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Sixteenth Congress Nox WA
First Regular Session SS

House BILL. No.__4449

Introduced by Honorable Joaquin M. Chipeco, Jr.

EXPLANATORY NOTE

The continuing saga involving PDAF accountabilities has brought to
the fore widespread abuses and malpractices committed by some Non-
Governmental Organizations (NGOs). While the 1987 Philippine
Constitution has laudably enshrined peoples’ organizations (POs),
cooperatives and NGOs as the fleshing-out of the “people power” legacy of
the Filipino nation, it was not long before a number of these organizations
were corrupted by predatory individuals in collusion with certain self
serving politicians. Registered as non-stock, non-profit organizations, these
fraudulent organizations have put honest-to-goodness foundations and
NGOs as whole into disrepute.

Questions then have been asked — why didn’t the Securities and
Exchange Commission (SEC), the government's corporate watchdog, alert
the general public as to the existence of these dubious organizations? Did the
SEC fail in its mandate of protecting the people by its inability to raise “red
flags” concerning unethical business practices of these entities? The SEC
‘excuses itself from responsibility by claiming that at present there is no law
that specifically mandates the Commission to monitor foundations, NGOs,
etc. except for some provisions of the Terrorist Financing Prevention and
Suppression Act.

This bill aims to address this deficiency in our laws by empowering
the SEC to monitor charitable organizations, foundations, and NGOs _ with
the end in view of protecting the general public from unscrupulous practices.


There is also a need to remedy the reported acute lack of resources
and personnel on the part of the SEC. With only eight (8) processors tasked
to do the job, the Commission could not possibly check the activities of
10,000 active foundations out of a total 21,000 registered foundations. The
current SEC practice of performing random examinations of around six to 10
percent of the active foundations in a year is not enough to cleanse the slate
of illegitimate organizations. It is also deemed necessary to equip the
Commission with sufficient information technology to, among others,
trigger alerts regarding irregular activities of these organizations from the
moment they file their applications for registration with the Commission.

In view of all the foregoing considerations, the early approval of this
bill is earnestly requested.

resentative
Second District of Laguna


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILL NO. 4449

Introduced by Honorable Joaquin M. Chipeco, Jr.

AN ACT
GRANTING THE SECURITIES AND EXCHANGE COMMISSION
THE AUTHORITY TO MONITOR AND/OR INVESTIGATE NON-
GOVERNMENTAL ORGANIZATIONS, FOUNDATIONS, AND
SIMILAR INSTITUTIONS.

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

SECTION. Authority to Monitor and Investigate Non-Governmental
Organizations, Foundations and Similar Organizations. ~ The Securities
and Exchange Commission (SEC), either upon its own initiative or upon the
sworn application of any person or organization, is hereby authorized to
investigate the acts and practices of any Non-Governmental Organization
(NGO), foundation, and similar organizations when there exists probable
cause to believe that such organizations are committing or attempting or
conspiring to commit, or participating in or facilitating an act in violation of
existing laws, rules and regulations. Further, the SEC shall ensure that its
monitoring activities shall cover all or substantially all of these active

organizations.


For this purpose, the SEC may enlist the assistance of any branch,
department, bureau, office, agency or instrumentality of the government,
including GOCCs in undertaking its monitoring and/or investigatory
functions, which may include the use of its personnel, facilities and

resources.

‘The SEC shall furnish the appropriate law enforcement agencies with

the official results of its investigations.

S|

EC. 2, Mandate to Upgrade Personnel and Equipment, ~The SEC
shall conduct a periodic review of its budgetary requirements, with the end
in view of upgrading its personal services and institutionalizing computer-

as:

sted monitoring and review of activities of all active NGOs, foundations
and similar institutions registered with the Commission, The Commission
shall submit this budget proposal for immediate consideration in the next

budget cycle.

SEC. 3. Appropriations. - The amount necessary for the
implementation of this Act shall be included in the annual General

Appropriations Act following its enactment.

SEC. 4. Separability clause. ~ All laws, decrees, executive orders,

rules and regulations and other issuances or parts thereof inconsistent with


the provisions of this Act are hereby repealed, modified or amended

accordingly.

SEC. 5, Lffectivity clause. - This Act shall take effect fifteen (15)

days after its publication either in the Official Gazette or in two (2)

newspapers of general circulation.

Approved,