FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 744 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
ExpLANATORY NOTE 
Republic Act No. 8182, as amended by Republic Act No. 8555, defines 
Official Development Assistance ,(ODA), as a loan or a grant administered with 
the objective of promoting sustainable social and economic development and 
welfare of the Philippines. Since domestic resources are not enough to finance 
domestic investments needed for economic growth and development, the 
country, therefore, resorts to foreign resources to supplement existing resources. 
ODA, thus, provides a relatively more concessional means of financing 
government programs and projects. 
While the objectives of the ODA Law is laudable, as this will mean more 
infrastructure projects that will greatly aid in the growth and development of the 
country, ODA has, unfortunately', been used to muddle, if not to avoid, the 
requirement of competitive bidding in the procurement of goods, services, and 
infrastructure projects. Under the current ODA law, particularly under Section 11-
A thereof, the application of the ,Country's procurement laws may be waived or 
modified, which thereby negates the possibility of a price challenge that would 
help lower the debt expenditure of the government. What then is the guarantee of 
the country that the loan contracted as ODA was tightly negotiated and in 
accordance with sound procurement practice if the same did not go through 
competitive bidding? 
It is also noteworthy that during the passage of the ODA law, as well as 
during the passage of the amendatory law thereto (Republic Act No. 8555), the 
country did not yet have a consolidated procurement law that is now embodied in 
Republic Act No. 9184, otherwise known as the Government Procurement 
Reform Act, which mandates, among others, the use of competitive bidding in the 
procurement of goods, services, and infrastructure projects that would help 
ensure the most advantageous price for the country. 
This bill seeks to establish a check and balance in contracting ODA loans 
relative to the procurement of goods, services, and infrastructure projects by 
making the same the subject of review and approval by the Senate prior to its 
perfection and consummation. 
In view of the foregoing, the approval of this bill is earnestly sought. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
, SENATE 
Senate Bill No. 744 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
IMPOSING SAFEGUARDS IN CONTRACTING LOANS CLASSIFIED AS 
OFFICIAL DEVELOPMENT ASSISTANCE, AMENDING FOR THE PURPOSE 
REPUBLIC ACT NO. 8182, AS AMENDED BY REPUBLIC ACT NO. 8555, 
OTHERWISE KNOWN AS THE OFFICIAL DEVELOPMENT ASSISTANCE 
ACT OF 1996, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 2 of Republic Act No. 8182, as amended, otherwise 
known as the Official Development Assistance Act of 1996, is hereby amended 
to read as follows: 
Sec. 2. Official Development Assistance (ODA). - For purposes of this 
Act, ODA is a loan or loan and grant which means all of the following criteria: 
(a) It must be administered with the objective of promoting sustainable 
social and economic development and welfare of the Philippines; 
(b) It must be contracted with governments of foreign countries with whom 
the Philippines has diplomatic, trade relations or bilateral agreements or which 
are members of the United Nations, their agencies and international or 
multilateral lending institutions; 
(c) There are no available comparable financial instruments in the capital 
market: and 
(d) It must contain a grant .element of at least [twenty-five] FORTY percent 
(40Yo). Grant element under this Act is the reduction enjoyed by the borrower 
whenever the debt service payments which shall include both principal and 
interest and expressed at their present values discounted at ten percent (10%) 
OR AT THE YIELD ON COMPARABLE COMMERCIAL BONDS MOST 
RECENTLY ISSUED BY THE NATIONAL GOVERNMENT, WHICHEVER IS 
LOWER, are less than the face value of the loan or loan and grant. The grant 
element of a loan or loan and gr.ant is computed at the ratio of (i) the difference 
between the face value of the loan or loan and grant and the debt service 
payments to (ii) the face value of the loan or loan and grant; 
SEC. 2. Section 11-A of -Republic Act No. 8182, as amended, is hereby 
amended to read as follows: 


, 
Sec. 11-A. In the contracting of any loan, credit or indebtedness 
under this Act or any law, the President of the Philippines may, when 
necessary, agree to waive or modify the application of any provision of law 
granting preferences in connection with, or imposing restrictions on, the 
procurement of goods or services OR INFRASTRUCTURE PROJECTS: 
Provided, however, IF THE PROCUREMENT DOES NOT GO THROUGH 
COMPETITIVE BIDDING MANDATED UNDER REPUBLIC ACT NO. 
9184, OTHERWISE KNOWN AS THE GOVERNMENT PROCUREMENT 
REFORM ACT THE LOAN TO BE OBTAINED, REGARDLESS OF 
CLASSIFICATION, 
PRIOR 
TO 
ITS 
PERFECTION 
AND 
CONSUMMATION, 
AS 
WELL 
AS 
THE 
GOOD, 
SERVICE, 
OR 
INSFRASTRUCTURE PROJECT THAT IS INTENDED TO BE FUNDED 
THEREWITH, 
SHALL 
BE 
THE 
SUBJECT 
OF 
REVIEW 
AND 
RATIFICATION BY AT LEAST TWO-THIRDS (2/3) OF THE MEMBERS 
OF THE SENATE; Provided, further, That as far as practicable, utilization 
of the services of qualified Filipino citizens or corporations or associations 
owned by such citizens in the prosecution of projects financed under this 
Act shall be prepared on the basis of the standards set for a particular 
project: PROVIDED, FINALLY, That the matter of preference in favor of 
articles, materials, or supplies of the growth, production or manufacture of 
the Philippines, including the method or procedure in the comparison of 
bids for purposes therefor,. shall be the subject of agreement between the 
Philippine Government and the lending institution. (as amended by R.A. 
8555). 
SEC. 3. Separability Clause. - Any portion or provisions of this Act that 
may be declared unconstitutional or invalid shall not have the effect of nullifying 
other portions and provisions hereof as long as such remaining portion or 
provision can still subsist and be given effect in their entirety. 
SEC. 4. Repealing Clause. - All laws, decrees, executive orders, 
proclamations and administrative regulations, or parts thereof inconsistent 
herewith are hereby repealed or modified accordingly. 
SEC. 5. Effectivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in at least two national papers of general circulation. 
Approved,