UP Charter FAQ

August 25, 2008

The University of the Philippines Charter of 2008 (R.A. No. 9500)
Questions & Answers  

1.      When did the law take effect? 

RA 9500 entitled “An Act To Strengthen The University Of The Philippines As The National University”  was signed into law by President Gloria Macapagal Arroyo on 29 April 2008.  It will take effect fifteen (15) days from the time of its publication in the Official Gazette or in any newspaper of general circulation in the Philippines. 

2.      What does being a national university mean?

RA 9500 recognizes UP as the national university.  Being the national university, UP is acknowledged as the country’s most advanced institution of higher learning.  It leads in all of its academic programs, in teaching as well as in advanced studies and research undertakings, and graduate programs.   As the premier state university, UP joins the ranks of national universities in the region that are listed in the roster of the best universities in the world such as — the University of Tokyo, University of Malaya, Chulalongkorn University, National University of Singapore, University of Indonesia, Seoul National University and Peking University.  Within the country, UP is recognized as the leader and a model for other state universities, a source of knowledge and of top-rank teachers and researchers, and the best training ground for the country’s future leaders in government, in business and other professions.

3.     What provisions of this Act safeguard the welfare of the faculty and staff of UP?

The new UP Charter gives the Board of Regents the authority to draw up a position  classification and compensation plan for UP faculty and staff. Specifically the Charter states that salaries and other benefits of the faculty should be equivalent to those being received by their counterparts in the private sector.  This effectively means exempting the UP personnel from the Salary Standardization Law.   Further, this will arrest the exodus of UP faculty, many of whom have left the University to seek higher paying jobs in other schools and in corporations.  The minimal pay of the UP faculty has for sometime weakened the University’s ability to retain the best teachers who also conduct world-class research for the University.  With the new compensation scheme, UP will be able to offer competitive wages and benefits to its personnel.

4.     What revisions have been made to the Board of Regents?

First, the new UP Charter provides for a Staff Regent who will represent the full-time permanent research, extension, and professional staff or REPS and administrative personnel of the University.  The Staff Regent will serve for a term of two (2) years.  For many years now, other important sectors of the University community—the faculty, the students, and the alumni—have been represented in the BOR. This provision extends the same privilege to the REPS and administrative personnel. Second, the Charter provides for three (3) other Regents who have distinguished     themselves in their professions or fields of specialization, to be recommended by the BOR to the President of the Philippines for appointment.  Two of these Regents should be UP alumni.  The former Charter provides for five (5) Regents who are all appointed by the President of the Philippines. 

5.     How can UP strengthen its financial capabilities with the new Charter?

The new Charter ensures that UP is given flexibility to use its physical assets to generate income for the University, provided that this shall be consistent with the academic mission of UP and shall sustain and protect the environment in accordance with law.  The new Charter promotes UP’s financial health and independence as UP will be able to generate its own income from its resources and use whatever income it earns for its needs.  The Charter states that income derived from the development of all land grants and real properties shall be used to further the ends of the national university. It further states that the BOR may allow the use of income coming from real properties of the national university as security for transactions to generate additional revenues when needed for educational purposes. Likewise, the University’s earnings, including donations and grants, shall be exempt from taxes.  This will provide UP additional funds to be used to advance its academic goals and to be used for modernization and upkeep of university facilities and equipment. 

6.     What provisions prohibit UP from selling its land assets in the new Charter?

The following provisions in the new Charter state that (1) no joint venture shall result in the alienation of the real properties of the national university, and (2) the sale of any existing real property of the national university shall be prohibited, provided that the Board may alienate property donated after the effectivity of this Act if the terms of the donation specifically allow it.

7.      What are the safeguards for the disposition of assets in the new  Charter?

In the implementation of land leases, the following provisions are included in the new Charter:a.                 the lease of more than five years (5)  of the assets of the national university shall be discussed with the members of the BOR at least one (1) month before a decision is to be made;b.                 transactions shall be subject to public bidding as provided under the Government Procurement Reform Act;c.                  in the case of two (2) failed biddings and negotiated transactions, if undertaken, the BOR, when considering the approval of any such transaction, shall secure a fairness opinion report from an independent third-party body.  The body shall have five (5) members, three (3) of which shall be nominated by the Bankers Association of the Philippines (BAP), Investment Houses Association of the Philippines (IHAP), Trust Officers Association of the Philippines (TOAP) or the Financial Executive Institute of the Philippines (FINEX);d.                 If the contract or transaction involves an amount more than Fifty Million Pesos (P50,000,000.00) it shall be approved by three-fourths (3/4) of all the members of the Board.

8.  What safeguards are in place for the management of UP funds in the new  Charter?

For a more efficient management of the funds of the University, an independent trust committee shall be formed to provide the BOR with direction on appropriate investment objectives and permissible investments.  With the guidance of the independent trust committee, the University will be able to preserve its funds and  allow its financial resources to earn a reasonable return.  The independent trust committee shall be composed of the UP President as Chairperson, one (1) representative each nominated by the Bankers Association of the Philippines (BAP), Investment Houses Association of the Philippines (IHAP), Trust Officers Association of the Philippines (TOAP) and the Financial Executive Institute of the Philippines (FINEX)).  The independent trust committee shall recommend five (5) universal banks selected on a prudent basis which trust departments shall manage the corporate and other funds through trust agreements of the national university on a non-directed basis.

9.  What tax exemptions are provided for UP in the new Charter?

a.                 all revenues and assets of UP that are used for education purposes;b.                 gifts and donations of real and personal properties of all kinds shall be  exempt from donor’s tax and shall be considered as allowable deductions from the gross income of the donor, in accordance with the provisions of the National Internal Revenue Code of 1997, as amended; provided that the allowable deductions shall be equivalent to 150% of the value of such donation;c.                  importation of economic, technical, vocational, scientific, philosophical, historical and cultural books, supplied and materials, including scientific and educational computer and software equipment; d.                 all academic awards; e.                 the University shall only pay 0% value added tax for all transactions subject to this tax.