Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
QUEZON CITY 
19TH CONGRESS 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Honorable Michael L. Romero 
EXPLANATORY NOTE 
Corporate Social Responsibility or CSR refers to voluntary and sustained 
initiatives of businesses, working with employees, families and communities that 
contribute to the social and economic development of the nation. 
In the Philippine context, corporations can complement efforts of the 
national government to ensure the social welfare and development of the country. 
This bill defines the scope of CSR-related activities, as among others, 
charitable programs and projects, scientific research, youth and sports 
development, cultural and education promotion, services to veterans and senior 
citizens, social welfare, environmental sustainability, health development, 
disaster relief and assistance, socialized and low-cost housing projects, and 
incentivizes its practice. It is believed that by offering a raft of rewards, CSR will 
be widely observed to the benefit of the people. 
Under this bill, stock corporations will be allowed to retain profits in excess 
of 100% of paid-in capital stock to be used for corporate social responsibility 
projects and programs while mandating the Department of Trade and Industry 
to recognize and rewards business establishments for outstanding, innovative 
and world-class CSR related services. 
Given these aforementioned incentives, more corporations will be enacted 
to infuse a bigger portion of their income in charity and social enterprises that 
promote the common good, build human capital and create better communities. 
Plowing back corporate resources to communities, especially those underserved 
by the government, would help cure the deficit in state spending in areas that 
cry out for development. 
July 1, 2022 
10:50 am
800


Such scheme can be seen as direct intervention by the private sector in 
which they get to spend money which would have paid as taxes but in an efficient 
manner without the overhead associated with the bureaucracy. 
This proposed bill was filed in the 17th and 18th Congress, underwent 
thorough deliberations and was subsequently passed on the Third Reading. 
Hence, immediate passage of this measure is earnestly prayed for. 
MICHAEL L. ROMERO Ph.D. 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
QUEZON CITY 
19TH CONGRESS 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Honorable Michael L. Romero 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
AN ACT 
ENCOURAGING CORPORATE SOCIAL RESPONSIBILITY, 
PROVIDING INCENTIVES THEREFOR 
SECTION 1. SHORT TITLE. Act shall be known as the "Corporate Social 
Responsibility Act". 
SECTION 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. 
SECTION 
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 
800


lives in ways that are good for business, sustainable development agenda and 
society at large. CSR-related activities shall include the following: 
a) Charitable programs and projects; 
b) Scientific research;  
c) Youth and sports development; 
d) Cultural or educational promotion; 
e) Services to veterans and senior citizens; 
f) Social welfare; 
g) Environment sustainability; 
h) Health development; 
i) Disaster relief and assistance; 
j) Socialized and low-cost housing; and 
k) Employee and worker welfare-related CSR activities 
 
SECTION 4. DEDUCTION FROM UNRESTRICTED RETAINED EARNINGS. To 
encourage companies to engage in CSR, Section 43 of Batas Pambansa Blg. 68, 
otherwise Known as the "Corporation Code of the Philippines" is hereby amended 
to read as follows: 
"Sec. 43 Power to declare dividends. 
— xxx xxx xxx 
Stock corporations are prohibited from retaining surplus 
profits in excess of one hundred (100) percent of their paid-in 
capital stock except: (1) when justified by definite corporate 
expansion OR FOR CORPORATE SOCIAL RESPONSIBILITY 
projects and programs approved by the board of directors; or 
(2) when the corporation is prohibited under any loan 
agreement with any financial institution or creditor, whether 
local or foreign, from declaring dividends without its/his 
consent, and such consent has not yet been secured; or (3) 
when it can clearly show that such retention is necessary 
under circumstances obtaining in the corporation, such as 
when there is need for special reserve for probable 
contingencies." 
SECTION 5. AWARDS AND RECOGNITION. The Department of Trade and 
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 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. 


SECTION 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. 
SECTION 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 (DOF), as the case may be. 
SECTION 8. IMPLEMENTING RULES AND REGULATIONS. Within sixty (60) 
days, the Secretary of Finance shall, in coordination with the Department of 
Trade and Industry and the Securities and Exchange Commission, promulgate 
the rules and regulations for the effective implementation of this Act and shall 
monitor strict compliance therewith. 
SECTION 9. SEPARABILITY CLAUSE. If any provision of this Act is declared 
invalid or unconstitutional, the remaining provisions not affected thereby shall 
continue in full force and effect. 
SECTION 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 thereof, inconsistent with this Act are hereby repealed or 
modified accordingly. 
SECTION 11. EFFECTIVITY. This Act shall take effect fifteen (15) days after 
publication in the Official Gazette or in a newspaper of general circulation. 
Approved,