REPUBLIC OF THE PHILIPPINES i
HOUSE OF REPRESENTATIVES |{
Quezon City

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NINETEENTH CONGRESS
First Regular Session

1001

HOUSE BILL NO.

EXPLANATORY NOTE

This bill seeks to encourage corporate social responsibility among
corporations, domestic or foreign, partnerships, and other
establishments doing business in the country. This bill has already been
approved by the House of Representatives on its 3 and final reading in
the 17 and 18» Congress. Considering however the significance of this
bill recognizing the indubitable role of the private sector in nation
building it is imperative that this bill be filed.

The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed
investments (Section 20, Article II, 1987 Constitution). The State shall
encourage non-governmental, community-based, or _ sectoral
organizations that promote the welfare of the nation. To this end, the
State shall encourage the participation of the private sector through the
concept of corporate responsibility with the end in view of achieving
sustainable economic and environmental protections. It is high time for
corporations to take full responsibility of the effects of their actions in the
community where they operate. It is high time for corporate managers to
take care of the environment free from abuse and corporate neglect, and
at the same time incentivize the same for their corporate expense and
contributions.


In view of the bill’s importance as an institutionalized mechanism
in integrating the involvement of private corporations and partnerships
in the delivery of socio-economic and social services beneficial to the
people, it is earnestly sought that this bill be approved.

lip
L. IMICIAS-AGABAS


REPUBLIC OF THE PHILIPPINES

HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1001

L. PRIMICIAS-AGABAS

AN ACT
ENCOURAGING CORPORATE SOCIAL RESPONSIBILITY, PROVIDING
INCENTIVES THEREFOR

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

Congress assembled:

SECTION 1.Short Title. - This Act shall be known as
“Corporate Social Responsibility Act”.

SEC, 2. Declaration of Policy. - The state recognizes the vital role of
the private sector in nation building and shall encourage its active
participation in fostering sustainable economic development and
environment protection in the Philippines. Towards this end, the
government shall mobilize its various agencies, in coordination
with non-government and people’s organizations, to work hand-in-
hand for the integration, promotion, and strengthening of
corporate social responsibility in all business organizations.

SEC. 3. Corporate Social Responsibility. -— All business
organizations established and operating under Philippine laws,
whether domestic or foreign, are hereby encouraged to observe
corporate social responsibility in the operation of their businesses
in the country,

As used in this Act, corporate social responsibility (CSR)
refers to the commitment of business to contribute on a voluntary
basis to sustainable economic development by working with
relevant stakeholders to improve their lives in ways that are good
for business, sustainable development agenda and society at large

CSR-related activities shall include the following:


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(a) Charitable programs and projects;
(b) Scientific research;

(c) Youth and sports development;

(d) Cultural and educational promoting;

(e) Services to veterans and senior citizens;

(9 Social welfare

(g) Environmental sustainability;

(h) Health development;

(i) Disaster relief and assistance;

(i) Socialized and low-cost housing; and

(k) Employee and worker welfare related CSR activities.

SEC. 4. Deduction from Unrestricted Retained Earnings.- To
encourage companies to engage in CSR, Section 43 of Batas
Pambansa Big. otherwise known as the “Corporation Code of the
Philippines” is hereby amended to read as follows:

“Sec. 43. Power to Declare Dividends. —

‘oor

“Stock corporations are prohibited from retaining surplus profits
in excess of onc hundred percent (100%) of their paid in capital stock,
cept: (1) when justified by definite corporate expansion OR FOR
CORPORATE SOCIAL RESPONSIBILITY projects or programs
approved by the board of directors; or (2) when the corporation is
prohibited under any loan agreement with any financial
institutions or creditors, whether local or foreign, from declaring
dividends without its/his consent, and such consent has not yet
been secured; or (3) when it can be clearly shown that stich
retention is necessary under special circumstances obtaining in
the corporation, such as when there is need for special reserve for
probable contingencies.”

SEC. 5. Awards and Recognition. - The Department of Tradeand
Industry (DTI) shall recognize and reward all business
organizations for outstanding, innovative and world-class CSR-
related services, projects and programs. It shall likewise extend


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endorsement and encouragements to domestic and foreign
corporations doing business in the Philippines which are
candidates for recognition in international award-giving bodies for
their CSR-related activities.

SEC. 6. Local Government Units. ~ All local government units where
CSR- related activities are conducted shall extend whatever assistance
is necessary for business organizations to accomplish their CSR
programs and projects.

SEC. 7. Periodic Report. ~ All business organizations shall submit
the list of their CSR activities as part of their annual or regular
report to the Securities and Exchange Commission (SEC), the DTI,
or the Department of Finance, as the case may be.

SEC. 8. Implementing Rules and Regulations. — Within sixty (60)
days, the Secretary of Finance shall, in coordination with the DTI
and the SEC, promulgate rules and regulations for the effective
implementation of this Act and shall monitor strict compliance
therewith.

SEC. 9. Separability Clause. - If any provision of this Act is
declared invalid or unconstitutional, the remaining provisions not
affected thereby shall continue to be in full force and effect.

SEC. 10. Repealing Clause. - Section 43 of Batas Pambansa Big. 68
is hereby amended. All laws, decrees, orders, rules and
regulations, and other issuances, or parts of thereof, inconsistent
with this Act are hereby repealed or modified accordingly.

SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of
general circulation

Approved,