Student Fare Discount Act

Constitutional policy and intent

The Act is grounded on the State duty to protect and promote the right of citizens to quality education and to make education accessible to all through appropriate steps (Section 2).
The Act is grounded on the State direction to establish and maintain a system of scholarship grants, student loan programs, subsidies, and other incentives for deserving students in both public and private schools, especially to the underprivileged (Section 2).
The Act establishes a mechanism that ensures the mandatory grant of a student fare discount privilege (Section 2).
The Act enlists cooperation of public transportation utilities to extend assistance to students as a social responsibility through observance of the privilege (Section 2).
The Act encourages students, particularly the poor and underprivileged, to pursue quality education to secure their future and become responsible citizens (Section 2).

Core definitions

A “Student” is a Filipino citizen currently enrolled in a duly authorized elementary, secondary, technical-vocational, or higher education institution (Section 3(a)).
A “Student” excludes those enrolled in post graduate degree courses and informal short-term courses such as dancing, swimming, music and driving lessons, and seminar-type courses (Section 3(a)).
“Public transportation utilities” are all Philippine common carriers engaged in carrying or transporting passengers or goods by land, sea/water, or air for compensation, offering services to the public (Section 3(b)).
A “Public transportation utility operator” is the person or entity granted with a Certificate of Public Convenience by a regulatory agency to operate as a common carrier (Section 3(c)).

Coverage: who and what services

The Act covers all public transportation utilities, including public utility buses (PUBs), public utility jeepneys (PUJs), taxis and other similar vehicles-for-hire, tricycles, passenger trains, aircrafts, and marine vessels (Section 4).
The application of the Act does not cover school service, shuttle service, tourist service, and any similar service covered by contract or charter agreement with a valid franchise or permit from the Land Transportation Franchising and Regulatory Board (LTFRB) (Section 4).
The student fare discount is available during the entire period the student is enrolled, including weekends and holidays (Section 4).
If a public transportation utility operator grants a promotional fare as approved by the concerned regulatory agency, the student may choose between the promotional fare and the regular fare less the discount under the Act (Section 4).

Student fare discount entitlement

A student is entitled to a twenty percent (20%) discount on domestic regular fares (Section 5).
The discount is granted upon personal presentation of the student’s duly issued school identification cards (IDs) or current validated enrollment form, supported by the prescribed government-issued identification document (Section 5).
The discount is subject to an appropriate verification mechanism to be provided in the implementing rules and regulations (IRR) (Section 5).
For air public transportation utilities, the discount applies only to the base fare or the price of the ticket before taxes and costs for ancillary services (Section 5).

Limits: ban on double discounting

The student fare discount privilege cannot be claimed if the student claims a higher discount granted by a public transportation utility, or under other existing laws, or in combination with other discount programs or incentives (Section 6).

Tax deduction for operators

A public transportation utility operator may claim the student fare discount as a tax deduction based on the cost of the services rendered (Section 7).
The cost of the discount is allowed as a deduction from gross income for the same taxable year that the discount is granted (Section 7).
The total amount of the tax deduction net of value-added tax, if applicable, must be included in the operator’s gross sales receipts for tax purposes (Section 7).
The claim is subject to proper documentation and the provisions of the National Internal Revenue Code, as amended (Section 7).

Relief for operators and drivers

Regulatory agencies regulating fares, especially for public land transportation, may determine and provide under the IRR other alternative ways such as reduction or exemption from some regulatory fees and charges to provide additional relief or support to public transportation utility operators, including drivers, to mitigate the impact of the discount (Section 8).

Complaint filing and responsible authorities

A student refused the fare discount privilege may file a complaint with the following authorities (Section 9):
- LTFRB for land public transportation utilities, except tricycles (Section 9(a));
- MARINA for sea/water public transportation utilities (Section 9(b));
- Civil Aeronautics Board (CAB) for air public transportation utilities (Section 9(c));
- The Legal Service of the Department of Transportation (DOTr) for rail public transportation facilities, including Manila Light Rail Transit System, Manila Metro Rail Transit System, and Philippine National Railway System (Section 9(d));
- The Office of the Local Chief Executive of the concerned local government unit for tricycles (Section 9(e)).
These agencies and offices are authorized to impose the penalties in Section 10 against public transportation utilities that refuse or fail to grant the student fare discount privilege (Section 9).

Penalties for refusal and non-compliance

Penalties apply only after due investigation and a finding that the complaint is true and valid (Section 10).
Land public transportation utilities, including tricycles:
- The driver faces suspension of driver’s license for:
  - One (1) month for the first offense;
  - Two (2) months for the second offense;
  - Three (3) months for the third offense; and
  - Three (3) months plus a fine of PHP 1,000.00 for each subsequent offense (Section 10(a)).
- The owner or operator faces:
  - PHP 5,000.00 for the first offense;
  - PHP 10,000.00 and impounding of unit for thirty (30) days for the second offense; and
  - PHP 15,000.00 and cancellation of Certificate of Public Convenience (CPC) for the third and subsequent offenses (Section 10(a)).
Sea/water public transportation utilities:
- The owner or operator faces fines of:
  - PHP 5,000.00 for the first offense;
  - PHP 10,000.00 for the second offense;
  - PHP 20,000.00 for the third offense; and
  - Additional increments of PHP 10,000.00 on top of the fine for the third offense for each subsequent offense (Section 10(b)).
Air public transportation utilities:
- The owner or operator faces:
  - PHP 50,000.00 for the first offense;
  - PHP 100,000.00 and a warning for the second offense;
  - PHP 150,000.00 and other sanctions as may be determined by CAB for the third and subsequent offenses (Section 10(c)).
Rail public transportation utilities:
- Rail public transportation utilities must observe the student fare discount privilege and designate a student/senior citizen fare booth in their boarding stations (Section 10(d)).
- Violations are sanctioned or fined under existing civil service rules for applicable rail public transportation utilities (Section 10(d)).
- For privately-operated rail public transportation utilities, the fines prescribed under Section 10(b) apply and are imposed by DOTr (Section 10(d)).
- Upon filing an appropriate complaint and after due notice and hearing, proper authorities may cause the cancellation or revocation of CPC, permit to operate, franchise, licenses and other privileges granted to transportation utilities that fail to comply, for private railways under Section 10(d) (Section 10(d)).

Fraud and falsified documents

Any person who avails or attempts to avail of the privilege using falsified identification documents, fraud, or any form of misrepresentation is denied the privileges and may be subject to civil and penal liabilities prescribed by law (Section 11).

Implementing rules and regulations

The Act requires the following agencies to promulgate sector-specific IRRs within ninety (90) days from the effectivity of this Act (Section 12):
- LTFRB for land transport;
- MARINA for sea/water transport;
- CAB for air transport; and
- DOTr for rail transport (Section 12).
The IRRs must take into consideration the government central identification platform and must be issued in consultation with Department of the Interior and Local Government, Department of Finance, Bureau of Internal Revenue, Department of Education, Commission on Higher Education, Technical Education and Skills Development Authority, Philippine Statistics Authority, and other concerned government agencies, public transportation utility operators, and stakeholders (Section 12).

Separability, repeals, and consolidation

If any portion or provision of the Act is declared invalid or unconstitutional, the remaining provisions remain in full force and effect (Section 13).
All laws, decrees, executive orders, proclamations, rules and regulations, and other issuances, or parts thereof, inconsistent with the Act are repealed or modified accordingly (Section 14).
The Act consolidates Senate Bill No. 1597 and House Bill No. 8885 and was passed by the Senate on February 6, 2019 and by the House of Representatives on February 7, 2019.