In 1998, as Chairman of EDB, he decided to name publicly the holders of government scholarships who broke their bonds to shame them. This created a controversy generating public debates on whether those who received scholarship have a moral obligation to serve, or whether the scholarship is merely a contractual agreement which could be broken in return for the stated penalties. The debate culminated when MP Chng Hee Kok (庄熙国) questioned Yeo's decision. Yeo responded by calling for Chng to resign his seat in Parliament because of his view. This led to even more unhappiness at the audacity of a civil servant talking down to an elected Member of Parliament. Then Deputy Prime Minister, Lee Hsien Loong had to intervene in what was seen as a face-saving rebuke for both – that Philip Yeo was wrong to tell Chng Hee Kok to resign, but Chng had also been wrong in arguing that it was acceptable for scholars to break their bonds because they were merely legal contracts.