COVER SHEET

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(Company's Full Name)

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(Business Address: No. Street City ITown IProvince)

ARSENIO C. CABRERA, JR. I (61312) Islslll 3171111111Contact Person Company Telephone Number

~~Month Day

Fiscal Year

SEC FORM 17-C 1st Thursday of November

FORM TYPE Month DayAnnual Meeting

Secondary License Type, IfApplicable

I I I IDept. Requiring this Doc. Amended Articles Number/Section

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~ __ ~I ~I__ ~Total No. of Stocholders Domestic Foreign

To be accomplished by SEC Personnel concerned

11111111111 -File Number LCU

11111111111 -Document 1.0. Cashier

STAMPS

SEC FORM 17-C

SECURITIES AND EXCHANGE COMMISSIO

CURRENT REPORT UNDER SECTION 1OF THE SECURITIES REGULATION COD

AND RSA RULE 17.2(c) THEREUNDER

1. 21 January 2021Date of Report (Date of earliest event reported)

2. SEC Identification Number .... 0000113156 3. BIRTax Identification No ....000143457

4. STI Education Services Group, Inc.Exact name of issuer as specified in its charter

5. Philippines 6. ._I_--,-,-,,--,I (SECUseOnly)Province, country or other jurisdiction ofincorporation

7. STI Academic Center Ortigas-Cainta,Ortigas Avenue Extension, Cainta, RizalAddress of principal office

1900Postal Code

8. (632)8812-1784Issuer's telephone number, including area code

9. ------------------------------------------------------------------------------Former name or former address, if changed since last report

10. Securities Registered Pursuant to Section8 and 12 of the SRCor Sections4 and 8of the RSA

Title of EachClass Number of Shares ofCommonStockOutstanding and Amount

ofDebt Outstanding

Common StockFixed Rate Bonds

3,087,829,443PJ,OOO,OOO,OOO.OO

11. Indicate the item numbers reported herein: Item 9

Item 9. Other Events

Philippine Rating Services Corporation (PRS) submitted a report to theSecurities and Exchange Commission (SEC),with a copy to STI Education ServicesGroup, Inc. (STI ESG) stating that the rating given to the bonds issued by STI ESGhas been changed to PRS A plus from PRS Aa. The Outlook has likewise beenchanged from Stable to Negative.

PRS also stated in its report that obligations rated PRS A have favorableinvestment attributes and are considered as upper-medium grade obligations. It alsomentioned that although these obligations are somewhat more susceptible to theadverse effects of changes in economic conditions, the obligor's capacity to meet itsfinancial commitments on the obligation is still strong. Further, PRS likewise statedthat a Negative Outlook indicates that there is a potential for the present credit ratingto be downgraded in the next 12 months.

The PRS report also indicated that the assigned Issue Credit Rating took intoaccount the following factors:

• Relatively resilient demand for tertiary education, albeit with significantlyincreased competition brought about by the Universal Access to QualityTertiary Education Act

• Declining profitability due to lower enrollees and increasing expenses, largelyattributed to depreciation and interest expenses, with net income significantlyinfluenced by non-core items

• Increasing economic uncertainty and the adverse impact of the communityquarantine attributable to the COVID-19 pandemic on the company'sbusiness

The management of STI ESG, on its part, has recognized the effects of theUniversal Access to Quality Education Act and has sustained its initiatives toprovide a wide range of course offerings for its tertiary level. New programs areintroduced and existing ones are continuously developed and aligned with marketneeds and demands. Installment payment schemes are being offered for a lighterpayment plan. For SY2019-2020,there was actually an increase of 44% in STI ESG'snew college enrollees, that is, from 13,828 in SY2018-2019to 19,898 in SY 2019-2020.This resulted in a 6% increase in the number of total college students in SY2019-2020.

The increase in depreciation and interest expenses is largely due to thefacilities purchased and constructed by STI ESG in accordance with its strategy ofbringing the schools closer to the students and to provide adequate and sustainableschool facilities. Further, the facilities are designed to accommodate six levels oflearning, that is, Grades 11 and 12 and the four levels in the tertiary. In school year2021-2022,these six levels will be filled up.

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The COVID-19 pandemic has affected various industries and the educationsector is not spared. In the case of STI ESG, COVID-19 stopped our plans to make2020 a good year in terms of enrollment. Fortunately, though, it is prepared totransition into online learning. Since SY 2015-2016, STI ESG has been using thedigital approach in teaching through the use of its electronic Learning ManagementSystem (eLMS). With the restrictions imposed by COVID-19, STI ESG has re-tooledits eLMS to become a wholistic approach to online and onsite learning.

Further, STI ESG undertook a rationalization effort that encompassedresources and schools within the STI network. Management determined thatcontinuing the operations of some schools in the network was no longer viable dueto low enrolment turnout and/ or the high cost of rent. It thus made the difficultdecision of suspending or ceasing operations of some schools in order to streamlinethe delivery of the educational content more effectively. STI ESG has prepared itscampuses for the new normal and is continuing to improve its blended form ofeducation.

SIGNATURES

Pursuant to the requirements of the Securities Regulation Code, the ssuer hasduly caused this report to be signed on its behalf by the undersi d reunto dulyauthorized.

STI EDUCATIONSE S GROUP, INC.

21 January 2021Date

ARSENIOC.

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