13th CONGRESS 0 
REPUBLIC 
) 
1 
'o(J JUL. -G All :04 
OF THE PH 
NES 
First Regular Session 
1 
~~~~~~V~~ BY:.., 
*~~ 
\ 
S. BILL NO. 
f 
Introduced by Senator Ralph G. Recto 
Explanatory Note 
The enactment of Republic Act No. 6957 or the BOT Law, as amended by 
blic Act 7718 in 1994, has brought in big-budgeted projects such as the Metro Rail 
Skyway, the NAIA 11 and 111 airport terminals and the now 
, which government, on its own, could 
s. Contingent liabilities have become a 
nt continues to encourage the private 
tee covers to private 
mze, the risks faced by 
larly those under the 
dent power producers (I 
en given its limited res 
astructure. By providin 
s able to eliminate, if no 
public infrastructure proj 
However, in a policy paper', the Philippine Institute for Development Studies 
guarantees provided to BOT projects have also given rise to 
es of the government. PIDS estimates that the cumulative 
OT project proponents amount to US$89.4 billion over the 
a 15% discount rate, a net present value of P208.3 bi 
% of GNP in 1995. Annually, PIDS estimates that government faces co 
'lities at an average of 0.3 to 0.4 % of GNP. 
This bill reqgires the annual public disclosure of government's contingent 
1iabilitieTd least a month prior to the submission of the annual national expenditure 
by the President to Congress. It will enable members of Congress to 
tand better the fiscal and monetary impact of the government's contingent 
ities on the national budget for the succeeding year. Likewise, the media, the 
c, investors, credit-rating agencies, and multilateral institutions can make sound 
fiscal and monetary performance of the administration and in 
determining whether they should chastise government for exposing the State to 
excessive risks and for concealing those risks. 
In this age when fiscal discipline has become a byword in the international 
financial markets, the passage of this bill has never been more a 
Thus, its immediate approval is earnestly sought. 
' Llanto, Gilbert0 and Ma. Cecilia Soriano. 1997. Government guarantee 
second, third look at the policy. PIDS Policy Notes Nu 97-11, Makab City. Philuppine Institute for 
Development Studies. 


THE PHILIPPINES 
714 
JUL -6 MI :a4 
S E N A T E  
AN ACT 
DISCLOSURE 
OF 
ALL 
SECTION 
1. Title. - This Act shall be known as the "Contingent Liabilities 
losure Act of 2004". 
SEC. 2. Declaration of Polzcy. - It is the declared policy of the State to 
decisions and as such, shall afford the citizen access to official records, and to 
documents, and papers pertaining to official acts as well as to government 
research data used as basis for fiscal and monetary policy. 
SEC. 3. Definition of Terms. - The following terms used in this Act shall 
12 
have the meanings stated below: 
(a) 
Contingent liabilities - explicit guarantees extended by the national 
government or any of its agencies including government-owned and controlled 
corporations 
- -  
(GOCCs) including, but not limited to, the following: 
4 
15 
16 
(i) 
Guarantees arising from Republic Act No. 6957, as 
17 
amended; 
18 
(ii) 
Liabilities of GOCCs; 
19 
(iii) 
Guarantee programs under the Quedan and Rural Credit 
20 
Corporation (QRCC), Small Business Guarantee and 
1 
$;MkTE 
Q?$ycE or 7Lif 
~~~~~~~~~ 
OF THE REPUBLIC ) 
THE PHILIPPINES 
714 
JUL -6 MI :a4 
S E N A T E  
S. BILL NO. 
Introduced by Senator Ralph G. Recto 
AN ACT 
AL 
DISCLOSURE 
OF 
ALL 
T LIA 
te and the House of Representatives of the Philippines zn 
SECTION 
1. Title. - This Act shall be known as the "Contingent Liabilities 
losure Act of 2004". 
SEC. 2. Declaration of Polzcy. - It is the declared policy of the State to 
people to information on matters of public concern. The 
11 be transparent in all its financial transactions and 
decisions and as such, shall afford the citizen access to official records, and to 
documents, and papers pertaining to official acts as well as to government 
research data used as basis for fiscal and monetary policy. 
SEC. 3. Definition of Terms. - The following terms used in this Act shall 
2 
have the meanings stated below: 
(a) 
Contingent liabilities - explicit guarantees extended by the national 
government or any of its agencies including government-owned and controlled 
corporations 
- -  
(GOCCs) including, but not limited to, the following: 
4 
15 
16 
(i) 
Guarantees arising from Republic Act No. 6957, as 
17 
amended; 
18 
(ii) 
Liabilities of GOCCs; 
19 
(iii) 
Guarantee programs under the Quedan and Rural Credit 
20 
Corporation (QRCC), Small Business Guarantee and 


4 
Finance 
Corporation 
(SBGFC), 
the 
Comprehensive 
Agricultural Loan Fund (CALF) under the Land Bank of the 
Philippines (LBP), Trade and Industry Development 
Corporation (TIDCORP), Industrial and Guarantee Loan 
Fund (IGLF) under the Development Bank of 
the 
Philippines (DBP), and the Home Guaranty Corporation 
(HGC); and 
Other potential losses arising from pending and threatened 
litigation relating to claims and assessments in respect of 
--breach of contract, damages to persons and property, and 
(iv) 
similar items. 
(b) Full disclosure - reporting of the government's contingent 
ilities indicating, but not limited to, all the specific contingent liabilities of 
nment classified by major category, the amount involved, the purpose and 
of each contingent liability, its duration, and the intended beneficiaries. 
rmation on past calls on the government to meet contingent liabilities shall 
, 
SEC. 4. Full disclosure of contingent liabilities. - The Department of Finance 
(DOF) is hereby mandated to implement full disclosure of all contingent 
liabilities of the national government or any of its agencies including GOCCs. All 
ation related to the contingent liabilities of the government shall be 
d in at least two newspapers of national circulation at least a month 
prior to the submission of the annual national expenditure program by the 
3 
24 
President to Congress. 
SEC. 5. Irnplemenfing rules and uegulations. - The DOF, the National 
27 
Economic Development Authority (NEDA), the Department of Public Works and 
28 
Highways (DPWH), and other appropriate government agencies shall 
29 
promulgate rules and regulations necessary for the effective implementation of 
0 
this Act. 


SEC. 6. Repealing Clause. - All laws or parts of any law inconsistent with the 
rovisions of this Act are hereby repealed or modified accordingly. 
SEC. 7. Separabzlzty Clause. - If any provision of this Act is held invalid, the 
rovisions not affected thereby shall continue in operation. 
SEC. 8. Efectivity Clause. - This Ac 
ication in at least two (2) newspa 
ct fifteen (15) days after 
- 
.- 
3 3