SENATE OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
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First Regular Session 
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OCT 16 
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SENATE .. 
Senate Bill No. . 1855 
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO 
EXPLANATORY NOTE 
This bill seeks to bar local government units from obtaining loan 
for infrastructure projects ont; (1) year prior to evcery National and/or 
Local Elections. In the same vein, this is also intended to stop lending 
institutions from approving it, or releasing its proceeds to the local 
government. 
Loans of any kind are burden to'local governments. As such, it 
must be use to serve its purpose and not to fatten the pockets of public 
officials. But unlike loans for social services, loans for infrastructure are 
source of graft and corruption especially when election draws near. It is 
arguably the milking cow of crooked politicians and the money stashed 
from this practice is used during elections .. 
On the other hand, corrupt public officials can hardly reap 
monetary windfall from livelihood projects, and financial (burial, 
educational, 
medical and transportation) 
assistance 
to 
indigent 
constituents because of the very nature of this service. 
This will serve us guaranty to our people that loans contracted by 
their local government units one year before the election will be for social 
services only. 
The immediate approval of this bill is earnestly sought . 
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~--: 
JOSEPH VICTOR G. EJERCITO 
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SENATE OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regular Session 
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SENATE 
Senate Bill No. 1855 
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OCT 16 
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Introduced by SENATOR JOSEPH VICTOR G. EJERCITO 
AN ACT PROHIBITING LOCAL GOVERNMENT UNITS FROM 
APPLYING FOR LOANS TO FINANCE INFRASTRUCTURE PROJECTS 
AND LENDING INSTITUTIONS FROM APPROVING IT OR RELEASING 
THE PROCEEDS ONE YEAR BEFORE ELECTIONS. 
Be it enacted by the Senate and House of Representatives of the 
Philippines in the Congress assembled: 
SECTION 1. Short Title. This Act shall be known as Loan Election 
Ban 0/2013. 
SECTION 2. Declaration of Policy. The State shall maintain honesty 
and integrity in the public service and take positive and effective 
measures against graft and corruption. 
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. 
SECTION 3. Definition of Terms. As used in th~s Act: 
(al 
"Infrastructure loan" shall mean loan made by a local 
government unit from any private or public lending institution for the 
purpose of financing the construction, 
rehabilitation, 
repaIr or 
improvement of local infrastructure project. 
(bl 
"Local government unit" shall mean political subdivision of 
the State duly constituted by law which has substantial control of local 
affairs. It shall refer to barangay, municipality, city, province and the 
Autonomous Region in Muslim Mindanao (ARMM). 
(c) 
"Local infrastructure project" shall include but is not limited 
to the construction, repair, rehabilitation or improvement of buildings, 
roads, bridges, public markets, pavements, pathways, footbridges, 
fences, stages, police/jail/fire stations, housing units, flood control, 


, . 
water supply system, irrigation projects/facilities, electrification projects, 
septage / sewerage project. 
SECTION 4. Prohibited Acts. The following acts shall be prohibited: 
(a) 
The enactment of a resolution by the sangguniang barangay, 
sangguniang 
bayan, 
sangguniang 
panlungsod, 
sangguniang 
panlalawigan, or the Regional Legislative Assembly (ARMM) authorizing 
the local government unit, through the punong barangay, mayor or 
governor, as the case may be, to apply or obtain loan for local 
infrastructure projects one (1) year before the local or national elections; 
(b) 
The signing or execution of any infrastructure loan 
agreement involving the local government unit and the private or public 
lending institution one (1) year before the local or national elections; 
(c) 
The approval by the private or public lending institution of 
the infrastructure loan application of the'local government one (1) year 
before the local or national elections; and 
(d) 
The release by the private or public lending institution of the 
amount or proceeds of the infrastructure loan to the local government 
one (1) year before the local or national elections. 
SECTION 5. Criminal Liability. - (a) Any elective local official 
who commits an act prohibited under this law shall be punished by 
imprisonment of three years and one day to six years. 
(b) Any public employee or private individual who knowingly 
participated in the commission of an act prohibited under this law shall 
be punished by imprisonment of one year and one day to three years, 
SECTION 6. Separability Clause. - If any section or part of this 
Act is held unconstitutional, no other section or provision shall be 
affected. 
SECTION 7. Repealing Clause. All laws, decrees, executive 
orders, rules and regulations, issuances or any part thereof inconsistent 
with the provisions of this Act are deemed repealed. 
SECTION 8. EffectiVity. - This Act shall take effect (15) days after 
its publication in at least two (2) national newspapers of general 
circulation, 
Approved,