Policy and objectives for public education

The Act requires a complete revision of the public elementary school system to meet the increasing demand for public elementary instruction and comply with the constitutional mandate on public education (Section 2).
The revision must be directed to: (a) simplify, shorten, and make more practical and economical the primary and intermediate courses so schoolchildren can access education; (b) ensure every school-age child has facilities to commence and complete at least the primary course; (c) ensure primary completers gain working knowledge of reading and writing, arithmetic, geography, Philippine history and government, and character and civic training; and (d) keep elementary school attendees literate and develop them into useful, upright and patriotic citizens (Section 2).
Public elementary education must be arranged to allow practical implementation through curriculum adjustment and school calendar alignment (Section 3).

Curriculum revision and school year alignment

The Department of Public Instruction must forthwith revise the elementary school curriculum to effectuate the objectives in Section 2 (Section 3).
The Department must also adjust the academic school year so that school vacations coincide as much as possible with working seasons in the Philippines (Section 3).
The revised elementary curriculum, once approved by the President, must be adopted in all public schools as soon as practicable, but not later than the commencement of the school year 1941-1942 (Section 3).

Admission age, duration of elementary instruction

With the approval of the President, the Act allows raising the retired age for admission to public elementary schools to not more than nine years (Section 4).
With the President’s approval, the Act allows reducing the time required to complete elementary instruction (comprising both primary and intermediate courses) to not less than five years (Section 4).
Any approved increase in minimum age under Section 4 must not affect children already enrolled before the school year 1940-1941 (Section 4).

Compulsory attendance and waiver grounds

No child may be admitted into the public elementary schools except on the condition that the child remains in school until completing at least the primary course (Section 5).
Compulsory attendance may be waived in four cases (Section 5):
- When the distance from the child’s home to the nearest school exceeds three kilometers and the school is not conveniently accessible considering the available means of transportation;
- When the child is mentally defective or physically unable to enter school, supported by a certificate of a duly licensed physician;
- When the child cannot afford to continue due to the economic condition of his parents; or
- When the child transfers to a private school.
Parents, guardians, or those in control of children who fail to keep them in school without justification under Section 5 are liable to a fine of not less than twenty pesos and not more than fifty pesos (Section 5).

Capacity measures and multiple sessions

To accommodate all children qualified to attend elementary schools, the Secretary of Public Instruction may, with the approval of the President, authorize:
- the holding of two or more complete single sessions a day, or
- other measures calculated to take care of the largest number of schoolchildren (Section 6).

Financing obligations, sites, and fees

Public elementary education (comprising primary and intermediate courses) must be supported by the National Government, starting with the school year 1940-1941 (Section 7).
Chartered cities must continue to support all intermediate classes within their respective jurisdictions (Section 7).
The National Government may grant aid to chartered cities that are not financially able to fully provide for the support of their intermediate schools or classes, with the approval of the President (Section 7).
School sites for primary and intermediate classes must be acquired by the appropriate local government units—municipalities, municipal districts, or chartered cities—through purchase or conditional or absolute donation (Section 7).
The Department of Public Instruction may, with the approval of the President of the Philippines, waive any requirement for acquisition of school sites of standard size when such sites are not available (Section 7).
Matriculation fees for intermediate grades may be collected by municipalities and municipal districts in an amount determined by the President, but not exceeding two pesos for each pupil enrolled in the intermediate grades (Section 7).
Proceeds of matriculation fees must accrue to the funds of the national Government and must be expended primarily for: (a) purchase of library books and equipment, and (b) financing athletic activities in the intermediate classes (Section 7).

National revenue allocation for elementary schools

From and after July 1, 1940, disposition of proceeds of certain taxes under Commonwealth Act No. 465 (“Residence Tax Law”) must follow Section 8 (Section 8).
Of all taxes collected and remitted to the Collector of Internal Revenue as provided in Section 8 of Commonwealth Act No. 465, 50% must be allotted among provinces, chartered cities, municipalities, and municipal districts on the basis of population from the latest official census (Section 8).
Within that provincial/city/municipality share:
- One-half goes to the general funds of the provinces, with a subprovince receiving a proportionate share of the province’s share (Section 8).
- The other half goes to the general funds of chartered cities, municipalities, and municipal districts (Section 8).
From the remaining 50% of the proceeds of Commonwealth Act No. 465 taxes:
- Chartered cities must continue to receive the corresponding share in the school fund of cities, municipalities, and municipal districts to which they were entitled under law in force prior to July 1, 1940; and
- The balance accrues to the National Government (Section 8).
Disposition of proceeds of certain taxes under Commonwealth Act No. 466 (“National Internal Revenue Code”) as referred to in Sections 358, 360, and 363 must also follow Section 8 (Section 8).
Three-sevenths of proceeds of internal revenue percentage taxes on agricultural products under Sections 187 and 188, plus taxes due from proprietors/operators of rope factories, sugar centrals, rice mills, corn mills, coconut oil mills, and desiccated coconut factories under Section 189 of the National Internal Revenue Code accrue to provinces; the remaining four-sevenths accrue to the National Government (Section 8).
The provincial apportionment must be based on population from the latest official census (Section 8).
2.5% of the proceeds of the tax on income accrues to the provinces; the remainder accrues to the National Government (Section 8).
2.5% of the proceeds of the tax on estate, inheritance, legacies, and other acquisitions mortis causa, as well as on gifts accrues to the provinces, another 2.5% accrues to the municipalities, and the remaining 95% accrues to the National Government (Section 8).
Provincial and municipal proceeds must be apportioned by population from the latest official census (Section 8).
Of the national internal revenue accruing to the National Treasury under Section 362 of the National Internal Revenue Code, 10% is set apart as allotment to provinces, divided equally between their general and road and bridge funds (Section 8).
For fiscal year 1940-1941, instead of 10%, only 9% is set apart as provincial and road and bridge allotments in the same proportions; for fiscal years thereafter, 10% is set apart (Section 8).
Notwithstanding the modified allotments, chartered cities must continue to receive the corresponding shares in the municipal allotment to which they were entitled under the law in force prior to July 1, 1940 (Section 8).

Disestablishment of municipal school fund and fee rules

Effective July 1, 1940, the school fund in all municipalities and municipal districts is disestablished (Section 9).
Any amount in the municipal school fund that remains unexpended and unobligated on the date of approval of the Act becomes part of the municipal general fund (Section 9).
All moneys accruing to the municipal school by operation of law and not specifically transferred to the National Government must accrue to the municipal general fund after June 30, 1940 (Section 9).
No tuition fees for intermediate instruction may be collected by municipalities and municipal districts (Section 9).
Tuition fees collected during school year 1940-1941 for the maintenance of intermediate classes must be returned to the respective contributors (Section 9).

Repeal of conflicting laws

Section 10 repeals Commonwealth Act No. 381.
Section 10 repeals Section 8 of Commonwealth Act No. 465.
Section 10 repeals Sections 358, 360, and 363 of Commonwealth Act No. 466.
Section 10 repeals so much of Section 366 of Commonwealth Act No. 466 as conflicts with the Act.
Section 10 repeals other Acts to the extent they conflict with the provisions of Commonwealth Act No. 586 (Section 10).