MANILA - The Department of Finance said Tuesday, the Capital Market Development Council (CMDC) was studying the creation of a child trust fund for education of poor families' children.
The fund will be sourced from the national and local governments, the DOF said in a statement, citing a 2017 Philippine Statistics Authority (PSA) survey that showed some 18 percent of out-of-school youths said financial woes hinder them from getting an education.
For public school students, the fund may also be used for daily allowances, transportation expenses, board and lodging and other miscellaneous expenses, National Treasurer Rosalia de Leon said.
“The fund can also either be managed by the government and a part of it can also be cut out to be managed by the private sector. We are still on an exploratory stage and we would like to further do a more detailed or granular study on the CTF and to sell it to the Council in the coming meetings,” de Leon said, who also acts as treasurer of the CMDC.
The proposal is similar to the UK and Singapore's child trust funds, according to De Leon.
In the UK, government provided an initial seed money of 250 or 500 British pounds per child and the accumulated fund can be withdrawn when they reach 18 years of age, she said.
Meanwhile in Singapore, government contributes 4,000 SGD over 10 years of primary and secondary education with no withdrawal restrictions. The account is closed once the child reaches 16 years old, De Leon added.
Aside from funding children's education, the program also aims to revive the “savings culture” in the country, said Consuelo Garcia, liaison director for Capital Markets of FINEX.
"It is actually to be the missing link to what we have right now. The PERA (Personal Equity and Retirement Account (PERA) is for the working class. This one is for the young people. The baby boomers already got left behind so I think we could have this as a starting point,” she said.
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