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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES

Quezon City
SEVENTEENTH CONGRESS yw
Third Regular Session

House Bill No. _ 8480

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

EXPLANATORY NOTE

Article 7, Section 20 of the Constitution states, “The President may contract or guarantee
foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the
Monetary7 Board, and subject to such limitations as may be provided by law. The Monetary"
Board shall, within thirty’ days from the end of every quarter of the calendar year, submit to
the Congress a complete report of its decisions on applications for loans to be contracted or
guaranteed by the Government or government-owned and controlled corporations which
would have the effect of increasing the foreign debt, and containing other matters as may be
provided by law”.

In consonance with this Constitutional provision, Republic Act No. 4860 was enacted in 1966
which authorizes the President to incur indebtedness on behalf of the Republic in the amount
not to exceed One billion US dollars. It was later amended by Republic Act No. 8182 which
excluded Official Development Assistance (ODA) from the limit.

Based on government data, the amount of foreign debts acquired and the allocated budget for
debt servicing has been increasing for the past three years. From a total debt of USS78.9
billion in 2014, this has ballooned to P6.432 trillion as of August 2017. While incurring
public debt is not necessarily undesirable, obtaining debt without sound evaluation and
proper analysis would prove to be detrimental to the economic and social interest of our
country given our government's limited resources,

While we recognize the power given to the President when it comes to incurring loans meant
spur growth and promote equity in the provision of public services and benefits, we should
censure transparency and accountability on all government borrowings. Hence, there is a need
institutionalize an effective check and balance on the executive power to contract and
guarantee loans.

In recognition of the Congress’ power of the purse as well as the exercise of its oversight
powers, this proposed measure seeks to establish a Congressional Oversight Committee to
ensure the fiscal health of the country by ensuring that the proper implementation of all laws,
implementing rules and regulations, and executive issuances relating to foreign and domestic
borrowings are observed.

In view of the foregoing, immediate passage of this measure is camestly sought.

‘Representative
Magdalo Para sa Pilipino Party-List


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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

House Bill No. _ 8480

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT.
CONSTITUTING A CONGRESSIONAL OVERSIGHT COMMITTEE ON DEBT
MANAGEMENT TO LOOK INTO ALL FOREIGN AND DOMESTIC
BORROWINGS NEGOTIATED, CONTRACTED OR GUARANTEED BY THE
PRESIDENT ON BEHALF OF THE PHILIPPINES AS WELL AS THOSE BY THE
GOVERNMENT OR GOVERNMENT OWNED AND CONTROLLED
CORPORATIONS AND FOR OTHER PURPOSES

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

SECTION 1. Declaration of Policy. — \n accordance with the Constitutional
prescription on transparency and accountability, the State shall endeavor and pursue a debt
management system that shall be made available to public scrutiny and subject to strict
adherence to existing pertinent laws and rules and regulations.

The State shall likewise ensure the most appropriate use of its limited resources
bearing in mind the Constitutional mandate of giving priority to education, health, science
and technology, acceleration of social progress and promotion of total human liberation and
development.

SEC.2. The Congressional Oversight Committee. — A Congressional Oversight
Committee on Debt Management, hereinafter referred to as the Committee, is hereby
constituted in accordance with the provisions of this Act.

The Committee shall be composed of the Chairpersons of the Committee on Ways
and Means of the Senate and the house of Representatives and three (3) additional members
from each chamber to be designated by the Senate President and the house Speaker,
respectively. One (1) of the said three (3) additional members shall come from the minority
members of each chamber.

The Congressional Oversight Committee constituted under Section 8, paragraph (c) of
Republic Act No. 8182 shall cease to exist and is hereby replaced by the Committee.

SEC.3. Functions and Duties of the Committee. — The Committee shall, among.
others, in aid of legislation:
a) Monitor and ensure the proper implementation of all laws, implementing rules and
regulations, and executive issuances relating to foreign and domestic borrowings
such as, but not limited to, Republic Act Nos. 4860 and 8182;


b) Review all documents relating to contracts, guarantees and negotiations on foreign
and domestic borrowings.

©) Review all susbsisting contracts and guarantees and negotiations on foreign and
domestic borrowings; and

) Determine that the power of the President of the Republic, the government and
government owned and controlled corporations to negotiate, contract and
guarantee foreign and domestic borrowings is reasonably and legally exercised

The phrase foreign and domestic borrowings shall refer to such borrowings or loans
negotiated, contracted and/ or guaranteed by the President on behalf of the Philippines, the
government or government owned and controlled corporations.

SEC.4. Requisite Authority of the Committee. — \n furtherance of the above-
enumerated functions and duties of the Committee, the Committee is empowered to require
all government agencies concemed, including the Office of the President, the submission of
all pertinent information and data on foreign and domestic borrowings. Provided, however,
that information or data that are privileged shall be furnished the Committee only in
Executive Session.

SEC. 5. Separability Clause. — If any provision of this Act or the application of such
provision to any person or circumstance is declared invalid, the remainder of the Act or the
application of such provision to other persons or circumstances shall not be affected thereby.

SEC. 6. Repealing Clause. — All laws, decrees, executive issuances, rules and
regulations inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 7. Effectivity Clause. — This Act shall take effect fifteen (15) days after
publication in at least two (2) newspapers of general circulation.

Approved,