceding the date of acquisition by the SSS of such bonds, debentures or other evidence of indebtedness, the net earnings of the issuing or assuming institution available for its fixed

charges, as defined in this Act, shall have been not less than one and one-quarter times the total of its fixed charges for such year: Provided, further, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund; "(i) In preferred or common shares of stocks listed or about to be listed in the stock exchange or options or warrants to such stocks or, subject to prior approval of the Bangko Sentral ng Pilipinas, such other risk management instruments of any prime or solvent corporation or financial institution created or existing under the laws of the Philippines with proven track record of profitability over the last three (3) years and payment of dividends at least once over the same period: Provided, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund; "(j) In domestic or foreign mutual funds in existence for at least three (3) years; Provided, That such investments shall not exceed twenty percent (20%) of the Investment Reserve Fund: Provided, further, That investments in foreign mutual funds shall not exceed one percent (1%) of the Investment Reserve Fund in the first year which shall be increased by one percent (1%) for each succeeding year, but in no case shall it exceed seven and one-half percent (7.5%) of the Investment Reserve Fund; "(k) In foreign currency deposits or triple "A" foreign currency denominated debts, prime and non-speculative equities, and other Bangko Sentral ng Pilipinas approved financial instruments or other assets issued in accordance with the existing laws of the countries where such financial instruments are issued: Provided, That these instruments or assets are listed in bourses of the respective countries where these instruments or assets are issued: Provided, further, That the issuing company has proven track of record of profitability over the last three (3) years and a record of regular dividend pay-out over the same period: Provided, finally, That such investments shall not exceed one percent (1%) of the Investment Reserve Fund in the first year which shall be increased by one percent (1%) for each succeeding year, but in no case shall it exceed seven and one-half percent (7.5%) of the Investment Reserve Fund; "(l) In loans secured by such collaterals like cash, government securities or guarantees of multilateral institutions: Provided, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund; and "(m) In other Bangko Sentral ng Pilipinas approved investment instruments with the same intrinsic quality as those enumerated in paragraphs (a) to (l) hereof, subject to the policies and guidelines which the Commission may formulate. "No portion of the Investment Reserve Fund or income thereof shall accrue to the general fund of the National Government or to any of its agencies or instrumentalities, including government-owned or controlled corporations, except as may be allowed under this Act: Provided, That no portion of the Investment Reserve Fund shall be invested for any purpose or in any instrument, institution or industry over and above the prescribed cumulative ceilings as follows: 40% in private securities 35% in housing 30% in real estate related investments 10% in short and medium-term member loans 30% in government financial institutions and corporations 30% in infrastructure projects 15% in any particular industry 7.5% in foreign-currency denominated investments

SEC. 26-A. Fund Managers. - As part of its investment operations, the SSS may appoint local or, in the absence thereof, foreign fund managers to manage the Investment Reserve Fund, as it may deem appropriate.

SEC. 26-B. Mortgagor Insurance Account. - (a) As part of its investment operations, the SSS shall act as insurer of all or part of its interest on SSS properties mortgaged to the SSS, or lives of mortgagors whose properties are mortgaged to the SSS. For this purpose, the SSS shall establish a separate account to be known as the "Mortgagors’ Insurance Account." All amounts received by the SSS in connection with the aforesaid insurance operations shall be placed in the Mortgagors’ Insurance Account. The assets and liabilities of the Mortgagors’ Insurance Account shall at all times be clearly identifiable and distinguishable from the assets and liabilities in all other accounts of the SSS. Notwithstanding any provision of law to the contrary, the assets held in the Mortgagors’ Insurance Account shall not be chargeable with the liabilities arising out of any other business the SSS may conduct but shall be held and applied exclusively for the benefit of the owners or beneficiaries of the insurance contracts issued by the SSS under this paragraph. "(b) The SSS may insure any of its interest or part thereof with any private company or reinsurer. The Insurance Commission or its authorized representatives shall make an examination into the financial condition and methods of transacting business of the SSS at least once in two (2) years, but such examination shall be limited to the insurance operation of the SSS as authorized under this paragraph and shall not embrace the other operations of the SSS; and the report of said examination shall be submitted to the Commission and a copy thereof shall be furnished the Office of the President of the Philippines within a reasonable time after the close of the examination: Provided, That for each examination, the SSS shall pay to the Insurance Commission an amount equal to the actual expense of the Insurance Commission in the conduct of examination, including the salaries of the examiners and of the actuary of the Insurance Commission who have been assigned to make such examination for the actual time spent in said examination: Provided, further, That the general law on insurance and the rules and regulations promulgated thereunder shall have suppletory application insofar as it is not in conflict with this Act and its rules and regulations.

SEC. 27. Records and Reports. - The SSS President shall keep and cause to keep records of operations of the funds of the SSS and of disbursements thereof and all accounts of payments made out of said funds. During the month of January of each year, the SSS President shall prepare for submission to the President of the Philippines and to Congress of the Philippines a report of operations of the SSS during the preceding year, including statistical data on the number of persons covered and benefited, their occupations and employment status, the duration and amount of benefits paid, the finances of the SSS at the close of the said year, and recommendations. He shall also cause to be published in two (2) newspapers of general circulation in the Philippines a synopsis of the annual report, showing in particular the status of the finances of the SSS and the benefits administered.

SEC. 28. Penal Clause. - (a) Whoever, for the purpose of causing any payment to be made under this Act, or under an agreement thereunder, where none is authorized to be paid, shall make or cause to be made false statement or representation as to any compensation paid or received or whoever makes or causes to be made any false statement of a material fact in any claim for any benefit payable under this Act, or application for loan with the SSS, or whoever makes or causes to be made any false statement, representation, affidavit or document in connection with such claim or loan, shall suffer the penalties provided for in Article One hundred seventy-two of the Revised Penal Code.

"(b) Whoever shall obtain or receive any money or check under this Act or any agreement thereunder, without being entitled thereto with intent to defraud any member, employer or the SSS, shall be fined not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisoned for not less than six (6) years and one (1) day nor more than twelve (12) years. "(c) Whoever buys, sells, offers for sale, uses, transfers or takes or gives in exchange, or pledges or gives in pledge, except as authorized in this Act or in regulations made pursuant thereto, any stamp, coupon, ticket, book or other device, prescribed pursuant to Section Twenty-three hereof by the Commission for the collection or payment of contributions required herein, shall be fined not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisoned for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court. "(d) Whoever, with intent to defraud, alters, forges, makes or counterfeits any stamp, coupon, ticket, book or other device prescribed by the Commission for the collection or payment of any contribution required herein, or uses, sells, lends, or has in his possession any such altered, forged or counterfeited materials, or makes, uses, sells or has in his possession any such altered, forged, material in imitation of the material used in the manufacture of such stamp, coupon, ticket, book or other device, shall be fined not less than Five thousand pesos (P5,000.00) non more than Twenty thousand pesos (P20,000.00) or imprisoned for not less than six years (6) and one (1) day nor more than twelve (12) years, or both, at the discretion of the court. "(e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Commission, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court: Provided, That where the violation consists in failure or refusal to register employees or himself, in case of the covered self-employed or to deduct contributions from the employees’ compensation and remit the same to the SSS, the penalty shall be a fine of not less Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years. "(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense. "(g) Any employee of the SSS who receives or keeps funds or property belonging, payable or deliverable to the SSS and who shall appropriate the same, or shall take or misappropriate, or shall consent, or through abandonment or negligence, shall permit any other person to take such property or funds, wholly or partially, or shall otherwise be guilty of misappropriation of such funds or property, shall suffer the penalties provided in Article Two hundred seventeen of the Revised Penal Code. "(h) Any employer who, after deducting the monthly contributions or loan amortizations from his employee’s compensation, fails to remit the said deduction to the SSS within thirty (30) days from the date they became due, shall be presumed to have misappropriated such contributions or loan amortizations and shall suffer the penalties provided in Article Three hundred fifteen of the Revised Penal Code. "(i) Criminal action arising from a violation of the provisions of this Act may be commenced by the SSS or the employee concerned either under this Act or in appropriate cases under the Revised Penal Code: Provided, That such criminal action may be filed by the SSS in the city or municipality where the SSS office is located, if the violation was committed within its territorial jurisdiction or in Metro Manila, at the option of the SSS.

SEC. 29. Government Aid. - The establishment of the SSS shall not disqualify the members and employers from receiving such government assistance, financial or otherwise, as may be provided.

SEC. 30. Transitory Clause. - Any employer who is delinquent or has not remitted all contributions due and payable to the SSS may, within six (6) months from the effectivity of this Act, remit said contributions or submit a proposal to pay the same in installment within a period of not more than twelve (12) months from the effectivity of this Act without incurring the prescribed penalty, subject to the implementing rules and regulations which the Commission may prescribe: Provided, That the employer submits the corresponding collection lists together with the remittance or proposal to pay in installments: Provided, further, That in case the employer fails to remit contributions within the six-month grace period or defaults in the payment of any amortization provided the approved proposal, the prescribed penalty shall be imposed from the time the contributions first became due as provided in Section 22 (a) hereof."

SEC. 2. Separability Clause. - If any provision of this Act is declared invalid, the other provisions not affected thereby shall remain valid.

SEC. 3. Repealing Clause. - All laws, proclamations, executive orders, rules and regulations or parts thereof inconsistent with this Act are hereby repealed, modified or amended accordingly: Provided, That no person shall be deemed to be vested with any property or other right by virtue of the enactment or operation of this Act.

SEC. 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or in at least two (2) national newspapers of general circulation whichever comes earlier.Approved: May 01, 1997

THEGOVERNMENT SERVICE INSURANCE SYSTEM ACT OF 1997

  REPUBLIC ACT NO. 8291

 AN ACT AMENDING PRESIDENTIAL DECREE NO. 1146, AS AMENDED, EXPANDING AND INCREASING THE COVERAGE AND

BENEFITS OF THE GOVERNMENT SERVICE INSURANCE SYSTEM, INSTITUTING REFORMS THEREIN AND FOR OTHER PURPOSES.

 SECTION 1. Presidential Decree No. 1146, as amended, otherwise known as the "Revised Government Service Insurance Act of 1977", is hereby further amended to read as follows: "SECTION 1. Title. -The title of this Act shall be: "The Government Service Insurance System Act of 1997."

"A. DEFINITIONS"SEC. 2. Definition of terms.- Unless the context otherwise indicates, the following terms shall mean: "(a) GSIS- The Government Service Insurance System created by Commonwealth Act No. 186; "(b) Board- The Board of Trustees of the Government Service Insurance System; "(c) Employer- The national government, its political subdivisions, branches, agencies or instrumentalities, including government-owned or controlled corporations, and financial institutions with original charters, the constitutional commissions and the judiciary; "(d) Employee or Member- Any person receiving compensation while in the service of an employer as defined herein, whether by election or appointment, irrespective of status of appointment, including barangay and Sanggunian officials; "(e) Active Member- A member who is not separated from the service; "(f) Dependents- Dependents shall be the following: (a) the legitimate spouse dependent for support upon the member or pensioner; (b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is unmarried, not gainfully employed, not over the age of majority, or is over the age of majority but incapacitated and incapable of self-support due to a mental or physical defect acquired prior to age of majority; and (c) the parents dependent upon the member for support; "(g) Primary beneficiaries- The legal dependent spouse until he/she remarries and the dependent children; "(h) Secondary beneficiaries- The dependent parents and, subject to the restrictions on dependent children, the legitimate descendants; "(i) Compensation- The basic pay or salary received by an employee, pursuant to his election/appointment, excluding per diems, bonuses, overtime pay, honoraria, allowances and any other emoluments received in addition to the basic pay which are not integrated into the basic pay under existing laws; "(j) Contribution- The amount payable to the GSIS by the member and the employer in accordance with Section 5 of this Act; "(k) Current Daily Compensation- The actual daily compensation or the actual monthly compensation divided by the number of working days in the month of contingency but not to exceed twenty-two (22) days; "(l) Average Monthly Compensation (AMC)- The quotient arrived at after dividing the aggregate compensation received by the member during his last thirty-six (36) months of service preceding his separation/retirement/ disability/death by thirty-six (36), or by the number of months he received such compensation if he has less than thirty-six (36) months of service: Provided, That the average monthly compensation shall in no case exceed the amount and rate as may be respectively set by the Board under the rules and regulations implementing this Act as determined by the actuary of the GSIS: Provided, further, That initially the average monthly compensation shall not exceed Ten thousand pesos (P10,000.00), and premium shall be nine percent (9%) and twelve percent (12%) for employee and employer covering the AMC limit and below and two percent (2%) and twelve percent (12%) for employee and employer covering the compensation above the AMC limit; "(m) Revalued average monthly compensation- An amount equal to one hundred seventy percent (170%) of the first One thousand pesos (P1,000.00) of the average monthly compensation plus one hundred percent (100%) of the average monthly compensation in excess of One thousand pesos (P1,000.00); "(n) Lump sum- The basic monthly pension multiplied by sixty (60); "(o) Pensioner- Any person receiving old-age permanent total disability pension or any person who has received the lump sum excluding one receiving survivorship pension benefits as defined in Section 20 of this Act; "(p) Gainful Occupation- Any productive activity that provided the member with income at least equal to the minimum compensation of government employees; "(q) Disability- Any loss or impairment of the normal functions of the physical and/or mental faculty of a member which reduces or eliminates his/her capacity to continue with his/her current gainful occupation or engage in any other gainful occupation; "(r) Total Disability- Complete incapacity to continue with his present employment or engage in any gainful occupation due to the loss or impairment of the normal functions of the physical and/or mental faculties of the member; "(s) Permanent Total Disability- Accrues or arises when recovery from the impairment mentioned in Section 2 (Q) is medically remote; "(t) Temporary Total Disability- Accrues or arises when the impaired physical and/or mental faculties can be rehabilitated and/or restored to their normal functions; "(u) Permanent Partial Disability- Accrues or arises upon the irrevocable loss or impairment of certain portion/s of the physical faculties, despite which the member is able to pursue a gainful occupation.

"B. MEMBERSHIP IN THE GSIS"SEC. 3. Compulsory Membership. - Membership in the GSIS shall be compulsory for all employees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status, except members of the Armed Forces of the Philippines and the Philippine National Police, subject to the condition that they must settle first their financial obligation with the GSIS, and contractuals who have no employer and employee relationship with the agencies they serve. "Except for the members of the judiciary and constitutional commissions who shall have life insurance only, all members of the GSIS shall have life insurance, retirement, and all other social security protections such as disability, survivorship, separation, and unemployment benefits. "SEC. 4. Effect of Separation from the Service. - A member separated from the service shall continue to be a member, and shall be entitled to whatever benefits he has qualified to in the event of any contingency compensable under this Act.

"C. SOURCES OF FUNDS"SEC. 5. Contributions. - (a) It shall be mandatory for the member and employer to pay the monthly contributions specified in the following schedule:

"Monthly Compensation         Percentage of Monthly                                                                    Compensation                                                                        Payable by                                                      Member             Employer I.  Maximum Average     Monthly Compensation     (AMC) Limit and Below      9.0%                 12.0% II. Over the Maximum     AMC Limit      -Up to the Maximum       AMC Limit                             9.0%                  12.0%     -In Excess of the      AMC Limit                               2.0%                  12.0%

"Members of the judiciary and constitutional commissioners shall pay three percent (3%) of their monthly compensation as personal share and their employers a corresponding three percent (3%) share for their life insurance coverage. "(b) The employer shall include in its annual appropriation the necessary amounts for its share of the contributions indicated above, plus any additional premiums that may be required on account of the hazards or risks of its employee’s occupation. "(c) It shall be mandatory and compulsory for all employers to include the payment of contributions in their annual appropriations. Penal sanctions shall be imposed upon employers who fail to include the payment of contributions in their annual appropriations or otherwise fail to remit the accurate/exact amount of contributions on time, or delay the remittance of premium contributions to the GSIS. The heads of offices and agencies shall be administratively liable for non-remittance or delayed remittance of premium contributions to the GSIS. "SEC. 6. Collection and Remittance of Contributions. - (a) The employer shall report to the GSIS the names of all its employees, their corresponding employment status, positions, salaries and such other pertinent information, including subsequent changes therein, if any, as may be required by the GSIS; the employer shall deduct each month from the monthly salary or compensation of each employee the contribution payable by him in accordance with the schedule prescribed in the rules and regulations implementing this Act. "(b) Each employer shall remit directly to the GSIS the employee’s and employer’s contributions within the first ten (10) days of the calendar month following the month to which the contributions apply. The remittance by the employer of the contribution to the GSIS shall take priority over and above the payment of any and all obligations, except salaries and wages of its employees. "SEC. 7. Interest on Delayed Remittances. - Agencies which delay the remittance of any and all monies due the GSIS shall be charged interests as may be prescribed by the Board but not less than two percent (2%) simple interest per month. Such interest shall be paid by the employers concerned. "SEC. 8. Government Guarantee. - The government of the Republic of the Philippines hereby guarantees the fulfillment of the obligations of the GSIS to its members as and when they fall due.

"D. BENEFITS"SEC. 9. Computation of the Basic Monthly Pension. - (a) The basic monthly pension is equal to: "1) thirty-seven and one-half percent (37.5%) of the revalued average monthly compensation; plus "2) two and one-half percent (2.5%) of said revalued average monthly compensation for each year of service in excess of (15) years: Provided, That the basic monthly pension shall not exceed ninety percent (90%) of the average monthly compensation. "(b) The basic monthly pension may be adjusted upon the recommendation of the President and General Manager of the GSIS and approved by the President of the Philippines in accordance with the rules and regulations prescribed by the GSIS: Provided, however, that the basic monthly pension shall not be less than One thousand and three hundred pesos (P1,300.00): Provided, further, that the basic monthly pension for those who have rendered at least twenty (20) years of service after the effectivity of this Act shall not be less than Two thousand four hundred pesos (P2,400.00) a month. "SEC. 10. Computation of Service. - (a) The computation of service for the purpose of determining the amount of benefits payable under this Act shall be from the date of original appointment/election, including periods of service at different times under one or more employers, those performed overseas under the authority of the Republic of the Philippines, and those that may be prescribed by the GSIS in coordination with the Civil Service Commission. "(b) All service credited for retirement, resignation or separation for which corresponding benefits have been awarded under this Act or other laws shall be excluded in the computation of service in case of reinstatement in the service of an employer and subsequent retirement or separation which is compensable under this Act. "For the purpose of this section, the term service shall include full-time service with compensation: Provided, that part-time and other services with compensation may be included under such rules and regulations as may be prescribed by the GSIS.

"SEPARATION BENEFITS"SEC. 11. Separation Benefits. - The separation benefits shall consist of: (a) a cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000) payable upon reaching sixty (60) years of age upon separation, whichever comes later: Provided, that the member resigns or separates from the service after he has rendered at least three (3) years of service but less than fifteen (15) years; or "(b) a cash payment equivalent to eighteen (18) times his basic monthly pension at the time of resignation or separation, plus an old-age pension benefit equal to the basic monthly pension payable monthly for life upon reaching the age of sixty (60): Provided, that the member resigns or separates from the service after he has rendered at least fifteen (15) years of service and is below sixty (60) years of age at the time of resignation or separation. "SEC. 12. Unemployment or Involuntary Separation Benefits. - Unemployment benefits in the form of monthly cash payments equivalent to fifty percent (50%) of the average monthly compensation shall be paid to a permanent employee who is involuntarily separated from the service due to the abolition of his office or position usually resulting from reorganization: Provided, That he has been paying integrated contributions for at least one (1) year prior to separation. Unemployment benefits shall be paid in accordance with the following schedules:

                        "Contributions Made                         Benefit Duration                     1 year but less than 3 years                     2 months                     3 or more years but less than 6 years       3 months                     6 or more years but less than 9 years       4 months                     9 or more years but less than 11 years     5 months                     11 or more years but less than 15 years   6 months "The first payment shall be equivalent to two (2) monthly benefits. A seven-day (7) waiting period shall be imposed on succeeding monthly payments. "All accumulated unemployment benefits paid to the employee during his entire membership with the GSIS shall be deducted from voluntary separation benefits. "The GSIS shall prescribe the detailed guidelines in the operationalization of this section in the rules and regulations implementing this Act.

"RETIREMENT BENEFITS"SEC. 13. Retirement Benefits. - (a) Retirement benefits shall be: "(1) the lump sum payment as defined in this Act payable at the time of retirement plus an old-age pension benefit equal to the basic monthly pension payable monthly for life, starting upon expiration of the five-year (5) guaranteed period covered by the lump sum; or "(2) cash payment equivalent to eighteen (18) months of his basic monthly pension plus monthly pension for life payable immediately with no five-year (5) guarantee. "(b) Unless the service is extended by appropriate authorities, retirement shall be compulsory for an employee of sixty-five (65) years of age with at least fifteen (15) years of service: Provided, That if he has less than fifteen (15) years of service, he may be allowed to continue in the service in accordance with existing civil service rules and regulations. "SEC. 13-A. Conditions for Entitlement. - A member who retires from the service shall be entitled to the retirement benefits enumerated in paragraph (a) of Section 13 hereof: Provided, That:

(1) he has rendered at least fifteen years of service; (2) he is at least sixty (60) years of age at the time of retirement; and (3) he is not receiving a monthly pension benefit from permanent total disability.

"SEC. 14. Periodic Pension Adjustment. - The monthly pension of all pensioners including all those receiving survivorship pension benefits shall be periodically adjusted as may be recommended by the GSIS actuary and approved by the Board in accordance with the rules and regulations prescribed by the GSIS.

"PERMANENT DISABILITY BENEFITS"SEC. 15. General Conditions for Entitlement. - A member who suffers permanent disability for reasons not due to his grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another, shall be entitled to the benefits provided for under Sections 16 and 17 immediately following, subject to the corresponding conditions thereof. "SEC. 16. Permanent Total Disability Benefits. - (a) If the permanent disability is total, he shall receive a monthly income benefit for life equal to the basic monthly pension effective from the date of disability: Provided, That: (1) he is in the service at the time of disability; or (2) if separated from the service, he has paid at least thirty-six (36) monthly contributions within the five (5) year period immediately preceding disability, or has paid a total of at least one hundred eighty (180) monthly contributions, prior to his disability: Provided, further, That if at the time of disability, he was in the service and has paid a total of at least one hundred eighty (180) monthly contributions, in addition to the monthly income benefit, he shall receive a cash payment equivalent to eighteen (18) times his basic monthly pension: Provided, finally, That a member cannot enjoy the monthly income benefit for permanent disability and the old-age retirement simultaneously. "(b) If a member who suffers permanent total disability does not satisfy conditions (1) and (2) in paragraph (a) of this section but has rendered at least three (3) years of service at the time of his disability, he shall be advanced the cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000.00) which should have been his separation benefit. "(c) Unless the member has reached the minimum retirement age, disability benefit shall be suspended when:

"(1) he is reemployed; or

"(2) he recovers from his disability as determined by the GSIS, whose decision shall be final and binding; or

"(3) he fails to present himself for medical examination when required by the GSIS. "(d) The following disabilities shall be deemed total and permanent:  

"(1) complete loss of sight of both eyes;

"(2) loss of two (2) limbs at or above the ankle or wrist;

"(3) permanent complete paralysis of two (2) limbs;

"(4) brain injury resulting in incurable imbecility or insanity; and

"(5) such other cases as may be determined by the GSIS.

"SEC. 17. Permanent Partial Disability Benefits. - (a) If the disability is partial, he shall receive a cash payment in accordance with a schedule of disabilities to be prescribed by the GSIS: Provided, That he satisfies either conditions (1) or (2) of Section 16 (a); "(b) The following disabilities shall be deemed permanent partial:

"(1) complete and permanent loss of the use of:

(i) any finger (ii) any toe (iii) one arm (iv) one hand (v) one foot (vi) one leg (vii) one or both ears (viii) hearing of one or both ears (ix) sight of both eyes  

"(2) such other cases as my be determined by the GSIS.

"TEMPORARY DISABILITY BENEFITS"SEC. 18. Temporary Total Disability Benefits. - (a) A member who suffers temporary total disability for reasons not due to any of the conditions enumerated in Section 15 hereof shall be entitled to seventy-five percent (75%) of his current daily compensation for each day or fraction thereof of temporary disability benefit not exceeding one hundred twenty (120) days in one calendar year after exhausting all his sick leave credits and collective bargaining agreement sick leave benefits, if any, but not earlier than the fourth day of his temporary total disability: Provided, That:

"(1) he is in the service at the time of his disability; or "(2) if separated, he has rendered at least three (3) years of service and has paid at least six (6) monthly contributions in the twelve-month period immediately preceding his disability.

"Provided, however, That a member cannot enjoy the temporary total disability benefit and sick leave pay simultaneously: Provided, further, That if the disability requires more extensive treatment that lasts beyond one hundred twenty (120) days, the payment of the temporary total disability benefit may be extended by the GSIS but not to exceed a total of two hundred forty (240) days. "(b) The temporary total disability benefit shall in no case be less than Seventy pesos (P70.00) a day. "(c) The notices required of the member and the employer, the mode of payment, and the other requirements for entitlement to temporary total disability benefits shall be provided in the rules and regulations to be prescribed by the GSIS. "SEC. 19. Non-scheduled Disability. - For injuries or illnesses resulting in a disability not listed in the schedule of partial/total disability provided herein, the GSIS shall determined the nature of the disability and the corresponding benefits therefor.

"SURVIVORSHIP BENEFITS"SEC. 20. Survivorship Benefits. - When a member or pensioner dies, the beneficiaries shall be entitled to survivorship benefits provided in Sections 21 and 22 hereunder subject to the conditions therein provided for. The survivorship pension shall consist of:

(1) the basic survivorship pension which is fifty percent (50%) of the basic monthly pension; and

(2) the dependent children’s pension not exceeding fifty percent (50%) of the basic monthly pension.

"SEC. 21. Death of a Member. - (a) Upon the death of a member, the primary beneficiaries shall be entitled to: (1) survivorship pension: Provided, That the deceased:

(i) was in the service at the time of his death; or (ii) if separated from the service, has at least three (3) years of service at the time of his death and has paid thirty-six (36) monthly contributions within the five-year period immediately preceding his death; or has paid a total of at least one hundred eighty (180) monthly contributions prior to his death; or

(2) the survivorship pension plus a cash payment equivalent to one hundred percent (100%) of his average monthly compensation for every year of service: Provided, That the deceased was in the service at the time of his death with at least three (3) years of service; or

(3) a cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000.00): Provided, That the deceased has rendered at least three (3) years of service prior to his death but does not qualify for the benefits under item (1) or (2) of this paragraph.

(b) The survivorship pension shall be paid as follows: (1) when the dependent spouse is the only survivor, he/she shall receive the basic survivorship pension for life or until he/she remarries;

(2) when only dependent children are the survivors, they shall be entitled to the basic survivorship pension for as long as they are qualified, plus the dependent children’s pension equivalent to ten percent (10%) of the basic monthly pension for every dependent child not exceeding five (5), counted from the youngest and without substitution;

(3) when the survivors are the dependent spouse and the dependent children, the dependent spouse shall receive the basic survivorship pension for life or until he/she remarries, and the dependent children shall receive the dependent children’s pension mentioned in the immediately preceding paragraph (2) hereof.

(c) In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to: (1) the cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000.00): Provided, That the member is in the service at the time of his death and has at least three (3) years of service; or

(2) in the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to his legal heirs.(d) For purposes of the survivorship benefits, legitimate children shall include legally adopted and legitimated children.

"SEC. 22. Death of a Pensioner. - Upon the death of an old-age pensioner or a member receiving the monthly income benefit for permanent disability, the qualified beneficiaries shall be entitled to the survivorship pension defined in Section 20 of this Act, subject to the provisions of paragraph (b) of Section 21 hereof. When the pensioner dies within the period covered by the lump sum, the survivorship pension shall be paid only after the expiration of the said period.

"FUNERAL BENEFITS"SEC. 23. Funeral Benefits. - The amount of the funeral benefits shall be determined and specified by the GSIS in the rules and regulations but shall not be less than Twelve thousand pesos (P12,000.00): Provided, That it shall be increased to at least Eighteen thousand pesos (P18,000.00) after five (5) years and shall be paid upon the death of:

(a) an active member as defined under Section 2 (e) of this Act; or (b) a member who has been separated from the service, but who may be entitled to future benefit pursuant to Section 4 of this Act; or (c) a pensioner, as defined in Section 2 (o) of this Act; or (d) a retiree who at the time of his retirement was of pensionable age under this Act but who opted to retire under Republic Act No. 1616.

"LIFE INSURANCE BENEFITS"SEC. 24. Compulsory Life Insurance. - All employees except for Members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) shall, under such terms and conditions as may be promulgated by the GSIS, be compulsorily covered with life insurance, which shall automatically take effect as follows:

(1) for those employed after the effectivity of this Act, their insurance shall take effect on the date of their employment; (2) for those whose insurance will mature after the effectivity of this Act, their insurance shall be deemed renewed on the day following the maturity or expiry date of their insurance; (3) for those without any life insurance as of the effectivity of this Act, their insurance shall take effect following said effectivity.

"SEC. 25. Dividends. - An annual dividend may be granted to all members of the GSIS whose life insurance is in force for at least one (1) year in accordance with a dividends allocation formula to be determined by the GSIS. "SEC. 26. Optional Insurance. - Subject to the rules and regulations prescribed by the GSIS, a member may apply for insurance and/or pre-need coverage embracing life, health, hospitalization, education, memorial plans, and such other plans as may be designed by the GSIS, for himself and/or his dependents. Any employer may likewise apply for group insurance coverage for its employees. The payment of the premiums/installments for optional insurance and pre-need products may be made by the insured or his employer and/or any person acceptable to the GSIS. "SEC. 27. Reinsurance. - The GSIS may reinsure any of its interests or part thereof with any private company or reinsurer whether domestic of foreign: Provided, That the GSIS shall submit an annual report on its reinsurance operations to the Insurance Commission.

"E. ADJUDICATION OF CLAIMS AND DISPUTES"SEC. 28. Prescription. - Claims for benefits under this Act except for life and retirement shall prescribe after four (4) years from the date of contingency. "SEC. 29. Facility of Payment. - The GSIS shall prescribe rules and regulations to facilitate payment of benefits, proceeds, and claims under this Act and any other laws administered by the GSIS. Payments made by the GSIS prior to its receipt of an adverse claim, to a beneficiary or claimant subsequently found not entitled thereto, shall not bar the legal and eligible recipient to his right to demand the payment of benefits, proceeds, and claims from the GSIS, who shall, however, have a right to institute the appropriate action in a court of law against the ineligible recipient. "SEC. 30. Settlement of Disputes. - The GSIS shall have original and exclusive jurisdiction to settle any disputes arising under this Act and any other laws administered by the GSIS. The Board may designate any member of the Board, or official of the GSIS who is a lawyer, to act as hearing officer to receive evidence, make findings of fact and submit recommendations, together with all documentary and testimonial evidence to the Board within thirty (30) working days from the time the parties have closed their respective evidence and filed their last pleading. The Board shall decide the case within thirty (30) days from the receipt of the hearing officer’s findings and recommendations. The cases heard directly by the Board shall be decided within thirty (30) working days from the time they are submitted by the parties for decision. "SEC. 31. Appeals. - Appeals from any decision or award of the Board shall be governed by Rules 43 and 45 of the 1997 Rules of Civil Procedure adopted by the Supreme Court on April 8, 1997 which will take effect on July 1, 1997: Provided, That pending cases and those filed prior to July 1, 1997 shall be governed by the applicable rules of procedure: Provided, further, That the appeal shall take precedence over all other cases except criminal cases when the penalty of life imprisonment or death or reclusion perpetua is imposable. The appeal shall not stay the execution of the order or award unless ordered by the Board, by the Court of Appeals or by the Supreme Court and the appeal shall be without prejudice to the special civil action of certiorari when proper. "SEC. 32. Execution of Decision. - When no appeal is perfected and there is no order to stay by the Board, by the Court of Appeals or by the Supreme Court, any decision or award of the Board shall be enforced and executed in the same manner as decisions of the Regional Trial Court. For this purpose, the Board shall have the power to issue to the city or provincial sheriff or its appointed sheriff such writs of execution as may be necessary for the enforcement of such decision or award, and any person who shall fail or refuse to comply with such decision, award, writ or process after being required to do so shall, upon application by the GSIS, be punished for contempt. "SEC. 33. Oaths, Witnesses, and Production of Records. - When authorized by the Board, an official or employee of the GSIS shall have the power to administer oath and affirmation, take deposition, certify to official acts, and issue subpoena ad testificandum and subpoena duces tecum to compel the attendance of witnesses and the production of books, papers, correspondences, and other records deemed necessary as evidence in connection with any question arising under this Act. Any case of contumacy shall be dealt with in accordance with the provisions of Section 580 of the Revised Administrative Code.

"F. FUNDS OF THE GSIS"SEC. 34. Funds. - All contributions payable under Section 5 of this Act together with the earnings and accruals thereon shall constitute the GSIS Social Insurance Fund. The said fund shall be used to finance the benefits administered by the GSIS under this Act. In addition, the GSIS shall administer the optional insurance fund for the insurance coverage described in Section 26 hereof, the Employees’ Compensation Insurance Fund created under P.D. 626, as amended, General Insurance Fund created under Act No. 656, as amended, and such other special funds existing or that may be created for special groups or persons rendering services to the government. The GSIS shall maintain the required reserves to guarantee the fulfillment of its obligations under this Act.

The funds of the GSIS shall not be used for purposes other than what are provided for under this Act. Moreover, no portion of the funds of the GSIS or income thereof shall accrue to the General Fund of the national government and its political subdivisions, instrumentalities and other agencies including government-owned and controlled corporations except as may be allowed under this Act. "SEC. 35. Deposits and Disbursements. - All revenues collected and all accruals thereto shall be deposited, administered and disbursed in accordance with the law. A maximum expense loading of twelve percent (12%) of the yearly revenues from all sources may be disbursed for administrative and operational expenses except as may be otherwise approved by the President of the Philippines on the basis of actuarial and management studies. "SEC. 36. Investment of Funds. - The funds of the GSIS which are not needed to meet the current obligations may be invested under such terms and conditions and rules and regulations as may be prescribed by the Board: Provided, That investments shall satisfy the requirements of liquidity, safety/security and yield in order to ensure the actuarial solvency of the funds of the GSIS: Provided, further, That the GSIS shall submit an annual report on all investments made to both Houses of Congress of the Philippines, to wit:

(a) in interest-bearing bonds or securities or other evidence of indebtedness of the Government of the Philippines;

(b) in interest-bearing deposits or securities in any domestic bank doing business in the Philippines: Provided, That in the case of such deposits, there shall not exceed at any time the unimpaired capital and surplus or total private deposits of the depository bank, whichever is smaller: Provided, further, That the said bank has prior designation as a depository for the purpose by the Monetary Board of the Central Monetary Authority;

(c) in direct housing loans to members and group housing projects secured by first mortgage, giving priority to the low income groups and in short and medium term loans to members such as salary, policy, educational, emergency stock purchase plan and other similar loans: Provided, That no less than forty percent (40%) of the investible fund of the GSIS Social Insurance Fund shall be invested for these purposes;

(d) in bonds, securities, promissory notes or other evidence of indebtedness of educational or medical institutions to finance the construction, improvement and maintenance of schools and hospitals;

(e) in real estate property including shares of stocks involving real state property and investments secured by first mortgages on real estate or other collaterals acceptable to the GSIS: Provided, That such investment shall, in the determination of the Board, redound to the benefit of the GSIS, its members as well as the general public;

(f) in debt instruments and other securities traded in the secondary markets;

(g) in loans to, or in bonds, debentures, promissory notes or other evidence of indebtedness of any solvent corporation created or existing under the laws of the Philippines;

(h) in common and preferred stocks of any solvent corporation or financial institution created or existing under the laws of the Philippines listed in the stock exchange with proven track record of profitability over the last three (3) years and payment of dividends at least once over the same period;

(i) in domestic mutual funds including investments related to the operations of mutual funds; and

(j) in foreign mutual funds and in foreign currency deposits or foreign currency-denominated debts, non-speculative equities and other financial instruments or other assets issued in accordance with existing laws of the countries where such financial instruments are issued: Provided, That these instruments or assets are listed in bourses of the respective countries where these instruments or assets are issued: Provided, further, That the issuing company has proven track record of profitability over the last three (3) years and payment of dividends at least once over the same period.

"SEC. 37. Records and Reports. - The GSIS shall keep and cause to keep such records as may be necessary for the purpose of making actuarial studies, calculations and valuations of the funds of the GSIS including such data needed in the computation of rates of disability, mortality, morbidity, separation and retirement among the members and any other information useful for the adjustment of the benefits of the members. The GSIS shall maintain appropriate books of accounts to record its assets, liabilities, income, expenses, receipts and disbursement of funds and other financial transactions and operations. "SEC. 38. Examination and Valuation of the Funds. - The GSIS shall make a periodic actuarial examination and valuation of its funds in accordance with accepted actuarial principles. "SEC. 39. Exemption from Tax, Legal Process and Lien. - It is hereby declared to be the policy of the State that the actuarial solvency of the funds of the GSIS 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 members of the GSIS and their employers. Taxes imposed on the GSIS tend to impair the actuarial solvency of its funds and increase the contribution rate necessary to sustain the benefits of this Act. Accordingly, notwithstanding any laws to the contrary, the GSIS, its assets, revenues including all accruals thereto, and benefits paid, shall be exempt from all taxes, assessments, fees, charges, or duties of all kinds. These exemptions shall continue unless expressly and specifically revoked and any assessment against the GSIS 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 of 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 guaranty of the national government to secure such solvency or liability. "The funds and/or the 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 processes issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountability 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, is in favor of the GSIS.

"G. ADMINISTRATION"SEC. 40. Implementing Body. - The Government Service Insurance System as created under Commonwealth Act No. 186 shall implement the provisions of this Act. "SEC. 41. Powers and Functions of the GSIS. - The GSIS shall exercise the following powers and functions:

(a) to formulate, adopt, amend and/or rescind such rules and regulations as may be necessary to carry out the provisions and purposes of this Act, as well as the effective exercise of the powers and functions, and the discharge of duties and responsibilities of the GSIS, its officers and employees;

(b) to adopt or approve the annual and supplemental budget of receipts and expenditures including salaries and allowances of the GSIS personnel; to authorize such capital and operating expenditures and disbursements of the GSIS as may be necessary and proper for the effective management and operation of the GSIS;

(c) to invest the funds of the GSIS, directly or indirectly, in accordance with the provisions of this Act;

(d) to acquire, utilize or dispose of, in any manner recognized by law, real or personal property in the Philippines or elsewhere necessary to carry out the purposes of this Act;

(e) to conduct continuing actuarial and statistical studies and valuations to determine the financial €condition of the GSIS and taking into consideration such studies and valuations and the limitations herein provided, re-adjust the benefits, contributions, premium rates, interest rates or the allocation or re-allocation of the funds to the contingencies covered;

(f) to have the power of succession;

(g) to sue and be sued;

(h) to enter into, make, perform and carry out contracts of every kind and description with any person, firm or association or corporation, domestic or foreign;

(i) to carry on any other lawful business whatsoever in pursuance of, or in connection with the provisions of this Act;

(j) to have one or more offices in and outside of the Philippines, and to conduct its business and exercise its powers throughout and in any part of the Republic of the Philippines and/or in any or all foreign countries, states and territories: Provided, That the GSIS shall maintain a branch office in every province where there exists a minimum of fifteen thousand (15,000) membership;

(k) to borrow funds from any source, private or government, foreign or domestic, only as an incident in the securitization of housing mortgages of the GSIS and on account of its receivables from any government or private entity;

(l) to invest, own or otherwise participate in equity in any establishment, firm or entity;

(m) to approve appointments in the GSIS except appointments to positions which are policy determining, primarily confidential or highly technical in nature according to the Civil Service rules and regulations: Provided, That all positions in the GSIS shall be governed by the compensation and position classification system and qualifications standards approved by the GSIS Board of Trustees based on a comprehensive job analysis and audit of actual duties and responsibilities: Provided, further, That the compensation plan shall be comparable with the prevailing compensation plans in the private sector and shall be subject to the periodic review by the Board no more than once every four (4) years without prejudice to yearly merit reviews or increases based on productivity and profitability;

(n) to design and adopt an Early Retirement Incentives Plan (ERIP) and/or financial assistance for the purpose of retirement for its own personnel;

(o) to fix and periodically review and adjust the rates of interest and other terms and conditions for loans and credits extended to members or other persons, whether natural or juridical;

(p) to enter into agreement with the Social Security System or any other entity, enterprise, corporation or partnership for the benefit of members transferring from one system to another subject to the provisions of Republic Act No. 7699, otherwise known as the Portability Law;

(q) to be able to float proper instrument to liquefy long-term maturity by pooling funds for short-term secondary market;

(r) to submit annually, not later than June 30, a public report to the President of the Philippines and the Congress of the Philippines regarding its activities in the administration and enforcement of this Act during the preceding year including information and recommendations on board policies for the development and perfection of the programs of the GSIS;

(s) to maintain a provident fund, which consists of contributions made by both the GSIS and its officials and employees and their earnings, for the payments of benefits to such officials and employees or their heirs under such terms and conditions as it may prescribe;

(t) to approve and adopt guidelines affecting investments, insurance coverage of government properties, settlement of claims, disposition of acquired assets, privatization or expansion of subsidiaries, development of housing projects, increased benefit and loan packages to members, and the enforcement of the provision of this Act;

(u) any provision of law to the contrary notwithstanding, to authorize the payment of extra remuneration to the officials and employees directly involved in the collection and/or remittances of contributions, loan repayments, and other monies due to the GSIS at such rates and under such conditions as it may adopt: Provided, That the best interest of the GSIS shall be observed thereby;

(v) to determine, fix and impose interest upon unpaid premiums due from employers and employees;

(w) to ensure the collection or recovery of all indebtedness, liabilities and/or accountabilities, including unpaid premiums or contributions in favor of the GSIS arising from any cause or source whatsoever, due from obligors, whether public or private. The Board shall demand payment or settlement of the obligations referred to herein within thirty (30) days from the date the obligation becomes due, and in the event of failure or refusal of the obligor or debtor to comply with the demand, to initiate or institute the necessary or proper actions or suits, criminal, civil or administrative or otherwise, before the courts, tribunals, commissions, boards, or bodies of proper jurisdiction within thirty (30) days reckoned from the expiry date of the period fixed in the demand within which to pay or settle the account;

(x) to design and implement programs that will promote and mobilize savings and provide additional resources for social security expansion and at the same time afford individual members appropriate returns on their savings/investments. The programs shall be so designed as to spur socio-economic take-off and maintain continued growth; and

(y) to exercise such powers and perform such other acts as may be necessary, useful, incidental or auxiliary to carry out the provisions of this Act, or to attain the purposes and objectives of this Act.

"SEC. 42. The Board of Trustees; its Composition; Tenure and Compensation. - The corporate powers and functions of the GSIS shall be vested in and exercised by the Board of Trustees composed of the President and General Manager of the GSIS and eight (8) other members to be appointed by the President of the Philippines, one (1) of whom shall be either the President of the Philippine Public School Teachers Association (PPSTA) or the President of the Philippine Association of School Superintendents (PASS), another two (2) shall represent the leading organizations or associations of government employees/retirees, another four (4) from the banking, finance, investment, and insurance sectors, and one (1) recognized member of the legal profession who at the time of appointment is also a member of the GSIS. The Trustees shall elect from among themselves a Chairman while the President and General Manager of the GSIS shall automatically be the vice-chairman. The Trustees, except the President and General Manager who shall cease as trustee upon his separation, shall hold office for six (6) years without reappointment, or until their successors are duly appointed and qualified. Vacancy, other than through the expiration of the term, shall be filled for the unexpired term only. The members of the Board shall be entitled to a per diem of Two thousand five hundred pesos (P2,500.00) for each board meeting actually attended by them, but not to exceed Ten thousand pesos (P10,000.00) a month and reasonable transportation and representation allowances as may be fixed by the Board. "SEC. 43. Powers and Functions of the Board of Trustees. - The Board of Trustees shall have the following powers and functions:

"(a) to formulate the policies, guidelines and programs to effectively carry out the purposes of this Act;

"(b) to promulgate such rules and regulations as may be necessary or proper for the effective exercise of the powers and functions as well as the discharge of the duties and responsibilities of the GSIS, its officers and employees;

"(c) upon the recommendation of the President and General Manager, to approve the annual and supplemental budget of receipts and expenditures of the GSIS, and to authorize such operating and capital expenditures and disbursements of the GSIS as may be necessary or proper for the effective management, operation and administration of the GSIS;

"(d) upon the recommendation of the President and General Manager, to approve the GSIS organizational and administrative structure and staffing pattern, and to establish, fix, review, revise and adjust the appropriate compensation packages for the officers and employees of the GSIS and reasonable allowances, incentives, bonuses, privileges and other benefits as may be necessary or proper for the effective management, operation and administration of the GSIS, which shall be exempt from Republic Act No. 6758, otherwise known as the Attrition Law;

"(e) to fix and periodically review and adjust the rates of interest and other terms and conditions for loans and credits extended to its members or other persons, whether natural or juridical;

"(f) the provision of any law to the contrary notwithstanding, to compromise or release, in whole or in part, any claim or settle liability to the GSIS, regardless of the amount involved, under such terms and conditions as it may impose for the best interest of the GSIS;

"(g) to approve and adopt guidelines affecting investments, insurance coverage of government properties, settlement of claims, disposition of acquired assets, development of housing projects, increased benefit and loan packages to members, and the enforcement of the provisions of this Act;

"(h) to determine, fix, and impose interest upon unpaid or unremitted premiums and/or contributions; and

"(i) to do and perform any and all acts necessary, proper or incidental to the attainment of the purposes and objectives of this Act."SEC. 44. Appointment, Qualifications, and Compensation of the President and General Manager and of other Personnel. - The President and General Manager of the GSIS shall be its Chief Executive Officer and shall be appointed by the President of the Philippines. He shall be a person with management and investments expertise necessary for the effective performance of his duties and functions under this Act. "The GSIS President and General Manager shall be assisted by one or more executive vice-presidents, senior vice-presidents and managers in addition to the usual supervisory and rank-and-file positions who shall be appointed and removed by the President and General Manager with the approval of the Board, in accordance with the existing Civil Service rules and regulations. "SEC. 45. Powers and Duties of the President and General Manager. - The President and General Manager of the GSIS shall, among others, execute and administer the policies and resolutions approved by the Board and direct and supervise the administration and operations of the GSIS. The President and General Manager, subject to the approval of the Board, shall appoint the personnel of the GSIS, remove, suspend or otherwise

discipline them for cause, in accordance with the existing Civil Service rules and regulations, and prescribe their duties and qualifications to the end that only competent persons may be employed. "SEC. 46. Auditor. - (a) The Chairman of the Commission on Audit shall be the ex officio auditor of the GSIS, and the necessary personnel to assist said representative in the performance of his duties. "(b) The Chairman of the Commission on Audit or his authorized representatives, shall submit to the Board soon after the close of each calendar year, an audited statement showing the financial condition and progress of the GSIS for the calendar year just ended. "SEC. 47. Legal Counsel. - The Government Corporate Counsel shall be the legal adviser and consultant of the GSIS, but the GSIS may assign to the Office of the Government Corporate Counsel (OGCC) cases for legal action or trial, issues for legal opinions, preparation and review of contracts/agreements and others, as the GSIS may decide or determine from time to time: Provided, however, That the present legal services group in the GSIS shall serve as its in-house legal counsel. "The GSIS may, subject to approval by the proper court, deputize any personnel of the legal service group to act as special sheriff in the enforcement of writs and processes issued by the court, quasi-judicial agencies or administrative bodies in cases involving the GSIS. "SEC. 48. Powers of the Insurance Commission. - The Insurance Commissioner or his authorized representatives shall make an examination of financial condition and methods of transacting business of the GSIS at least once every three (3) years and the report of said examination shall be submitted to the Board of Trustees and copies thereof be furnished the Office of the President of the Philippines and the two houses of the Congress of the Philippines within five (5) days after the close of examination: Provided, however, That for each examination, the GSIS shall pay the office of the Insurance Commissioner an amount equal to the actual expenses incurred by the said office in the conduct of examination, including the salaries of the examiners and of the actuary of such examination for the actual time spent.

"H. GENERAL PROVISION"SEC. 49. Dispensation of Social Insurance Benefits. - (a) The GSIS shall pay the retirement benefits to the employee on his last day of service in the government: Provided, That all requirements are submitted to the GSIS within a reasonable period prior to the effective date of the retirement; "(b) The GSIS shall discontinue the processing and adjudication of retirement claims under R.A. No. 1616 except refund of retirement premium under R. A. No. 910. Instead, all agencies concerned shall process and pay the gratuities of their employees. The Board shall adopt the proper rules and procedures for the implementation of this provision. "SEC. 50. Development and Disposition of Acquired Assets. - The GSIS shall have the right to develop and dispose of its acquired assets obtained in the ordinary course of its business. To add value to, improve profitability on, and/or enhance the marketability of an acquired asset, the GSIS may further develop/renovate the same either with its own capital or through a joint venture arrangement with private companies or individuals. "The GSIS may sell its acquired assets in accordance with existing Commission on Audit (COA) rules and regulations for an amount not lower than the current market value of the property. For this purpose, the GSIS shall conduct an annual appraisal of its property or acquired assets to determine its current market value. All notices of sale shall be published in newspapers of general circulation. "No injunction or restraining order issued by any court, commission, tribunal or office shall bar, impede or delay the sale and disposition by the GSIS of its acquired assets except on questions of ownership and national or public interest. "SEC. 51. Government Assistance to the GSIS. - The GSIS may call upon any employer for such assistance as may be necessary in the discharge of its duties and functions.

"I. PENAL PROVISIONS"SEC. 52. Penalty. - (a) Any person found to have participated directly or indirectly in the commission of fraud, collusion, falsification, or misrepresentation in any transaction with the GSIS, whether for him or for some other persons, shall suffer the penalties provided for in Article 172 of the Revised Penal Code. "(b) Whoever shall obtain or receive any money or check invoking any provision of this Act or any agreement thereunder, without being entitled thereto with the intent to defraud any member, any employer, the GSIS, or any third party, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) or by imprisonment of not less than six (6) years and one (1) day to twelve (12) years, or both, at the discretion of the court. "(c) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations adopted by the GSIS, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) or imprisonment of not less than six (6) years and one (1) day to twelve (12) years, or both, at the discretion of the court. "(d) The treasurer, finance officer, cashier, disbursing officer, budget officer or other official or employee who fails to include in the annual budget the amount corresponding to the employer and employee contributions, or who fails or refuses or delays by more than thirty (30) days from the time such amount becomes due and demandable, or to deduct the monthly contributions of the employee shall, upon conviction by final judgment, suffer the penalties of imprisonment from six (6) months and one (1) day to six (6) years, and a fine of not less than Three thousand pesos (P3,000.00) but not more than Six thousand pesos (P6,000.00), and in addition, shall suffer absolute perpetual disqualification from holding public office and from practicing any profession or calling licensed by the government. "(e) Any employee or member who receives or keeps fund or property belonging, payable or deliverable to the GSIS and appropriates the same, or takes or misappropriates or uses the same for any purpose other than authorized by this Act, or permits another person to take, misappropriate or use said fund or property by expressly consenting thereto, or through abandonment or negligence, or is otherwise guilty of the misappropriation of said fund or property, in whole or in part, shall suffer the penalties provided in Article 217 of the Revised Penal Code, and in addition, shall suffer absolute perpetual disqualification from holding public office and from practicing any profession or calling licensed by the government. "(f) Any employee who, after deducting the monthly contribution or loan amortization from a member’s compensation, fails to remit the same to the GSIS within thirty (30) days from the date they should have been remitted under Section 6(a), shall be presumed to have misappropriated such contribution or loan amortization and shall suffer the penalties provided in Article 315 of the Revised Penal Code, and in addition, shall suffer absolute perpetual disqualification from holding public office and from practicing any profession or calling licensed by the government. "(g) The heads of the offices of the national government, its political subdivisions, branches, agencies and instrumentalities, including government-owned or controlled corporations and government financial institutions, and the personnel of such offices who are involved in the collection of premium contributions, loan amortization and other accounts due the GSIS who shall fail, refuse or delay the payment, turnover, remittance or delivery of such accounts to the GSIS within thirty (30) days from the time that the same shall have been due and demandable shall, upon conviction by final judgment, suffer the penalties of imprisonment of not less than one (1) year nor more than five (5) years and a fine of not less than Ten thousand pesos (P10,000.00) nor more than Twenty thousand pesos (P20,000.00), and in addition, shall suffer absolute perpetual disqualification from holding public office and from practicing any profession or calling licensed by the government.

"(h) The officers and/or personnel referred to in paragraph (g) of this section shall be liable not only criminally but also civilly to the GSIS or to the employee or member concerned in the form of damages, including surcharges and interests. "(i) For the charges or complaints referred to in paragraph (g) of this section, the liabilities therein set forth shall be construed as waiver of the State of its immunity from suit, hence, the above-mentioned officials and/or personnel may not invoke the defense of non-suability of the State. "(j) Failure of the Members of the GSIS Board, including the chairman and the vice-chairman, to comply with the provisions of paragraph (w) of Section 41 hereof, shall subject them to imprisonment of not less than six (6) months nor more than one (1) year or a fine of not less than Five thousand pesos (P5,000.00) nor more than Ten thousand pesos (P10,000.00) without prejudice to any civil or administrative liability which may also arise therefrom. "(k) Criminal actions arising from violations of the provisions of this Act may be commenced by the GSIS or by the aggrieved member, either under this Act or, in appropriate cases, under the Revised Penal Code. "SEC. 53. Implementing Rules and Regulations. - The implementing rules and regulations to carry out the provisions of this Act shall be adopted and promulgated by the GSIS not later than ninety (90) days after the approval of this Act. "SEC. 54. Non-impairment of Benefits, Powers, Jurisdiction, Rights, Privileges, Functions and Activities. - Nothing in this Act shall be construed to repeal, amend or limit any provision of existing laws, Presidential Decrees and Letters of Instructions, not otherwise specifically inconsistent with the provisions of this Act. "SEC. 55. Exclusiveness of Benefits. - Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him. However, if the benefits provided by the law chosen are less than the benefits provided under this Act, the GSIS shall pay only the difference. "SEC. 56. Appropriations. - The amount necessary to carry out the provisions of this Act shall be included in the respective budgets of the agencies in the national government obligation program of the year following its enactment into law and thereafter." SEC. 2. Separability Clause. - Should any provision of this Act or any part thereof be declared invalid, the other provisions, so far as they are separable from the invalid ones, shall remain in force and effect. SEC. 3. Repealing Clause. - All laws and any other law or parts of law specifically inconsistent herewith are hereby repealed or modified accordingly: Provided, That the rights under the existing laws, rules and regulations vested upon or acquired by an employee who is already in the service as of the effectivity of this Act shall remain in force and effect: Provided, further, That subsequent to the effectivity of this Act, a new employee or an employee who has previously retired or separated and is reemployed in the service shall be covered by the provisions of this Act. SEC. 4. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in at least two (2) newspapers of general circulation. This Act, which is a consolidation of Senate Bill No. 2013 and House Bill No. 8561, was finally passed by the Senate and the House of Representatives on May 29, 1997 and May 28, 1997, respectively.Approved: May 30, 1997

REPUBLIC ACT NO. 9163       January 23, 2002AN ACT ESTABLISHING THE NATIONAL SERVICE TRAINING PROGRAM (NSTP) FOR TERTIARY LEVEL STUDENTS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 7077 AND PRESIDENTIAL DECREE NO. 1706, AND FOR OTHER

PURPOSESBe 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 "National Service Training Program (NSTP) Act of 2001".Section 2. Declaration of Policy - It is hereby affirmed the prime duty of the government to serve and protect its citizens. In turn, it shall be the responsibility of all citizens to defend the security of the State and in fulfillment thereof, the government may require each citizen to render personal, military or civil service.Recognizing the youth's vital role in nation-building, the State shall promote civic consciousness among the youth and shall develop their physical, moral, spiritual, intellectual and social well-being. It shall inculcate in the youth patriotism, nationalism, and advance their involvement in public and civic affairs.In pursuit of these goals, the youth, the most valuable resource of the nation, shall be motivated, trained, organized and mobilized in military training, literacy, civic welfare and other similar endeavors in the service of the nation.Section 3. Definition of Terms - For purposes of this Act, the following are hereby defined as follows:

(a) "National Service Training Program (NSTP)" is a program aimed at enhancing civic consciousness and defense preparedness in the youth by developing the ethics of service and patriotism while undergoing training in any of its three (3) program components. Its various components are specially designed to enhance the youth's active contribution to the general welfare.(b) "Reserve Officers' Training Corps (ROTC)" is a program institutionalized under Sections 38 and 39 of Republic Act No. 7077 designed to provide military training to tertiary level students in order to motivate, train, organize and mobilize them for national defense preparedness.(c) "Literacy Training Service" is a program designed to train students to become teachers of literacy and numeracy skills to school children, out of school youth, and other segments of society in need of their service.(d) "Civic Welfare Training Service" refers to programs or activities contributory to the general welfare and the betterment of life for the members of the community or the enhancement of its facilities, especially those devoted to improving health, education, environment, entrepreneurship, safety, recreation and morals of the citizenry.(e) "Program component" shall refer to the service components of the NSTP as enumerated in Section 4 of this Act.

Section 4. Establishment of the National Service Training Program. - There is hereby established a National Service Training Program, which shall form part of the curricula of all baccalaureate degree courses and of at least two (2)-year technical vocational courses and is a requisite for graduation, consisting of the following service components:

(1) The Reserve Officers' Training Corps (ROTC), which is hereby made option and voluntary upon the effectivity of this Act;(2) The Literacy Training Service; and(3) The Civic Welfare Training ServiceThe ROTC under the NSTP shall instill patriotism, moral virtues, respect for rights of civilians, and adherence to the Constitution, among others. Citizenship training shall be given emphasis in all three (3) program components.The Commission on Higher Education (CHED) and Technical Education and Skills Development Authority (TESDA), in consultation with the Department of National Defense (DND), Philippine Association of State Universities and Colleges (PASUC), Coordinating Council of Private Educational Associations of the Philippines (COCOPEA) and other concerned government agencies, may design and implement such other program components as may be necessary in consonance with the provisions of this Act.

Section 5. Coverage - Students, male and female, of any baccalaureate degree course or at least two (2)-year technical vocational courses in public and private educational institutions shall be required to complete one (1) of the NSTP components as requisite for graduation.Section 6. Duration and Equivalent Course Unit - Each of the aforementioned NSTP program components shall be undertaken for an academic period of two (2) semesters.In lieu of the two (2) semester program for any of the components of the NSTP, a one (1)-summer program may be designed, formulated and adopted by the DND, CHED, and TESDA.Section 7. NSTP Offering in Higher and Technical-Vocational Educational Institutions - All higher and technical-vocational institutions, public and private, must offer at least one of the program components; Provided, that State universities and colleges shall offer the ROTC component and at least one other component as provided herein; Provided, further, that private higher and technical-vocational education institutions may also offer the ROTC if they have at least three hundred and fifty (350) cadet students.In offering the NSTP whether during the semestral or summer periods, clustering of affected students from different educational institutions may be done, taking into account logistics, branch of service and geographical considerations. Schools that do not meet the required number of students to maintain the optional ROTC and any of the NSTP components shall allow their students to cross-enroll to other schools irrespective of whether or not the NSTP components in said schools are being administered by the same or another branch of service in the Armed Forces of the Philippines (AFP), CHED and TESDA to which schools are identified.Section 8. Fees and Incentives - Higher and technical vocational institutions shall not collect any fee for any of the NSTP components except basic tuition fees, which shall not be more than fifty percent (50%) of what is currently charged by schools per unit.In the case of ROTC, the DND shall formulate and adopt a program of assistance and/or incentive to those students who will take the said component.The school authorities concerned, CHED and TESDA shall ensure that group insurance for health and accident shall be provided for students enrolled in any of the NSTP components.Section 9. Scholarships - There is hereby created a Special Scholarship Program for qualified students taking the NSTP which shall be administered by the CHED and TESDA. Funds for this purpose shall be included in the annual regular appropriations of the CHED and TESDA.Section 10. Management of the NSTP Components - The school authorities shall exercise academic and administrative supervision over the design, forumulation, adoption and implementation of the different NSTP components in their respective schools; Provided, That in case a CHED- or TESDA-accredited non government organization (NGO) has been contracted to formulate and administer a training module for any of the NSTP components, such academic and administrative supervision shall be exercised jointly with that accredited NGO; Provided, further, That such training module shall be accredited by the CHED and TESDA.

The CHED and TESDA regional offices shall oversee and monitor the implementation of the NSTP under their jurisdiction to determine if the trainings are being conducted in consonance with the objectives of this Act. Periodic reports shall be submitted to the CHED, TESDA and DND in this regard.Section 11. Creation of the National Service Reserve Corps - There is hereby created a National Service Reserve Corps, to be composed of the graduates of the non-ROTC components. Members of this Corps may be tapped by the State for literacy and civic welfare activities through the joint effort of the DND, CHED and TESDA.Graduates of the ROTC shall form part of the Citizens' Armed Force, pursuant to Republic Act No. 7077.Section 12. Implementing Rules. - The DND, CHED and TESDA shall have the joint responsibility for the adoption of the implementing rules of this Act within sixty (60) days from the approval of this Act.These three (3) agencies shall consult with other concerned government agencies, the PASUC and COCOPEA, NGOs and recognized student organizations in drafting the implementing rules.The implementing rules shall include the guideline for the adoption of the appropriate curriculum for each of the NSTP components as well as for the accreditation of the same.Section 13. Transitory Provisions - Students who have yet to complete the Basic ROTC, except those falling under Section 14 of this Act, may either continue in the program component they are currently enrolled or shift to any of the other program components of their choice; Provided, That in case he shifts to another program component, the Basic ROTC course he has completed shall be counted for the purpose of completing the NSTP requirement; Provided, further, That once he has shifted to another program component, he shall complete the NSTP in component.Section 14. Suspension of ROTC Requirement - The completion of ROTC training as a requisite for graduation is hereby set aside for those students who despite completing all their academic units as of the effectivity of this Act have not been allowed to graduate.Section 15. Separability Clause - If any section or provision of this Act shall be declared unconstitutional or invalid, the other sections or provisions not affected thereby shall remain in full force and effect.Section 16. Amendatory Clause - Section 35 of Commonwealth Act No. 1, Executive Order No.207 of 1939, Sections 2 and 3 of Presidential Decree No. 1706, and Sections 38 and 39 or Republic Act No. 7077, as well as all laws, decrees, orders, rules and regulations and other issuances inconsistent with the provisions of this Act are hereby deemed amended and modified accordingly.Section 17. Effectivity - This Act shall take effect fifteen (15) days after its publication in two (2) newspapers of national circulation, but the implementation of this Act shall commence in the school year of 2002-2003.Approved: January 23, 2002

REPUBLIC ACT NO. 9155      August 11, 2001AN ACT INSTITUTING A FRAME WORK OF GOVERNANCE FOR BASIC EDUCATION, ESTABLISHING AUTHORITY AND

ACCOUNTABILITY, RENAMING THE DEPARTMENT OF EDUCATION, CULTURE AND SPORTS AS THE DEPARTMENT OF EDUCATION, 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 "Governance of Basic Education Act of 2001." Section 2. Declaration of Policy. - It is hereby declared the policy of the State to protect and promote the right of all citizens to quality basic education and to make such education accessible to all by providing all Filipino children a free and compulsory education in the elementary level and free education in the high school level. Such education shall also include alternative learning systems for out-of-school youth and adult learners. It shall be the goal of basic education to provide them with the skills, knowledge and values they need to become caring, seIf-reliant, productive and patriotic citizens. The school shall be the heart of the formal education system. It is where children learn. Schools shall have a single aim of providing the best possible basic education for all learners. Governance of basic education shall begin at the national level it is at the regions, divisions, schools and learning centers herein referred to as the field offices - where the policy and principle for the governance of basic education shall be translated into programs, projects and services developed, adapted and offered to fit local needs. The State shall encourage local initiatives for improving the quality of basic education. The State shall ensure that the values, needs and aspirations of a school community are reflected in the program of education for the children, out-of-school youth and adult learners. Schools and learning centers shall be empowered to make decisions on what is best for the learners they serve. Section 3. Purposes and Objectives. - The purposes and objectives of this Act are: (a) To provide the framework for the governance of basic education which shall set the general directions for educational policies and standards and establish authority, accountability and responsibility for achieving higher learning outcomes; (b) To define the roles and responsibilities of and provide resources to, the field offices which shall implement educational programs, projects and services in communities they serve; (c) To make schools and learning centers the most important vehicle for the teaching and learning of national values and for developing in the Filipino learners love of country and pride in its rich heritage;(d) To ensure that schools and learning centers receive the kind of focused attention they deserve and that educational programs, projects and services take into account the interests of all members of the community; (e) To enable the schools and learning centers to reflect the values of the community by allowing teachers/learning facilitators and other staff to have the flexibility to serve the needs of all learners; (f) To encourage local initiatives for the improvement of schools and learning centers and to provide the means by which these improvements may be achieved and sustained; and (g) To establish schools and learning centers as facilities where schoolchildren are able to learn a range of core competencies prescribed for elementary and high school education programs or where the out-of-school youth and adult learners are provided alternative learning programs and receive accreditation for at least the equivalent of a high school education. Section 4. Definition of Terms. - For purposes of this Act, the terms or phrases used shall mean or be understood as follows: (a) Alternative Learning System -is a parallel learning system to provide a viable alternative to the existing formal education instruction. It encompasses both the nonformal and informal sources of knowledge and skills; (b) Basic Education - is the education intended to meet basic learning needs which lays the foundation on which subsequent learning can be based. It encompasses early childhood, elementary and high school education as well as alternative learning systems four out-of-school youth and adult learners and includes education for those with special needs; (c) Cluster of Schools - is a group of schools which are geographically contiguous and brought together to improve the learning outcomes; (d) Formal Education - is the systematic and deliberate process of hierarchically structured and sequential learning corresponding to the general concept of elementary and secondary level of schooling. At the end of each level, the learner needs a certification in order to enter or advance to the next level; (e) Informal Education - is a lifelong process of learning by which every person acquires and accumulates knowledge, skills, attitudes and insights from daily experiences at home, at work, at play and from life itself; (f) Integrated School. - is a school that offers a complete basic education in one school site and has unified instructional program; (g) Learner - is any individual seeking basic literacy skills and functional life skills or support services for the improvement of the quality of his/her life; (h) Learning Center - is a physical space to house learning resources and facilities of a learning program for out-of-school youth and adults. It is a venue for face-to-face learning and activities and other learning opportunities for community development and improvement of the people's quality of life; (i) Learning Facilitator - is the key learning support person who is responsible for supervising/facilitating the learning process and activities of the learner; (j) Non-Formal Education - is any organized, systematic educational activity carried outside the framework of the formal system to provide selected types of learning to a segment of the population; (k) Quality Education - is the appropriateness, relevance and excellence of the education given to meet the needs and aspirations of an individual and society; (I) .School - is an educational institution, private and public, undertaking educational operation with a specific age-group of pupils or students pursuing defined studies at defined levels, receiving instruction from teachers, usually located in a building or a group of buildings in a particular physical or cyber site; and (m) .School Head - is a person responsible for the administrative and instructional supervision of the school or cluster of schools.

CHAPTER 1GOVERNANCE OF BASIC EDUCATION

Section 5. Principles of Shared Governance. - (a) Shared governance is a principle which recognizes that every unit in the education bureaucracy has a particular role, task and responsibility inherent in the office and for which it is principally accountable for outcomes; (b) The process of democratic consultation shall be observed in the decision-making process at appropriate levels. Feedback mechanisms shall be established to ensure coordination and open communication of the central office with the regional, division and school levels; (c) The principles of accountability and transparency shall be operationalized in the performance of functions and responsibilities at all levels; and (d) The communication channels of field offices shall be strengthened to facilitate flow of information and expand linkages with other government agencies, local government units and nongovernmental organizations for effective governance. Section 6. Governance. - The Department of Education, Culture and Sports shall henceforth be called the Department of Education. It shall be vested with authority, accountability and responsibility for ensuring access to, promoting equity in, and improving the quality of basic education. Arts, culture and sports shall be as provided for in Sections 8 and 9 hereof. Section 7. Powers, Duties and Functions. - The Secretary of the Department of Education shall exercise overall authority and supervision over the operations of the Department. A. National Level In addition to his/her powers under existing laws, the Secretary of Education shall have authority, accountability and responsibility for the following:

(1) Formulating national educational policies; (2) Formulating a national basic education plan; (3) Promulgating national educational Standards; (4) Monitoring and assessing national learning outcomes; (5) Undertaking national educational research and studies; (6) Enhancing the employment status, professional competence, welfare and working conditions of all personnel of the Department; and (7) Enhancing the total development of learners through local and national programs and/or projects.

The Secretary of Education shall be assisted by not more than four (4) undersecretaries and not more than four (4) assistant secretaries whose assignments, duties and responsibilities shall be governed by law. There shall be at least one undersecretary and one assistant secretary who shall be career executive service officers chosen from among the staff of the Department. B. Regional Level There shall be as many regional offices as may be provided by law. Each regional office shall have a director, an assistant director and an office staff for program promotion and support, planning, administrative and fiscal services. Consistent with the national educational policies, plans and standards, the regional director shall have authority, accountability and responsibility for the following:

(1) Defining a regional educational policy framework which reflects the values, needs and expectations of the communities they serve; (2) Developing a regional basic education plan; (3) Developing regional educational standards with a view towards bench-marking for international competitiveness; (4) Monitoring, evaluating and assessing regional learning outcomes; (5) Undertaking research projects and developing and managing region wide projects which may be funded through official development assistance and/or or other finding agencies; (6) Ensuring strict compliance with prescribed national criteria for the recruitment, selection and training of all staff in the region and divisions. (7) Formulating, in coordination with the regional development council, the budget to support the regional educational plan which shall take into account the educational plans of the divisions and districts; (8) Determining the organization component of the divisions and districts and approving the proposed staffing pattern of all employees in the divisions and districts; (9) Hiring, placing and evaluating all employees in the regional office, except for the position of assistant director; (10) Evaluating all schools division superintendents and assistant division superintendents in the region; (II) Planning and managing the effective and efficient use of all personnel, physical and fiscal resources of the regional office, including professional staff development.; (12) Managing the database and management information system of the region; (13) Approving the establishment of public and private elementary and high schools and learning centers; and (14) Preforming such other functions as may be assigned by proper authorities.

C. Division Level A division shall consist of a province or a city which shall have a schools division superintendent, at least one assistant schools division superintendent and an office staff for programs promotion, planning, administrative, fiscal, legal, ancillary and other support services. Consistent with the national educational policies, plans and standards the schools division superintendents shall have authority, accountability and responsibility for the following:

(1) Developing and implementing division education development plans; (2) Planning and managing the effective and efficient use of all personnel, physical and fiscal resources of the division, including professional staff development; (3) Hiring, placing and evaluating all division supervisors and schools district supervisors as well as all employees in the division, both teaching and non-teaching personnel, including school heads, except for the assistant division superintendent; (4) Monitoring the utilization of funds provided by the national government and the local government units to the schools and learning centers; (5) Ensuring compliance of quality standards for basic education programs and for this purpose strengthening the role of division supervisors as subject area specialists; (6) Promoting awareness of and adherence by all schools and learning centers to accreditation standards prescribed by the Secretary of Education; (7) Supervising the operations of all public and private elementary, secondary and integrated schools, and learning centers; and (8) Performing such other functions as may be assigned by proper authorities.

D. Schools District Level Upon the recommendation of the schools division superintendents, the regional director may establish additional schools district within a schools division. School districts already existing at tile time of the passage of the law shall be maintained. A schools district shall have a schools district supervisor and an office staff for program promotion. The schools district supervisor shall be responsible for:

(1) Providing professional and instructional advice and support to the school heads and teachers/facilitators of schools and learning centers in the district or cluster thereof; (2) Curricula supervision; and (3) Performing such other functions as may be assigned by proper authorities.

E. School Level There shall be a school head for all public elementary schools and public high schools or a cluster thereof. The establishment of integrated schools from existing public elementary and public high schools shall be encouraged. The school head, who may be assisted by an assistant school head, shall be both an instructional leader and administrative manager. The school head shall form a them with the school teachers/learning facilitators for delivery of quality educational programs, projects and services. A core of nonteaching staff shall handle the school's administrative, fiscal and auxiliary services. Consistent with the national educational policies, plans and standards, the school heads shall have authority, accountability and responsibility for the following:

(1) Setting the mission, vision, goals and objectives of the school; (2) Creating an environment within the school that is conducive to teaching and learning; (3) Implementing the school curriculum and being accountable for higher learning outcomes; (4) Developing the school education program and school improvement plan; (5) Offering educational programs, projects and services which provide equitable opportunities for all learners in the community; (6) Introducing new and innovative modes of instruction to achieve higher learning outcomes; (7) Administering and managing all personnel, physical and fiscal resources of the school; (8) Recommending the staffing complement of the school based on its needs; (9) Encouraging staff development; (10) Establishing school and community networks and encouraging the active participation of teachers organizations, nonacademic personnel of public schools, and parents-teachers-community associations; (11) Accepting donations, gifts, bequests and grants for the purpose of upgrading teachers' learning facilitators' competencies, improving ad expanding school facilities and providing instructional materials and equipment. Such donations or grants must be reported to the appropriate district supervisors and division superintendents; and (12) Performing such other functions as may be assigned by proper authorities.

The Secretary of Education shall create a promotions board, at the appropriate levels, which shall formulate and implement a system of promotion for schools decision supervisors, schools district supervisors, and school heads. Promotion of school heads shall be based on educational qualification, merit and performance rather than on the number of teachers/learning facilitators and learners in the school. The qualifications, salary grade, status of employment and welfare and benefits of school heads shall be the same for public elementary, secondary and integrated schools. No appointment to the positions of regional directors, assistant regional directors, schools division superintendents and assistant schools division superintendents shall be made unless file appointee is a career executive service officer who preferably shall have risen from the ranks.

CHAPTER 2TRANSFER OF CULTURAL AGENCIES

SEC. 8. Cultural Agencies. - The Komisyon ng Wikang Pilipino, National Historical Institute, Records Management and Archives Office and the National Library shall now be administratively attached to the National Commission for Culture and the Arts (NCCA) and no loner with the Department of Education. The program for school arts and culture shall remain part of the school curriculum.

CHAPTER 3ABOLITION OF THE BUREAU OF PHYSICAL EDUCATION AND SCHOOL SPORTS

Section 9. Abolition of BPESS. - All functions, programs and activities of the Department of Education related to sports competition shall be transferred to the Philippine Sports Commission (PSC). The program for school sports and physical fitness shall remain part of the basic education curriculum. The Bureau of Physical Education and School Sports (BPESS) is hereby abolished. The personnel of the BPESS, presently detailed with the PSC, are hereby transferred to the PSC without loss of rank, including the plantilla positions they occupy. All other BPESS personnel shall be retained by the Department.

CHAPTER 4SUPPORT AND ASSISTANCE OF OTHER GOVERNMENT AGENCIES

Section 10. The Secretary of Education and the Secretary of Budget and Management shall, within ninety (90) days from the approval of this Act, jointly promulgate the guidelines on the allocation, distribution and utilization of resources provided by thenational government for the field offices, taking into consideration the uniqueness of the working conditions of the teaching service. The Secretary of the Department of Education shall ensure that resources appropriated for the field offices are adequate and that resources for school personnel, school desks and textbooks and other instructional materials intended are allocated directly and released immediately by the Department of Budget and Management to said offices. Section 11. The Secretary of the Department of Education, subject to civil service laws and regulations, shall issue appropriate personnel policy rules and regulations that will best meet the requirements of the teaching profession taking into consideration the uniqueness of the working conditions of the teaching service. Section 12. The Commission on Audit, in the issuance of audit rules and regulations that will govern the utilization of all resources as well as the liquidation, recording and reporting thereof, shall take into account the different characteristics and distinct features of the department's field offices, its organizational set up as well as the nature of the operations of schools and learning centers.

CHAPTER 5FINAL PROVISIONS

Section 13. Governance in the ARMM; - The Regional Education Secretary for the Autonomous Region in Muslim Mindanao (ARMM) shall exercise similar governance authority over the divisions, districts, schools and learning centers in the region as may be provided in the Organic Act. without prejudice to the provisions of Republic Act No. 9054, entitled "An Act to Strengthen and Expand tile Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act No.6734, entitled' An Act Providing for the Autonomous Region in Muslim Mindanao, as amended"'. Section 14. Rules and Regulations. - The Secretary of Education shall promulgate the implementing rules and regulations within ninety (90) days after the approval of this Act: Provided, That the Secretary of Education shall fully implement the principle of shared governance within two (2) years after the approval of this Act. Section 15. Separability Clause. - If for any reason, any portion or provision of this Act shall be declared unconstitutional, other parts or provisions hereof which are not affected thereby shall continue to be in full force and effect.Section 16 Repealing Clause. - All laws, decrees, executive orders, rules and regulations, part or parts thereof, inconsistent with the provisions of this Act, are hereby repealed or modified accordingly. Section 17. Effectivity Clause. - This Act. shall take effect fifteen (15) days following its publication in at least two (2) newspapers of general circulation. Approved: August 11, 2001

[ REPUBLIC ACT NO. - 7722 - ]

AN ACT CREATING THE COMMISSION ON HIGHER EDUCATION, APPROPRIATING FUNDS THEREFOR 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 "Higher Education Act of 1994".

SEC. 2 Declaration of Policy. - The State shall protect, foster and promote the right of all citizens to affordable quality education at all levels and shall take appropriate steps to ensure that education shall be accessible to all. The State shall likewise ensure and protect academic freedom and shall promote its exercise and observance for the continuing intellectual growth, the advancement of learning and research, the development of responsible and effective leadership, the education of high-level and middle-level professionals, and the enrichment of our historical and cultural heritage.

State-supported institutions of higher learning shall gear their programs to national, regional or local development plans. Finally, all institutions of higher learning shall exemplify through their physical and natural surroundings the dignity and beauty of, as well as their pride in, the intellectual and scholarly life.

SEC. 3. Creation of the Commission on Higher Education. - In pursuance of the abovementioned policies, the Commission on Higher Education is hereby created, hereinafter referred to as the Commission. The Commission shall be independent and separate from the Department of Education, Culture and Sports (DECS), and attached to the Office of the President for administrative purposes only. Its coverage shall be both public and private institutions of higher education as well as degree-granting programs in all post-secondary educational institutions, public and private.

SEC. 4. Composition of the Commission. - The Commission shall be composed of five (5) full-time members. During the transition period, which begins upon approval of this Act, the president may appoint the Secretary of Education, Culture and Sports as ex-officio chairman of the Commission for a maximum period of one (1) year. Thereafter, the President shall appoint a Chairman of the Commission and four (4) commissioners, who shall be holders of earned doctorate(s), who have been actively engaged in higher education for at least ten (10) years, and must not have been candidates for elective positions in the elections immediately preceding heir appointment. They shall be academicians known for their high degree of professionalism and integrity who have distinguished themselves as authorities in their chosen fields of learning. The members of the Commission shall belong to different academic specialization.

In no case shall any and all of the Commissioners appoint representatives to act on their behalf.

SEC. 5. Term of Office. - The President shall appoint the full-time chairman and the commissioners for a term of four (4) years, without prejudice to one reappointment. The terms of the initial appointees shall be on staggered basis: the full-time chairman shall hold office for a term of four (4) years, the next two (2) commissioners for three (3) years, and the last two (2) commissioners for two (2) years.

The commission shall hold office until their successors shall have been appointed and qualified. Should a member of the Commission fail to complete his term, his successor shall be appointed by the President of the Philippines but only for the unexpired portion of the term.

SEC. 6. Rank and Emoluments. = The chairman and the commissioners shall have the rank of a Department Secretary and Undersecretary, respectively. They shall receive the compensation and other emoluments corresponding to those of a Department Secretary and Undersecretary, respectively, and shall be subject to the same disqualification.

SEC. 7. Board of Advisers. - There shall be constituted a Board of Advisers which shall meet with the Commission at least once a year to assist it in aligning its policies and plans with the cultural, political and socioeconomic development needs of the nation and with the demands of world-class scholarship.

The Board of Advisers shall be composed of the following:

a) the Secretary of Education, Culture and Sports, as chairman;

b) the Director-General of the National Economic and Development Authority, as co-chairman;

c) the Secretary of Science and Technology;

d) the Secretary of Trade and Industry;

e) the Secretary of Labor and Employment;

f) the President of the Federation of Accrediting Association of the Philippines (FAAP); and

g) the President of the Fund for Assistance to Private Education (FAPE).

The President upon recommendation of the Commission may appoint two (2) additional members of the Board of Advisers.

SEC. 8. Powers and Functions of the Commission. - The Commission shall have the following powers and functions:

a) formulate and recommend development plans, policies, priorities and programs on higher education and research

b) formulate and recommend development plans, policies, priorities and programs on research;

c) recommend to the executive and legislative branches, priorities and grants on higher education and research;

d) set minimum standards for programs and institutions of higher learning recommended by panels of experts in the field and subject to public hearing, and enforce the same;

e) monitor and evaluate the performance of programs and institutions of higher learning for appropriate incentives as well as the imposition of sanctions such as, but not limited to, diminution or withdrawal of subsidy, recommendation on the downgrading or withdrawal of accreditation, program termination or school closure;

f) identify, support and develop potential centers of excellence in program areas needed for the development of world-class scholarship, nation building and national development;

g) recommend to the Department of Budget and Management the budgets of public institutions of higher learning as well as general guidelines for the use of their income;

h) rationalize programs and institutions of higher learning and set standards, policies and guidelines for the creation of new ones as well as the conversion or elevation of schools to institutions of higher learning, subject to budgetary limitations and the number of institutions of higher learning in the province or region where creation, conversion or elevation is sought to be made;

i) develop criteria for allocating additional resources such as research and program development grants, scholarships, and other similar programs: Provided, That these shall not detract from the fiscal autonomy already enjoyed by colleges and universities;

j) direct or redirect purposive research by institutions of higher learning to meet the needs of agro-industrialization and development;

k) devise and implement resource development schemes;

l) administer the Higher Education Development Fund, as described in section 10 hereunder, which will promote the purposes of higher education;

m) review the charters of institutions of higher learning and state universities and colleges including the chairmanship and membership of their governing bodies and recommend appropriate measures as basis of necessary action;

n) promulgate such rules and regulations and exercise such other powers and functions as may be necessary to carry out effectively the purpose and objective of this Act; and

o) perform such other functions as may be necessary for its effective operations and for the continued enhancement, growth or development of higher education.

SEC. 9. The Secretariat. The Commission shall organize a secretariat, which shall be headed by an executive officer, subject to the national compensation and position classification plan. It shall fix the secretariat's staffing pattern, determine the duties, qualifications,

responsibilities and functions, as well as the compensation scheme for the positions to be created upon the recommendation of the executive officer. It shall also prepare and approve its budget.

SEC. 10. The Higher Education Development Fund. - A Higher Education Development Fund, hereinafter referred to as the Fund, is hereby established exclusively for the strengthening of higher education in the entire country.

a) The Government's contribution to the fund shall be the following:

1) the amount of five hundred million pesos (P500,000,000) as seed capital;

2) the amount of fifty million pesos (P50,000,000) for the initial operation of the Commission;

3) the equivalent of forty percent (40%) annual share on the total gross collections of the travel tax;

4) the equivalent of thirty percent (30%) share of the collections from the Professional Registration Fee; and

5) the equivalent of one percent (1%) of the gross sales of the lotto operationof the Philippine Charity Sweepstakes Office (PCSO).

b) Starting Fiscal Year 1995 and every year thereafter, government financing

Institutions identified and requested by the Commission may contribute to the Fund an amount equivalent to not less than three percent (3%) but not more than five (5%) percent of their unimpaired surplus realized during the immediately preceding year.

c) The Fund shall have a private portion to be raised from donations, gifts, and other conveyances including materials, equipment, properties and services by gratuitous title.

SEC. 11. Management and Administration of the Higher Education Development fund. - The Fund shall be administered by the Commission. For sound and judicious management of the Fund, the Commission shall appoint a reputable government financial institution as portfolio manager of the Fund, subject to the following conditions:

As administrator of the Fund, the Commission shall prepare the necessary guidelines for its use, subject to the following conditions:

a) No part of the seed capital of the Fund, including earnings thereof, shall be used to underwrite overhead expenses for administration;

b) Unless otherwise stipulated by the private donor, only earnings of private contributions shall be used for administrative expenses;

c) The Commission shall appoint and organize a separate staff, independent Administratively and budgetarily separate from the Commission Secretariat; and

d) The Fund shall be utilized equitably according to regions and programs.

SEC. 12. The Technical Panels. - The Commission shall reconstitute and/or organize technical panels for different disciplines/program areas. They shall assist the Commission in setting standards and in program and institution monitoring and evaluation. The technical panels shall be composed of senior specialists or academicians to be appointed by the Commission. SEC. 13. Guarantee of Academic Freedom. - Nothing in this Act shall be construed as limiting the academic freedom of universities and colleges. In particular, no abridgment of curricular freedom of the individual educational institutions by the Commission shall be made except for; (a) minimum unit requirements for specific academic programs, (b) general education distribution requirements as may be determined by the Commission; and (c) specific professional subjects as may be stipulated by the various licensing entities. No academic or curricular restriction shall be made upon private educational institutions, which are not required for chartered state colleges and universities.

SEC. 14. Accreditation. - The Commission shall provide incentives to institutions of higher learning, public and private, whose programs are accredited or whose needs are for accreditation purposes.

SEC. 15. Tax Exemptions. - Any donation, contribution, bequest and grant which may be made to the Commission shall constitute as allowable deduction from the income of the donor for income tax purposes and shall be exempt from donor's tax, subject to such conditions as provided under the National Internal Revenue Code, as amended.

SEC. 16. Authority. The Commission shall exercise such authority as may be deemed necessary within its premises. Or areas of operation to effectively carry out its powers and functions to attain its objectives: Provided, That the Commission may seek the assistance of other government agencies for the proper implementation of this Act.

SEC. 17. Appropriation. The amount of five hundred million pesos is hereby authorized to be appropriated for the seed capital of the fund. The additional amount of 50, 000,000 pesos is hereby authorized to be appropriated out of the funds in the National Treasury not otherwise appropriated or out of the Philippine Amusement and Gaming Corporation (PAGCOR) funds for the initial operation of the Commission.

The sum equivalent to the appropriations for the current year for the Bureau of Higher Education and the degree-granting-programs of the Bureau of Technical Vocational Education, including those for higher and tertiary education and degree-granting vocational and technical programs of the Bureau of Technical-Vocational Education in the regional offices, as well as parts of the Budgetary items under the DECS budget that are concerned higher and tertiary education and degree-granting vocational and technical programs such as those for personal services, maintenance and other operating expenses and capital outlay, shall be transferred to the Commission.

Thereafter, the funds necessary shall be included in the General Appropriations Act.

SEC. 18. Transitory Provisions. Such personnel, properties, assets and liabilities, functions and responsibilities of the Bureau of Higher Education, including those for higher and tertiary education and degree-granting vocational and technical programs in the regional offices, under the Department Education, Culture and Sports, and other government entities having functions similar to those of the Commission are hereby transferred to the Commission.

The Commission shall have the authority to appoint its own personnel.

All regular and permanent employees transferred to the Commission shall not suffer any loss of seniority or rank or decrease in emoluments. Personnel of the Bureau of Higher Education not otherwise transferred to the Commission shall be reassigned by the DECS in any of its offices and bureau: Provided, however, That, any employee who cannot be accommodated shall be given all the benefits as may be provided under existing laws, rules and regulations.

Jurisdiction over DECS-supervised or chartered state-supported post-secondary degree granting vocational and technical programs and tertiary institutions shall be transferred to the Commission.

A transitory body is hereby created which shall be composed of the Secretary of Education, Culture and Sports (DECS), Chair of the Senate Committee on Education, Arts and Culture. Chair of the House Committee on Education and Culture, a representative each of the Association of Christian Schools and Colleges (ACSC). The Catholic Educational Association of the Philippines (CEAP), The Philippine Association of Colleges and Universities (PACU), the Philippine Association of Private Schools Colleges and Universities (PAPSCU), the Philippine Association of State Universities and Colleges (PASUC), and the Philippine Association Of Private Technical Institutions.

The transitory body shall facilitate the complete and full operation of the Commission, which shall not be later than three (3) months after the effectivity of this Act. It shall likewise, promulgate the rules and regulations necessary to effectively implement the smooth and orderly transfer to the Commission.

SEC. 19. Repealing Clause. All laws, presidential decrees, executive orders, rules and regulations and parts thereof which are inconsistent with the provisions of this Act are hereby repealed.

SEC. 20. Separability Clause. If any part or provision of this Act shall be held unconstitutional or invalid, other provisions hereof which are not affected thereby shall continue to be in full force and effect.

SEC. 21. Effectivity. - This Act shall take effect upon its approval.

This Act, which is a consolidation of Senate Bill No. 1453 and House Bill No. 12200, was finally passed by the Senate and the House of Representatives on may 4, 1994 and May 17, 1994, respectively.

Approved: 18 May 1994