FIFTEENTH CONGRES OF THE REPUBLIC 
OF THE PHILIPPINES 
) 
) 
) 
First Regular Session 
SENATE 
S. BILL NO. 2659 
Introduced by Sen. Ralph G. Recto 
EXPLANATORY NOTE 
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JAN 31 
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The country's total outstanding debt as of October 2010 is P4.6 trillion, of which P2.6 
trillion is domestic and P2.0 trillion is foreign. The total outstanding debt is increasing because 
the government has not kept the commitment to meet revenue targets and manage our fiscal 
position. 
The government's huge budget deficit results in a seemingly relentless borrowing to cover 
expenditures for needed infrastructure and services. If left uncontrolled, the public debt can 
balloon to a magnitude that can wreak havoc on the fiscal balance. This can have a negative 
impact on the economy as a whole and with grave consequence on the quality of life of the 
people. 
The bill proposes to put a cap on the indebtedness of the government at 60% of the Gross 
Domestic Product (GDP). The debt ceiling may be breached only when there are extraneous 
events beyond the control of the government subject to Presidential certification, and approval of 
Congress. 
Historically, our fiscal managers have never met the original program targets set forth in 
the national budget. Every year, they propose to Congress a formula on how they would finance 
the proposed expenditure program for the incoming year. But at the end of the year, the actual 
revenue collections fall short of the numbers in the Budget of Expenditures and Sources of 
Financing (BESF). 
This proposed measure also puts a cap on the borrowings of the national government by 
mandating the Chief Executive to go back to Congress and seek authority to borrow more in the 
event that the national government fiscal deficit target submitted by the President is breached 
before the end of the fiscal year. It is essential that Congress should be closely guided by a 
borrowing program developed by the President to restore fiscal discipline before the country falls 
into another debt trap. 
Hence, this bill proposes to compel our economic managers to be more accurate and 
prudimt in their targets on the revenue and expenditure program. Likewise, this will allow 
Congress to assert its power of the purse. 
Moreover, the debt cap will compel the government to exercise prudence in spending and 
strengthen its fiscal management. Setting limits to borrowings will provide opportunities for 
better prioritization of programs and projects as it has to spend within available resources. 
It is hoped that this measure will be seriously conQS1' aerw-fuJ immediate approval. 
o 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
) 
) 
) 
S, BILL NO. 2858 
Introduced by Sen. Ralph G. Recto 
AN ACT 
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JAN 31 
P2 :14 
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SETTING A CEILING TO THE INDEBTEDNESS OF THE REPUBLIC OF THE 
PHILIPPINES TO ENSURE MACRO-ECONOMIC STABILITY AND SUSTAINABLE 
GROWTH AND FOR OTHER PURPOSE 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. This Act shall be known as the "Government Indebtedness Cap Act of2011". 
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SEC. 2. 
The national government and any of its agencies, offices, GOCCs shall limit its 
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total indebtedness which carry the sovereign guaranty of the Republic of the Philippines to an 
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amount not exceeding 60% of the latest Gross Domestic Product (GDP). 
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SEC. 3. 
The debt ceiling provided herein may be temporarily breached when there are 
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extraneous factors beyond its control including occurrence of catastrophic emergencies of 
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national proportion, as may be declared by the President and upon consultation with both Houses 
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of Congress. The presidential certification must specify the urgency and necessity of such 
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breach, the period of time within which the government should offset the breach, as well as 
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measures to cushion the effects of said breach to the national economy. 
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SEC. 4. 
In the event that the national government fiscal deficit target as indicated in the 
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Budget of Expenditures and Sources of Financing (BESF) submitted by the President of the 
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Republic of the Philippines to Congress, pursuant to Section 22, Article VIl of the 1987 
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Constitution, is breached, the Government of the Philippines shall in no case borrow from 
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foreign and/or domestic sources without the prior approval of the House of Representatives and 
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concurrence by the Senate. 
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SEC. 5. 
The debt cap provided for in this Act shall not preclude the adoption of another 
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debt policy option or a combination of debt options that will reduce the country's outstanding 
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debt stock. 
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SEC. 6. 
The Secretary of Finance shall, within ten (10) days from the end of every 
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quarter of the calendar year, submit to Congress a written report on the country's fiscal position 
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and the modes of financing the government has undertaken during the period. 
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SEC. 7. 
All laws, decrees and orders or parts thereof inconsistent with the provisions of 
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this Act are hereby repealed or modified accordingly. 
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SEC. 8. 
This act shall take effect fifteen (15) days after its puhlication in the Official 
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Gazette or in two (2) newspapers of national circulation. 
Approved,