FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session }

HOUSE of REPRESENTATIVES
House Bill No.__ 4723

Introduced by: MA. THERESA B. BONOAN-DAVID
4% District, City of Manila

EXPLANATORY NOTE

Part of the legislative priorities of Congress for fiscal reforms to
achieve macroeconomic stability is to provide a framework for stronger
financial oversight of Government-Owned or Controlled Corporations,
Government Financial Institutions, state-owned universities, and other
agencies in the public sector.

Article Xi, Section 16 of the Constitution provides that Government-
Owned or Controlled Corporations may be created or established by special
charters in the interest of the common good and subject to the test of
economic and financial viability.

Despite the explicit mandate under the Constitution for these
corporations to be subject to the test of economic and financial viability,
Government-Owned or Controlled Corporations account for an inordinately
high proportion of the country’s external debt, public sector deficits, and
total credits.

There is thus a need for Congress to review, monitor, and evaluate the
overall performance of these Government-Owned or Controlled Corporations
to ascertain whether or not these corporations have been fulfilling their
mandates under their respective charters and are economically and
financially viable. Congress must ensure the accountability of these entities
through effective monitoring and oversight for the benefit of the people.

In view of the foregoing, the passage of this bill is earnestly sought.

wer

MA. THE! BONOAN-DAVID
4th District, City of Manila


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES }
First Regular Session }

HOUSE of REPRESENTATIVES
House Bilt No. 4723

Introduced by: MA. THERESA B. BONOAN-DAVID
4% District, City of Manila

AN ACTTO ENSURE THE ACCOUNTABILITY OF
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS
(GOCC), GOVERNMENT FINANCIAL INSTITUTIONS,
STATEOWNED UNIVERSITIES, AND OTHER SIMILAR AGENCIES IN
THE PUBLIC SECTOR BY REQUIRING THESE ENTITIES
TO BE EVALUATED AND SUBJECTED TO THE TEST OF ECONOMIC
AND FINANCIAL VIABILITY, CREATING A CONGRESSIONAL
OVERSIGHT COMMITTEE THEREFOR, AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. - This Act shall be known as the “Government-
Owned or Controlled Corporations (GOCCs) Accountability Act of 2011.”

Sec. 2. Policy. - It is the policy of the State to create or establish
Government-Owned or Controlled Corporations only in the interest of the
common good and subject to the test of economic and financial viability.

Every Government-Owned or Controlled Corporation must be free
from fraud, abuse, and wastage, and must be made accountable through
effective monitoring and oversight by Congress for the benefit of the
people.

Sec. 3. Government-Owned or Controlled Corporation Defined. — For
purposes of this Act, “Government-Owned or Controlled Corporation” or
“GOCC” refers to a stock or non-stock corporation, performing
governmental or proprietary functions directly chartered by special law
or, if otherwise formed, is owned or controlled by the Government
directly or indirectly through a parent or subsidiary corporation. It


includes Government Financial Institutions, state-owned universities,
and other similar agencies in the public sector.

Sec. 4. Submission of Reports. - Every GOCC is required to submit
quarterly and consolidated annual reports to Congress.

Each quarterly report, to be submitted within thirty (30) days from
the end of each calendar quarter, shall be in the form of an executive
summary concerning the finances and operations of the GOCC and shall
indicate any achievement and major projects. It shall include all financial
reports and minutes of directors’ and shareholders' meetings for the
subject quarter.

Each annual report, to be submitted within sixty (60) days from the
end of each calendar or fiscal year as may be applicable, shall include
the following:

1) A list of directors and officers;

2) A consolidated executive summary;

3) A summary of the remuneration paid to directors and officers over
the last year;

4) The Commission on Audit report for the last year; and

5) The audited financial statement for the last year,

Sec. 5. Mandatory Publication. - Every GOCC is required to disclose and
publish in at least one (1) newspaper of general circulation within thirty
(30) days from the end of each calendar or fiscal year as may be
applicable the following information:

1) Travel and hospitality expenses for directors and officers; and
2) Contracts for goods and services over five hundred thousand pesos
{P500,000.00)

Sec. 6. Creation of a Congressional Oversight Committee for GOCCs. -
There is hereby created a Congressional Oversight Committee for GOCCs.
to be composed of six (6) members, with three (3) representatives each
from the Senate and the House of Representatives, and co-chaired by the
Chairpersons of the Senate Committee on Government Corporations and
Public Enterprises and the House Committee on Government Enterprises
and Privatization.

The Congressional Oversight Committee for GOCCs shall receive
and evaluate the reports submitted by the GOCCs to Congress. It shall


be the principal legislative monitoring arm and policy recommending
body for all GOCCs.

Sec. 7. Powers and Functions of the Congressional Oversight Committee
for GOCCs, - The Congressional Oversight Committee for GOCCs shall
have the following powers and functions:

1) Prescribe and adopt guidelines that will govern its work;

2) Secure. from any department, bureau, office, agency, or
instrumentality of the Government such assistance as may be
needed, including technical information preparation and
production of reports and submission of recommendations or
plans as it may require;

3) Summon by subpoena ad testificandum any public or private
citizen to testify before it, or require by subpoena duces tecum to
produce before it such records, reports or other documents as
may be necessary in the performance of its functions;

4) Use resource persons from the public and private sectors as may
be needed;

5) Hold hearings, receive testimonies and reports pertinent to its
specified concerns;

6) Approve the budget for the Congressional Oversight Committee
for GOCCs and all disbursements therefrom, including
compensation of all personnel;

7) Organize its staff and hire and appoint such employees and
personnel, whether temporary or contractual, subject to
applicable laws; and

8) Exercise all other powers necessary to attain its purposes.

Sec. 8. Conduct of Review. - The Congressional Oversight Committee for
GOCCs shall review the quarterly and annual reports submitted by the
GOCCs to Congress.

The Congressional Oversight Committee for GOCCs may require
the submission of additional pertinent corporate and commercial
documents and/or the revelation of all relevant data as may be deemed
necessary for the conduct of such review. Failure to submit any of the
required documents or to reveal any required data shall subject the
directors and officers of the concerned GOCC to appropriate
administrative, civil, and criminal liability.


The Congressional Oversight Committee for GOCCs shall review the
reports, documents, and data submitted by each GOCC and shall be
authorized to conduct investigations in furtherance of such review. The
scope of review shall include the:

1) The accomplishments of the goals and as may be set forth in
their respective charters;

2) Propriety of the allocation of resources of each GOCC;

3) Existences or instances of duplication of functions; and

4) Financial and social investment rate of returns and productivity:

Sec. 9, Submission of Recommendations. - The Congressional Oversight

Committee on GOCCs shall submit its recommendations to the Senate
and the House of Representatives, copy furnished to the Office of the
President, for appropriate action. The recommendations may include the

following:

1) Continued existence of and corresponding budgetary allocation
for each GOCC;

2) Termination of the existence of or budget allocation for the
GOCC by either privatization or dissolution;

3) Merger or consolidation of GOCCs performing similar or
overlapping functions;

4) Restructure of the GOCCs in the Executive branch;

5} Adjustment of compensation packages for directors, officers, and
employees:

6) Filing of appropriate civil, criminal, or administrative charges;

7) Contract review or renegotiation as may be appropriate; and

8) Other recommendations as may be deemed appropriate

Sec. 10. Repealing Clause. - All laws, decrees, orders, rules and
regulations or other issuances or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

Sec. 11. Separability Clause. - If any portion or provision of this Act is
declared unconstitutional, the remainder of this Act or any provisions
not affected thereby shall remain in force and effect.

Sec. 12. Effectivity Clause. - This Act shall take effect after fifteen (15)
days following the completion of its publication either-in the Official
Gazette or in a newspaper of general circulation in the Philippines.

Approved.