The Minister of the Budget
        The Director General, National Economic and Development Authority
        The Presidents, State Universities and Colleges

1.    A state university or college shall consider as its principal objectives, tertiary education, research and extension services. It shall establish clear goals and a program of implementation for each of these objectives;

2.    Each university or college shall formulate a development plan that is supportive of the manpower goals of the region and of the nation. It shall identify an area of specialization, that is within the objectives specified in its Charter, its capability to implement well taking into consideration its faculty profile, building sand equipment and availability of educational opportunity in other state universities and colleges and in good private schools in the area. There shall be little or no duplication in course offerings among public or private schools in the area;

3.    A physical development plan shall be formulated by an institution, looking at the long term manpower needs that it seeks to serve. In order to minimize expensive duplication in land, buildings, equipment, libraries, and other facilities, the school shall whenever possible gradually reduce the number of campuses, in favor of the systematic upgrading of the mother campus of the school. No new branches or extension units shall be established or existing schools absorbed by a state university or college except where authorized by virtue of the General Appropriations Act or other law;

4.    As subsidized institutions, state universities and colleges shall aim to pioneer in areas of manpower development and technological advance that are not or cannot be handled by private schools. They shall aim at ways, private schools, smaller state colleges and universities, and the public school system.

5.    New degree offerings of the institution shall be limited to those consistent with the principal objectives of the institution and the focus of activity as established within its development plan. The minimum standards of faculty, equipment and facilities established by the Ministry of Education, Culture and Sports for new course offerings of private educational institutions shall apply as well to state universities and colleges;

6.    State colleges and universities shall take steps to accredit their degree programs with the Federation of Accrediting Associations of the Philippines (FAAP) or equivalent body as may be authorized by the Ministry of Education, Culture and Sports, as a means of gradually upgrading the standards of these institutions. The successful accreditation of programs shall be considered by the Office of Budget and Management in recommending budgetary allocations for the school;

7.    State universities and colleges shall participate in the activities of other agencies of government, including agricultural extension, reforestation, small and medium scale in industry development, KKK, and Sariling Sikap. A mechanism shall be developed with the Minister of the Budget in order to assure the retention in the school of its proper share of the income from such activities and in order to allow participating faculty and staff members and students, to obtain promptly their fair share of the proceeds of such operations;

8.    A college shall meet the same accreditation and other standards required by the Ministry of Education, Culture and Sports for the upgrading of private colleges into universities before it aspires for legislative conversion to university status;

9.    Each school shall evaluate its finances, with the aims of rationalizing the proportion of national government budgetary contributions and of enjoying greater fiscal autonomy. In particular, the school shall formulate a program for increasing income from land grants, business concessions, alumni fund raising activities, philanthropic organizations, and other sources, aiming for a fiscal autonomy such that national government budgetary support does not exceed about sixty (60) percent of total costs. The Minister of the Budget shall also study the possibility of extending autonomy over expenditures of the school, within the constraints of position classification and compensation laws and observing reasonable ceilings on personal services expenditures as a percentage of the total expenditure of the school;

10.    State schools shall seek to allocate the maximum amounts of funds possible for student and faculty scholarships. These shall be supported by a program for the construction of student dormitories at the main campus of the school, so as to allow access to education to as many deserving students as possible without having to proliferate in the number of campuses;

11.    State universities and colleges shall concentrate on tertiary education and shall gradually reduce their secondary and elementary level programs to the minimum necessary to service any experimental education course programs and the education of faculty and staff children. There shall be no further expansion of secondary and elementary programs of state, universities and colleges, whether by increased enrolment is existing units or through absorption of presently non-affiliated or non-component high schools; and

12.    A University or College shall be adopted by the Board of Regents, containing the policies, programs, rules, regulations, and other related matters affecting the academic and administrative processes of the institution. In formulating a Code, the Board of Regents shall consider the experience of other institutions, particularly those of the University of the Philippines, Mindanao State University and other established schools. Efforts shall be taken through the Philippine Association of State Universities and Colleges (PASUC) to achieve consistency in the Code adopted by state universities and colleges of the same size and category.

Since 19.07.98.