SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 767 
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JULI '5 
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INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
Republic Act No. 8182, as amended by Republic Act No. 8555, defines 
Official Development Assistance (ODA), as a loan or a grant administered with 
the objective of promoting sustainable social and economic development and 
welfare of the Philippines; Since domestic resources are not enough to finance 
domestic investments needed for economic growth and development, the 
country, therefore, resorts to foreign resources to supplement existing resources. 
ODA, thus, provides a relatively more concessional means of financing 
government programs and projects. 
While the objectives of the ODA Law is laudable, as this will mean more 
infrastructure projects that will greatly aid in the growth and development of the 
country, ODA has, unfortunately, been used to muddle, if not to avoid, the 
requirement of competitive bidding in the procurement of goods, services, and 
infrastructure projects. Under the current ODA law, particularly under Section 11-
A thereof, the application of the country's procurement laws may be waived or 
modified, which thereby negates the possibility of a price challenge that would 
help lower the debt expenditure of the government. What then is the guarantee of 
the country that the loan contracted as ODA was tightly negotiated and in 
accordance with sound procurement practice if the same did not go through 
competitive bidding? 
It is also noteworthy that during the passage of the ODA law, as well as 
during the passage of the amendatory law thereto (Republic Act No. 8555), the 
country did not yet have a consolidated procurement law that is now embodied in 
Republic Act No. 9184, otherwise known as the Government Procurement 
Reform Act, which mandates, among others, the use of competitive bidding in the 
procurement of goods, services, and infrastructure projects that would help 
ensure the most advantageous price for the country. 
This bill seeks to establish a check and balance in contracting ODA loans 
relative to the procurement of goods, services, and infrastructure projects by 
making the same the subject of review and approval by the Senate prior to its 
perfection and consummation. 
In view of the foregoing, the approval of this bill is earnestly sought. 
Senator 


, 
... -
, 'to . 
~ 
SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 7 6 7 
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'13 
JUL 15 
I) 6 :18 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
IMPOSING SAFEGUARDS IN CONTRACTING LOANS CLASSIFIED AS 
OFFICIAL DEVELOPMENT ASSISTANCE, AMENDING FOR THE PURPOSE 
REPUBLIC ACT NO. 8182, AS AMENDED BY REPUBLIC ACT NO. 8555, 
OTHERWISE KNOWN AS THE OFFICIAL DEVELOPMENT ASSISTANCE 
ACT OF 1996, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 2 of Republic Act No. 8182. as amended. otherwise 
known as the Official Development Assistance Act of 1996, is hereby amended 
to read as follows: 
SEC. 2. Official Development Assistance (ODA). - For purposes of this 
Act. ODA is a loan or loan and grant which means all of the following criteria: 
(a) 
It must be administered with the objective of promoting sustainable 
social and economic development and welfare of the Philippines; 
(b) It must be contracted with governments of foreign countries with 
whom the Philippines has diplomatic. trade relations or bilateral 
agreements or which are members of the United Nations. their 
agencies and international or multilateral lending institutions; 
(c) 
There are no available comparable financial instruments in the capital 
market; and, 
(d) 
It must contain a grant element of at least [twenty-five] FORTY 
percent (40Yo). Grant element under this Act is the reduction enjoyed 
by the borrower whenever the debt service payments which shall 
include both prinCipal and interest and expressed at their present 
values discounted at ten percent (10%) OR AT THE YIELD ON 
COMPARABLE COMMERCIAL !;lONDS MOST RECENTLY ISSUED 
BY THE NATIONAL GOVERNMENT. WHICHEVER IS LOWER, are 
less than the face value of the loan or loan and grant. The grant 
element of a loan or loan and grant is computed at the ratio of (i) the 
difference between the face value of the loan or loan and grant and 
the debt service payments to (Ii) the face value of the loan or loan 
and grant. 


....... 
.' 1...' 
SEC. 3. Section 11-A of Republic Act No. 8182, as amended, is hereby 
amended to read as follows: 
"SEC. 11-A. In the contracting of any loan, credit or 
indebtedness under this Act or any law, the President of the 
Philippines may, when necessary, agree to waive or modify the 
application of any provision of law granting preferences in 
connection with, or imposing restrictions on, the procurement of 
goods or services OR INFRASTRUCTURE PROJECTS: Provided, 
however, IF THE PROCUREMENT DOES NOT GO THROUGH 
COMPETITIVE BIDDING MANDATED UNDER REPUBLIC ACT 
NO. 9184, OTHERWISE KNOWN AS THE GOVERNMENT 
PROCUREMENT REFORM ACT THE LOAN TO BE OBTAINED, 
REGARDLESS 
OF 
CLASSIFICATION, 
PRIOR 
TO 
ITS 
PERFECTION AND CONSUMMATION, AS WELL AS THE GOOD, 
SERVICE, 
OR 
INSFRASTRUCTURE 
PROJECT 
THAT 
IS 
INTENDED TO BE FUNDED THEREWITH, SHALL BE THE 
SUBJECT OF REVIEW AND RATIFICATION BY AT LEAST TWO-
THIRDS (2/3) OF THE MEMBERS OF THE SENATE; Provided, 
further, That as far as practicable, utilization of the services of 
qualified Filipino citizens or corporations or associations owned by 
such citizens in the prosecution of projects financed under this Act 
shall be prepared on the baSis of the standards set for a particular 
project: PROVIDED, FINALLY, That the matter of preference in 
favor of articles, materials, or supplies of the growth, production or 
manufacture of the Philippines, including the method or procedure 
in the comparison of bids for purposes therefor, shall be the subject 
of agreement between the Philippine Government and the lending 
institution. (as amended by R.A. 8555)." 
SEC. 4. Separability Clause. - Any portion or provisions of this Act that 
may be declared unconstitutional or invalid shall not have the effect of nUllifying 
other portions and provisions hereof as long as such remaining portion or 
provision can still subsist and be given effect in their entirety. 
SEC. 5. Repealing Clause. - All laws, decrees, executive orders, 
proclamations and administrative regulations, or parts thereof inconsistent 
herewith are hereby repealed or modified accordingly. 
SEC. 6. Effectivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in at least two national papers of general circulation. 
Approved,