NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Third Regular Session
‘JF'ffitf of 111’ 3 ■(flM u
24 JUL-9 P4:28
SENATE
s. No. 2722
lllxtl.. LI
Introduced by Senator Raffy T. Tulfo
AN ACT
ENCOURAGING CORPORATE SOCIAL RESPONSIBILITY, PROVIDING 
INCENTIVES THEREFOR
EXPLANATORY NOTE
The value of corporate social responsibility cannot be stressed sufficiently 
enough: through the initiatives that benefit society, the environment, and the 
economy, businesses contribute to the broader well-being of communities. At the 
heart of it, these actions, whether through philanthropy, sustainability efforts, or 
community engagement, is a manifestation of the necessity of businesses in pursuit 
of a better world. What we witness from these efforts is pertinent not only to the 
corporate entities themselves but as well to the society and environment they impact. 
It should thus follow that the establishment of corporate social responsibility (CSR) 
within business organizations is of paramount importance as it merits the full attention 
and resources of our government.
Recognizing this, the Constitution seeks to encourage active participation from 
businesses in the Philippines. Regrettably, despite the intrinsic value of CSR, many 
business organizations have yet to fully embrace its principles. For one, there is a lack 
of structured incentives and clear guidelines that would encourage companies to 
undertake CSR initiatives. The absence of a systematic framework in order to 
recognize and reward CSR efforts has led to inconsistent and superficial engagement


from the private sector. These gaps, in its purest intent, necessitate a legislative 
measure to promote, regulate, and incentivize CSR activities comprehensively.
The Corporate Social Responsibility Act seeks to establish a developed 
framework for the promotion and implementation of CSR among business 
organizations by amending Section 42 of Republic Act (R.A.) No. 11232 or the Revised 
Corporation Code of the Philippines to allow companies to allocate surplus profits for 
CSR projects. Seeing the essentiality of such efforts, the Corporate Social 
Responsibility Act mandates the Department of Trade and Industry (DTI) to recognize 
and reward outstanding CSR efforts. This recognition aims to elevate the status of 
CSR activities which motivates companies to achieve excellence in their social 
responsibility initiatives.
Moreover, this bill requires that all business organizations report their CSR 
activities to relevant government agencies, ensuring transparency and accountability. 
The Secretary of Finance, in coordination with the DTI and the Securities and 
Exchange Commission (SEC), will issue implementing rules and regulations to facilitate 
the effective execution of the bill. This approach then merits far greater support and 
discretion in pursuit of a supportive environment for CSR and promotes active private 
sector participation in sustainable development and social responsibility.
In view of the foregoing, the early passage of this bill is earnestly requested.
RAFFY T. TULFO
Senator
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NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
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24 JUL -9 P4 :28
SENATE
S. No. 2722
atCHIVbO B\:
Introduced by Senator Raffy T. Tulfo
AN ACT
ENCOURAGING CORPORATE SOCIAL RESPONSIBILITY, PROVIDING 
INCENTIVES THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress Assembled:
1 
Section 1. Short Title. — This Act shall be known as "Corporate Social
2 
Responsibility Act".
3 
Sec. 2. Declaration of Policy. — The State recognizes the vital role of the private
4 
sector in nation-building and shall encourage its active participation in fostering
5 
sustainable economic development and environment protection in the Philippines.
6 
Towards this end, the government shall mobilize its various agencies, in
7 
coordination with non-government and people's organizations, to work hand-in-hand
8 
for the integration, promotion, and strengthening of corporate social responsibility in
9 
all business organizations.
10 
Sec. 3. Corporate Social Responsibility. — All business organizations
11 
established and operating under Philippine laws, whether domestic or foreign, are
12 
hereby encouraged to observe corporate social responsibility in the operation of their
13 
businesses in the country.
14 
As used in this Act, corporate social responsibility (CSR) refers to the
15 
commitment of business to contribute on a voluntary basis to sustainable economic
16 
development by working with relevant stakeholders to improve their lives in ways that


1 
are good for business, sustainable development agenda and society at large. CSR-
2 
related activities shall include the following:
3 
a. Charitable programs and projects;
4 
b. Scientific research;
5 
c. Youth and sports development;
6 
d. Cultural or educational promotion;
7 
e. Services to veterans and senior citizens;
8 
f. Social welfare;
9 
g. Environmental sustainability;
10 
h. Health development;
11 
i. Disaster relief and assistance;
12 
j. Socialized and low-cost housing; and
13 
k. Employee and worker related CSR activities.
14 
All business organizations are allowed to donate products and service under
15 
their CSR-related activities for disaster relief and assistance, in accordance with the
16 
regulations to be issued by the appropriate government agency. All existing laws and
17 
regulations restricting or prohibiting the right of local government units under a state
18 
of calamity and /or during a national emergency to solicit or accept any donation of
19 
products and services under the CSR- related activities for disaster relief and
20 
assistance of a business organization are hereby amended.
21 
Sec. 4. Deduction from Unrestricted Retained Earnings— To encourage
22 
companies to engage in CSR, Section 42 of Republic Act No. 11232, otherwise known
23 
as the "Revised Corporation Code of the Philippines" is hereby amended to read as
24 
follows:
25 
"SEC. 42. Power to Declare Dividends. - xxx
26 
"Stock corporations are prohibited from retaining surplus profits in excess of
27 
one hundred percent (100%) of their paid-in capital stock, except: (a) when justified
28 
by definite corporate expansion OR FOR DEFINITE CORPORATE SOCIAL
29 
RESPONSIBILITY (CSR) projects or programs approved by the board of directors;
30 
or (b) when the corporation is prohibited under any loan agreement with financial
31 
institutions or creditors, whether local or foreign, from declaring dividends without
32 
their consent, and such consent has not yet been secured; or (c) when it can be clearly


1 
shown that such retention is necessary under special circumstances obtaining in the
2 
corporation, such as when there is need for special reserve for probable
3 
contingencies."
4 
Sec. 5. Awards and Recognition. — The Department of Trade and Industry
5 
(DTI) shall recognize and reward ail business organizations for outstanding, innovative
6 
and world-class CSR-related services, projects and programs. It shaii likewise extend
7 
endorsement and encouragements to domestic and foreign corporations doing
8 
business in the Philippines which are candidates for recognition in international award-
9 
giving bodies for their CSR-related activities.
10 
Sec. 6. Local Government Units. — All local government units where CSR-
11 
related activities are conducted shall extend whatever assistance is necessary for
12 
business organizations to accomplish their CSR programs and projects and shall
13 
encourage business organizations within their territorial jurisdiction to conduct CSR
14 
projects/activities.
15 
Sec. 7. Periodic Report. — All business organizations shall submit the list of
16 
their CSR activities as part of their annual or regular report to the Securities and
17 
Exchange Commission (SEC), DTI, or the Department of Finance, as the case may be.
18 
Sec. 8. Implementing Rules and Regulations. — Within sixty (60) days after
19 
the effectivity of the Act, the Secretary of Finance shall, in coordination with Dn and
20 
the SEC, promulgate rules and regulations for the effective implementation of this Act.
21 
Sec. 9. Separability Clause. — If any provision of this Act is declared invalid or
22 
unconstitutional, the remaining provisions not affected thereby shall continue in full
23 
force and effect.
24 
Sec. 10. Repeating Clause. — Section 42 of Republic Act No. 11232 is hereby
25 
amended. All laws, decrees, orders, rules and regulations, and other issuances, or
26 
parts thereof, inconsistent with this Act are hereby repealed or modified accordingly.
27 
Sec. 11. Effectivity. — This Act shall take effect fifteen (15) days after its
28 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,