EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES }
Third Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriquez
House Bill No. 10221

EXPLANATORY NOTE

‘Section 27, Article Il of the 1987 Constitution provides that:
“The State shall maintain honesty and integrity in the public service and
take positive and effective measures against graft and corruption.”

The Philippine International Trading Corporation (PITC), was created by Presidential Decree
No, 252. It was established to trade with Socialist and Other Centrally Planned Economy
Countries (SOCPEC). In 1977, their mandate was expanded via PD 1071 to be one of the
drivers of Philippine trade worldwide.

The PITC was originally crafted as a mechanism to formalize trade with planned economies
through government-to-government procurement. However, as of today, only two (2) centrally
planned economies are in existence, which are Cuba and North Korea.

The passage of RA No. 9184 or the Government Procurement Reform Act undermines the
mandate of the PTIC through the inclusion of relevant provisions that seek to strengthen the
procurement service of national government agencies. Section 11, Article 5 of RA 9184 states
that “all procurement agencies shall establish a single Bids and Awards Committee (BAC) for
its procurement". Section 63 (c) further tasks the Government Procurement Policy Board
(GPPB) to strengthen the said BACs by ensuring "that Procuring Entities regularly conduct
procurement training programs and prepare a procurement operation manual for all offices
and agencies of government.”

There have also been issues and controversies surrounding the PITC, including their 2020
Annual Audit Report which showed that Php 11.02 billion worth of funds transferred from 2014
to 2020 by various source agencies remain unutiized as of December 2020. These transfers
were conducted in order to increase the utilization rate of government agencies, as funds
transferred to the PITC are considered obligated and disbursed already. There are also reports
of source agencies using the interests from money transferred to the PITC to generate
savings, which are used by the source agency to fund bonuses, among others.

Thus, this bill which seeks to abolish the PITC. The trade liberalization thrust of the global
economy has made the mandate of the PITC redundant and irrelevant in the current times
The passage of RA No. 9184 or the "Government Procurement Reform Act” has also
weakened the mandate of the PITC.

In view of the foregoing, the approval of this bill is earnestly sought.

RU . jUEZ


EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
Third Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriquez

House Bill No. 10221

AN ACT
ABOLISHING PHILIPPINE INTERNATIONAL TRADING CORPORATION (PITC), AND
FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Declaration of Policy. - The State shall maintain honesty and integrity in the
delivery of public service and take positive and effective measures against graft and
corruption. Thus, the State shall maintain accountability and responsibility among its public
officials and employees and shall take appropriate measures to prevent unlawful and
ineffectual acts and practices, therefore promoting efficiency and transparency in the conduct
of its business,

SEC 2. Abolition of the Philippine International Trading Corporation (PITC). — The
Philippine International Trading Corporation (PITC) is hereby abolished.

The Department of Trade and Industry (DT!) shall undertake the functions of PITC in
relation to facilitative trade-related services, responsive business solutions, and trade-related
government-to-government transaction, among others.

SEC 3. Separation and Retirement from Service. - Employees affected by the abolition of
the PITC shall receive separation benefits under the Government Reorganization Law and
other existing laws, rules, and regulations. Provide that, those who are qualified to retire and
receive retirement benefits under existing retirement laws shall be allowed to retire under
existing laws, rules, and regulations.

SEC 4. Reversion of Funds. - In coordination with the concerned Departments and
Agencies, the PITC shall revert all prior year’s unutilized advances to the National Treasury.
The current year’s advances and all other funds held in trust by the PITC shall be returned to
the concerned Departments and Agencies.

SEC 5. Separability Clause. - If any provision or part of this Act is held invalid or
unconstitutional, the remaining parts or provisions not affected shall remain in full force and
effect.

SEC 6. Repealing Clause. ~ All laws, executive orders, presidential decrees or issuances,
letter of instruction, administrative orders, rules, and regulations as well as local ordinances
contrary to or inconsistent with the provisions of this Act are hereby repealed, amended, or
modified accordingly.

SEC 7. Effectivity Clause. - This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in a newspaper of general circulation.

Approved,