Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILLNO.__2147

Introduced by Honorable Oscar “Richard” S. Garin, Jr.

“AN ACT CONVERTING THE WESTERN VISAYAS MEDICAL
CENTER INTO A GOVERNMENT-OWNED AND -CONTROLLED
HOSPITAL CORPORATION WITH THE SAN JOAQUIN
MUNICIPAL HOSPITAL AS ITS SUBSIDIARY AND
APPROPRIATING FUNDS THEREFOR”

EXPLANATORY NOTE

No less than the fundamental law declares the policy of the State to protect and
promote the right to health of the people. Article Il, Section 15 of the 1987
Philippine Constitution explicitly provides for this affirmation.

In the fulfillment of this constitutional mandate, this bill seeks the conversion of
Western Visayas Medical Center in Mandurriao, Iloilo into a Government Owned
and Controlled Corporation (GOCC) and the 10 bed- Municipal Hospital in the
Municipality of San Joaquin, as subsidiary of Western Visayas Medical Center in
Mandurtiao, lloilo.

With the development of its shoreline as first class fishing ports and seaside fish
ports, the Municipality of San Joaquin shows very high potential to be a future
site of commerce and tourism. It is an emerging center of trading and commerce
in the island of Panay serving both the Province of lloilo and the Province of
Antique. The rapid economic and tourism growth of the Municipality of San
Joaquin has to be accompanied with improved hospital services to its people and
the neighboring municipalities.

This bill is an answer to health related needs that come alongside rapid

economic growth and development.

OSCAR “1


Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILL NO. 2147

Introduced by Honorable Oscar “Richard” S. Garin, Jr.

“AN ACT CONVERTING THE WESTERN VISAYAS MEDICAL
CENTER INTO A GOVERNMENT-OWNED AND -CONTROLLED
HOSPITAL CORPORATION WITH THE SAN JOAQUIN
MUNICIPAL HOSPITAL AS ITS SUBSIDIARY AND
APPROPRIATING FUNDS THEREFOR”

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

SECTION 1. Short Title. - This Act shall be known as “The Conversion
of the Western Visayas Medical Center to a Government-Owned and -Controlled
Hospital Corporation (GOCC) with the San Joaquin Municipal Hospital as its
Subsidiary”.

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the
State to adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods, health and other
social services available to all the people at affordable cost; to prioritize the
needs of the underprivileged, sick, elderly, disabled, women and children; to
provide free medical care to paupers; to establish and maintain an effective food
and drug regulatory system; and to undertake appropriate health manpower
development and research responsive to the country's health needs and
problems.

In the pursuit of the Health Sector Reform Program undertaken by the
national government in coordination with other health partners, this Act shall be
anchored on these principles:

(a) Public health is a measure of the equitable distribution of wealth and
sustainable economic growth;

(b) The citizens are entitled to a hospital care delivery system that is

affordable, accessible and acceptable;


(c) Service provision to less privileged and indigent patients shall be
prioritized hence requiring necessary policy directions and financial support,
closer cooperation with local government unit (LGU) and other partners;

(d) Fiscal and management autonomy of the Western Visayas Medical
Center will lead to better quality and more efficient delivery of health services;
and

(e) The corporate form of organization will give hospital administrators the
necessary flexibility for the effective stewardship of hospital assets, funds,
management and personnel supervision.

SEC. 3. Name and Domicile. - The Western Visayas Medical Center, with
principal office at Mandurriao, lloilo City, hereinafter referred to as the WVMC, is
hereby converted into a pilot government-owned and -controlled hospital
corporation, hereinafter referred to as the Corporation, with the San Joaquin
Municipal Hospital as its subsidiary, with principal office at San Joaquin, lloilo.

SEC. 4. Duration and Conditions of Existence. — The conversion of the
WVWC as a government-owned and -controlled corporation, with the San
Joaquin Municipal Hospital as its subsidiary, shall be for a period of five (5) years
to commence at the beginning of the fiscal year 2010 up to the end of fiscal year
2015 and shall be extendable for another term of five (5) years upon the
discretion of the Department of Health (DOH) subject to the termination clause
provided hereunder or as subsequent legislation may provide.

During this transition, it will be monitored closely based on predetermined
performance indices by the National Center for Health Facility Development
(NCHFD) in order to determine the applicability of corporate restructuring. If
these said performance targets are not met or if backsliding is noted within five
(5) years and/or if no significant improvement occurs after ten (10) years, upon
the recommendation of the Secretary of Health, this corporation Act shall be
revoked and the WVMC shall revert as a budgetary line agency under the DOH
and the San Joaquin Municipal Hospital shall revert to the local government of
San Joaquin. In this event, the DOH shall formulate the implementing rules and
regulations (IRR) to carry out this reversion.

SEC. 5. General Objectives. — This Act has the following general
objectives:

(a) Provide the Filipino people with a more affordable, quality and timely
hospital care through a more efficient health service delivery system; and


(b) Institute reforms in the organization, administration and_ financial
management of the WVMC as a means of reducing the cost and improving the
quality of public health care.

SEC. 6. Purposes. - The WVMC, with the San Joaquin Municipal Hospital
as its subsidiary, shall have the following purposes:

(a) To provide and maintain affordable, quality and timely hospital care
through a more efficient health service delivery system with priority for the needs
of the underprivileged sick, elderly, disabled, women and children, and resources
permitting to provide free medical care to indigent citizens;

(b) To promote the development of hospital facilities of the WVMC,
advancement in medical technology and establishment of health care providers
for the underprivileged;

(c) To foster hospital and medical service operation conditions conducive to
the efficient delivery service to the public;

(d) To promote, encourage and engage in scientific research in the
prevention of diseases and the care and/or treatment of patients and related
activities, including scholarship and conduct of relevant congresses,
conventions, seminars and conferences;

(e) To encourage and/or undertake the training of physicians, nurses,
medical technicians, health officers, social workers and other health
professionals on the practical and scientific conduct and implementation of
health and medical services, and related activities; and

(f) To extend services pursuant to the goals, objectives and rules of the
National Health Insurance Program (NHIP).

SEC. 7. Powers and Functions. — The WVMC and its subsidiary, the San
Joaquin Municipal Hospital, shall have the following powers and functions:

(a) To enter into contracts with any person or entity, domestic or foreign,
and with the government for the undertaking of the varied aspects of hospital
and health care operation, including the acquisition, by way of purchase, lease or
rent or other deferred payment arrangements of equipment and/or raw materials
and supplies, as well as for service connected therewith under such terms and
conditions as it may deem proper and reasonable;

(b) To borrow money from local and foreign sources as may be necessary

for its operations;


(c) To invest its funds as it may deem proper and necessary in any activity
related to hospital or medical care operations, including any bonds or securities
issued and guaranteed by the government of the Philippines;

(d) To authorize such expenditures by the Corporation in the interest of
effective administration and operation of the Corporation;

(e)To hold and acquire rights over lands of the areas permitted to
corporations, associations and persons by statute;

(f) To engage in export and import business of medicines, medical
equipment, hospital supplies and medical technology, as well as in related
activities;

(g) To acquire assets, real or personal, or interest therein, and encumber or
otherwise dispose the same as it may deem proper and necessary in the
conduct of its business;

(h) Subject to existing laws and regulations, if it deems necessary, to
establish and maintain such communication system, whether by radio, telegraph
or any other manner;

(i) To establish and maintain offices or other units anywhere as may be
needed by the Corporation and reorganize or abolish the same as it may deem
proper;

(j) To exercise the right of eminent domain as may be necessary for the
purpose which the Corporation is created;

(k) Subject to payment of the proper amount, to enter private lands for
purposes of conducting medical experiment, research and studies in connection
with hospital and medical care operations;

() To acquire easement over public and private lands necessary for the
purpose of carrying out any work essential to its hospital and medical care
operations, subject to payment of reasonable consideration;

(m) To establish and maintain administrative, management, professional
and technical educational systems for the sustained development of the
necessary manpower to manage and operate its affair and business;

(n) To create position items and hire personnel to fill up such created
positions;

(0) To promulgate such rules and regulations as may be necessary to carry
out the purpose of this Act;

(p) To adopt and use a corporate seal which shall be judicially noticed;

(q) To sue and be sued;


(9) To accept any gift, contribution, endowment, grant, bequest and device
of any kind of real or personal property which are necessary and proper for the
attainment of the purposes of the Corporation;

(s) To exercise the general powers mentioned in the Corporation Law,
insofar as they are not inconsistent or incompatible with this Act;

(t) To perform such acts and exercise such functions as may be necessary
for the attainment of the purposes and objectives herein specified; and

(u) To perform such other functions as may be provided by law.

SEC. 8. Board of Trustees. — The affairs and business of the WVMC and
its subsidiary, the San Joaquin Municipal Hospital, shall be directed and its
properties managed and preserved and its corporate powers exercised, unless
‘otherwise provided in this charter, by a Board of Trustees, which shall be
composed of ten (10) members, as follows:

Voting members:

(a) The Secretary of the Department of Health as Chairman of the Board;

(b) The President of the Philippine Health Insurance Corporation or his/her
duly authorized representative;

(c) The Director-General of the National Economic and Development
Authority or his/her duly authorized representative;

(d) The Secretary of the Department of Budget and Management or his/her
duly authorized representative;

(e) The representative of the Committee on Health of the House of
Representatives;

() The duly elected president of the WVMC employees association,
representing hospital personnel;

(g) A representative from local, medical and allied professional organization;

(h) A representative from the people's organization/socio-civic/_non-
government organization; and

(i) A representative from the business sector.

Non-voting member:

(j) The WVMC Director (Medical Center Chief as Chief Executive Officer).

Members of the Board of Trustees enumerated in subparagraphs (a), (b),
(c), @), (©), (f) and () shall serve as ex officio members. The members of the
Board of Trustees enumerated in paragraphs (g), (h) and (i) shall be appointed
by the Secretary of Health for the first or initial appointees, and then by the
Board of Trustees for subsequent appointees.


The appointive members of the Board of Trustees shall serve for a term of
three (3) years who may be appointed for a maximum of two (2) terms; while the
ex officio members mentioned in subparagraphs (a), (b), (c), (d), (e), (f) and (j)
shall serve as members of the Board of Trustees for the duration of their
incumbency.

No person shall be appointed member of the Board of Trustees unless
he/she is a citizen and a resident of the Philippines, of good moral character and
has attained proficiency, expertise and recognized competence in one or more of
the following fields: hospital finance and administration, medical care, public
health care, government rules and regulations, law, business management and
marketing. They should have at least five (5) years experience in his/her field of
expertise.

The Board of Trustees shall be governed by a set of bylaws which shall
contain, but not limited to, their responsibilities, accountabilities and cause of
termination.

SEC. 9. Corporate Officers. - The Board of Trustees shall appoint a
Secretary of the Board and such other officers as may be deemed necessary.
Selection of the corporate officers must be based on the fundamental and
specific qualifications prescribed by existing laws.

SEC. 10. Chief Executive Officer. - The present Director of the
WNC shall assume the position of Chief Executive Officer (CEO) of the
Corporation. As CEO he/she shall be in-charge of the usual and regular course
of business of the Corporation and shall be accountable to the Board of Trustees
of the Corporation who can remove or replace him/her for a cause for reasons of
fraud, incompetence, dishonesty and other similar grounds and after due
process. In case of vacancy after the assumption of office by the present
Director of the WVMC, the next CEO shall be appointed by the Board of
Trustees of the WVMC.

SEC. 11. Corporate Structure. - The WVMC should follow the
standard corporate structure to be formulated by the DOH Central Office in
coordination with different agencies.

SEC.12. Executive Committee and Other Committees. - The
Board of Trustees may, by resolution passed by the majority of all its members,
create an Executive Committee of not more than five (5) members who shall be


appointed by the Board of Trustees. At least three (3) members of the Executive
Committee shall be members of the Board of Trustees. The Executive
Committee shall have and exercise all such powers as may be delegated to it by
the Board of Trustees. The Executive Committee shall keep regular minutes of
its proceedings and report the same to the Board of Trustees whenever required.
The Board of Trustees shall have the power to change the members of the
Executive Committee at any time, to fill vacancies therein and to discharge or
dissolve such committee either with or without cause.

The majority of all the members of the Board of Trustees may, by
resolution, create other committees with such powers and functions as may be
delegated to them by the Board of Trustees. All such committees shall keep a
record of their proceedings and report the same to the Board of Trustees,
whenever required. The Board of Trustees shall have the power to appoint and
remove the members of such committees and may, at any time, with or without
cause, dissolve any of such committees.

SEC. 13. Board of Trustees’ Meetings and Quorum. — The Board
of Trustees shall hold meetings at least once a month. Special meetings may be
convened at the call of the Chairman or by the majority of the members of the
Board of Trustees. The Chairman or his/her designated representative shall
preside over the meeting of the Board of Trustees. In the absence of the
Chairman or his/her representative, a temporary presiding officer shall be
designated by the majority of the quorum. Six (6) members of the Board of
Trustees shall constitute a quorum to transact business, and the vote of the
majority of those present, there being a quorum, shall constitute valid and
binding act of the WVMC. However, the affirmative vote of at least six (6)
members of the Board is required on the following matters:

(a) Adoption or changes of policy;

(b) Investment of the WVMC funds;

(©) Contracting loans, except as may be provided for in the IRR where a
vote of a majority of those present, there being a quorum, shall suffice as to
specified certain amount of loan borrowed;

(d) Appointment, discipline and termination of the WVMC Hospital Chief
Executive Officer/Director. The appointment, discipline and termination of other
officers and employees shall be by a vote of a majority of those present, there
being a quorum; and

(e) Authority to use corporate assets as collateral for loans and borrowings.


SEC.14. Compensation of Nongovernment Members of the Board
of Trustees. — The appointive nongovernment members of the Board of
Trustees shall be entitled to honorarium for each meeting actually attended at
rates in accordance with existing laws, rules and regulations.

However, all members of the Board of Trustees, by resolution of the
majority of the members in good standing of the Corporation, claim expenses for
attendance in regular or special meetings of the Board of Trustees. Actual and
necessary traveling expenses of the members of the Board of Trustees while
engaged in serving the interests of the Corporation and in pursuit of its defined
objectives and purposes may be allowed by special resolution of the Board of
Trustees.

SEC. 15. Property of the WVMC and the San Joaquin Municipal
Hospital. — The property of the WVMC and San Joaquin Municipal Hospital shall
consist of such real, personal, mix and other type of property now owned by it or
reserved for or may hereafter be given, donated, acquired, transferred or
conveyed to it by the Philippine government, its branches and instrumentalities,
or any foreign government, as well as by trust, foundation, corporations or
persons, alien or domestic, in order to carry out its purposes and objectives as
set forth herein,

SEC. 16. Assistance from Other Government Offices. — The
WVMC may call upon any department, bureau, office, agency or instrumentality
of the government, including government-owned or -controlled corporations, for

such assistance, as it may need in the pursuit of its purposes and objectives.

All individuals, entities and institutions are hereby enjoined to render full
assistance and cooperation to the WVMC in the accomplishment of its objectives
and activities.

SEC. 17. Donations. - Any donation, contribution, bequest and
grant which may be made to the WVMC shall be exempt from the donor's tax
and the same shall be considered as allowable deduction from the gross income
in the computation of the income tax of the donor in accordance with the
provisions of the National Internal Revenue Code (NIRC) of 1997, as amended:
Provided, That such donations shall not be disposed of, transferred or sold.

SEC. 18. Auditor. - The Commission on Audit shall appoint a
representative who shall be the auditor of the WVMC and such personnel as


may be necessary to assist said representative in the performance of his/her
duty.

SEC. 19. Civil Service Law Coverage for Employees. — The hiring,
appointment, promotion, discipline and other terms and conditions of the service
of all employees of the WVMC and the San Joaquin Municipal Hospital shall be
consistent with the provisions of the Civil Service law, rules and regulations,
except as otherwise provided for in this Act.

SEC. 20 Salaries, Benefits and Other Compensation. - The
salaries, benefits and other compensation of the officers and employees of the
WVMC shall be in accordance with the existing compensation and position
classification system.

SEC, 21 Early Retirement and Separation Benefits. — Officials and
employees of the WVMC and the San Joaquin Municipal Hospital voluntarily
opting for separation or retirement shall be entitled to the benefits provided for
under existing laws.

SEC. 22 Non-registration with the Securities and Exchange
Commission. — The WVMC, as a government-owned and -controlled hospital
corporation, with the San Joaquin Municipal Hospital as its subsidiary, shall be
governed by its charter and prohibited from being registered in the Securities and
Exchange Commission (SEC) as a private corporation.

SEC. 23 Implementing Rules and Regulations (IRR). — Within
fifteen (15) days from completion of membership, the Board of Trustees shall
convene to formulate the rules and regulations necessary for the implementation
of this Act which shall be issued within six (6) months after the approval of this
Act. The IRR shall adopt appropriate provisions of issuances of government
agencies on corporate organizational structures as well as corporate

governance.

SEC. 24 Events of Early Termination. - (a) In the event a law
has been passed and approved by Congress revoking the conversion of the
WVMC into a Corporation and the San Joaquin Municipal Hospital as its
subsidiary.


(b) In the event that the Corporation shall fail to perform or to meet pre-
arrange indicators or to a degree such that in a reasonable opinion of the
Secretary of the DOH, such failure amounts to an ineffective management of the
hospital and it jeopardizes the delivery of hospital and medical services.

SEC. 25 Suppletory Application of Corporation Code. - The
provisions of the Corporation Code shall have suppletory application in matters
not provided for in this Act.

SEC. 26. Reports. — The Corporation shall, within three (3) months
after the end of every fiscal year, submit such periodic or other reports as may
be required of it from time to time to the DOH.

SEC. 27. Transfer of Personnel, Assets, Records and Equipments. —
All personnel, assets, funds, records, equipments and liabilities of the WVMC
and the San Joaquin Municipal Hospital are hereby transferred to and shall
henceforth appertain to the WVMC as a Corporation and the San Joaquin
Municipal Hospital as its subsidiary.

SEC. 28. Effect of Dissolution of the Center. — If, for any reason, the
WMC is dissolved, its property and personnel remaining at the time of such
dissolution shall revert to the DOH and the San Joaquin Municipal Hospital shall
revert to the local government of San Joaquin for disposition in accordance with

law.

SEC. 29.  Separability Clause. — If any part, section or provision of
this Act is held invalid or unconstitutional, the other parts or provisions not
affected thereby shall remain in force and effect.

SEC.30. Repealing Clause. — All other laws, decrees, orders,
issuances, rules and regulations that are inconsistent with the provisions of this
Act are hereby repealed, amended or modified accordingly.

SEC. 31. Effectivity. -— This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in any newspaper of general

circulation.

Approved,