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FOURTEENTH CONGRESS OF THE 
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First Regular Session 
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REPUBLIC OF THE PHILIPPINES 
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E” ’j 1;t.J 
I;E::E!\/EB 
EN. 
S E N A T E  
S.B. No. 
873 
Introduced by SENATOR EDGARDO J. ANGARA 
EXPLANATORY NOTE 
Government hospitals, while receiving subsidy from the National 
Government, cannot utilize their income for the maintenance and other 
operating expenses (MOOE) and capital outlay of the hospital. Said income 
is required by law to be remitted to the national treasury. 
This practice however, has a debilitating effect on the hospital’s 
capability for expansion and improvement of its services. To address this 
counter-productive approach, this proposed measure seeks to give more 
meaning to the autonomy of government hospitals in the area of physical and 
operational development by granting them the authority to utilize their 
income for their maintenance and other operating expenses (MOOE) and 
capital outlay expenditures. 
Admittedly, as per special provision No. 
6 of the General 
Appropriations Act (GAA), Department of Health (DOH) hospitals are 
already authorized to retain their income since 2003. The DOH has again 
proposed the inclusion of said provision in the 2005 GAA. 
Through this proposal, DOH hospitals and all other government 
hospitals for that matter shall now be granted authority to retain their 
income permanently, without need of proposing its inclusion in the GAA on a 
yearly basis. 
It is hoped that in making our government hospitals more financially 
independent, effective and efficient delivery of quality health services to the 
people will be consistently ensured. 
Approval of this bill, therefore, is earnestly sought. 
w 
EDGARDO J. ANGARA 
Senator 


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Introduced by SEN. EDGARDO J. ANGARA 
AN ACT AUTHORIZING GOVERNMENT HOSPITALS TO UTILIZE 
ALL ITS INCOME FOR HOSPITAL OPERATIONS PARTICULARLY 
MAINTENANCE AND OTHER OPERATING EXPENSES (MOOE) 
AND CAPITAL OUTLAY. 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress Assembled: 
SECTION 1. Government hospitals are hereby authorize to utilize 
their income from pharmacy, fees from in-house services and facilities, 
including but not limited to laboratory, radiology, operating room and 
nursery facilities and income derived from non-patient related services such 
as parking fees, interview fees and tour fees, for the maintenance and other 
operating expenditures including capital outlay, especially for the acquisition 
of hospital machineries and equipment. 
SECTION. 2. Expenditures under this Act shall be subject to existing 
auditing rules and regulations. In addition, the retained hospitals shall 
submit quarterly report of income and expenditures to the Department of 
Health (DOH), while devolved hospitals shall submit the same to the office of 
the Provincial Governor or the CitylMunicipal Mayor. 
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SECTION. 3. The DOH, in coordination with the agencies concerned 
shall formulate the necessary rules and regulations for the effective 
implementation of this Act within sixty (60) days from its approval. 
SECTION. 4. If any provision of this Act or an application thereof to any 
person or circumstance is held invalid, the other provisions of this Act, and the 
application of such provision to other persons or circumstances, shall not be affected 
thereby. If any provision of this Act is held invalid, any other provision not so 
affected shall continue to be valid and effective. 
SECTION. 5. All existing laws, orders, rules and regulations or parts 
thereof deemed inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
SECTION 6. This Act shall take effect fifteen (15) days following the 
date of its publication in the Official Gazette or in at least two (2) newspapers 
of general circulation, whichever comes first 
Approved, 
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