Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

‘TWENTIETH CONGRESS
First Regular Session

nouse saiho. 4523

Introduced by: Hon. Iris Marie D, Montes

AN ACT
INSTITUTIONALIZING THE PARTICIPATION OF CIVIL SOCIETY ORGANIZATIONS
(CSOs) IN THE PREPARATION AND AUTHORIZATION PROCESS OF THE ANNUAL
NATIONAL BUDGET, AND PROVIDING EFFECTIVE MECHANISMS THEREFOR

EXPLANATORY NOTE
Article II, Section 23 of the 1987 Constitution provides that, "The State

shall encourage non-governmental, community-based or sectoral organizations
that promote the welfare of the nation.”

Further, Article XIII, Section 16 ensures that, "The right of the people and
their organizations to effective and reasonable participation at all levels of social,
political, and economic decision-making shall not be abridged. The State shall,
by law, facilitate the establishment of adequate consultation mechanisms.”

In recognition of the role and contribution of civil society organizations
(CSOs) in nation-building, this bill seeks to institutionalize their participation in
one of the most important aspects of governance - the budget process.

It provides for mechanisms for the accreditation and participation of the
CSOs in the preparation and authorization of the annual national budget. It also
seeks to grant privileges and incentives to accredited CSOs to encourage wider
participation in the process.

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

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

‘TWENTIETH CONGRESS
First Regular Session

Introduced by: Hon. Iris Marie D. Montes

(AN ACT
INSTITUTIONALIZING THE PARTICIPATION OF CIVIL SOCIETY ORGANIZATIONS
(CSOs) IN THE PREPARATION AND AUTHORIZATION PROCESS OF THE ANNUAL
NATIONAL BUDGET, AND PROVIDING EFFECTIVE MECHANISMS THEREFOR

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 "People's
Participation in the National Budget Process Act".

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to
facilitate the establishment of adequate consultation and feedback mechanisms
to promote meaningful and effective participation of Civil Society Organizations
(CSOs) in the preparation and authorization of the annual national budget in
order to ensure that the annual appropriations will be an instrument of
development that is reflective of the national objectives, strategies, and plans
beneficial to the people.

SEC. 3. Definition of Terms. - For purposes of this Act, the following terms
are defined as follows:

(1) Accreditation refers to the registration process of CSOs with the National
Government Agencies (NGAs) and Government-Owned and Controlled
Corporations (GOCCs), in order to allow them to participate in the preparation
and authorization of the annual national budget;

(2) Accredited CSOs refers to CSOs that have fulfilled the requirements in
Section 5 of this Act;

(3) Budget Call refers to the budget document issued by the Departmen of
Budget and Management (DBM) and sent to all NGAs and GOCCs which contains
the policy guidelines and procedures in the preparation of the annual budget,
including the budget preparation calendar for any given year. The issuance of a
budget call signals the beginning of the budget preparation phase;

(4) Civil Society Organizations (CSOs) refers to non-government
organizations (NGOs), cause-oriented groups, people's _ organizations,
cooperatives, trade unions, professional associations, faith-based organizations,
media groups, indigenous peoples movements, foundations, and other citizen


groups formed primarily for social and economic development, which monitor
government projects, engage in policy discussions, and actively participate in
collaborative activities with Government;

(5) Conflict of Interest refers to a condition which occurs when a CSO or any
of its key officers are involved in multiple interests that prevent an impartial or
unbiased attitude towards their participation in the national budget process;

(6) Constructive Engagement refers to a partnership between Government
and counterpart CSOs marked by sustained dialogue towards problem solving
while respecting and retaining the focus on assertion for reforms;

(7) Government-Owned or Controlled Corporation (GOCC) refers to any
agency organized as a stock or non-stock corporation, vested with functions
relating to public needs whether governmental or proprietary in nature, and
owned by the Government of the Republic of the Philippines directly or through
its instrumentalities either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least a majority of its outstanding capital stock;

(8) National Government Agency (NGA) refers to a unit of the National
Government, including the Judiciary, both Houses of Congress, and
Constitutional Offices; and

(9) Participatory Mechanisms refer to the means by which CSOs can
articipate meaningfully and effectively in the government process of formulating
and authorizing an annual national budget that is responsive to the needs of the
different sectors in our society.

SEC. 4. Coverage. - This Act shall apply to all NGAs and GOCCs whose
budget is included in the Annual General Appropriations Act.

SEC. 5. Accreditation. - The application for accreditation for the Senate,
the House of Representatives, the Judiciary, and the Constitutional Offices shall
be filed at the Office of the Secretary, the Secretary-General, the Supreme Court
Clerk of Court, and the Office of the Chairman, respectively.

Each office shall prescribe its own application form, which shall conform to
the eligibility criteria provided under this Act and incorporate the minimum
required information prescribed by the Department of Budget and Management
(DBM), The DBM-prescribed standards shall be adopted by all NGAs and GOCCs
to ensure uniformity and consistency in the accreditation process. Each office
shall make the prescribed application form publicly available, including through
their official websites. For all other NGAs and GOCCs, the application for
accreditation may be filed at their respective regional or central offices. The
completed application shall be submitted together with the following supporting
documents:

(1) Articles of Incorporation and By-Laws of the applicant CSO;
(2) Certificate of Registration and/or other such similar documents, issued

by an appropriate government agency tasked to register civil society
organizations, such as, but not limited to, the Securities and Exchange


Commission, Bureau of Labor Relations, Department of Human Settlements and
Urban Development, Insurance Commission, and the Cooperative Development
Authority.

(3) The list of officers, directors, trustees, and members;

(4) Duly audited financial statements for the past three (3) years showing
the assets and liabilities of the organization;

(5) Full disclosure of the sources of fund, including grants and donations
from foreign or domestic entities; and

(6) Full disclosure of service contracts with other NGAs, CSO, GOCC,
private corporations, other CSOs, and other engagements which may result in
conflict of interest.

These disclosures shall be submitted under oath and made publicly
available through the websites of the concerned NGA or GOCC, subject to
existing laws on data privacy and confidentiality.

Upon approval of the application, the head of the concerned NGA or GOCC
shall issue the certificate of accreditation. This shall be valid for three (3) years
following its issuance, except for the certificate of accreditation issued by the
Senate and the House of Representatives, which shall be valid for the entire
term of the Congress under which such certificate of accreditation was issued.

No application shall be denied without due notice and hearing. The
decision of the head of the concerned NGA or GOCC shall be rendered within
twenty (20) working days from the time of the filing of the application. Failure to
act upon the application within the prescribed period shall constitute automatic
approval of the application for accreditation of the concerned CSO, and the
issuance of a certificate of accreditation shall necessarily ensue.

SEC. 6. Eligibility Criteria. - To be accredited under this Act, a CSO must:

(1) Have at least three (3) years of demonstrated experience in civic
engagement, public accountability, or development work;

(2) Have no record of administrative or criminal liability involving fraud,
misrepresentation, or misuse of public funds;

(3) Be independent from any political party or government official;

(4) Have an identifiable sectoral, geographic, or thematic constituency;
and

(5) Be able to demonstrate capacity to engage in budget analysis and
advocacy through existing projects, networks, or trained personnel.

SEC. 7. CSO Participation. - In the interest of transparency, CSO
participation shall be a component in the preparation and authorization of the
annual national budget. All NGAs and GOCCs shall be required to formulate and


adopt guidelines outlining the mechanism for the accreditation and active
participation of the CSOs in the preparation and authorization of the annual
national budget.

The DBM shall ensure that the NGA or GOCC has complied with the above-
mentioned requirement.

Accredited CSOs, through their duly authorized representatives, shall be
allowed to participate as resource persons in the budget hearings to be
conducted by the appropriate Committees of each House of Congress, provided
that they comply with the guidelines to be issued by both Houses of Congress.

Notwithstanding their participation in the budget hearings to be conducted
by the appropriate Committees of each House of Congress as provided in the
preceding paragraph, the Committee on Appropriations of the House of
Representatives and the Committee on Finance of the Senate shall schedule one
hearing day for the presentation of the positions of accredited CSOs on the
budget.

SEC. 8. Privileges and Incentives. - An accredited CSO shall enjoy the
following privileges and incentives:

(1) To have similar participation rights accorded to NGOs in the Local
Development Councils pursuant to the provisions of RA No. 7160 otherwise
known as the "Local Government Code of 1991", in setting the direction of
economic and social development, coordinating development efforts within its
territorial jurisdiction;

(2) Access to the documents prepared by the DBM for submission to
Congress by the President as a basis for the General Appropriations Bill required
under Article VII, Section 22 of the Constitution;

(3) To present written proposals on projects and activities of the
government entities whose budget is under deliberation; and

(4) Immediate access to stenographic notes and committee reports
released by both Houses, including the bicameral conference committee report.
The bicameral conference committee meetings and all other meetings related or
associated thereto shall be recorded and be made accessible immediately to
promote transparency and to allow members of both Houses to easily determine
how conflicting provisions in the proposed national budget were reconciled or
resolved prior to the submission thereof for ratification by both Houses of
Congress.

SEC. 9. Sectoral Representation. - To ensure inclusive and balanced
participation, the accreditation and engagement of CSOs under this Act shall
reflect sectoral diversity. At least thirty percent (30%) of accredited CSOs
participating in the budget process at any level shall represent marginalized,
disadvantaged, or underrepresented sectors, including but not limited to women,
Indigenous Peoples, workers, youth, senior citizens, persons with disabilities,
environmental groups, and consumer organizations.


The DBM, in coordination with relevant oversight agencies and CSO
networks, shail issue guidelines to operationalize sectoral representation and
verify constituency legitimacy.

SEC. 10. Notice to CSOs. - Notice to CSOs may be sent through electronic
mail, facsimile machine, postal mail, and by posting at the website of the NGA or
GOCC concerned. Any of the said modes of sending notices shall be deemed
compliance to the requirements under Section 7(a) of this Act.

SEC. 11. Conflict of Interest. - It is the responsibility of the CSO to inform
the NGA or GOCC of a conflict of interest in their work with the concerned
agency, if and when such a situation arises.

However, if the NGA or GOCC deems that the CSO has a conflict of
interest with the work of such NGA or GOCC, the latter shall allow the applicant-
CSO to explain and prove that the conflict of interest does not exist.

SEC. 12. Cancellation of Accreditation. - Upon receipt of a verified
complaint in writing, which charges the holder of a certificate of accreditation of
having procured their certificate of accreditation by fraud or deceit, the head of
the NGA or GOCC shall notify and serve a copy of the complaint to the CSO
concerned, who shall be given an opportunity to be heard.

Inaction by the NGA or GOCC on the said complaint within twenty (20)
working days from the receipt of such complaint shall be deemed a dismissal of
the complaint against the CSO involved.

SEC. 13. Non-Accredited CSOs. - Non-accredited CSOs may still
participate in the budget process by submitting position papers for the
consideration of the NGA or GOCC and by attending and observing public
consultations. They may be invited to expound on their critique or proposals
when said institutions deem it fit. Nothing in this Act shall be construed to
deprive non-accredited CSOs of the rights, privileges, and incentives accorded to
them by the Constitution, existing laws, executive orders, rules and regulations,
and other issuances.

SEC. 14. Public and Timely Disclosure of Budget Documents and Other
Related Data. - For CSOs to participate in an informed manner, the NGA or
GOCC shall post on their websites or other public posting areas, budget
documents to which CSOs shall have access, as provided for under Section 7 of
this Act.

Nothing in this Act shall be construed to delay or impair compliance with
the timeline and procedural requirements for the enactment of the General
Appropriations Act.

SEC. 15. Ethics and Accountability Framework. - The DBM shall prescribe
the standard application form, minimum required information, and
accompanying ethics and accountability requirements for CSO accreditation
under this Act.


As part of these requirements, the DBM shall develop, in consultation with
CSO networks, a Code of Conduct for participating CSOs and establish a
Grievance Redress Mechanism to address violations, abuse of participation, or
ethical misconduct.

Accredited CSOs shall commit to the Code of Conduct as a condition of
participation. Breaches may result in suspension, revocation of accreditation, or
blacklisting, subject to due process.

SEC. 16. Penalties and Blacklisting. - Any CSO found to have secured
accreditation through fraud, misrepresentation, or concealment of material
information, or to be acting as a front or proxy for any political actor,
government official, or government contractor or supplier, shall be subject to the
following penalties:

(1) Immediate revocation of accreditation and disqualification from
participation in the national budget process for a period of five (5) years;

(2) Inclusion in a national blacklist and red-flag database, to be
maintained by the DBM, in coordination with relevant accrediting agencies and
oversight bodies;

(3) Referral for investigation to appropriate authorities if there is evidence
of violation of anti-graft, procurement, or other applicable laws. The following
acts shall be grounds for blacklisting or red-flagging:

(a) Acting as a dummy or proxy organization for a government official,
elected representative, political party, public utility, or business entity engaged
in procurement contracts, joint ventures, franchises, among other privileges with
the national government;

(b) Engaging in undue lobbying or influence-peddling for the benefit of a
public official or agency;

(c) Recelving or funneling funds from government agencies, suppliers, or
contractors that compromise the independence of the CSO;

(d) Failure to disclose relationships, contracts, or funding sources that
present a conflict of interest.

(CSOs included in the blacklist may file a verified petition for delisting,
subject to rules and evaluation procedures to be issued by the DBM.

SEC. 17. Separability Clause. - If any provision of this Act shall be
declared invalid or unconstitutional, the remaining part or provisions not
otherwise affected shall remain in force.

SEC. 18. Repealing Clause. - Any law, decree, ordinance, administrative
circulars not consistent with any provision of this Act is hereby amended,
repealed, or modified accordingly.


SEC. 19. Effectivity Clause. -This Act shall take effect fifteen (15) days
after its complete publication in the Official Gazette or in at least two (2)
newspapers of general circulation.

Approved,