SAMPLE BUSINESS PLAN

(OUTPUT-BASED EDUCATION)

Disclaimer:
The information provided in this sample business plan (i.e. OBE -output based education) is designed to
provide helpful information on the subject discussed. This sample business plan is not meant to be used, nor
should it be used. This sample business plan are provided for information purposes only and do not constitute
endorsement. Readers should be aware that this sample business plan may change.

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 PROJECT HIGHLIGHTS

Name of Project : XXX TRANSFER OF THE XXXX DEPARTMENT FROM

SCIENCE & XXXX TO XXX BUILDING

Project Proponent : XXX XXXX

Project site : XXX

Type of Campus : One Building under XXX Campus

Projected Number of Enrollees: XXX on the first school year

5% increase per year on the succeeding years

Total Project Cost : XXX

Projected Net Income : 9.4 million on the 1st school year

Return on Investment : 2.25% for the first school year

Target Date of Operation : School Year 2014-2015

Objectives:

1. To address the decline of market share particularly in XXX XXX ;

2. To capture thousands of potential enrollees from at XXX in XXX City and nearby provinces;

3. Physical transfer of the grade school department from science & engineering bldg. to
elementary building (newly St. XXXXX School;

4. To fully carry out the four basic objectives as agreed upon by XXX namely, increase XXX
market share through enrollment, increase profitability, market positioning (putting XXX in a
position to take advantages of forecasted opportunities) quality education.

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 EXECUTIVE SUMMARY

The introduction of additional courses during the last few years has contributed to the rise in student
population. The XXX grade school also shares classroom facilities with at least two other colleges at same
building. A current trend among XXX is to open XXX or satellite branches in XXX City to open to their grade
school pupils a more conducive learning environment. The present strategy is also aimed to bring our product
closer to our prospective pupils who wish to pursue quality and personalized studies.

The rationale behind the proposal is not only to target prospective XXX from XXX but XXX of
government and private employees working nearby XXX.

Aside from market potential, other factors considered for the planned transfer were spaciousness,
accessibility, and safety to both XXX. The proposed site, a XXX building, with approximately XXX and can XXX
with a XXX ratio 1:40 possesses all the factors being considered. First, the total floor area of the two upper
floors not only can house the XXX, but likewise can accommodate future increases in the number of enrollees.
Being situated near a major thoroughfare, the building is very accessible from all directions in . Finally, the
proposed venue is conductive for learning because no major crimes were reported in the area during the last
decade.

The proposed XXX as an initial move, the new building will be constructed. Funding source for
proposed project, estimated at XXX, may be taken from a portion of the XXX ‘s retained earnings. Projected
date of operation will be on the opening of school year XXX primarily because of the one year advance notice”
required by the XXX.

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 TABLE OF CONTENTS

Project Title 1

Project Highlights 2

Executive Summary 3

Table of Contents 4

General Description of the Study 5

Project Cost 6

Documentary Processing and Legal Aspects 8

Management Aspects 9

Marketing Aspects/Strategies 12

Financial Projection 13

Socio-Economic and Environmental Aspects 21

General Conclusion 23

Annexes 24

A Panoramic View of the Building

B Cost Estimate of Establishing a New Campus
C CHED Requirements
D Vicinity Map
E Floor Plan Sketch of the Proposed Site
F Enrollment Application Form
End Notes

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GENERAL DESCRIPTION OF THE PROJECTS

New Landscape of Preschool Studies

Today, XXX XXX than they did several years ago. The curriculum is broader, new kinds of XXX are
offered, requiring different types of space and teaching resources; and the XXX ratio is significantly reduced in
each class. This is the main reason for the necessity of this study. The original elementary building which was
established more or less twenty five years ago, though could still be renovated but it is now condemned by
XXX XXX.

The General Objectives

The proposed project basically involves the physical transfer of the XXX from Science and Engineering
bldg. to XXX bldg XXX. The main reason for the planned transfer is to strengthen XXX ’s preschool program
searching for more suitable venues for preschool while at the XXX XXX s. The study also seek to determine
why it is now more appropriate to establish one in XXX as what other schools are doing in the area.

The Specific Move

The study proposes that XXX management should use existing building for its planned new XXX XXX
funded from its retained earnings instead of infusing fresh capitalization. This was done both by XXX and
XXXto house their preschools pupils in a separate zone building

The Proposed Campus

The proposed St. XXX School of XXX school campus will be the XXX Building (Annex A-Panoramic
View of the Building), a four edifice situated beside XXX chapel along XXX ave. with access to major
thoroughfare.

Why is the Proposed Campus an Ideal Site

The proposed area is a very ideal site for XXX’s XXX program because of the following reasons:
 The building as enough rooms to accommodate not only its present student population but also for up
to 30% increase in enrollees. It has also enough space for other school facilities like offices, faculty
rooms, XXX. At the side of the building is an open area were pupils and teachers can casually interact
or can use for waiting area for the XXX and maid.
 The proposed campus is situated within a kilometer radius of at least two dozen government/private
offices, including four big department stores and which employs at least two thousand five hundred
personnel.
 It is also relatively near to existing business districts. It is also understood that some of the government
offices and private business offices in the area might be affected by the said plan.
 The proposed site is very accessible from any part of XXX City, and the building parking area is very
accommodating and many safe parking spaces in the vicinity.

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 PROJECT COST

Funding Sources

Estimate cost for the proposed transfer of the XXX from XXX Bldg & XXX XXX Bldg. to XXX building
range from XXX millions for relocation and construction of new building to as much XXX million, for the
purchase of a new lot and construction of a new multi-storey building. As an initial move, the study
recommends that XXX management shall relocate and construct an entirely new building.

Project funding could be sourced from retained earnings as reflected in its latest Financial Statement.
With a lower cash outlay requirement, the proposed construction of new building is a more practical option
(Annex B- General Cost Estimate of a XXX).

Fund Allocation

Bulk of the funds allocated for the project will go to constructions of the new XXX and the purchase of
new equipment especially on the XXX. Building construction which is estimated to a cost almost more than
one-half for the total project cost, not only involves repainting and the construction of new facilities like an
audio-video room and a state-of-the-art library but likewise, the redesigning of existing rooms to suit the
requirements of an institution of XXX. Almost the same percentage of the fund is earmarked for the acquisition
of tables, chairs, documents storage facilities, a service vehicle or XXX for XXX , audio-video equipment,
computers and other XXX.

The remaining portion of the fund goes to other start-up expenses like logistics (physical transfer of
supplies, XXX equipment from the old campus to the proposed site), utility deposits, and to legal and other
documentary expenses (i.e. fees, permits, documentation, professional fees).

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 PROJECTED EXPENSES FOR THE XXX /
CONSTRUCTION OF NEW BUIDING
(IN MILLION PESOS)

Estimated Building Construction Cost P 16.67

Designing of New Rooms P 4.17

Electrical and Electronic Installation 3.33

Const. of Multi-media Rooms & Modern Library 5.00

Const. of Offices for Officials & Program Directors 2.50

Exterior and Interior Finishing 1.67

Purchase of New Equipment and Supplies 25.0

Computers and other IT Equipment P 12.50

Office Furniture, Air-conditioners & Cabinets 4.17

Service Vehicle & Equipment and Accessories 6.25

Book, Office & School Supplies (Including printing) 2.08

Other Start-up Operational Needs 8.33

Logistical / Transfer Related Expenses 2.50

Admin, Permits Related Expenses 1.67

Advance Rental/Deposit (6 mos. @ P1.2 M) 3.00

Reserved Start-up/Operational Fund 0.75

Miscellaneous Expenses 0.41

Total Estimated Project Cost P50.00

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DOCUMENTARY PROCESSING AND LEGAL ASPECT

The idea of converting existing XXX to St. XXX School of XXX School could initially be discussed by
the XXX, which exercises corporate powers of the university and administers its business, property and other
affairs. Initial assessment on the viability of the plan, may be done by the XXX of the Board, who is also the
XXX of the XXX key assistance from the XXX and the XXX committees to fully study the XXX. The
comprehensive work to be done, may take-off from this brief study.

As soon as the board issues a directive to proceed, document processing shall be one of the priority
activities to be undertaken. This is to ensure that succeeding, management moves will be in line with existing
government policies and regulations.

Among the government institutions to be dealt with and the corresponding legal documents to be
processed include:

1. Department of Education (DepED) which is responsible for formulating and implementing policies,
plans and programs for the development and efficient operation of the system of preschool education in
the country (Annex C - DepED Requirements for the establishment of a New School).

According to the XXX guidelines, the first requirement is the submission of a declaration of an intent to
open and establish a new school to the DepED Regional Office XXX school that transferred to another
site or location shall be considered a school branch and shall adopt be considered a school branch and
shall adopt the same policies/rules on opening of new schools: and, (b) if the extension classes
possess the characteristics of a school branch, then the same requirement/procedure as in a new
school apply.

In effect, if ever the XXX Board finally decides to transfer its campus, the transmission of the intent shall
be one of the priority actions. With the one year advance notice requirement, the earliest date wherein
the St. XXX School of XXX can operate will be on opening of the school year 2014-2015.

2. Securities and Exchange Commission (SEC) which has jurisdiction and supervision over all
corporations, partnership or associations who are grantees of primary franchises and/or a license or
permit issued by the Government.

Private preschool education institutions like the St. XXX School of XXX are established under the
Corporation Code and are governed by special laws and general provisions of said Code. The XXX is
one private corporation of learning which is duly XXX. As such, any major changes in the university’s
organizational set-up must have the knowledge of the SEC. Moreover, the school’s financial statement
which is quarterly required for submission must clearly contain the financial status of the XXX as a
separate campus.( ANNEX D-SEC Name Reservation).

3. XXX City Government for the issuance of business permits and licenses to operate. Basically three
permits are to be processed: (1) the permit to renovate the old building, (2).The corresponding
occupancy permit; and, (3). The permit to establish/operate a new school campus.

The basic requirements for new businesses include:

3.1 Barangay Clearance

3.2 Location Clearance
3.3 Fire Inspection Certificate

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 3.4 Electrical Inspection Certificate
3.5 Securities and Exchange Commission Registration
3.6 TCT or Lease of Contract of Site

The Mayor’s Permit Fee is composed of fixed fees (i.e. inspection fees or zoning fee) and variable fees
(i.e. annual business permit fee based on aggregate area utilized by the business).

4. Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources
(DENR) for the necessary environmental Impact Statement (EIS) System. Submission of project with
supporting documents accompanying the application to include: (1) a detailed location map of the
project site showing the relevant features of the site; and, (2) an environmental management plan.

Once the above-stated requirements are accomplished and evaluated, the XXX of the D XXX or the D
XXX Regional Office issues a XXX (Exemption Certificate) certifying that the project will not bring
significant damage to the environment.

5. Bureau of XXX for the XXX registration as a new business entity.

Pursuant to Section 236 of the National Internal Revenue Code, the XXX registered taxpayer shall, whenever
applicable, update its registration information with the Revenue District Office where its registered, specifying
therein any change in tax type and other taxpayer details (i.e. change in registered, specifying activities/line of
industry, change in registered name/trade name).

MANAGEMENT ASPECTS

The proposed XXX School is envisioned to be a partner among XXX’s existing campus. It shall be an
autonomous unit to be headed by XXX. It shall be called the St. XXX School of XXX XXX to distinguish it from
the XXX Main Campus.

The XXX also anticipates hiring approximately 15 additional employees to man the administrative and
other non-academic requirements of a separate campus. For its other XXX school mandate, it expects to
acquire XXX trained staff capable of providing leadership and complex support to its research and extension
centers. It also needs academic experts who will assists with teaching work closely with pupils, and administer
new programs.

The XXX / XXX

He/she exercises general supervision over the XXX. XXX, the different chairs as well as the heads of
administrative and academic offices concerned with admission, registration, student’s affairs, information
technology, and the library as the general services. He/she is directly responsible to the XXX by assisting him
in implementing academic policies laid down by the Board of Trustees and in administering the entire
educational concern. He also assists the XXX in developing the linkages and making arrangement with the
business sector, the government and with reputable international academic institution in pursuit for academic
excellence and global competitiveness.

Academic and Administrative Officials

Campus Administrator The XXX school XXX manages and supervises the affairs of the school and is being
assisted by the XXX. He acts as the chief of academic and administrative officer whose overall supervision
over all matters pertaining to the XXX affect its teacher, XXX. The Administrator of the XXX is expected to
create the environment in the campus that is conducive to optimum learning and to set the tone of leadership
in creating the character or culture unique to the XXX. He reports directly to the XXX.

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The Registrar The college registrar executes the criteria for admission and retention of XXX pupils. The
Registrar, who is essentially occupying a permanent administrative item as the chief of the Office of the
Registrar, is the equivalent of Dean XXX so he may carry the title of a Dean, Similar to the Campus
Administrator, he also reports directly to the XXX.

Chief, Accounting Department The head of the Department is in-charge of preparing the financial
statements, XXX and various reports for submission to the upper management and the Board of Trustees. He
is responsible for providing management with relevant and timely financial reports as bases for decision
making.

Chief, XXX Systems Department (MISD) The XXX SD chief manages programs for the computerization of all
academic XXX cords and reports of the different colleges including the XXX. He/ She proposes suitable
mainframe schemes, programs and applications and coordinates with the users to ensure proper maintenance
and administration of the management information systems. He shall also see to it that St. XXX School of XXX
IT programs are integrated with that of the entire XXX IT network. The operation of the multi-media rooms is
under the XXX in coordination with the XXX.

Chief Librarian The chief Librarian takes charge in providing library and information services in the proposed
campus. He shall see to it that the facility provides and maintains a collection of print and non-print materials
especially in areas where post graduate courses are offered. He shall also oversee the provision of facilities for
internet access, CD and DVD viewing, online periodicals access, and online catalog searching in close
coordination with the head of MISD.

Director, Research Development Center (RDO) RDC is headed by a Director, who oversee the plans,
implements and evaluate research activities to ensure effective development of research studies to help meet
local and national priority needs. He also manages the people in charge of the production of journals
newsletters and other publication of XXX.

Director, Extension and Community Services Center (ECSC) The XXX r is also headed by a XXX. The
head of the XXX responsible for carrying the primary objectives of the extension service, which include among
others,(a) to strengthen university-community relationship through mutual cooperation and support; (b) to
mobilize the XXX for meaningful and XXX service; and (c) to provide technical, educational, social, and health
services to the community taking into consideration the XXX capabilities and resources. In coordination with
the other Chairs and in consultation with the XXX XXX r, he prepares packaged programs on extension
services in accordance with the XXX and thrusts and the program’s expertise and services. The XXX may
oversee the linkage needs of the XXX. These linkages provide the means by which pupils and teachers
exchanges may be facilitated. Other mutual benefits of linkages include study grant, professional growth and
development, student recruitment, facility sharing, benchmarking and networking.

Chief, General Services The head of General Services Office takes charge of the supply, engineering,
security and environmental service needs of the campus. In coordination with other officers concerned, it
makes available materials and equipment for official graduate schools activities. In the area of security, it
coordinates with the law enforcement agencies off campus in addition to its primordial duty of the maintenance
and protection of people and property within the campus. It is also in-charge of the housekeeping and
sanitation requirements and the upgrading of facilities of the proposed XXX.

RATIONALE AND TECHNECIAL ASPECTS

To fully evaluate the proposal to transfer the existing grade school department from Science and
Engineering Bldg to Elementary bldg, very important considerations relative to the issue needs to be
addressed. These include:

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 1. Why a XXX?
2. Why XXX Bldg? Why not outside XXX?
3. Is there a need to construct a new building or go for a leasehold agreement?

Why a new XXX?

Admittedly, class rooms are still relatively conducive at its present site. There is, however, a need for
additional spaces for meetings, rooms for teacher and experts, research and extension, and the university ’s
vision for increased enrollment.

In addition to physical space constraints, there is also a need to relocate to a more spacious venue
because of the merging culture of the undergraduate. The existing preschool venue is not well suited for the
kind of interactive, dynamic XXX program that XXX seeks to develop. The teacher is a bit isolated from each
other and from the pupils. There is no place for teacher and pupils to regularly meet and interact casually.
Moreover, there is a need to fully house the Montessori school’s research and extension services.

The provision of a new infrastructure is necessary to allow the XXX school to grow, adopt, and remain
at the forefront of preschool education. XXX management has to look ahead to the next critical stage of growth
education school. The need for additional physical space is necessary because without it, the XXX cannot be
the transformational institutional that it hopes to be in the 21st century.

Why in XXX.? Why not outside XXX?

The current trend among XXX and universities is to open within or inside main campuses as an
expansion move. Among XXX based schools opened inside campuses in XXX are XXX, XXX. Aside from
offering to pupils a more conducive educational environment, the rationale behind their move is to capture
Naga young professional parents who wish to pursue their kids in XXX studies.
XXX
The current concentration of “transfer” or the establishment of new XXX campuses among leading XXX
School mainly contribute to the choice of XXX bldg. as an alternative expansion site. In effect, XXX’s proposed
project site is a departure to the normal/current trend.

The next logical question then is “why inside XXX campus and why not some other strategic location in
Naga area? Aside from its educational ambience or perfect educational landscape, potential Montessori
enrollees in the area is practically unlimited because of the presence of the dozens government agencies
based around the area in addition to a number of private companies. Similar to XXX the presence of young
professionals parents employed at XXX is relatively near the proposed site is an indicator factor.

Another reason why XXX deserves to be considered at the proposed venue is the planned
redevelopment of XXX area will not only profit from the potential enrollees but will likewise benefit from
linkages with the big businesses in terms of partnerships in education and research and employment of its
XXX parents.

MARKETING ASPECT

Today, there are now at least six leading XXX school programs. These include, the well known XXX
School. As stated earlier, a number of XXX based educational Institutions have also opened XXX school
campuses in XXX. So, all in all, there are now more or less two (2) dozens XXX schools in XXX.

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 This development has primarily contributed to the choice of XXX as an alternative expansion site. From
a marketing point of view, the choice is very logical. While XXX has a huge number of potential XXX school
enrollees because of the presence of many trade business establishment and multi-national corporations,
financial institutions and business offices, a saturation point could happen because of the relatively big number
of parties sharing the enrollment pie.

The Existing Enrollees

Despite the transfer, existing XXX in XXX would still be interested to remain with the school because of
their anticipation and expectation of a more conducive venue for advanced studies. Potential enrollees from all
over the country and abroad would also be attracted to pursue their kid’s preschool studies at the new site due
to the same reason. In fact, the availability of safer and less crowded dormitories near the proposed site would
doubly encourage them.

As additional incentives to the present enrollees, marketing strategies (i.e. freeze in tuition fees for old
students until graduation, assistance in finding ways for discounts) may be made.

Potential Enrollees

As an additional enrollment source, the area has enormous potential because of its strategic location.
Housed at the vicinity of the proposed XXX i site are Naga national XXX archives office and four departments’
stores, financial institutions, XXX and more than one dozen government agencies and near hospital area.

Not far from the proposed venue is the XXX with thousands of employee which alone has an employment total
of more or less two thousand employees.

Other Potential Pupils

Expected Market Share

As mentioned in the preceding paragraph, there are already a number of XXX schools which are based
near at the St. XXX School of XXX campus. However, XXX courses offered by most of these educational
institutions are limited. The XXX which offer very range of program, meanwhile, have exceptional admission
requirement. The XXX School has very high standards of admission while XXX has prohibitive school fees.

In effect, there is less market competition among schools operating in the area. Possible market share XXX
XXX School of XXX School, among potential enrollees is expected to be very high.

The Need for Marketing

Despite its strategic location, the school needs to conduct some marketing strategies to maximize
enrollment potential. Once the proposed transfer is finalized by the XXX, occasional press releases may be
made extolling the advantages of such transfer. The formal opening or inauguration has to be well attended
and covered by the media. A road show especially in institutions will proceed smoothly and expeditiously

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because the aforementioned marketing efforts may telegraph to the other educational institutions’ this
expansion plan of the university.

FINANCIAL PROJECTIONS

Under normal circumstances, the financial aspect part of a XXX is one of the most important bases in
determining the viability of a proposed project. However, in this case, marketing, management and technical
aspects are as significant as or even more important than the financial aspect. The rationale behind this
conclusion is the fact that (1) the proposed project is not exactly a novel idea or an entirely new take on the
current school operation business; and, (2) its financial viability is primarily dependent on the right technical
evaluation, effective management and realistic assessment of marketability of the proposal.

Analysis on the financial viability of the project is concentrated on three items which are considered
most variable: the number of enrollees, school fees, and compensation. Increase in salaries and wages
expense may be due to higher remuneration of employees or the hiring of additional workforce. All other
accounts like rent, utilities, repairs and maintenance are treated either as constant or with very little movement.

Despite difficulty in the acquisition of pertinent financial data, the financial analysis contains some
specific list of operational expenses to clearly identify where the school’s money is going. The financial data
likewise give adequate information, which would hopefully help officials effectively make decisions i.e. making
changes, switching to lower-cost suppliers, and adoption of cost saving measures. Aside from staying
organized and assisting business analysis, a list of expenses is necessary in preparing tax returns or even
seeking financial advice.

Projected Income

Hereunder is a summarized computation of the project’s projected income based on basic general
assumptions XXX, significant percentage changes are presented to highlights the changes in the projected
income (or loss) of the project. However, more detailed figures (which are based on the understated
assumptions) are used in the –year projected income statement to make the study more realistic.

Assumption A Assumption E

No. of enrollees is based on SY XXX average With XXX increase in enrollment (based on the original number)
No. of faculty is based on SY XXX average With XXX increase in tuition fees
Salaries & wages expense is based on current average With XXX increase in Salaries and wages expenses

Assumption B Assumption F

With 10% increase in enrollment With XXX increase in enrollment (based on the original number)
No. of teacher based on SY XXX average With XXX increase in tuition fees
Salaries & wages expense is based on current average
With XXX increase in Salaries and wages expenses
Assumption C
Assumption G
With XXX % increase in enrollment
With XXX increase in enrollment (based on the original number)
With XXX % increase in tuition fees
Salaries & wages expense is based on current average With XXX increase in tuition fees
With XXX increase in Salaries and wages (based on the original
Assumption D number)
With 1 XXX % increase in enrollment
PLUS THE GENERAL ASSUMPTION THAT INCREASES WILL
With XXX % increase in tuition fees
HAPPEN IN THE FIRST 2 YEARS OF OPERATION
Salaries & wages expense is based on current average

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 XX XXX OF XXX INC.
PROJECTED INCOME
BASED ON GENERAL ASSUMPTIONS
(IN PESOS EXCEPT ON THE NUMBER OF XXX)

A B C D
Particulars 10% inc 20% inc 30% inc
status quo
enrollees enrollees enrollees
1.10 1.20 1.30
number of students per school year 539 593 647 701
tuition fee per student per SY 27,000.00 27,000.00 27,000.00 27,000.00
Gross Revenue 14,553,000.00 16,008,300.00 17,463,600.00 18,918,900.00
Less: Expenses
Full Time teachers @ P15,000/ month per SY 2,700,000.00 3,060,000.00 3,240,000.00 3,600,000.00
Part Time IT teachers @ 3 pax x P20,000/ month x 4 240,000.00 240,000.00 240,000.00 240,000.00
Laptop x P 20,000 / unit 300,000.00 340,000.00 360,000.00 400,000.00
Payment for program @15 pcs x P15,000.00 225,000.00 255,000.00 270,000.00 300,000.00
Contingency Fund (20% of the total cost – assumptions) 693,000.00 779,000.00 822,000.00 908,000.00
Total Expenses 4,158,000.00 4,674,000.00 4,932,000.00 5,448,000.00
Income before Income Tax 10,395,000.00 11,334,300.00 12,531,600.00 13,470,900.00
Less: Provision for Income Tax (10%) 1,039,500.00 1,133,430.00 1,253,160.00 1,347,090.00
Net Income from Operations 9,355,500.00 10,200,870.00 11,278,440.00 12,123,810.00

Return on Investment (ROI) 2.25 2.18 2.29 2.23

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Viability

As stated earlier due to lack of complete data, viability of the proposed project is just based on
basic key performance indicators. These include:

A. Growth in Net Income (the difference between current and the original net income
divided by the original net income.
Based on the foregoing projected net income computations, growth is achieved by the
increase in enrollment and/or by the imposition of additional school fees. Logically,
increase in net income is tempered by corresponding increase in salaries wages. For
purposes of this study, growth is measured based on the original net income instead of
based on the preceding income.
B. Return on Revenue (net income divided by tuition and other school fees). This shows
how much profit is derived from every peso of tuition and other school fees.

ASSUMPTIONS A B C D
Gross Revenues 14,553,000.00 16,008,300.00 17,463,600.00 18,918,900.00
Net Income 9,355,500.00 10,200,870.00 11,278,440.00 12,123,810.00
Return on Revenues 64% 64% 65% 64%

C. Return on Investment or ROI (net profit divided by the total investment made X 100).
Often called a company’s return on total assets, ROI measures the overall profit made
on an investment expressed as a percentage of the amount investment. It measures a
company’s profitability and its management’s ability to generate profits from the funds
investors have placed at its disposal. Normally, a business with an ROI lower than the
rate on financial markets is not viable. Hereunder is the ROI based on the general
assumptions presented earlier.

Additional Revenue Sources

Similar to other educational institutions, the school may gain additional revenues from other
sources. These include examination fees, penalties on late payments, interests on bank
deposits and income from other auxiliary service. It may also have additional revenues from
business partnerships as mentioned earlier or from sub-leases, if applicable. Income from these
services may be used for the university’s other programs like research development, teacher
enhancement and scholarships to outstanding pupils.

PROJECTED INCOME STATEMENT

A projected income state of an educational institution normally includes estimated future

business revenues from tuition fees and other school fees, and other school income, less
controllable and non-controllable expenses. The statement shows the expected financial future
of the business. Specially, the statement is utilized to project the financial results of the
university’s operations for a period of time. Depending on the requirements, the projections can
range from three (3) years to five (5) years.
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Net income of a proprietary educational institution is generally subject to a 10% income tax
(Sec. 27-B of RA 8424 or the CTRP). It is important to consider income tax in preparing
projected statements because it helps determine the final profit margin. Investment may only be
determined if the income tax is favorable. Major statistical data inputted in the initial year (Year
1) of the projected income statement are mostly sourced from the projected profit matrix
presented earlier. These include the figures for tuition fees in the “income bracket” and salaries
and wages and rent expense in the “expense bracket”. In preparing the 5-year projected
income statement, the following specific assumptions are made (based on the general
assumption).

o Tuition fees and other school fees increased by 15% per year due to
increased rate in school fees and rise in enrollment except in the 5th year
wherein the increase is lowered to 10%.
o Other school income to increase by just 10% per year.

o Salaries and allowances to rise by an average of 10% annually.

o Provision for employees’ allowance and professional fees are presented

separately with an average of 10% increase per year.

o All other operational expenses to raise by an average of 10% per year.

o Essentially no increase in the amount of depreciation (a non-cash expense

which is an estimation of the use of the business’s fixed assets).
o An income tax rate based on the general provision of RA 8424.
Similar to other realistic projections, projected income and expenses are
based on conservative estimates (income is slightly understated; expenses
are overstated for flexibility). For instance, income in the first four years of
operation is projected to increase by 15% only (even by 10% in the fifth year),
despite projected 10% yearly increases both in school fees and enrollment.
Employees’ remuneration meanwhile is assumed to increase 10% annually.

XX XXX OF XXX INC.

PROJECTED INCOME STATEMENT

Year 1 Year 2 Year 3 Year 4 Year 5

EDUCATIONAL INCOME
Tuition Fees XXX 00 2 XXX,675 31,997,226 36,796,810 40,476,491
Other School Fees 1,500,000 1,725,000 1,983,750 2,281,313 2,509,444
OTHER INCOME 500,000 550,000 605,000 665,500 732,050
GROSS INCOME 26,194,500 30,098,675 34,585,976 39,743,623 43,717,985
LESS: OPERATING EXPENSES
Salaries and Allowance 6,660,000 7326,000 8,058,600 8,864,460 9,750,906
Employed Benefits 800,000 880,000 968,000 1,064,800 1,171,280
Rentals 14,400,000 XXX,000 14,400,000 XXX,000 14,400,000
Office Supplies 60,000 66,000 72,600 79,860 87,846
Utilities 80,000 88,000 96,800 106,480 117,128
Security Services 360,000 396,000 435,600 479,160 527,076
17 | P a g e
Repairs and Maintenance 50,000 55,000 60,500 66,550 73,205
Professional Fees 240,000 264,000 290,400 319,440 351,384
Property Insurance 40,000 44,000 48,400 53,240 58,564
Taxes and Licenses 60,000 66,000 72,600 79,860 87,846
Publicity and Promotions 60,000 66,000 72,600 79,860 87,846
Charitable Contributions 50,00 55,000 60,500 79,860 87,846
Depreciation 500,000 500,000 500,000 500,000 500,000
Others 50,000 55,000 60,500 66,550 73,205
Total Operating Expenses 23,410,000 24,261,000 25,197,100 26,240,120 27,374,132
NET PROFIT BEFORE INCOME TAX 2,784,500 5,837,675 9,388,876 13,503,503 16,343,853
Less: Provision for Income Tax (10%) 278,450 583,768 938,888 1,350,350 1,634,385
NET INCOME 2,506,050 5,253,908 8,449,989 12,153,152 14,709,468

PROJECTED CASH FLOW STATEMENT

The Projected Cash Flow Statement (PCFS) indicate source and the amount of income and
income and expense activities for a given period in the future (i.e. a 5-year period). In the study
at hand, it shows how cash is expected to flow in and out of the proposal to transfer the XXX. It
also shows how much and when money invested may be recovered.
A PCFS function as a planning tool because it demonstrates the ability to repay the investment
made or to make expansion moves in a timely manner, something that is important to investors.
It also allows management to participate situations (i.e. shortage of money to pay important
payables). Finally, it gives a much better idea of how much capital investment a business idea
needs.
For easier understanding, the following assumptions are made:
School Fees are on cash basis (no receivables)
Only minimal additional investment is made

XXXXXX
PROJECTED CASH FLOWS STATEMENT

Year 1 Year 2 Year 3 Year 4 Year 5

CASH INFLOWS
Tuition Fees 24,194,500 27,823,675 31,997,226 36,796,810 40,476,491
Other School Fees 1,500,000 1,725,000 1,983,000 2,281,313 2,509,444
Other Income 500,000 550,000 605,000 665,500 732,050
TOTAL CASH FLOWS 26,194,500 30,098,675 34,585,976 39,743,623 43,717,985

CASH OUTFLOWS
From operational expenses 22,910,000 23,761,000 24,697,100 25,740,120 26,874,132
Less: Depreciation (500,000) (500,000) (500,000) (500,000) (500,000)
Additional Investment – equipment 50,000 100,000 100,000 100,000
Partial payments – term notes payable 5,000,000 8,000,000 12,000,000 15,000,000
Income Tax Payment 278,450 583,768 939,088 1,350,350 1,634,385

NET CASH OUTFLOWS 23,188,450 29,394,768 33,736,188 39,190,470 43,608,517

NET INCREASE (DECREASE) IN 3,006,050 703,907 849,788 553,153 109,468
CASH & CASH EQUIV.
CASH AND CASH EQUIVALENT, 100,000 3,106,050 3,809,957 4,659,745 5,212,898
BEGENNING
CASH AND CASH EQUIVALENT, END 3,106,050 3,809,957 4,659,745 5,212,898 5,322,366

18 | P a g e
PRO-FORMA BALANCE SHEET
A Pro Forma Balance Sheet is similar to historical balance sheet. The only difference is that a
pro-forma balance represents a future (i.e. the projected amount of money tied up in
receivables, inventory, etc.). it can also be used to project the overall financial soundness of the
company (i.e. it quickly pinpoints a high debt-to-equity ratio).

XXX
19 | P a g e
 PROJECTED BALANCE SHEETS

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS

Cash 3,106,050 3,809,957 4,659,745 5,212,898 5,322,366

Accounts Receivables 6,000 200,000 50,000 20,000 30,000
Notes Receivables 40,000 100,000 50,000 30,000 20,000
Office Supplies 20,000 50,000 30,000 20,000 30,000
Investments - 50,000 80,000 100,000 110,000
Prepaid Insurance 100,000 200,000 200,000 200,000 200,000
Prepaid Rent 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
Properly Inventory 60,000 400,000 450,000 500,000 550,000
Total Current Assets 4,532,050 6,009,957 6,719,745 7,282898 7,462,366
Furniture & Fixtures 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000
Less: Accum. Depreciation 30,000 30,000 30,000 30,000 30,000
Met Book Value 19,970,000 19,970,000 19,970,000 19,970,000 19,970,000
Office & Plant Equipment 45,000,000 45,000,000 45,000,000 45,000,000 45,000,000
Less: Accum. Depreciation 200,000 200,000 200,000 200,000 1,000,000
Net Book Value 44,800,000 44,800,000 44,800,000 44,800,000 44,000,000
Transportation Equipment 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000
Less: Accum. Depreciation 40,000 40,000 40,000 40,000 40,000
Net Book Value 14,960,000 14,960,000 14,960,000 14,960,000 14,960,000
Building 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000
Less: Accum. Depreciation 230,000 230,000 230,000 230,000 230,000
Net Book Valu 39,770,000 39,770,000 39,770,000 39,770,000 39,770,000
Total Fixed Assets 119,500,000 119,500,000 119,500,000 119,500,000 118,700,000
TOTAL ASSETS 124,032,050 125,509,957 126,219,745 126,782,898 126,162,366

LIABILITIES & RETAINED

EARNINGS

Liabilities
Account Payable 500,000 600,000 1,000,000 800,000 700,000
Accrued Payroll 1,026,000 2,149,999 2,009,798 2,619,799 2,389,799
Notes Payable 120,000,000 115,000,000 107,000,000 95,000,000 80,000,000
Total Liabilities 121,526,000 117,749,999 110,009,798 98,419,799 83,089,799
Owners’ Equity
Retained earnings, beg. 2,506,050 7,759,958 16,209,947 28,089,099
Add: Income (Loss) from 2,506,050 5,253,908 8,449,989 12,153,152 14,709,468
Operation 2,506,050 7,759,958 16,209,947 28,363,099 43,072,567
Retained Earnings, end 2,506,050 7,759,958 16,209,947 28,363,099 43,072,567
Total Equity
TOTAL LIABILITIES AND 124,032,050 125,509,957 126,219,745 126,782,898 126,162,366
RETAINED EARNINGS

The 5-year protected balance sheet shows that the proposed school’s total assets is not
growing much but its long-term notes payable, which represent the P120 million initial

20 | P a g e
investment has gone down P80 million in Year 5. Consequently, total liabilities are decreasing
while total equity is increasing, showing a favorable debt-to-equity ratio.

RETURN OF INVESTMENT

Often called a company’s return on total assets, ROI measures the overall profit made on an
investment expressed as a percentage of the amount invested. It measures a company’s
profitability and its management’s ability to generate profits from the funds investors have
placed at its disposal. Normally, a business with an ROI lower than the rate on financial markets
is not viable.

ROI is arrived at the net profit by the total investment, multiplied by 100.

BREAK-EVEN RATIO ANALYSIS

Lender and/or investor use the break-even ratio analysis as one of the methods in providing
financing to a proposal. Too high “break-even ratio” is a cautionary indicator.
To arrive at a break-even ratio, add the debt service/investment partially returned and the
operating expenses then divide the resulting amount or the sub-total, by the gross income.

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Debt service / Partial return 5,000,000 8,000,000 12,000,000 15,000,000
on investment made
Operating Expenses 23,410,000 24,261,000 25,197,100 26,240,120 27,374,132
Sub-total 23,410,000 29,261,000 33,240,120 38,240,120 42,374,132
Operating Income 26,194,500 30,098,675 34,585,976 39,743,623 43,717,985
Break-even Ratio 89% 97% 96% 96% 97%

SOCIO-ECONOMIC AND ENVIRONMENTAL ASPECTS

Based on the result of the financial study of the project, the proposal is only very viable if its
enrollment population increases. Additional net earnings brought about by enrollment increase
are also tempered by corresponding increases in operational expenses especially on salaries
and wages. However, the objectives establishing educational institutions are not wholly for
financial gain. There is also the noble objective of viable (it should be to be sustainable), the
proposal is more than good enough. Besides with good management practices, financial gains
automatically follow.

The Expected Beneficiaries

The proposed project will benefit not only the XXX (administration, faculty, students and alumni)
but XXX as well. For starter, the XXX government should be fortunate to host one more
prestigious school of XXX learning in the Philippines which offers a wide range of preschool
discipline.

XXX research and extension programs also bode well to the people and businesses in the area.
While target of the school’s research and extension programs are boundless, it may be good to
21 | P a g e
concentrate initially on the local socio-economic and business activities. Research work and
extension services on XXX planning problem for example, is a very good field of study.

The immediate neighboring of the school site, especially the entrepreneurs also benefits from
the transfer. Expectedly, owners of canteens, van for hire, pedicab, taxi, tricycle, boarding
houses, and even sari-sari stores will gain additional income once the proposed project
materializes. As XXX i business activity increase, the city government’s coffers also profits.

Again employees of institutions (especially government) near the area will be one of the
favorable recipients of the transfer. With the availability of a prestigious XXX learning institution
near their area of employment, they will be encouraged and inspired to pursue their siblings to
XXX. As stated earlier, this is manifested by the “XXX i” programs conducted by XXX based
schools XXX which produced graduates now occupying middle management to superior
positions. Finishing a XXX studies is an additional edge in the future employment and promotion
processes of the government as well as private especially in the supervisory and middle
management level because of good quality foundation.

Some Disadvantages

The proposed transfer is not altogether beneficial to all stakeholders. Some of the XXX staying
and/or working in XXX will have to do some adjustment ditto with the teacher and staff.

On the Environment

Effect on the environment happens during the construction phase of the new building for
Montessori school. However, the effects are just minor inconveniences to the pedestrians
because the exterior repairs only involve repainting. The volume of construction materials to be
delivered are also very significant.

Once the construction is finished, there will be no much environmental concerns as the school
complies with the government environmental requirements. The building shall, at all times, be
ready for inspection with regard to sanitation, waste disposal plans, and safety measures.

GENERAL CONCLUSION

As in other feasibility studies, the most tedious part in the preparation of this research on the
physical transfer of the Grade school D XXX from S XXX and En XXX bldg. to XXX.( XXX) is
the gathering of data. This is the primary reason why some of the raw data used, especially on
the technical and financial aspects, are either representations or equivalents to the true details.
However, the bulk of the inputs are product of intensive research, field work and interviews.

For instance, accurate financial projections may only be achieved if the information contained in
the marketing aspect (especially on the number of potential enrollees) are true, the technical
data especially on the proposed transfer site and the building are accurate and the potential for
growth are effectively shepherd by good management practice. With good site selection,
accurate marketing data gathering and effective school management, financial and socio-
economic rewards automatically follow.

22 | P a g e
Per research made, the XXX has already invested more than a billion pesos for its XXX main
XXX. In effect, it may be safe to conclude that the management has the capacity to infuse fresh
funds. However, it is proposed that initial allocation be taken from its retained earnings. Once
the Montessori school continues to grow and financial condition permits, the purchase of lot and
the building of a truly XXX building in XXX will be the next logical move.

As stated in the management aspect of the paper, if the Board of Trustees finds the proposal
worth pursuing, a detailed and comprehensive job may take off from this project study

Annex A – 1 Panoramic View of the Building

Annex A – 2

23 | P a g e
Annex A – 3

24 | P a g e
 2010

25 | P a g e
 DepEd-NCR, Elementary Education Division

REQUIREMENTS FOR PROPOSAL

FOR OPENING OF NEW SCHOOL
(Checklist only)

_____ 1. Application duly accomplished and notarized DECS Form GPR 4

_____ 2. Board Resolution on the intention to operate a school indicating the course/s and school
year (For school operated by non-stock / profit corporation)
_____ Certified by the Corporate Secretary
_____ 3. Statements on the following:
_____ Philosophy and goals of the course
_____ 4. Certificate of SEC registration ( ) non-stock / non-profit ( ) profit
* purpose ( ) Preschool ( ) Elementary ( ) Special Education (SPED)
_____ 5. Waiver to BP 232 on requirement of incorporation
(for family-administered school offering pre-elementary only)
_____ 6. School site
( ) at least 500 sq. m. for preschool
( ) more or less 5000 sq. m. for preschool, elementary and sped
( ) owned / donation ( ) authority to use the school site (for church schools)
_____ Copy (ies) of Transfer Certificate (s) of Title (TCT)
_____ Total floor area available (Indicated) __________
( ) owned ( ) leased / donation ( ) authority to use the school site
( ) adequate ( ) inadequate
TCT No. (s) __________ __________ __________
__________ __________ __________
Location ( ) same as given address, same block and lots are adjacent with
each other
( ) in the name of the school ( )in the name of the school owner
( ) in the name of the congregation ( ) in the name of the lessor
(privately owned)
lease contract
( ) at least 10 years ( ) __ years
_____ 7. Location of school in relation to its environment
_____ Far from places cited under Section 30.7, Art IV, 2010 Revised Manual of
Regulations for Private Schools in Basic Education (cockpits, bars, cemetery, funeral
parlor and others)
_____ Free from noise / unpleasant odor and dust
( ) conducive to learning ( ) not conducive to learning
( ) accessible and safe ( ) not accessible and safe
_____ 8. Campus development and landscaping plans
_____ fully implemented _____ not implemented
_____ partially implemented
_____ 9. Document (s) of ownership of school building (Reference: Realty Tax Declaration)
_____ total floor area (indicate) _____
_____ Academic classroom (s) indicate total number of rooms _____
( ) standard size(s) (indicated size) _____ ( ) substandard (indicate size) _____
* 6 X 8 m. / bigger * less than 6 X 8 m.
( ) adequately lighted /ventilated ( ) inadequately lighted / ventilated

Page 1

26 | P a g e
 DepEd-NCR, Elementary Education Division

_____ Other quarters

( ) office ( ) library ( ) H. E. & shop ( ) Computer room
( ) canteen ( ) rest rooms ( ) Science Laboratory/room
( ) clinic ( ) guidance, etc.
_____ 10. Certificate of Occupancy of school building
_____ signed by proper city / municipal authorities
_____ 11. Pictures of school building (s), classrooms, office, guidance, laboratories (science & EPP),
library, medical and dental health facilities, canteen, playground apparatus (for preschool),
etc.
_____ 12. Proposed budget / annual expenditures for the succeeding school year approved by the
Chairman of the Board / Directors
_____ 13. Proposed / approved curriculum / class program
_____ Conforms to DECS Order No. 107, s. 1989 (for Kindergarten)
_____ Implements the Elementary School Curriculum prescribed by DepED
( ) NESC ( ) BEC ( ) Modified BEC
( ) SPED Curriculum
_____ Class Program
_____ Preschool
_____ Elementary ( ) Secondary (SPED)
______ Time Allotment per subject area ( ) correct ( ) not correct
_____ 14. Proposed tuition and other school fees (for new schools)
_____ 15. Copy of retirement plan
_____ School initiated retirement plan
Social Security System (SSS) /Pag-Ibig Fund
Remittance of payment / Latest O.R. No.: ________________

For items 16-18 of columnar form is preferred.

_____ 16. Name of administrator / Principal

_____ Educationally qualified _____ not qualified

School Head
( ) Filipino
( ) Master’s degree in Education
(at least 5 years of relevant teaching or administrative experience)
_____ Transcript of Records
_____ Appointment / contract
_____ Salaries & other fringe benefits
_____ 17. List of academic non-teaching personnel (registrar, librarian, school physician, school
dentist, school nurse, school office staff, guidance counselor, support staff, etc..)
_____ Educationally qualified _____ Not qualified
Registrar : Bachelor’s degree and have at least 3 years of training or experience
in the serving and maintenance of student academic records and related school
work
Librarian: at least with 18 units of Library Science
_____ Transcript of Records
_____ Appointment / contract
_____ Salaries & other fringe benefits
_____ Full time _____ Part time
_____ 18. List of teaching staff
_____ Educationally qualified _____ not qualified

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27 | P a g e
 DepEd-NCR, Elementary Education Division

_____ Pre-Elementary teachers should be holders of Bachelor’s Degree in Early

Childhood Education or Bachelor’s Degree in Elementary Education with at
least 18 units of Early Childhood Education.
_____ Elementary school teachers should be holders of a Bachelor’s Degree in
Elementary Education or its equivalent.
_____ Elementary school teachers should be holders of a Licensure Examination
for teachers
_____ Transcript of Records
_____ Subject assignments in accordance with qualification
_____ Appointments / Contract
_____ Salary /benefits in accordance with prescribed standards
_____ Ratio of full time
full time
-
paid monthly or hourly, based on the regular teaching loads as provided in
policies, rules and standards
- a total working day of 8 hours daily
- no other remunerative occupation elsewhere requiring regular hours of work
- who are not teaching in any other educational institutions
_____ 19. List of laboratory facilities, equipment, furniture, supplies and materials classified by
subject area certified by school head.
_____ complies with minimum standards and requirements by subject area
_____ 20. List of library holdings, teachers’ references, general references, supplementary readers,
periodicals, magazines.
_____ Complies with prescribed standards and requirements by classification / subject area
_____ 21. Certification of bank deposit in the name of the school
_____ adequate funds to support operation for one year
_____ 22. Application and Inspection fee (P2,000.00)
_____ Total fees paid __________ Date of Issuance
_____ O. R. Number __________ Place of Issuance
_____ 23. School Bond (P1,000.00) per course)
_____ Bond agreement duly accomplished and notarized
_____ Total amount of bond posted
_____ Kind of Bond
( ) Surety ( ) Cash ( ) Real Estate

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28 | P a g e
ANNEX -D –S.E.C. NAME RESERVATION

29 | P a g e
 Manual of Regulation for Private Schools – General Provisions

I. GENERAL PROVISIONS

 
Section 1. Title. This Manual shall be known as the 2010 Revised Manual of Regulation For Private Schools In Basic
Education.

 Section 2. Coverage. This Manual shall apply to all private educational institutions in basic education except as
otherwise provided herein.

 Section 3. Minimum Standards or Criteria. The standards or criteria provided in this Manual are the minimum required
for government recognition, and schools may adopt higher standards or criteria consistent with laws, rules and
regulations.

 Section 4. Fundamental State Policies on Education. The following are the fundamental state policies relevant to private
schools in basic education:

1. Education For All (EFA). The State shall protect and promote the right of all citizens to quality education at all levels
and shall take appropriate steps to make such education accessible to all.

2. Complete Adequate and Integrated System of Education. The State shall establish, maintain and support a
complete, adequate and integrated system of education relevant to the needs of the people and society.

3. Scholarship Grants, Student Loan Programs, Subsidies. TheState shall establish and maintain a system of scholarship
grants, student loan programs, subsidies and other incentives which shall be available to deserving students in both
public and private schools especially to the underprivileged.

4. Alternative Learning Systems. The State shall encourage non-formal, informal, and indigenous learning systems as
well as self-learning, independent, and out-of-school study programs particularly those that respond to community
needs. The State shall provide adult citizens the disabled and out-of-school youth with training in civics, vocational
efficiency and other skills.

5. Constitution as Part of Curricula. All educational institutions shall include the study of the Constitution as part of the
curricula.

6.      Inculcating   Patriotism,   Nationalism   and   Other   Values. Educational institutions shall inculcate
patriotism and nationalism, foster love of humanity, respect for human rights, appreciations of the
role of national heroes in the historical development of the country, teach the rights and duties of
citizenship, strengthen ethical and spiritual values, develop moral character and personal discipline,
encourage critical and creative thinking, broaden scientific and technological knowledge and
promote vocational efficiency.

7. Complementary Roles of Public and Private Institutions in the Educational System. The State
recognizes the complementary roles of public and private institutions in the educational system
and shall exercise reasonable supervision and regulation of all educational institutions.

8. Ownership of Schools. All private schools other than those established by religious groups and mission boards
shall be owned solely by citizens of the Philippines or corporations or associations at least sixty per centum of the
capital of which is owned by such citizens.

9. Control and Administration of Schools. The control and administration of educational institutions shall be vested
in citizens of the Philippines.

10. Establishment of Schools for Aliens and Composition of Aliens in Enrollment. No educational institution shall be
established exclusively for aliens and no group of aliens shall comprise more than one third of the enrollment in any
school. Said prohibitions do not apply to schools established for foreign diplomatic personnel and their dependents
and, unless otherwise provided by law, for other foreign temporary residents.
30 | P a g e
 11. Exemption from Taxes and Duties. All revenues and assets of non-stock, non-profit educational institutions used
actually, directly and exclusively for educational purposes shall be exempt from taxes and duties. Likewise,
subject to conditions prescribed by law, all grants, endorsements, donations or contributions used actually,
directly and exclusively for educational purposes shall be exempt from tax. Proprietary educational institutions,
including those cooperatively owned, may likewise be entitled to such exemptions, subject to the limitations
provided by law, including restrictions on dividends and provisions for reinvestment.

12. Educational Policies and Programs. The State shall take into account regional and sectoral needs and conditions
and shall encourage local planning in the development of educational policies and programs.

13. Academic Freedom. Academic freedom shall be enjoyed in all institutions of higher learning.

14. Right to Choose a Profession. Every citizen has a right to select a profession or course of study, subject to fair,
reasonable and equitable admission and academic requirements.

15.   Right of Teachers to Professional Advancement. The State shall enhance the right of teachers to professional
advancement. Non-teaching academic and non-academic personnel shall enjoy the protection of the State.

16. Highest Budgetary Priority. The State shall assign the highest budgetary priority to education and ensure that
teaching will attract and retain its rightful share of the best available talents through adequate remuneration
and other means of job satisfaction and fulfillment.

 Section 5. Definition of Terms. Except as otherwise provided, the terms below shall be construed as
follows:

a. “Government” includes the National Government, the local governments, and all other instrumentalities, agencies
or branches of the Republic of the Philippines, including government-owned or controlled corporations and their
subsidiaries.

b. “Department” refers to the Department of Education.

c. “Secretary” refers to the Secretary of Education.

d. “Bureau of Elementary Education” refers to the Bureau which is functionally assigned to pre-school and
elementary levels.

1. Bureau of Secondary Education” refers to the Bureau which is functionally assigned to the secondary level.

2. ‘Bureau of Alternative Learning System” refers to the Bureau which is functionally assigned to the alternative
learning system.

e. “Regional Office” refers to any of the regional offices of the Department which has jurisdiction over the school of
institution concerned.

f. “School” means an educational institution, private or public, undertaking educational operations with an organized
group of pupils or students pursuing defined studies at defined levels, receiving instructions from teachers, usually
located in a building or group of buildings in a particular physical or cyber site recognized by the State and
specifically intended for educational purposes.

1.    Pre-School Course applies to any class below Grade I.

2.    Primary Course applies to Grades I to IV inclusive.
3.    Intermediate Course applies to Grades V to VI or VII inclusive
4.    Secondary Course applies to First to Fourth Year of the High School Level.

g. “Private School” means a privately owned and managed institution for teaching and learning, established and
authorized by the Department to operate certain educational programs in accordance with law and the prescribed
policies and rules of the Department.
 
h. “Foreign or International School”, as distinguished from a Philippine private school, is one that is
31 | P a g e
 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
Philippines.

1. “Integrated School” refers to a school that offers complete basic education in one school site and has unified
instructional programs.

2. ‘Learning Center” may refer to a physical space to house learning resources and facilities, or it may be an area
designated for convening a group of learners for the purpose of teaching. It is a venue for face-to-face learning
activities and other opportunities for development and improvement of the people ’s quality of life.

i. “Government Authority” means either a permit or recognition issued by the Department to a private school for the
operation of a particular educational program.

 “Educational Program” refers to a specific course of study in any of the basic education level, that is pre-school,
elementary, secondary, special education and alternative learning system with core curriculum.

 “Department Policies and Rules” refers to the minimum standards or guidelines issued or prescribed by the Department
governing the establishment of a private school, the operation of its educational programs and activities, and the
management of its affairs.

 “School Policies and Rules” means the internal governance system of each private school, including its own prescribed
standards, as defined and approved by its governing body in accordance with law, and the applicable policies and rules
of the Department.

 “Members of the Community” refers to the general membership of every private school established in accordance with
law and duly authorized by the Department to operate certain educational programs or courses. The term includes,
either singly or collectively, the following:

1. Pupil means a child who regularly attends classes in any grade of the elementary education level, including pre-
school, under the supervision and tutelage of a teacher.

2. Student means any person who is regularly enrolled and engaged in formal education studies and attends
classes at the secondary or higher education levels.

3. School Personnel means the persons, singly or collectively, working in a private school. They are
classified as follows:

a. “School Head” refers to the chief executive officer of a private school.

b. “Other School Officials” include other school officers, including teachers who are occupying supervisory
positions of responsibility and are involved in policy implementation in a private school.

c. “Academic Personnel” includes all school personnel who are formally engaged in actual teaching service or
in research assignments, either on full-time or part-time basis, as well as those who possess certain
prescribed academic functions directly supportive of teaching, such as registrars,librarians, guidance
counselors, researchers, and other similar persons. They may include school officials responsible for
academic matters, and other school officials.

d. “Non-academic personnel” means school personnel usually engaged in administrative functions who are not
covered under the definition of academic personnel. They may include school officials.
e. “Formal Education” refers to the systematic and deliberate process of hierarchically structured and
sequential learning corresponding to the general concept of elementary and secondary level of schooling. At
the end of each level, the learners must obtain a certification in order to enter or advance to the next level.

f. “Non-formal education” refers to any organized systematic educational activity carried outside of the
framework of the formal system to provide selected types of learning to a segment of the population.
32 | P a g e
 g. “Special Education” refers to the education of persons who are physically, mentally, emotionally, socially or
culturally different from so-called “normal” individuals, such that they require modification of school
practices/services to develop them to their maximum capacity. Special education provides distinct services,
facilities, curricula, and instructional materials, which are geared to pupils or students who are significantly
higher or lower than the average or norm, on the basis of which special treatment is called for.

h. “Accreditation” means the process leading to the issuance of a certificate of accredited status by an
organized body of educational institutions attesting to the quality or standards of a private school or to any
of its educational programs or courses, and to the effectiveness of the management and operations of the
private school offering the program as exceeding the minimum standards or criteria for government
recognition as provided for in this Manual. Accreditation shall be voluntary in nature.

i. “Deregulation” is a necessary consequence of voluntary accredited status whereby the Department accords
to a private school certain benefits and advantages as may be provided for in this Manual and in applicable
legislation. As used in this Manual, deregulation is not considered as absolute, but represents degrees in the
liberalization of rules and regulations.

Annex B – General Cost Estimate of a New School Campus

The general cost estimate of establishing a new campus primarily depends on the exact site of the lot and the
design requirement of the building (i.e. design, location, materials used, method of construction and timetable).
Lot prices vary depending on the location.

LOT
Price per Square Meter (In P)
Lot Area (In 12,000 14,000 16,000 18,000 20,000 22,000
sq. m)
3,500 42,000,000 49,000,000 56,000,000 63,000,000 70,000,000 66,000,000
4,000 48,000,000 56,000,000 64,000,000 72,000,000 80,000,000 77,000,000
5,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 88,000,000
6,000 72,000,000 84,000,000 96,000,000 108,000,000 120,000,000 110,000,000
Sources of Basic Data: Real Estate Developers
BUILDING
Cost per Square Meter (In P)
Floor Area
(In sq.m) 10,000 12,000 14,000 16,000 18,000 20,000
3,000 30,000,000 36,000,000 42,000,000 48,000,000 54,000,000 60,000,000
4,000 40,000,000 48,000,000 56,000,000 64,000,000 72,000,000 80,000,000
5,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000
6,000 60,000,000 72,000,000 84,000,000 96,000,000 108,000,000 120,000,000
Source of Basic Data: Northcon Construction and Management

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Annex C – CHED Requirements for the Establishment of a New School

1. Declaration of intent to open and establish a new school to be submitted to the CHEDRO one (1) year
prior to the actual opening of the school

2. Approved SEC registration containing articles of incorporation, by-laws and objectives in opening a
school for private Higher Educational Institutions (HEIs) or copy of Local Government Ordinance for
Community College and Universities.

3. Application for government permit to operate new programs together with supporting documents as
listed in Government Permit/Recognition to Operate, Form 4 (GPRS4) within the prescribed deadline of
submission addressed to the CHEDRO Director.

Note:

 All application forms and other documents relative to the opening of a new school and new
course/program shall be under oath

 A school that transferred to another site or location shall be considered a school branch and shall adopt
the same policies/rules on opening of a new school.

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