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Under the law, "the State shall endeavor to modernize the Philippine higher education sector and bring international quality standards and expertise into the country with a view to making higher education globally competitive, attracting a flow of talented students, faculty, and staff and improving the country's human resource base.”
"The State shall actively encourage, promote, and accelerate the establishment of transnational higher education programs, the internationalization of higher education in the country, and the development of the transnational higher education sector,” the law read.
The law refers to TNHE as “all types and modes of delivery of higher education study programs, sets of courses of study, or educational services, including distance education and study-abroad programs, which involve education systems of a State different from the State where a TNHE provider operates or programs which may operate independently of any national education system where the learners are located in a country different from the one where the awarding institution is based.”
The courses offered by the TNHE institutions include undergraduate, graduate, and postgraduate degrees.
The Commission on Higher Education (CHED), in consultation with stakeholders from the higher education institutions (HEIs) and appropriate government agencies, may determine the propriety of offering other specialized courses including Bachelor of Laws and Bachelor of Medicine by qualified institutions.
Prior to the offering of the TNHE courses, all TNHE Institutions will submit their curricula to the CHED, which shall review and ensure that such curricula conform to international standards.
The curricula of the TNHEs, which belong to the top 500 World's Best Universities based on international ranking acknowledged by the CHED, are deemed to have met international standards and shall be exempt from complying the with CHED standards.
The law also calls for the creation of a Transnational Higher Education Division (TNHED) under the International Affairs Staff of the CHED to act on all matters related to the TNHE institutions and programs established in the country.
In the performance of its functions, the TNHED will coordinate with the Technical Committee for Transnational Education and the Technical Panel.
Meanwhile, it also states that a foreign higher education institution (FHEI) may engage in the business of providing educational services in the Philippines through any other arrangement with a Philippine HEI that is consistent with the Philippine Constitution and other laws and policies and based on mutually agreed terms.
An FHEI may incorporate a Philippine company to operate its branch but with a 60 percent share of its voting stocks for Filipino citizens as long as it has the approval of the Securities and Exchange Commission.
Foreign citizens may constitute up to 80 percent of the faculty and academic personnel and up to 40 percent of the administrative personnel and staff members in any of the local branches.
However, foreign students may not comprise more than one-third of enrollment.
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