Introduced by Senator Antonio “Sonny” F. Trillanes IV 
EXPLANATORY NOTE 
Section 21, Article XU of the 1987 Constitution states that foreign loans may only be incurred in 
accordance with law and the regulations of the monetary authority. The Constitution further 
provides in Section 20, Article VII that the President may contract or guarantee foreign loans on 
behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board 
subject to such limitations as may be provided by law. 
The limitations on foreign borrowings are critical in view of the automatic appropriations for 
debt service in the national budget. This means that once a debt is incurred, servicing such debt 
takes priority over other competing applications of the government’s financial resources, 
including infrastructure, education, public services, and other social development programs. 
To ensure that the social and economic benefits from foreign loans incurred justify their 
precedence over other social and economic programs, this bill provides, inter aka: (1) A debt 
ceiling equivalent to five percent (5%) of the country’s GNP; 
(2) the concurrence of Congress if 
the debt ceiling is to be exceeded; (3) Foreign loans shall be contracted or guaranteed solely to 
finance economic and social infrastructure programs in line with the national development 
program; and (4) Bilateral Agreements involving official assistance such as grants and 
commodity credit arrangements or indebtedness shall not be valid unless concurred by the 
Senate. 
In view of the foregoing, immediate approval of this bill is earnestly sought. 
A N ~ O ~ I O  
‘‘SONNY” $. TIULLANES N 
Senator 
1 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
FOURTEENTH CONGRESS OF THE 
1 
First Regular Session 
1 
E! 
if!& -‘I 
BE, :rsu 
REPUBLIC OF THE PHILIPPINES 
) 
Introduced by Senator Antonio “Sonny” F. Trillanes IV 
AN ACT 
PROVIDING FOR A CEILING ON ALL PUBLIC DEBTS OF THE REPUBLIC OF THE 
PHILIPPINES AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representative of the Philippines in Congress 
Assembled: 
SECTION 1. Title. This Act shall be h o r n  as the “Public Debt Ceiling Act of 2008. ” 
SEC. 2. DeJinitlon of Terms. - 
a) Public Debt refers to all debts incurred by the National Government as well as 
GOCCs which include foreign borrowings, assumed liabilities (foreign and 
domestic), bonds, treasury bills and like instruments. 
b) Emergency Loan is a loan incurred to meet an existing emergency which directly 
affects the public interest. The existence of an emergency loan shall be determined by 
the President upon the advice of the Secretary of Finance. 
c) Government-Owned and Controlled Corporations or GOCCs are those directly 
chartered under special laws. 
d) Vital Undertakings are economic and social infrastructure and programs. 
SEC. 3. Purpose of Contracting and Guaranteeing Foreign Laws. - Foreign loans shall 
be contracted or guaranteed solely to finance vital under takings in line with the national 
development program. 
1 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
SEC. 4. Who may Contract or Guarantee. - Only the President with the prior 
concurrence of Monetary Board may contract or guarantee both foreign and domestic debts on 
behalf of the Republic of the Philippines. 
SEC. 5. Debt Ceiling. - A ceiling is hereby imposed on the total public debt of the 
Philippines to the amount equivalent of five percent (5%) of the previous year’s Gross National 
Product (GNP) which may not be exceeded at anytime except with the concurrence of Congress. 
SEC. 6. Ekclusions to the Ceilings. - The President of the Philippines, upon 
recommendation of the Monetary Board, whenever required pursuant to a general rescheduling, 
restructuring, or re-financing of the external debt of the Philippines by foreign creditors, may 
exclude specific categories of external debt from the limits set by Section 2 of this Act. 
SEC. 7. Bilateral Agreements. - Bilateral Agreements involving official assistance such 
as grants and commodity credit arrangements or indebtedness which the President is authorized 
to enter into and conclude under Republic Act No. 4860, as amended, shall not be valid and 
effective unless concurred in by at least two-thirds of all the Members of the Senate. 
SEC. 8. Reportorial Requirement. - The Bangko Sentral ng Pilipinus shall, within thirty 
(30) 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. 
Information as to the terms and conditions of foreign loans obtained or guaranteed by the 
Government shall be made available for inspection subject to reasonable rules and regulation 
prescribed by the Bangko Sentral ng Pilipinus. 
27 
2 


1 
2 
SEC. 9. Implementing Rules and Regulations. - The Monetary Board of the Bangko 
Sentrul ng Pilipinus shall formulate and implement the necessary guidelines pursuant to this Act. 
5 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
SEC. 10. Penalties. - Any violation of the provisions of this Act shall, in addition to 
other penalties imposed by law, subject the public officials or persons responsible for such 
violation to an imprisonment of not less than twelve (12) years or a fine of not less than Five 
Hundred Thousand Pesos (P.500,000.00). 
SEC. 11. Repealing Clause. - The following laws, decrees, and executive order 
henceforth shall be repealed 
1) Presidential Decree No. 1961- An Act authorizing the President of the Philippines on 
behalf of the Republic of the Philippines, and authorizing the Central Bank of the 
Philippines, to enter into Foreign Currency Loan, Deposit and Guarantee Agreements 
and Arrangements in support of the National Economic Recovery Program, and for 
other purposes; 
2) Presidential Decree No. 1977- Amending Presidential Decree No. 1961. 
3) Presidential Decree No. 1685- Amending Presidential Decree Numbered Thirteen 
Hundred Nine Authorizing the Central Bank of the Philippines to engage in special 
borrowing and lending operations; 
4) Presidential Decree No. 1938- Further amending Presidential Decree Numbered 
Thirteen Hundred Nine, as amended by Presidential Decree Numbered Sixteen 
Hundred and Eighty Five authorizing the Central Bank of the Philippines to engage in 
special borrowing and lending operations; all laws, decrees, orders, rules and 
regulations, or parts thereof inconsistent with this Act are hereby repealed or 
amended accordingly. 
5 )  Executive Order No. 218- Extending the applicability 'of Presidential Decree. No. 
1962 as amended, to the 1987-1992 Philippine Financing Package and the Foreign 
3 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
Currency Loans, Credits and Indebtedness Made, Guaranteed and Insured by Foreign 
Governments and their agencies maturing on or after January 1, 1987 through 
December 3 1, 1992, subject to limitations; and 
6 )  Republic Act No. 254- An Act Authoring the Secretary of Finance to Borrow to meet 
Public Expenditures Authorized by Law, and for Other Purposes, as amended. 
All laws, decrees, orders, proclamations, rules and regulations, or parts thereof which are 
inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly. 
SEC. 12. Sepambili@ Clause. - If any provision of this Act or the application thereof is 
held invalid or unconstitutional, the validity of other provisions shall continue to be in full force 
and effect. 
SEC. 13. Efsectivl@ Clause. - This Act shall take effect fifteen (15) days following its 
complete publication in at least two (2) national newspapers of general circulation. 
Approved, 
4