HOUSE: OF RE
RECEIVED
DATE: 2 Ay ontg

TINE: ro
By: LY

RECISTRATION UNIT
BILLS AND iNDEX SERVICE

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Seventeenth Congress
First Regular Session

HOUSE BILL NO. 985

Introduced by Honorable Joaquin M. eco, Jr.

EXPLANATORY NOTE

The continuing saga involving PDAF accountabilities has brought
to the fore widespread abuses and malpractices committed by some Non-
Governmental Organizations (NGOs). While the 1987 Philippine
Constitution has laudably enshrined peoples’ organizations (POs),
cooperatives and NGOs as the fleshing-out of the “people power” legacy
of the Filipino nation, it was not long before a number of these
organizations were corrupted by predatory individuals in collusion with
certain self-serving politicians. Registered as non-stock, non-profit
organizations, these fraudulent organizations have put honest-to-goodness
foundations and NGOs as a whole into disrepute.

Questions then have been asked ~ why didn’t the Securities and
Exchange Commission (SEC), the government’s corporate watchdog,
alert the general public as to the existence of these dubious organizations?
Did the SEC fail in its mandate of protecting the people by its inability to
raise “red flags” concerning unethical business practices of these entities?
The SEC excuses itself from responsibility by claiming that at present
there is no law that specifically mandates the Commission to monitor
foundations, NGOs, etc. except for some provisions of the Terrorist
Financing Prevention and Suppression Act

This bill aims to address this deficiency in our laws by empowering
the SEC to monitor charitable organizations, foundations, and NGOs
with the end in view of protecting the general public from unscrupulous
practices.

There is also a need to remedy the reported acute lack of resources
and personnel on the part of the SEC. With only eight (8) processors
tasked to do the job, the Commission could not possibly check the


activities of 10,000 active foundations out of a total 21,000 registered
foundations. The current SEC practice of performing random
examinations of around six to 10 percent of the active foundations in a
year is not enough to cleanse the slate of illegitimate organizations. It is
also deemed necessary to equip the Commission with sufficient
information technology to, among others, trigger alerts regarding
irregular activities of these organizations from the moment they file their
applications for registration with the Commission.

In view of all the foregoing considerations, the carly approval of
this bill is eamestly requested.

‘cond District of Laguna


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Seventeenth Congress
First Regular Session

HOUSE BILL NO.__ 985

Introduced by Honorable Joaquin M. Chipeco, Jr.

AN ACT
GRANTING THE SECURITIES AND EXCHANGE COMMISSION
THE AUTHORITY TO MONITOR AND INVESTIGATE NON-
GOVERNMENTAL ORGANIZATIONS, FOUNDATIONS, AND
SIMILAR INSTITUTIONS

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

SECTION 1. Authority to Monitor and Investigate Non-
Governmental Organizations, Foundations and Similar Organizations. —
The Securities and Exchange Commission (SEC) may, either upon its
own initiative or upon the sworn application of any person or
organization, investigate the acts and practices of any non-governmental
organization (NGO), foundation, and similar organizations when there
exists probable cause to believe that such organizations are committing or
attempting or conspiring to commit, or participating in or facilitating an
act in violation of existing laws, rules and regulations. For this purpose,
the SEC is empowered to summon witnesses, issue subpoena duces
tecum, administer oaths, and take testimony or evidence relevant to the
investigation,

The SEC may enlist the assistance of any branch, department,

bureau, office, agency or instrumentality of the government, including


government-owned or controlled corporations, in undertaking its
monitoring and investigative functions, which may include the use of its
personnel, facilities and resources.

The SEC shall furnish the appropriate law enforcement agencies
with the official results of its investigations.

In the exercise of its investigatory powers, the SEC shall ensure
that its monitoring activities shall cover all or substantially all active
NGOs, foundations and similar organizations.

SEC. 2. Mandate to Upgrade Personnel and Equipment, — The
SEC shall conduct a periodic review of its budgetary requirements, with
the end in view of upgrading its personal services and institutionalizing
computer-assisted monitoring and review of activities of all active NGOs,
foundations and similar institutions. The Commission shall submit this
budget proposal for immediate consideration in the next budget cycle.

SEC. 3. Appropriations. - The amount necessary for the
implementation of this Act shall be included in the annual General
Appropriations Act.

SEC. 4. Effectivity. - This Act shall take effect fifteen (15)
days after its publication in the Official Gazette or in a newspaper of
general circulation.

Approved,