Research by E. J. M.

Atienza
Re: Establishment of an educational institution akin to international schools

1. What is a private international educational institution?

For the basic education level1, a foreign/international school, as distinguished

from a Philippine private school, is one that is duly established and authorized in
accordance with existing Philippine laws to operate certain educational programs
which primarily and principally adhere to either universally accepted and
recognized educational policies and standards or the unique differentially
prescribed system of education of a particular country other than the
Philippines2.

For the higher education level3, a foreign higher education institution as

distinguished from Philippine higher education institution, is one that is duly
established and authorized in accordance with existing Philippine laws to
operate higher education programs which are primarily adhering to either
universally accepted and recognized educational policies and standards or the
unique differentially prescribed system of education of a particular country other
than the Philippines4.

2. Why enrol in a private international educational institution?

International schools were established primarily for foreign students who have
stayed in the Philippines for periods longer than usual tourists. Most of the time,
they are the sons and daughters of expats or immigrants of the country,
diplomats, and state representatives who intend to stay in the Philippines. Thus,
given their distinct and individual cultures, an international educational
institution which offers a system of learning tailor fit to suit their learning needs.
Global standards are implemented to ensure continuity of their education when
they take further studies or employment abroad.

1 See Section 6 of Department of Education, 2010 Revised Manual of Regulations for Private Schools in
Basic Education, Department Order No. 88, Series of 2010 [DO No. 88 (2010)] (24 June 2010), which
provides:
Section 6. Coverage. Basic Education encompasses early childhood, elementary and high school
education, as well as alternative learning systems for out-of-school youth and adult learners and
includes education for those with special needs.
(emphasis supplied)
2 DO No. 88 (2010), Section 5 (h).
3 See Section 5 (15) of Commission on Higher Education, Manual of Regulations for Private Higher

Education of 2008, CHEd Memorandum Order No. 40, Series of 2008 [CMO No. 40 (2008)] (31July
2008), which provides:
Section 5. Definition of Terms. Except as otherwise provided, the terms below shall be construed as
follows:
xxx
(15) Higher Education Degree Program refers to the specific courses of study in the higher
level of the education system leading to a bachelors, masters or doctoral degree.
(emphasis supplied)
4 CMO No. 40 (2008), Section 5 (11).
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools
International educational institutions in the higher education level likewise take
advantage of the global marketability of foreign/international schools as it tends
to have partnerships with globally renowned business units and organizations
providing competitive employment opportunities for the students5.

3. What is the process for establishing a private international educational

institution?

Overview (General Process)

Table 16

Appropriate Accrediting
Securities and
Private Regulatory Agency
Exchange
Phases Educational Agency (CHEd, (for CHEd and
Commission
Institution DepEd, DepEd regulated
(SEC)
TESDA) entities)
Incorporation of Receives
a juridical entity
Reservation of request and
that would
corporate name reserves name
provide
and payment of upon
international
fees payment of
educational
fees
programs
Requests for
endorsement
from CHEd, Receives
DepEd, and request and
TESDA to SEC evaluates
(attached requirements
necessary based on
documents as Manual
required under
Manual)
Construction of
Facilities Conducts
(libraries, inspection of
classrooms, facilities
buildings, etc.)
Sends
endorsement
to SEC

5 See Welcome to Expatch The Manilas Expat Patch of the Web available at
http://www.expatch.org/2012/10/05/international-schools-in-the-philippines/ (last accessed 13
December 2017).
6 Culled from Interview with Ms. Jackie Gordame of Legal Division, CHEd Central Office at the

Conference Room, Legal Division, 3rd Flr. CHEd Bldg., U.P. Diliman Compound, Carlos P. Garcia
Ave., Quezon City (11 July 2017, 1:48pm).
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools
Receives AoI,
Execution of By-laws, Joint
Articles of Affidavit,
Incorporation, Treasurers
By-laws, Joint Affidavit,
Affidavit of Endorsements
Undertaking to from CHEd,
change name DepEd,
(by TESDA;
incorporators), Registers
Treasurer's Corporation
affidavit (if and issues
stock corp.) incorporation
documents
Receives
request and
Requests for
issues permit
Start of permit to
upon
Operations operate for 1st
compliance
YEAR
with
requirements
Receives
request and
Requests for
issues permit
permit to
upon
operate for 2nd
compliance
YEAR
with
requirements
Receives
request and
Requests for
issues permit
permit to
upon
operate for 3rd
compliance
YEAR
with
requirements
Receives
request and
Requests for
issues
Recognition
Recognition
and Special
and Special
Order (to confer
Order (for
degrees and
graduation)
conduct
upon
commencement
compliance
exercises)
with
requirements
Evaluates
Registers in
Accreditation application and
Accrediting
Processes issues
Organization
membership
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools
recognition

Applies for Conducts periodic

Accreditation accreditation in
from coordination with
Accrediting Regulatory
Agency Agency

For Higher Education Programs

As per inquiry7 with the Legal Division of CHEd NCRO, the following steps
should be taken by the applicant for recognition as a private international
school:

1. If there is no entity created to provide for such higher education degree

program yet, there must be a corporation, either a stock or non-stock, or a
foundation incorporated for such purposes before the Securities and
Exchange Commission (SEC). Thus, it would require the execution of
Articles of Incorporation (Articles), By-laws, Treasurers Affidavit, Joint
Incorporators Affidavit of Undertaking (to change name), proposed
capital structure (if stock), start-up financial statements, and such other
documents necessary to incorporate a corporation or foundation.

2. Submission of a letter-request applying for endorsement from the CHEd,

DepEd, and TESDA, which the latter would send directly to SEC upon
satisfaction of requirements. These requirements are as follows:

a. Articles of Incorporation
b. By-laws
c. Undertaking (to operate as indicated in the Articles)
d. SEC Referral (optional)
e. Referral from CHED Regional Office (where the institution is
to be located)
f. Official receipt of fees payment (ranging from Php 1,000.00
Php 1,500.00)

3. Upon issuance of the above endorsement, SEC will complete the entitys
registration. The entity would then seek a permit to operate for one (1)
year, and every year thereafter until its fourth (4th) year, where it will now
seek an authority/recognition from the regulatory agency responsible
(CHEd, in this case), as well as a special order (SO) to confer graduation to
its students. The application for authority and recognition is further
regulated by the following provisions under CHEd Memorandum Order

7 Supra. note 6.
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools
No. 40, Series of 20088, otherwise known as the Manual of Regulations for
Private Higher Education of 2008:

x x x
A. Article IV. Organization and General Powers (of CHEd)

a. Section 15. Supervision over Higher Education Institutions (HEIs)

i. All private higher educational institutions (PHEIs) shall be

established in accordance with law and shall be subject to
reasonable supervision and regulation by the Commission;

b. Section 17. Minimum standards or criteria

i. Supervision and regulation provided under the Manual are the

minimum standards;

ii. PHEIs may adopt other standards or criteria consistent with laws,
rules and regulations;

c. Section 18. Compliance with Section 17

i. A HEI that complies with the minimum standards, requirements

or criteria as provided for in the Manual and other issuances of
CHEd shall be entitled to the grant of a permit to operate or
recognition of a particular degree program;

d. Section 19. Guarantee of academic freedom

i. No abridgement of curricular academic freedom of the individual

HEI shall be made by CHEd EXCEPT for:

1. Minimum unit requirement for specific academic programs;

2. General education distribution requirements as may be

determined by CHEd;

3. Specific professional subjects as may be stipulated by the

various licensing entities;

ii. HEIs shall have freedom to innovate, introduce, and operate new
programs in spite of the absence of the particular policies and
standards for such program, provided minimum standards as
provided in the Manual are complied with;

8 CMO No. 40 (2008). The Manual implements rules and provisions of the 1987 Philippine
Constitution, Act No. 2706, as amended by Act No. 3075, Commonwealth Act No. 180, Batas
Pambansa Blg. 232, Republic Act No. 7772, Republic Act No. 6728, and other pertinent laws.
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools

iii. Prior authority from CHEd will be secured before operating such
programs;

iv. No academic or curricular restriction shall be made upon HEIs

which are not required for chartered state colleges and universities
(SCUs), including local colleges and universities (LCUs);

B. Article V. Establishment of PHEIs

a. Section 20. Incorporation of PHEIs

i. All PHEIs shall be established as non-stock or as a stock

educational corporation in accordance with the Corporation Code
of the Philippines9 and the Education Act of 198210, as amended by
Republic Act (RA) No. 7798;

ii. PHEIs must be solely owned by citizens, or by corporations at least

60% of capital of which is owned by citizens, EXCEPT: those
established by religious groups and mission boards;

iii. Paid-up capital for stock PHEIs shall not be less than Php
5,000,000.00, EXCEPT those already recognized PHEIs, which
may retain their original capitalization;

iv. For changes in ownership, it shall be the duty of the Board of

Trustees/Regents/Governing Board of the PHEI to disclose such
change in writing to CHEd and the members of the academic
community within 30 days;

b. Section 21. Articles and By-laws

i. The Securities and Exchange Commission (SEC) shall not accept

or approve Articles of Incorporation and By-laws without prior
favourable recommendation from CHEd;

ii. PHEIs must seeking registration must first seek permission from
CHEd through a petition containing the ff. information:

1. Name and location of PHEI;

2. Names and addresses of all officers, directors, governing

boards and faculties;

9 The Corporation Code of the Philippines [CORPORATION CODE] Batas Pambansa Blg. 68, as
amended.
10 An Act Providing for the Establishment and Maintenance of an Integrated System of Education

[Education Act of 1982] Batas Pambansa Blg. 232 (1982).

Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools

3. Date of organization and intended operation;

4. The total amount of money actually invested and other

information relative to the financial condition of the PHEI;

5. Description of the buildings occupied or to be occupied by

the institution or college, with full details regarding the
number and dimensions of rooms, plumbing and sanitary
arrangements, and facilities for proper lighting and
ventilation;

6. List of required teachers and assistants, showing their

academic degrees, profession, experience and qualifications,
and the subjects to be taught by each;

7. Complete information concerning the curriculum to be

established, with full details regarding the amount of
instruction to be given on each subject;

8. Full information relative to laboratories, equipment and

libraries; and

9. All other details as the CHEd may require for purposes of

passing upon the application;

iii. Favourable recommendation shall be issued upon substantial

compliance of the foregoing requirements, but shall not be
construed as an authority to operate a HEI or a permit to conduct
higher education programs;

iv. An educational institution offering basic education or post-

secondary education courses may also amend its articles and by-
laws to offer degree programs upon favourable recommendation of
CHEd;

v. No PHEI shall call itself or be called as a University unless it has

complied with the requirements for such status as provided in the
Manual;

c. Section 22. Establishment of a Foreign Higher Educational Institution

(FHEI)

i. Establishment and operation of FHEIs shall be governed by the

Constitution, law, and policies and rules of CHEd;

ii. Unless otherwise provided, the same terms, conditions or

requirements governing the grant of government authority to
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools
operate degree programs provided in the Manual shall likewise be
invariably and equally applicable to FHEIs that may operate any
degree program directly or indirectly in the Philippines;

iii. No PHEI shall be established exclusively for aliens, EXCEPT for

schools established for foreign diplomatic personnel and their
dependents, and unless otherwise provided by law, for other foreign
temporary residents; x x x

For Basic Education

Pursuant to the Department Order No. 88, Series of 201011, otherwise known
as the 2010 Revised Manual of Regulations for Private Schools in Basic
Education, the following rules apply to international schools offering basic
education services:

x x x
A. Establishment (Rules and Regulations Governing Private Schools in Basic
Education)

a. Section 20. Ownership

i. Educational institutions (EIs) must be solely owned by citizens, or
by corporations at least 60% of capital of which is owned by
citizens;
ii. EXCEPT: those established by religious groups and mission
boards;
iii. Percentage subject to increase by Congress;

b. Section 21. Prior approval

i. Establishment shall be subject to PRIOR approval of DepEd thru
its Regional Director having jurisdiction over the place where said
EI or branch thereof shall be established;

c. Section 23. Incorporation of EIs

i. Proposed EI may either be stock or non-stock corporation
incorporated in accordance with the Corporation Code of the
Philippines12, EXCEPT for family administered pre-school
institution;
ii. Paid-up capital for stock EIs shall not be less than Php
1,000,000.00 if engaging in elementary course, and not less than
Php 2,500,000.00 if engaging in both elementary and secondary
courses, EXCEPT those already recognized prior to Republic Act
(RA) No. 779813, which may retain their original capitalization;

11 DO No. 88 (2010).
12 CORPORATION CODE, as amended.
13 Education Act of 1982, as amended.
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools
iii. If organized as stock corporation, EI shall be ineligible for any form
of government subsidy, incentive or assistance, except those given
to individual students and teachers in the form of scholarship,
student loans or other forms of subsidy. If organized as a non-stock
corporation, EI shall be eligible but the same shall be used
exclusively for that purpose;

d. Section 24. Registration with SEC

i. The Securities and Exchange Commission (SEC) shall not accept
or approve Articles of Incorporation and By-laws without prior
favourable recommendation from DepEd;

e. Section 25. Reasonable Supervision and Regulation

i. All private EIs shall be subject to reasonable supervision and
regulation by the DepEd;

f. Section 26. Prohibition on establishment of schools exclusively for aliens

i. No EI shall be established exclusively for aliens
ii. No group of aliens shall comprise more than 1/3 of the enrolment
in any school;
iii. EXCEPT for schools established for foreign diplomatic personnel
and their dependents, and unless otherwise provided by law, for
other foreign temporary residents;

B. Permit and Recognition

a. Section 27. Establishment and Recognition

i. Establishment shall refer to creation, founding, or organization
of a school resulting in its legal existence as an institution;
ii. Recognition shall refer to an authorization granted by DepEd to
conduct educational programs or operations to an existing school;

b. Section 28. Authority to operate

i. EIs can undertake educational operations only when so authorized
by DepEd;
ii. The RD shall have authority, accountability, and responsibility for
approving establishment of pre-school, elementary, high schools,
and learning centers;

c. Section 29. Permit and Recognition

i. Authority for basic education may either be:
a. A permit for each year level or course, which shall be
effective only for a specific educational program and for one
(1) school year, and while issued on a school year basis,
shall remain valid until revoked by DepEd;
b. A recognition for each year level or course, which shall be
for an indefinite period, subject to satisfaction of standards
required by law;
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools

d. Section 30. Requirements for issuance of permits

i. Requests for opening of a new school or operation of a new grade or
year level in existing elementary and secondary schools should be
submitted to the Regional Office on or before August 30 preceding
the start of the school year when the school/new course is supposed
to operate. Subject to the authority of the Regional Director, the
division office may also accept said requests. The request shall be
accompanied with a notarized feasibility study covering
comprehensively the following factors, supported with sufficient
evidence:

a. Purpose and objectives of proposed school or course;

b. Availability and adequacy of school site and
building, including documents of ownership thereof,
location plan, development plan, pictures, or
architects plan of building, if the same is still to be
constructed;
c. Itemized cost of the project covering the entire
course in terms of site, site development, school
building and quarters, classroom equipment and
facilities, library, salaries of faculty, and staff and
maintenance;
d. Financial capacity of applicant, including his
resources to provide requirements for the entire
course and to support its operation from year to year
without depending solely on students fees;
e. Proposed faculty line-up and administrative and
supervisory staff together with their individual
Transcript of Records and evidence of willingness to
join the school; and
f. Need or demand for establishment of the school or
operation of the course in the locality. If the course
is already being offered in the same town or city,
there must be an evidence of the following factors:

i. Distance of the applicant school to

the existing school;
ii. Enrolment in the existing school;
iii. Number of students in the same
locality enrolled in schools other than
the existing school;
iv. Number of prospective students of
applicant school; and
v. Facilities, standards, and supportive
provisions for effective instruction
and quality education x x x
Research by E. J. M. Atienza
Re: Establishment of an educational institution akin to international schools
4. Other modes of providing international education

Aside from establishing a school that provides educational degrees under

international standards, schools may likewise opt for distance education and
transnational education programs.

Distance education is a mode of educational delivery whereby teacher and

learner are separated in time and space, and instruction is delivered through
specially designed materials and methods using appropriate technologies, and
supported by organizational and administrative structures and arrangements14.
Such method is allowed to be utilized only for post baccalaureate levels,
including Diploma, Masters and Doctoral programs15. Degree programs at the
undergraduate level shall not be offered fully by distance mode because
undergraduate students need face-to-face interaction with mentors and peers as
part of the academic environment for optimal learning16.

For an institution to be qualified to offer distance education programs, it must

have Level III Accreditation in the degree program applied for, or a CHEd
Center of Excellence (COE) status in the degree program applied for, or a
certification of compliance with the CHEd Quality Assurance System for
Distance Education17. For requirements and procedure, please see Annexes A
and B hereof.

Transnational Education, on the other hand, is higher education delivered in a

country other than the one where an awarding institution is based 18. It can either
be: a) inbound, i.e. programs operating in the Philippines19; b) outbound, i.e.
programs operating outside the Philippines20; c) onshore, i.e. country where an
HEP has its base of operations21; or d) offshore, i.e. any locality outside of the
country where an HEP has its base of operations22. For requirements and
procedure, please see Annexes C, C-1 and D hereof.

14 Commission on Higher Education, Policies and Guidelines on Distance Education, CHEd

Memorandum Order No. 27, Series of 2005 [CMO No. 27 (2005)] (03 August 2005), Art. II, Section 4.
15 CMO No. 27 (2005), Art. IV, Section 12.
16 Id., Art. IV, Section 13.
17 CMO No. 27 (2005), Art. V, Section 15.
18 Commission on Higher Education, Policies, Standards and Guidelines for Transnational Education

(TNE) Programs, CHEd Memorandum Order No. 62, Series of 2016 [CMO No. 62 (2016)] (29
December 2016), Art. III, Section 17.
19 CMO No. 62 (2016), Art. III, Section 17.1.
20 Id., Art. III, Section 17.2.
21 Id., Art. III, Section 17.3.
22 Id., Art. III, Section 17.4.