Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEHNTH CONGRHSS
First Regular Session
House`bii|No.6909
Introduced by Representative
GERVILLE "JINKY BITRICS" R. LUISTRO
EXPLANATORY NOTE
"Businesses cannot be successful when the society around them fails."1
Corporations are organized, existing, and operating for profit. Their financial
success  redounds  to  the  economic  well-being  of the  country.  Employments  are
created; taxes are collected;  and, the financial stability of the government as well
as those employed are attained. However, profit should not be the only motivating
factor for the existence of business entities.  Their success is  intertwined with the
communities  where  they   exist.   They   are   expected  to   assume   and  discharge
responsibilities that promote and protect the well-being of the people in society.
The   State   encourages   the   adoption   and   practice   of  Corporate   Social
Responsibility  (CSR)  programs  whereby  business  entities  are  cognizant  of their
roles   towards  the  economy,   society,   environment,   charity,   and  other  similar
concerns.
This  measure  intends  to  establish  an  incentive  for  corporations  that  are
conscious  of their  responsibilities  to  the  country.  To  be  precise,  this  proposal
allows  stock  corporations  to  retain  profits  of more  than  100%  of their  paid-in
capital stock as provisions for expansions or CSR programs. Further, corporations
are  given  the  privilege  to  fully  deduct  from  their  gross  income,  all  expenses
devoted  and used  for  CSR activities.  In  addition,  the  Department  of Trade  and
Industry (DTI) is mandated to cite exemplary CSR services, projects, and programs.
I Paul Polman, CE0 of UNILIVER


It also directs Local Government Units (LGUs) to extend the necessary assistance
to companies undertaking CSR programs.
This bill  enables  coaporations to  make  a real  and valuable  commitment to
sustainable  s o c i o - e conomic, charitable, and environmental development.
It  is  in  this  regard  that  the  immediate  consideration  and  passage  of this
proposed measure is eamestly requested.
Undersigned eamestly
proposed measure.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEHNTH CONGRESS
First Regular Session
-.-.
House Bill No.  6909
Introduced by Representative
GERVILLE "JINKY BITRICS" R. LUISTRO
AN ACT ENCOURAGING CORPORATE SOCIAL RESPONSIBILITY,
PROVIDING INCENTIVES THHREFOR, AND FOR OTHER PURPOSES
Be  it  enacted  by  the  Senate  and  House  Of Representatives  Of the  Philippines  in
Congress assembled
SECTION 1. Srfeorf rz.£/ei -This Act shall be known as the  "Corpo#cz/e Socz.cz/
Responsibility Act Of 2023 ."
SECTION   2. Dcc/¢rm!fz.oH  a/Po/i.c}}.  -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.
SE:C"OIN     3.    Corporate    Social    Responsibility.     -       A:Il    business
organizations established and operating under Philippine  laws,  whether domestic
or  foreign,  are hereby encouraged to observe corporate social responsibifity in the
operation of their businesses in the country .
As used  in this Act, corporcr/e socz.cr/ respo#sz.4z./jay (CSR) shall  refer 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 :
a)  Charitable programs andprojects;
b)  Scientific research;
c)  Youth and sports development;
d)  Cultural or educational promotion;
e)  Services to veterans and senior citizens;
I)   Social welfare;
g)  Environmental sustainability;
h)  Health development;
i)   Disaster relief and assistance;
j)   Socialized and low-cost housing;


k)  Employee and worker welfare related CSR activities, and
I)   Other programs, projects, and services which shall inure to the benefit of the
cormunity.
SrfLC"OIN     4.  Deduction  firom  IJarestricted  Retained  Earnings.  -To
encourage companies  to  engage in  CSR, Section 42  of Republic Act  No.  11232,
otherwise known as  the  "Revised Corporation Code  of the  Philippines" is hereby
amended to  read as follows:
"SECTION 42 . Power to declare dividends. -
-\..\..\.
"Stock corporations  are prohibited from  retaining surplus  profits  in
excess  Of one hundred (100%)  percent Of their  paid-in capital  stock,
except:
(a)  when  justified   by   deflinite   corporate    expansion   OR   FOR
CORPORATE     SOCIAL     RESPONSIBILITY     projects     and
programs approved by the board Of director;
(b)    when the corporation is prohibited under any  loan agreement
with any       financid institutions   or  creditors,  whether   local
or  fioreign,  from  declaring  dividends  without  their   consent,


and such  consent  has  not yet  been secured; or
(c)  when  it can  be clearly  shown that  such retention is necessary
under  circumstances   obtaining   in  the   corporation,  such   as
when   there   is   a   need  for  special   reserve   for   probable-
contingencies."
SECTION   5. Aw¢rds  ¢md Rccogrz.&.o„.  -The  Department  of Trade  and
Industry   (DTI),   in   collaboration   with   the   Department   of   Social   Welfare
Development (DSWD) and the Department of Environment and Natural Resources
(DENR),  shall  recognize  and  reward  all  business  organizations  for  outstanding,
exemplary,   innovative,    and   world-class   CSR-related    services,   projects    and
programs.  It  shall  likewise extend endorsement and encouragement  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.
SHCTI0N  6. £oc¢/ GotJer"mcHf tJ"i.ts. - All local government units where
CSR-related related  activities  are  conducted  shall  extend  all forms of assistance,
including  the  grant  of  exemptions  from  local  taxes  and  charges  to  qualified
corporations with exemplary CSR policies, that  are necessary  and  relevant  for
business organizations to accomplish their CSR programs and projects.


SECTION      7.   ron  Ded#ctr.b../try.   -      All   expenses   incurred   by   any
corporation  in  the  exercise  of its  corporate  social  responsibility  shall  be  fully
deducted from its gross income.
SECTION  8. Pe„.odI.c Rcpo#. -All business organizations shall submit the
fist  of their  CSR  activities  as  part   of  their  annual  or   regular  report   to   the
Securities  and  Exchange   Commission   (SEC),   the   Department  of Trade  and
Industry @TI), or the  Department  of Finance (DOF), as the  case may be.
SE:CTloIN  9. Implementing Rules and Regulations. -Wi+him s+xty (60) days
after the effectivity of this Act, ifesecretary of Finance shall, incoordination with the
DTI and the SEC , promulgate rules and regulations for the effective implementation
of this Act.
SECTION     10.  Sep¢rmbi./try  CJ¢#sc.  -  If  any  provision  of  this  Act  is
declared unconstitutional or otherwise invalid, the validity of the other provisions
shall not be affected thereby.
SECTION   11. jRcpc¢/I.Hg C/¢#sc. -All other laws, decrees,  orders, rules
and regulations, other issuances, or parts thereof inconsistent with the provisions of
this Act are hereby repealed or modified accordingly.


SECTION    12. E/Tgcfi.tJJ.fy.  -This  Act  shall  take  effect  fifteen  (15)  days
after its publication in the Qorcz.cr/ Gcize//e or in a newspaper of general circulation.
APPROVED.