of $e Philippines ' 
Second Regular Session 
) 
9 
FEB -3 P; ::!5 
Introduced by Senator Aquilino Q. Pimentel, Jr. 
EXPLANATORY NOTE 
The World Bank recently banned seven companies -- three 
from the Philippines and four from China -- from bidding on its 
projects due to corruption. 
The blacklisted firms were found by the World Bank to have 
engaged in "collusive practices" during the bidding of projects 
financed by the former. 
The corrupt incidents should not be allowed to recur in any 
manner or form in this country so that we do not perpetuate 
corruption in the country. 
This bill prohibits corporations, constructions firms, companies, 
partnerships, associations, legal entities or individuals which or who 
are officially banned by international funding agencies like the World 
Bank, for engaging in bribery, corruption or rigging of public biddings, 
or any act that taints those transactions from participating in any 
public bidding for construction contracts or agreements of any kind 
with the government. 
The bill also provides that existing contracts of private 
corporations, 
construction 
firms, 
companies, 
partnerships, 
associations, legal entities or individuals entered into with the 
government that are officially declared by international funding 
agencies to be impaired by anomalies, irregularities or corruption of 
any kind shall be rescinded forthwith by the government. 
This legislative measure provides that in case of violations of 
this Act committed by corporations, construction firms, companies, 
partnerships, associations or legal entities the president, chief 
executive officer, manager, administrator, directors, or any other 
officer in charge of the management and administration of the 
business shall suffer the penalty of imprisonment of not less than six 
(6) years and one (1) day, but, not more than ten ( I O )  years and a 
fine of not less than One Million (Pl,OOO,OOO.OO) Pesos at the 


of the Court. Likewise, they shall be held civilly and criminally liable 
under other applicable laws. 
In case of government officials violating the provisions of this 
Act, they shall suffer the penalty of imprisonment of not less than six 
(6) years and one (1) day, but not more than twelve (12) years and a 
fine of not less than Five Hundred Thousand (P500,OOO.OO) Pesos 
nor more than Two Million (P2,000,000.00) Pesos at the discretion of 
the Court. In addition, the public officer involved shall also suffer the 
penalty of perpetual absolute disqualification from public office. This 
is without prejudice to other civil, criminal and administrative cases 
that may be filed against the public officers concerned. 
The Government must be vigilant in defending the integrity and 
reliability of public transactions, and should hold wrongdoers 
accountable under the law. 
In view thereof, the immediate approval of this bill is earnestly 
sought. 
AQUILINO Q. PIM~NTEL, JR. 


14'h Congress of the Republic 
) 
of the Philippines 
) 
Second Regular Session 
1 
Introduced by Senator Aquilino Q. Pimentel, Jr. 
AN ACT PROHIBITING CORPORATIONS, CONSTRUCTION 
COMPANIES, FIRMS, PARTNERSHIPS, LEGAL ENTITIES OR 
INDIVIDUALS WHICH OR WHO ARE BANNED BY 
INTERNATIONAL FUNDING AGENCIES LIKE THE WORLD BANK, 
FROM PARTICIPATING IN ANY PUBLIC BIDDING OR 
CONSTRUCTION CONTRACT OR AGREEMENT OF ANY KIND 
WITH THE GOVERNMENT, AND PROVIDING PENALTIES IN 
VIOLATION THEREOF 
Be it enacted by the Senate and House of Representatives of 
the Philippines in Congress assembled: 
SECTION 1. Statement of Policy. It is the policy of the State to 
maintain integrity and honesty in the public service and institute 
appropriate measures to curb graft and corruption. The principle of 
transparency and accountability in government service, shall, at all 
times be observed. 
SECTION 2. (A) Prohibition. Private corporations, construction 
companies, firms, partnerships, associations, legal entities or persons 
which or who are banned by international funding agencies like the 
World Bank, for engaging in bribery, corruption or rigging of public 
biddings, or any act that corrupts transactions with the government 
are prohibited from participating in any public bidding or from being 
awarded construction contracts or any other agreement in any 
manner or form by government agencies local or national. 
(B) The prohibition defined above shall continue to be 
applicable notwithstanding any change in the names of the private 
corporations, 
construction 
firms, 
companies, 
partnerships, 
associations, legal entities or persons or any alteration in the 
membership in their boards of directors. 
The president, chief executive officer, manager, administrative 
officer, directors, or any other officer who were involved in the 
proscribed acts either in their personal capacity or as officer(s) of the 
corporations, 
construction 
firms, 
companies, 
partnerships, 


associations or legal entities as the persons-in-charge of the 
management and administration of the business or businesses 
concerned shall likewise be banned as provided under the first 
paragraph of this section. 
(C) The prohibition on the persons or individuals mentioned in 
this section shall likewise apply to them personally and to the 
corporations, 
construction 
companies, 
firms, 
partnerships, 
associations, legal entities or persons in which they are stock or 
share holders, counsel, consultants or investors, officers or 
employees in any capacity. The prohibition also applies where the 
individual spouses, children or relatives by consanguinity or affinity of 
the persons or individuals mentioned in the preceding sentence up to 
the third civil degree are connected in any of the capacities above 
mentioned 
with 
the 
aforementioned 
banned 
corporations, 
construction companies, firms, partnerships, associations, legal 
entities or persons. 
SECTION 3. 
Rescission of Contract. Contracts of private 
corporations, 
construction 
firms, 
companies, 
partnerships, 
associations, legal entities or persons entered into with the 
government which are officially declared by international funding 
agencies to be impaired by acts of bribery, rigging of bids or any 
similar corrupt acts or irregularities shall be rescinded by the 
government within one (1) month from such declaration. Thereafter, 
the Office of the Solicitor General shall initiate within ten (IO) days 
from the rescission thereof, proper cases for the recovery of funds 
previously paid to the offending corporations, construction firms, 
companies, partnerships, legal entities or persons and file the 
appropriate criminal and civil cases against them. 
SECTION 4. Penalfy Clause. In case of violations of this Act 
committed 
by 
corporations, 
construction 
firms, 
companies, 
partnerships, associations, or legal entities, the president, chief 
executive officer, manager, administrator, directors of the board, any 
other officer in charge of the management and administration of, or 
the individual running the business or businesses concerned shall 
suffer the penalty of imprisonment of not less than six (6) years and 
one (I) 
day to ten years and a fine of not less than One Million 
(PI ,000,000.00) Pesos or more than Five Million (P5,000,000.00) 
Pesos. Likewise, the person concerned shall be held civilly and 
criminally liable under other applicable laws. 
In the case of government officials violating the provisions of 
this Act, they shall suffer the penalty of imprisonment of not less than 
six (6) years and one (1) day, but not more than twelve (12) years 
and a fine of not less than Five Hundred Thousand (P500,000.00) 


Pesos nor more than Two Million (P2,000,000.00) Pesos. In addition, 
the public officer involved shall also suffer the penalty of perpetual 
absolute disqualification from public office. 
The penalties above 
mentioned shall be without prejudice to other civil, criminal and 
administrative cases that may be filed against them. 
SECTION 5. lmplemenfing Rules and Regulations. - Within 
sixty (60) days from the approval of this bill, the National Economic 
Development Authority (NEDA) shall issue such guidelines, orders or 
rules and regulations as may be necessary to facilitate the 
implementation of the provisions of this Act. 
SECTION 6. Repealing Clause. 
All laws, orders, decrees, 
proclamations, rules and regulations or parts thereof inconsistent with 
the provisions of this Act are hereby repealed or modified 
accordingly. 
SECTION 7. Separability Clause. If, for any reason, any section 
or provision of this Act is held unconstitutional or invalid, the other 
sections or provisions hereof shall not be affected and thereby remain 
in full force and effect. 
SECTION 8. Efecfivity Clause. This Act shall take effect fifteen 
(15) days after its complete publication in at least two (2) newspapers 
of general circulation. 
Approved,