. , 
SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
'stl'lZ!b 
t!!}fftft vf tli£ ?f'rrl'"t!lr~ 
'13 
JtJL -8 P 1 :15 
,~ I. • 
[ 
""""'j-
s.B.No·~94 
--------------------------~--------------~----------
Introduced by Senator FRANCIS G, ESCUDERO. 
EXPLANATORY NOTE 
This bill is an offshoot of the highly controversial, if not anomalous, National BroadbanJNetwork (NBN) 
project of the govermnent. . 
In the course of the inVestigation conducted by the Senate, it has been determined that the NBN project is 
to be funded through foreign borrowing or loan. Such being the case, legal issues have been raised as to whether 
or not the government complied with the requisites provided for by pertinent laws. 
One for instance is that if the NBN project is an Official Development Assistance (ODA) program, 
congressional approval is required as mandated by Section 4 of Republic Act No. 4860. 
Another is that if the NBN is not an ODA project compliance should still be had with Executive Order No. 459 
dated 25 November 1997. 
The govermnent apparently failed to meet the above statutory requirements. 
Equally important, nonetheless, is the way the govermnent has handled our country's debt management 
which undeniably resulted in an unprecedented and unreasonable growth. Estimates on our national debt indicate 
a rise from Php2.8 trillion by the end of 2001 to Php3.3 trillion by the end of 2002 - this translates to an appalling 
increase. of almost a trillion pesos a year. 
. 
. To put it in a practical manner, our debt increases by a million per minute or Php60 million an hour or 
Php 1.4 billion daily. Hence, debt servicing has been getting the highest budgetary allocation of 25% at the 
average, more 91' less, of our national budget since the 1980s. 
Consequently, with debt servicing, other sectors that require funding continuous to suffer and these 
include eduoiltion, health, science and technology, and other government programs on social progress and human 
development. 
This bill therefore seeks. not only to rectify the mistakes discovered in the NBN investigation but also to 
institutionalize an effective check and balance on the executive power to contract and guarantee loans. Such 
power if left unchecked and unbridled shall continue, as it has been, to be detrimental to the economic and social 
interest of our country given its limited resources. 
. 
It is for the above reasons, perhaps, that Section 20, ArtiCle VII of the Constitution is crafted in a manner 
that subject the above executive power, albeit foreign loans only, to "such limitations as may be provided by law." 
And certainly, for the same above reasons that Congress, as an independent .and a co-equal branch of 
govennnent, must effectively pursue and insist on its power and prerogative to approve, determine and allocate 
the national budget of the govermnent. 
In view of the foregoing, passage of this piece of legislation with dispatch is sincerely sought. 
. 
I 
.~ 
FRANCIS G. ESCUDERO 
... 
" 


SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B.No. 594 
Introduced by Senator FRANCIS G. ESCUDERO 
AN ACT 
i>"i'llli17 
I.~H!;t ,}f Hl(> ~Hn~hlf\t 
'13 
JUL -8 P 1 :15 
CONSTITUTING A CONGRESSIONAL OVERSIGHT .COMMITTEE ON 
DEBT MANAGEMENT to I,OOK INTO ALL FOREIGN AND DOMESTIC 
BORROWINGS NEGOTIATED, CONTRACTED OR GUARANTEED BY 
THE PRESIDENT ON BEHALF OF THE PHILIPPINES AS WELL AS THOSE 
BY THE GOVERNMENT OR GOVERNMENT OWNED AND 
CONTROLLED CORPORATIONS AND FOR OTHER PURPOSES 
Be . it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
. I 
SECTION I. Declaration of Policy. - In accordance with the constitutional prescription 
2 
on transparency and accountability, the State shall endeavor and pursue a debt management 
3 
system that shall be made available to public scrutiny and subject to strict adherence to existing 
4 
pertinent laws and rules and regulations. 
5 
6 
The State shall likewise ensure the most appropriate use of its limited resources bearing 
7 
in mind the constitutional mandate of giving priority to education, health, science and 
8 
technology, acceleration of social progress and promotion of total human liberation and 
9 
development. 
10 
II 
SEC. 2. The· Congressional Oversight. Committee. . - A Congressional Oversight 
12 
Committee on Debt Management, hereinafter referred to as the Committee, is hereby constituted 
13 
in accordance with the provisions of this Act. The Committee shall be composed of the 
14 
Chairpersons of the Committee on Ways and Means of the Senate and the I-louse of 
IS 
Eepresentatives and three (3) additional members from each chamber to be designated by the 
16 
Senate President and the House Speaker, respectively. One (1) of the said three (3) additional 
17 
members shall come from the minority members of each chamber. The Congressional Oversight 
18 
Committee constituted under Section 8, paragraph c) of Eepublic Act No. 8182 shall cease to 
19 
exist and is hereby replaced by the Committee. 
1 


1 
SEC. 3. Functions and Duties of the Conunittee. - The Conunittee shall among others, in 
2 
aid ofiegislation: 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
a) Monitor and ensure the proper implementation of all laws, implementing 
rules and regulations, and executive issuances relating to foreign and domestic 
borrowings s~ch as, but not limited to, Republic Act Nos. 4860 and 8182; I . 
b) Review all documents relating to contracts, guarantees and negotiations on 
foreign and domestic borrowings. 
I 
c) Review all subsisting contracts and guarantees on foreign and domestic 
. borrowings; and 
d) Determine that the power of the President of the Republic, the government 
and government owned and controlled corporation to negotiate, contract and 
guarantee foreign and domestic borrowings is reasonably and legally exercised. 
15 
. The phrase foreign and domestic borrowings shall refer to such borrowings or loans 
16 
. negotiated, contracted and/ or guaranteed by the President on behalf of the Philippines, the 
17 
. government or government owned and controlled corporations. 
18 
19 
SEC. 4. Requisite Authority of the Committee. - In furtherance of the above enumerated 
20 
functions and duties of the Committee, the Conunittee is empowered to require all govenunent 
21 
agencies concerned, including the Office of the President, the sUb1J1ission of all pertinent 
22 
information and data on foreign and domestic borrowings. Provided, however, that information 
23 
or data that are privileged shall be furnished the Conunittee only in Executive Session. 
24 
25 
SEC. 5. Separability Clause. - If any provision of this Act or the application of such 
26 
provision to any person or circumstance is declared invalid, the remainder of the Act or the 
27 
application of such provision to other persons or circumstances shall not be affected thereby. 
28 
29 
Sec. 6. Repealing Clause. - All laws, decrees and orders or parts thereof inconsistent 
30 
herewith are deemed repealed or modified accordingly. 
31 
32 
33 
34 
35 
36 
Sec. 7. Effectiv~ty. - This Act shall take effect after thirty (30) days f1llowing the 
completion of its publication in the Official Gazette or in two (2) national newspapers of general 
. 
I 
circulation. 
Approved, 
2