FOURTEENTH CONGRESS 
OF THE PHILIPPINES 
First Regular Session 
OF THE REPUBLIC) 
1 
SENATE 
s. NO. 1 4  
I/ 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
To achieve macro-economic stability, there is a need to provide a framework for 
stronger financial oversight of Government-Owned or Controlled Corporations, Government 
Financial Institutions, state-owned universities, and other agencies in the public sector. 
Article XII, Section 16 of the Constitution provides that Government-Owned or 
Controlled Corporations may be created or established by special charters in the interest of 
the common good and subject to the test of economic and financial viability. 
Despite the explicit mandate under the Constitution for these corporations to be 
subject to the test of economic and financial viability, Government-Owned or Controlled 
Corporations account for an inordinately high proportion of the country’s external debt, 
public sector deficits, and total credits. 
There is thus a need for Congress to review, monitor, and evaluate the overall 
performance of these Government-Owned or Controlled Corporations to ascertain whether 
or not these corporations have been fulfilling their mandates under their respective charters 
and are economically and financially viable. Congress must ensure the accountability of 
these entities through effective monitoring and oversight for the benefit of the people. 
This bill, which seeks to do just that, is the product of the latest deliberations in the 
Senate Committee on Government Corporations and Public Enterprises. It was reported on 
second reading for consideration of the Senate in the 13th Congress, but failed to pass due 
to lack of time. It is with great hope that this time this bill will be passed into law to ensure 
the accountability of Government-Owned or Controlled Corporations. e 
ICHARD J. GORDON 
J 
Senator? 


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FOURTEENTH CONGRESS OF 
OF THE PHILIPPINES 
Firsf Regular Session 
THE 
- 
REPUBLIC) , ; 
SENATE 
S. No. Ik4 
Introduced by Senator Richard J. Gordon 
AN ACT TO ENSURE THE ACCOUNTABILITY OF GOVERNMENT-OWNED OR 
CONTROLLED CORPORATIONS, GOVERNMENT FINANCIAL INSTITUTIONS, STATE- 
OWNED UNIVERSITIES, AND OTHER SIMILAR AGENCIES IN THE PUBLIC SECTOR 
BY REQUIRING THESE ENTITIES TO BE EVALUATED AND SUBJECTED TO THE 
TEST OF ECONOMIC AND FINANCIAL VIABILITY, CREATING A CONGRESSIONAL 
OVERSIGHT COMMITTEE THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. - This Act shall be known as the "Government-Owned or 
Controlled Corporations (GOCCs) Accountability Act of 2007." 
Sec. 2. Policy. - It is the policy of the State to create or establish Government- 
Owned or Controlled Corporations only in the interest of the common good and subject to 
the test of economic and financial viability. 
Every Government-Owned or Controlled Corporation must be free from fraud, abuse, 
and wastage, and must be made accountable through effective monitoring and oversight by 
Congress for the benefit of the people. 
All government corporations shall clearly define the parameters andlor limits of their 
financial and operational capabilities consistent with their established mandates and 
charters. 
Sec. 3. Government-Owned or Controlled Corporation Defined. - For purposes 
of this Act, "Government-Owned or Controlled Corporation" or "GOCC refers to a stock or 
non-stock corporation, performing governmental or proprietary functions directly chartered 
by special law or, if otherwise formed, is owned or controlled by the Government directly or 
indirectly through a parent or subsidiary corporation. It includes Government Financial 
Institutions, State-Owned Universities, and other similar agencies in the public sector. 
Sec. 4. Asset and Liability Management Guidelines. - The definition of the limits of 
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the financial and operational capabilities of each GOCC shall be embodied in their 


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respective asset and liability management guidelines which are universally accepted 
management tools whereby financial and operational activities are automatically confined 
within clearly defined limits. 
Foremost among the financial guidelines are the limits on borrowing, lending and 
Foremost among the operational guidelines are the recognition and acceptance of the 
limits of in-house talents and capabilities thereby inhibiting said corporation from engaging 
in activities outside its defined capabilities or in cases where it is necessary to engage in 
such transactions or activities, the mandatory requirement to tap outside talents preferably 
from other government agencies or institutions. 
guaranteeing any form of financial transaction, risk and/or commitment. 
Sec. 5. Use of Asset and Liakility Management Guidelines. - The Asset and 
Liability Management Guidelines shall be used primarily as a tool to anticipate, obviate 
prevent andlor minimize certain eventualities that may adversely affect the financial 
condition of individual corporations. As a standard requirement, however, it is seen as a 
vital instrument to stabilize and solidify the country’s overall financial condition. 
In cases where a GOCC is under the control or supervision of a department of the 
National Government, adherence to these asset and liability guidelines shall be the 
responsibility of the department under which these corporations belong. The department 
covered shall prescribe their respective policies and procedures including penalties for their 
violations, in order to ensure that such guidelines are strictly complied with. 
Sec. 6. Central Monitoring and Control by the Depatfment of Finance. - The 
central monitoring and control of the overall financial condition of GOCCs shall be made by 
the Department of Finance (DOF) which shall consolidate all related figures into an annual 
report. Within thirty (30) days from the end of each calendar year, the DOF shall submit this 
annual report to the Office of the President, copy furnished the Senate and the House of 
Representatives. 
Sec. 7. Submission of Reporfs. - Every GOCC is required to submit quarterly and 
consolidated annual reports to Congress. 
Each quarterly report, to be submitted within thirty (30) days from the end of each 
calendar quarter, shall be in the form of an executive summary concerning the finances and 
operations of the GOCC and shall indicate any achievement and major projects. It shall 
include all financial reports and minutes of directors’ and shareholders’ meetings for the 
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subject quarter, 


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(1) Travel and hospitality expenses for directors and officers; and 
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(2) Contracts for goods and services over one million pesos (PhP1,000,000). 
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Sec. 9. Creation of a Congressional Oversight Committee for GOCCs. - There is 
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hereby created a Congressional Oversight Committee for GOCCs to be composed of six (6) 
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members, with three (3) representatives each from the Senate and the House of 
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Representatives, and co-chaired by the Chairpersons of the Senate Committee on 
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Government Corporations and Public Enterprises and the House Committee on 
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Government Enterprises and Privatization. 
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powers and functions: 
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Each annual report, to be submitted within sixty (60) days from the end of each 
(1) A consolidated executive summary; 
(2) A list of directors and officers; 
(3) A summary of the remuneration paid to directors and officers over the last year; 
(4) The Commission on Audit report for the last year; and 
(5) The audited financial statement for the last year. 
Sec. 8. Mandatory Publicafion. - Every GOCC is required to disclose and publish 
in at least one (1) newspaper of general circulation within thirty (30) days from the end of 
each calendar or fiscal year as may be applicable the following information: 
calendar or fiscal year as may be applicable, shall include the following: 
The Congressional Oversight Committee for GOCCs shall receive and evaluate the 
reports submitted by the GOCCs to Congress. It shall be the principal legislative monitoring 
arm and policy recommending body for all GOCCs. 
Sec. 10. Powers and Functions of the Congressional Oversight Committee for 
GOCCs. - The Congressional Oversight Committee for GOCCs shall have the following 
(1) Prescribe and adopt guidelines that will govern its work; 
(2) Hold hearings, receive testimonies and reports pertinent to its specified concerns; 
(3) Secure from any department, bureau, office, agency, or instrumentality of the 
Government such assistance as may be needed, including technical information 
preparation and production of reports and submission of recommendations or 
plans as it may require; 
(4) Summon by subpoena ad fesfificandum any public or private citizen to testify 
before it, or require by subpoena duces tecum to produce before it such records, 


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reports or other documents as may be necessary in the performance of its 
functions; 
(5) Use resource persons from the public and private sectors as may be needed; 
(6) Approve the budget for the Congressional Oversight Committee for GOCCs and 
(7) Organize its staff and hire and appoint such employees and personnel, whether 
all disbursements therefrom, including compensation of all personnel; 
temporary or contractual, subject to applicable laws; and 
(8) Exercise all other powers necessary to attain its purposes. 
Sec. 11. Conduct of Review. - The Congressional Oversight Committee for 
GOCCs shall review the quarterly and annual reports submitted by the GOCCs to 
Congress. 
The Congressional Oversight Committee for GOCCs may require the submission of 
additional pertinent corporate and commercial documents and/or the revelation of all 
relevant data as may be deemed necessary for the conduct of such review. Failure to 
submit any of the required documents or to reveal any required data shall subject the 
directors and officers of the concerned GOCC to appropriate administrative, civil, and 
criminal liability. 
The Congressional Oversight Committee for GOCCs shall review the reports, 
documents, and data submitted by each GOCC and shall be authorized to conduct 
investigations in furtherance of such review, The scope of review shall include the 
following: 
(1) Accomplishment of the set goals as may be set forth in their respective charters 
or otherwise; 
(2) Allocation of resources of each GOCC; 
(3) Instances of duplication of functions; 
(4) Financial and social investment rate of returns and productivity; and 
(5) Interest of the common good. 
Sec. 12. Submission of Recommendations. - The Congressional Oversight 
Committee on GOCCs shall submit its recommendations to the Senate and the House of 
Representatives, copy furnished to the Office of the President, for appropriate action. The 
recommendations may include the following: 
(1) Continued existence of and corresponding budgetary allocation for each GOCC; 


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(2) Termination of the existence of or budget allocation for the GOCC by either 
(3) Merger or consolidation of GOCCs performing similar or overlapping functions; 
(4) Restructure of the GOCCs in the Executive branch; 
(5) Adjustment of compensation packages for directors, officers, and employees; 
(6) Filing of appropriate civil, criminal, or administrative charges; 
(7) Contract review or renegotiation as may be appropriate; and 
(8) Other recommendations as may be deemed appropriate. 
Sec. 13. Repealing Clause. - All laws, decrees, orders, rules and regulations or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
privatization or dissolution; 
Sec. 14. Separability Clause. - If any portion or provision of this Act is declared 
unconstitutional, the remainder of this Act or any provisions not affected thereby shall 
remain in force and effect. 
Sec. 15. Effectivity. - This Act shall take effect after fifteen (15) days following the 
completion of its publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines. 
Approved,