Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
20TH CONGRESS 
First Regular Session 
House Bill No. 1418 
Introduced by: REP.  JOEL R. CHUA 
Explanatory Note 
This Bill seeks to regulate Special Disbursing Officers of the Government, and impose 
appropriate penalties for misuse and misappropriation of funds. During the 19th Congress, a similar 
Bill was filed by this Representation as a product of the hearings conducted by the Committee on 
Good Government and Public Accountability. Unfortunately, due to lack of material time, the said 
measure remained in the House Committee level.  
This Bill is the same as what was submitted during the 19th Congress. As such, my 
explanation stated in the original is herein reiterated: 
Special Disbursing Officers (SDOs) are appointed and are not initially accountable 
officers. Appointed by the Head of Agency (HoA), SDOs are usually selected based on trust and 
confidence. SDOs are then empowered to disburse funds through cash advances (CAs). While 
there are guidelines for cash advances provided in Commission on Audit (COA) Circular No. 97-
002 for regular fund and COA-DILG-DBM-GCG-DND Joint Circular No. 2015-01 on 
confidential/intelligence fund, there are gaps in the guidelines. 
Without a law to buttress protection of the taxpayer money, these guidelines made it 
susceptible for HoAs and SDOs to abuse fund disbursement by the millions and billions without 
proper liquidation with impunity. These abuses committed by SDOs and HoAs were evident in the 
course of the hearings of the Committee on Good Government and Public Accountability during 
the 19th Congress.  
While there is a necessity for confidential and intelligence funds for the effective 
implementation of law enforcement mandates, it is high time that standards be put in place to truly 
hold these SDOs accountable.  
In view of the foregoing, the passage of this bill is earnestly sought. 
REP. JOEL R. CHUA 
3rd District of Manila 
July 7, 2025
11:33 am


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
20TH CONGRESS 
First Regular Session 
House Bill No. 1418 
Introduced by: REP.  JOEL R. CHUA 
AN ACT 
REGULATING SPECIAL DISBURSING OFFICERS AND IMPOSING PENALTIES FOR 
MISUSE AND MISAPPROPRIATION OF FUNDS 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
Section 1. Short Title. - This Act shall be known as the "Special Disbursing Officers 
Accountability Act". 
Section 2. Declaration of State Policies. - The state recognizes the need for the allocation 
and use of confidential/intelligence funds in certain government agencies with mandates that are 
directly related to national security, law enforcement, and intelligence operations, and other related 
critical functions requiring discretion, as well as use of regular funds in government operations 
through cash advances of special disbursing officers. It is the policy of the state that the use of 
such funds must be subject to stringent oversight, accountability, and transparency to ensure that 
they are not misused, misappropriated, or diverted for unauthorized purposes. Further, it is the 
policy of the state to prevent intentional and negligent dissipation of funds disbursed to special 
disbursing officers appointed by and acting under the direction of Heads of Agencies. 
Section 3. Scope. – This Act covers all special disbursing officers, handling both egular 
and confidential/intelligence funds, as defined in this bill. 
Section 4. Special Disbursing Officer. - The Special Disbursing Officer (SDO) refers to 
the Head of Agency (HoA) or a regular employee designated as such by the HoA, to be in-charge 
of making disbursement of the amount received. The SDO shall be accountable to the amount 
received for disbursement. 
Section 5. Qualifications of an SDO. - The SDO, designated as such by the HoA, shall be 
a permanent official or employee of the agency of at least SG 24, possess an educational 


background related to accounting, auditing or finance, with an approved fidelity bond equivalent 
to the SDO's accountability. 
Section 6. Limit on Accountability. – The SDO shall have an approved fidelity bond in 
an amount equivalent to their cash accountability and whose net worth can cover at least fifty per 
centum (50%) to one hundred per centum (100%) of their cash accountability. 
The SDO shall comply with the rules and regulations on the entitlement, release, use, 
reporting and audit of regular and confidential/intelligence funds, provided the same are not 
contrary to the provisions of this Act. 
Section 7. Non-delegability. – The SDO designated as such by the HoA shall not make 
further delegation of disbursing the funds to which the SDO is accountable. 
The funds disbursed to the SDO must be liquidated by the same SDO accountable therefor. 
The SDO shall ensure proper liquidation of the funds and that the purpose for which the fund was 
originally intended had been attained. 
In the case of confidential/intelligence funds, the SDO shall ensure and certify that the 
funds have been used in relation to the mandate of the agency directly related to national security, 
peace and order, or intelligence gathering for the effective implementation of its law enforcement 
mandate. 
Activities related to national security and peace and order includes purchase of information 
necessary for the formulation and implementation of program, activities and projects relevant to 
the national security and peace and order, payment of rewards, aid and/or capability development 
for personnel of law enforcement agencies, and volunteers/partners and other activities, crime 
prevention and law enforcement activities, and programs for anti-illegal drug, illegal gambling, 
counter-insurgency and/or counter-terrorism, illegal logging, illegal mining, illegal fishing, 
smuggling and human trafficking. 
Section 8. Prima facie evidence of misappropriation. - There shall be prima 
facie evidence of misuse and misappropriation of the funds if:  
(i) 
There is disbursement of funds allocated to a government agency, unit or 
instrumentality the mandate of which is not directly related to national security or 
peace and order; 
 
(ii) 
The SDO fails to fully liquidate the funds at the end of each year; 
 
(iii) 
The SDO disburses the funds to another person who shall make further 
disbursement of funds; 
 


(iv) 
There is disbursement of funds for activities not directly related to national security, 
peace and order, or intelligence gathering for effective implementation of its law 
enforcement mandate; or 
 
(v) 
Failure to personally comply with the documentary requirements of liquidation. 
Section 9. Liability of the SDO. – The SDO and the HoA shall be jointly and severally 
liable in case of failure to render accounts, misappropriation, or misuse of the funds whether 
through negligence or intentionally. 
Section 10. Penalties. – Without prejudice to the filing of criminal, civil and administrative 
cases, the penalty of perpetual disqualification from office shall be imposed upon the SDO for 
violation of any of the provisions of this act, including loss of benefits. 
Section 11. Prescription of Crimes. The offenses punishable under this Act shall 
prescribe in twenty (20) years. However, the right of the State to recover properties unlawfully 
misappropriated by the SDO and HoA shall not be barred by prescription, laches, or estoppel. 
Section 12. Implementing rules and regulations. – The Commission on Audit, Bureau 
of Treasury, Department of Interior and Local Government, Governance Commission for 
Government-owned or -controlled Corporations, Department of Budget and Management, and the 
Department of National Defense shall review and revise their existing circulars and joint circulars 
in accordance with this Act and shall produce Implementing Rules and Regulations within 90 
calendar days from publication of this Act. 
Section 13. Separability of Provisions. – If any provisions of this Act or the application 
thereof to any person or circumstance is held invalid, the remaining provisions of this Act and the 
application of such provisions to other persons or circumstances shall not be affected thereby. 
Section 14. Repealing Clause. – All laws, decrees, orders, rules, and regulations 
inconsistent with the provisions of this Act are hereby repealed or modified accordingly. 
Section 15. Effectivity. – This Act shall take effect fifteen (15) days after its publication 
in the Official Gazette or in at least two (2) newspapers of general circulation. 
Approved,