REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No, _1656

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN III

EXPLANATORY NOTE

Proclamation No. 50, issued on 08 December 1986, launched a program for the disposition of
non-performing assets of government financial institutions and government corporations that
have been found unnecessary and inappropriate for the public sector to maintain, It created
the Committee on Privatization (COP) and the Asset Privatization Trust (APT). These were
replaced, however, by the Privatization Council (PrC) and the Privatization and Management
Office (PMO) by virtue of Executive Order No. 323 issued on 06 December 2001
Considering that there are still a number of government assets to be subsequently divested to
the private sector, a specialized corporate body should therefore be organized.

This bill seeks to create the Government Asset Management Authority (GAMA), which shall
pursue a coordinated and efficient program for the disposition and liquidation of non-relevant
and non-performing government assets, including surrendered assets of the Presidential
Commission on Good Government (PCGG). Consequently, it proposes to abolish the PC,
PMO and the Board of Liquidators, and their respective properties, assets and liabilities,
fund, and personnel immediately transferred to the GAMA.

The GAMA shall remit to the National Treasury any and all proceeds from the sale and
disposition of government assets, in which 60% shall go to the special account of the
Agrarian Reform Fund and 40% to the General Fund.

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

Representati

Magdalo Para $e Pilipino Party-List


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

, 1656
House Bill No.

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN II

AN ACT
CREATING THE GOVERNMENT ASSET MANAGEMENT AUTHORITY,
DEFINING ITS POWERS AND FUNCTIONS, APPROPRIATING FUNDS
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 Asset
Management Act."

SEC. 2. Declaration of Policy. - It is hereby declared policy of the State to promote
an orderly, coordinated, and efficient program for the prompt disposition and liquidation of
non-relevant and non-performing assets of government agencies and government owned or
controlled corporations, including surrendered assets and idle properties which have been
found unnecessary or inappropriate for the government sector to maintain.

SEC. 3. Definition of Terms. - As used in this Act, the following terms shall mean:

A) “Disposition" which shall also be known as "Privatization," refers to the transfer
of government corporations, activities, or assets of government or its agencies to
private ownership. It could also include sale of shares of stock, sale of physical
assets, leasing, concession, joint venture schemes, management or maintenance
contracts, or securitization

B) "Assets" refer to: (1) receivables and other obligations due to the Government or
its agencies under credit, lease, indemnity, and other agreements together with all
collateral security and other rights (including but not limited to rights in relations
to shares of stock in corporation such as voting rights as well as right to appoint
directors of a corporation or otherwise engage in the management thereof granted
to the Government or its agencies by contract or operation of law to secure or
enforce the right of the payment of such obligation; (2) real and personal property
of any kind owned or held by the Government, including shares of stock in
corporation, obtained by the Government or its agencies, whether directly or
indirectly, through foreclosure or other means, in settlement of such obligations
and surrendered assets within the purview of Executive Order Nos. | and 2, series
of 1986; (3) shares of stocks and other investments held by the Government or its


agencies; (4) government corporations whether as parent or subsidiary
corporations; and (5) such other items as may be identified by law.

C) "Surrendered Assets" refer to any asset, property, business enterprise, or material
possession of persons ceded to the National Government by virtue of compromise
agreements entered into by the Presidential Commission on Good Government
(PCGG) pursuant to Executive Order Nos. 1 and 2, series of 1986. It shall also
include such similar assets that may be surrendered to the National Government in
the future.

D) "Idle Properties" refer to all real properties such as land, buildings, and other
improvements located in the Philippines and abroad owned by the National
Government through its departments, bureaus, offices, or agencies which have not
been substantially developed, improved, or cultivated for a period of more than
five (5) years as of the effectivity of this Act or thereafter.

E) "Board" refers to the Governing Board of the Government Asset Management
Authority constituted under this Act.

F) "Government-owned or Controlled Corporation (GOCC)" refers to a corporation
which is created by special law or incorporated and organized under the
Corporation Code and in which the government, directly or indirectly, has
‘ownership of the majority control and which is explicitly intended under that law
and government policy for ultimate transfer to private ownership under certain
specified conditions shall be considered a GOCC, until it is transferred to private
ownership and control: Provided, however, That an acquired asset corporation
which is either (1) under private ownership, the voting or outstanding shares of
which (i) were conveyed to the government or to a government agency,
instrumentality or corporation in satisfaction of debts whether by foreclosure or
otherwise, or (ii) were duly acquired by government through final judgment in a
sequestration proceeding; or (2) a subsidiary of a government corporation
organized exclusively to own and manage, or lease, or operate specific physical
assets acquired by a government financial institution in satisfaction of debts
incurred therewith, and which in any case by law or by enunciated policy is
required to be disposed of to private ownership within a specified period of time
shall not be considered as GOCC or government corporation.

SEC, 4. Creation of the Government Asset Management Authority. - For the

purpose of carrying out the above-stated policy, there is hereby created a body corporate to be
known as the "Government Asset Management Authority," hereinafter referred to as the
"Authority," which shall have its principal office in Metropolitan Manila. The Authority may
establish such branches and offices as it may deem necessary for the attainment of the
objectives of this Act. The Authority shall be attached to the Department of Finance.

SEC. 5. Powers and Functions. - The Authority, in addition to the regular powers

and functions provided under the Corporation Code of the Philippines, shall have the
following powers and functions

A) To develop and implement a comprehensive plan in identifying non-relevant and
non-performing assets of government agencies and government owned or


controlled corporations, government corporations whether parent or subsidiary,
surrendered assets, and idle properties for privatization;

B) To establish guidelines for the conversion, rehabilitation, and disposition of
government assets and corporations;

C) To approve or disapprove, on behalf of the National Government, the sale or
disposition of government assets;

D) To exercise on behalf of the National Government rights of ownership and/or
administration with respect to such assets, including the right to vote, whether
directly or through duly authorized nominees, shares of stocks held in the name of
the National Government,

E) To enter into contracts, acquire, purchase, hold, lease, transfer, and dispose of
property of any kind or nature necessary to carry out the purpose of this Act;

F) To establish, operate, manage, control, and supervise all activities connected with
the efficient management and disposition of government assets and corporations;

G) To receive and hold by request, donation, or by any gratuitous title and to manage
or administer or dispose any asset, grant, or property, real or personal, from
foreign or domestic sources, subject to such limitations as are provided in existing
laws and regulations;

H) To investigate and file cases in relation to conservation, rehabilitation, disposition,
and liquidation of non-relevant and non-performing assets of the government;

I) To undertake the conservation, rehabilitation, and disposition of non-relevant or
nonperforming government assets: Provided, That the budget for each
rehabilitation project shall be subject to prior approval of the Board;

J) To seek and secure the assistance of any office, agency, or instrumentality of the
government;

K) To issue such regulations as may be necessary for the proper use by private parties
of any or all of the Authority's properties and to impose fees or tolls for the use of
such properties;

L) To issue necessary guidelines to all government agencies to govern activities on
the disposal of government corporate assets,

M) To consult, deputize, or request the assistance of appropriate government agencies
or instrumentalities for the purpose of enforcing this Act and its implementing
rules and regulations, as well as the orders and decisions of the Authority;

N) To adopt, prescribe, and promulgate such rules and regulations as may be
necessary for the proper implementation of this Act;


0) To exercise the right of eminent domain as may be necessary for the purposes for
which the Authority is created; and

P) To do any and all acts and things and to exercise all powers which may be
necessary or convenient to the accomplishment or furtherance of its purposes and
objectives, or which a natural person can do and exercise and which may now be
or hereafter be authorized by law.

SEC. 6. Governing Board. - The affairs and business of the Authority shall be
directed and its properties managed and preserved by a Governing Board, hereinafter referred
to as the "Board", which shall be composed of the Secretary of the Department of Finance as
the ex-officio Chairman, and the following as members:

A) the Secretary of the Department of Justice;

B) the Director General of the National Economic and Development Authority;
C) the Secretary of the Department of Trade and Industry;
D) the Secretary of the Department of Budget and Management; and

E) two (2) representatives from the private sector to be appointed by the President of
the Philippines for a term of three (3) years: Provided, That the person appointed
shall be of good moral character, of unquestionable integrity, of known probity
and patriotism, and with experience of at least ten (10) years in business or
finance: Provided, further, That in the event of a vacancy, the successor appointed
to fill the same shall serve only the unexpired portion of the term of the member
he succeeds to.

SEC. 7. Meetings. - The Board shall meet as frequently as is necessary to discharge
its responsibilities: Provided, That it shall meet at least once every month. The presence of a
majority of the members present at a meeting at which a quorum exists shall be adequate for
any decision by the Board. Whenever any member of the Board is unable to attend a
particular meeting, he may designate any of his immediate subordinate with the rank of
undersecretary or its equivalent to attend in his stead.

SEC. 8. Per Diems, - The members of the Board shall be entitled to receive per diem
for every meeting actually attended at rates to be approved by the President of the Philippines
upon the recommendation of the Department of Budget and Management.

SEC. 9. Powers and Functions of the Board. - The Board shall have the following
powers and functions:

‘A) To adopt the by-laws of the Authority and to revise the same as may be
expedient;

B) To direct the management, operations, and administration of the Authority;

C) To approve the annual budget to cover the operations of the Authority based
on the following: (1) fees and charges imposed by the Authority; (2) payment

4


for the utilization of the projects of the Authority; and (3) annual
appropriations and other funds which Congress may approve for the
Authority;

D) To formulate, revise, or adjust periodically all policies, plans and programs,
and to promulgate the necessary rules and regulations to carry out the purposes
and objectives of this Act;

E) To create the organizational structure and staffing pattern necessary for the
efficient management, operation, and administration of the Authority, subject
to the Civil Service laws, rules and regulations;

F) To fix the compensation, emoluments and allowances of the officers and
employees of the Authority, subject to existing laws, rules and regulations;
and

G) To perform such other functions as may be necessary and proper for the
effective enforcement of this Act and to accomplish the purposes for which the
Authority was organized.

SEC. 10. Administrator. - The Authority shall have an Administrator to be appointed
by the President of the Philippines for a term of five (5) years unless sooner removed for
cause. He shall be a person of good moral character, of unquestionable integrity, of known
probity and patriotism, and with expertise and experience of at least ten (10) years in
professional management with a strong background in the legal profession, business, or
finance, He shall receive such compensation, allowances, and other emoluments as may be
approved by the President of the Philippines upon the recommendation of the Board.

SEC. 11. Powers and Duties of the Administrator. - The Administrator shall have the
following powers, duties, and responsibilities:

A) To submit to the Board, through the Chairman, policies and measures which,
in his judgment, are necessary to carry out the purposes and provisions of this,
Act;

B) To implement and execute the policies and measure approved by the Board;

C) To prepare the budget of the Authority for approval by the Board;

D) To appoint all employees of the Authority, except the heads of departments
and divisions whose appointments shall be made by the Board upon his
recommendation, and to remove, dismiss or otherwise discipline for cause
such employees in accordance with the Civil Service laws, rules, and

regulations;

E

To represent the Authority in all dealings with other offices, agencies, and
instrumentalities of the Government and with all persons and entities, public
or private, domestic or foreign; and

F) To exercise such other powers as may be granted to him by the Board.


SEC. 12. Legal Counsel. - The Office of the Government Corporate Counsel shall be
the General Counsel of the Authority.

SEC. 13. Utilization of Proceeds from Sale of Assets. - Any ot all proceeds from the
sale or any disposition of assets net of fees, related liabilities, and other reimbursable
expenses related to custodianship, marketing, selling, and disposition of assets of the
Authority as defined in the implementing rules and regulations to be issued by the
Department of Finance pursuant to Section 24 hereof, shall be remitted immediately to the
National Treasury in the following proportion: sixty percent (60%) to the special account to
the Agrarian Reform Fund and forty percent (40%) to the general fund. Provided, That in the
case of proceeds from sale of transferred assets recorded in the books of the Bureau of the
Treasury, the check shall be made payable in the name of the Treasurer of the Philippines and
shall be remitted immediately to the National Treasury in the same proportion as mentioned
above.

With respect to the sale or other disposition of government owned or controlled
corporations, all government owned or controlled corporations except for the Government
Service Insurance System and the Social Security System, shall remit to the National
Treasury at least fifty percent (50%) of the net proceeds derived from the sale or disposition
of assets. For this purpose, net proceeds shall mean gross proceeds less related liabilities and
selling expenses.

The preceding paragraphs, however, shall not apply to assets surrendered to or
otherwise recovered by Presidential Commission on Good Government. Any and all proceeds
from the sale or disposition of assets recovered by the PCGG shall be remitted to the National
Treasury in a special account for Agrarian Reform in accordance with the Comprehensive
Agrarian Reform Law:Provided, That recoveries relating to the coconut levy shall be
deposited in a special account in trust for coconut farmers.

SEC. 14. Exemption from Taxes, Fees and Other Charges. - The Authority, as well
as the corporations and assets held by it, shall be exempt from all taxes, fees, charges,
imposts, and assessments arising from or occasioned by the passing of title over such
corporations or assets from the government institutions to the Authority and/or from the
Authority to a private acquisitor or buyer imposed by the National Government or any
subdivision thereof including but not limited to stock transfer taxes, capital gains tax,
documentary stamps, registration fees and the like: Provided, That in case the said
government institutions acquired the said assets by foreclosure, non-payment of similar taxes,
fees, charges, imposts, and assessments shall not be a bar to the consolidation of title in the
foreclosing institutions and the subsequent passing of title to the Authority or the
corporations held by the Authority.

SEC. 15. Publication. - The sale or disposition of assets shall be published in at least
three (3) newspapers of general circulation for three (3) consecutive days: Provided, That the
last publication shall occur at least ten (10) days prior to the scheduled bidding or date of
negotiation.

SEC. 16. Restraining Order. - No court or administrative agency in the Philippines,

except the Court of Appeals, shall issue any restraining order or writ of preliminary
injunction against the Authority in connection with the acquisition, sale, or disposition of

6


assets in accordance with this Act, nor shall such order or writ be issued against the purchaser
of assets sold or disposed of by the Authority to prevent such purchaser from taking
possession of such assets.

SEC. 17. Public Accountability. - To ensure public accountability, the Authority shall
be subject to the audit of the Commission on Audit and shall comply with all accounting and
auditing rules and regulations and those which it may hereafter promulgate of its
constitutional mandate.

SEC. 18. Merit System. - All officials and employees of the Authority shall be
selected and appointed on the basis of merit and fitness. The recruitment, transfer, promotion,
and dismissal of all its employees including temporary personnel shall be in accordance with
Civil Service law, rules, and regulations.

SEC. 19. Transitory Provisions. - The Privatization Council, the Privatization and
Management Office, and the Board of Liquidators are hereby abolished, and their powers and
functions, including their applicable funds and appropriations, records, equipment, facilities,
rights, other assets, and personnel shall thereafter immediately be transferred to the
Authority. All contracts and liabilities, if any, are hereby also transferred to and assumed by
the Authority and shall be acted upon in accordance with the Auditing and shall be acted
upon in accordance with the Auditing Code and other pertinent laws, rules, and regulations:
Provided, That the officers and employees of said agencies who will be needed for the
continuity of the programs shall continue in a holdover capacity until such time as the new
officers and employees of the Authority shall have been duly appointed pursuant to the
provisions of this Act.

The management and disposition of surrendered assets as well as assets already
recovered by final judgment of the Presidential Commission on Good Government are hereby
transferred to the Authority.

Upon approval of this Act, the Commission on Audit shall undertake an examination
of all assets and liabilities remaining with the Privatization Council, the Privatization and
‘Management Office, and the Board of Liquidators. The Commission on Audit shall complete
such examination within one hundred eighty (180) days from the effectivity of this Act.

Lawsuits initiated by the Privatization Council, the Privatization and Management
Office, the Board of Liquidators, and the Presidential Commission on Good Government in
so far as surrendered assets are concerned, which are still pending before appropriate courts
upon the abolition of the said agencies, shall be pursued by the Office of the Government

Corporate Counsel until their proper termination in the name of or on behalf of the
Government,

SEC. 20. Structure and Staffing Pattern. - Within thirty (30) days from the
effectivity of this Act, the Board of Directors, pursuant to Section 9(e) hereof shall create the
organizational structure and staffing patter of the Authority, subject to the approval by the
Department of Budget and Management within ninety (90) days from submission thereof.

SEC. 21. Separation and Retirement Benefits. - The personnel of the herein

abolished agencies who are not absorbed in the new staffing pattern of the Authority shall be
deemed separated from the service and shall receive separation benefits in accordance with

7


existing laws. Those who are eligible and/or opt to retire shall be entitled to receive such
benefits as authorized under existing laws, rules, and regulations.

SEC. 22. Appropriations. - The amount necessary for the initial implementation of
this Act shall be taken from the existing appropriations under the current year’s General
Appropriations Act of Privatization Council, the Privatization and Management Office, and
the approved budget of the Board of Liquidators for the current year by the Office of the
President, Thereafter, such sums as may be necessary for the continued operation of the
Authority shall be included in the annual General Appropriations Act.

SEC. 23. Congressional Review. - Every three (3) years after the effectivity of this
Act. Congress shall conduct a systematic evaluation of the Authority to determine whether or
not its performance, impact or accomplishment with respect to its mandates merits its
continued existence. Such evaluation shall be undertaken by the Committee on Government
Corporations and Public Enterprises of the Senate and the Committee on Government
Enterprises and Privatization of the House of Representatives which have legislative
jurisdiction over the Authority.

SEC. 24, Implementing Rules and Regulations. - Within sixty (60) days from the
approval of this Act, the Authority, with the Department of Finance, shall promulgate the
necessary rules and regulations for the efficient implementation of this Act: Provided, That
the rules and regulations shall be published in two (2) newspapers of general circulation.

SEC. 25. Separability Clause. - If for any reason, any provision of this Act or the
application thereof to any person or circumstances, is held invalid or unconstitutional, the
remaining provisions not affected thereby shall continue to be in full force and effect.

SEC. 26. Repealing Clause. - Executive Order No. 372 (s. 1950), Executive Order
No. 323 (s. 2000), Republic Act No. 8758, Executive Order No. 12 (s. 1998), Republic Act
No. 7886, Republic Act No. 7661, Executive Order No. 37 (s. 1992), Executive Order No. 11
(s. 1992), Republic Act No. 7181, Administrative Order No. 14 (s. 1987), Proclamation No.
50, and Proclamation 50-A are hereby repealed. All other laws, decrees, orders,
proclamations, rules and regulations, or parts thereof, inconsistent with or contrary to the
provision of this Act or its purposes are hereby repealed, amended or modified accordingly.

SEC.27. Effectivity. - This Act shall take effect fifieen (15) days after its publication
in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,