ir , d:, 
J 
.
.
 . 
THIRTEENTH CONGRESS OF THE REPUBLI 
OF THE PHILIPPINE 
First Regular Session 
S. No. 
Introduced by Senator S. R. Osmeiia 111 
EXPLANATORY NOTE 
Republic Act No. 7202, otherwise known as the Sugar Restitution Law, 
states that it is “the policy of the Government to restitute the losses suffered by the 
sugar producers due to actions taken by government agencies in order to revive the 
economy in the sugar-producing areas of the country”. 
Section 2 of the same law provides that: “whatever amount recovered by the 
Government through the Presidential Commission on Good Government or any 
other agency or from any other source and whatever assets or lands that may be 
recovered or already recovered, which have been determined to have been stolen 
or illegally acquired from the sugar industry shall be used to compensate all sugar 
producers from Crop Year 1974-1 975 up to and including Crop Year 1984-1 985 on 
a pro-rata basis.” 
More than four years after its enactment in February 29, 1992, the PCGG has 
yet to turn over to the sugar producers the compensation prescribed by the law, 
despite the compromise agreement entered into by the PCGG and Mr. Roberto S. 
Benedicto. In the compromise agreement with the PCGG in Civil Case No. 0009, 
Mr. Benedicto ceded in favor of the Government certain assets, both Philippine and 
foreign, including his shareholdings, rights and participation in a ndmber‘ of 
companies. 
But this delay in the turnover of the Benedicto assets to the Sugar Restitution 
fund is not without logical basis. The PCGG maintains that it does not have the 
authority to determine which assets ceded by Mr. Benedicto are sugar-related since 
Section 2 of R.A. 7202 does not specify the person or agency which will do the 
determination. 
Section 2-r of the Implementing Rules and Regulations of R.A. 7202 
promulgated by the Bangko Sentral ng Pilipinas however states that : 
Sugar 
Restitution Fund shall refer to the ill-gotten wealth recovered by the Government 
through the PCGG or by any other agency or form any other source within the 
Philippines or abroad, and whatever assets or funds that may be recovered, or 


already recovered, which have been determined by PCGG or any other competent 
agency of the Government to have been stolen or illegally acquired from the sugar 
industry whether such recovery be the result of a judicial proceeding or by a 
compromise agreement .” 
While the above-stated provision of the IRR of the Sugar Restitution Law 
specifically delegates to the PCGG the authority to determine which of the 
Benedicto assets were illegally acquired from the sugar industry, the PCGG 
questions the validity of the provision on the grounds that the “BSP cannot authori.ze 
the PCGG to make the determination because the law is silent” and that “ No other 
agency outside the legislature can fill up the hiatus created by R.A. No. 7202 as the 
same will constitute an encroachment upon the powers of the legislative branch of 
the govern men t . ” 
The Department of Justice, in its Opinion No. 21, S. 1995, tends to support 
the PCGG through the following: 
“There is no law, administrative determination or court decision 
which expressly and categorically declares the assets in question to be 
ill-gotten from the sugar industry. On the contrary, the Supreme Court, 
in upholding the validity of the compromise agreement between 
Roberto S. Benedicto and PCGG explicitly declared that ownership of 
the assets was transferred to the Government not because PCGG 
‘won its cases in the courts and the true ownership 
or illegal 
acquisition has been definitely established. x x x Ownership has been 
transferred because of the compromise agreement.’ (Republic vs. 
Sandiganbayan, 226 SCRA 314)” 
In the same opinion, the DOJ goes on further to say that ‘ I  there is no extant 
law which designates” a body or agency to determine assets as illegally obtained 
from the sugar industry. The PCGG Charter (E.O. No. 1 and subsequent E.O.’s) 
and R.A. 7202 does not authorize the PCGG to make such determination. 
The DOJ, citing U.S.T. vs. Board of Tax Appeals, 93 Phil. 376; U.S. vs. 
Tupasi Molina, 29 Phil. 119, states that, “it is a settled rule that regulations 
promulgated by an administrative agency cannot amend or expand the provisions of 
the law or embrace matters not covered by the statute.” 
Opinion 21, S. 1995 goes on to say that, “it is likewise settled that an 
administrative agency, like the PCGG, has only such powers as are expressly 
granted to it by law and those that are necessarily implied in the exercise thereof 
(Republic vs. Court of Appeals, 200 SCRA 225, citing cases). The power to 
determine whether a particular asset recovered by the PCGG is ill-gotten or not has 
not been expressly granted to the PCGG, nor may such power be implied from its 
express powers.” 
It is the intention of this bill to facilitate the restitution of the sugar producers, 
as intended by Republic Act No. 7202, by vesting on the PCGG the authority to 
determine which of the Benedicto assets were illegally acquired from the sugar 
industry. 
*
.
 . 


The antecedent arguments and counter-arguments have contributed to the 
justifications for this bill, which should lay the issue at rest and expedite the 
implementation of the Sugar Restitution Law. 
In view of the foregoing, approval of this bill is earnestly requested. 
SEIRGIO OSMENA iii 
Senator 
'. . 
, 


THIRTEENTH CONGRESS OF THE REPUBLI 
First Regular Session 
)
'
 
1 
OF THE PHILIPPINE 
: ' ,  
8
-
 
* 
I 
i 
S. No. 
Introduced by Senator S. R. OsmeRa 111 
AN ACT 
AMENDING SECTION 2 OF REPUBLIC ACT NO. 7202, ENTITLED 'AN ACT 
AUTHORIZING THE RESTITUTION OF LOSSES SUFFERED BY . SUGAR 
PRODUCERS FROM CROP YEAR 1974-'l975 TO CROP YEAR 1984-1985 DUE 
TO THE ACTIONS OF GOVERNMENT-OWNED AND CONTROLLED AGENCIES' 
Be it enacfed by the Senate and House of Representatives of the Philippines 
in Congress assembled : 
I 
SECTION 1 . Section 2 of Republic Act No. 7202 is hereby amended to 
2 
read as follows: 
3 
" Section 2. Whatever amount OR ASSETS recovered by the 
4 
Government 
through 
the 
Presidential 
Commission 
on 
Good 
5 
Government (PCGG) or any other agency or from any other source 
6 
and whatever assets or lands that may be recovered, or already 
7 
recovered. which have be en determined B 
8 
OTHER COMPETENT AGENCY OF GOVERNMENT to have been 
9 
stolen or illegally acquired from the sugar industry shall be used to 
10 
compensate all sugar producers from Crop Year 1974-1975 up to and 
I 1  
12 
SECTION 2. Repealing Clause. - All laws, presidential decrees, executive 
including Crop Year 1984-1985 on a pro rata basis." 
13 
orders, rules and regulations or parts thereof which are inconsistent with this Act are 
14 
hereby repealed or modified accordingly. 


1 
SECTION 3. Effecfivify. 
- This Act shall take effect upon its approval. 
Approved,