SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 74 2 
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INTRODUCED BY SEN. JINGGOY EJERCITOr;STRADA 
EXPLANATORY NOTE 
The 1987 Constitution provides 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, and subject to such limitations as may be 
provided by law. The Monetary Board shall, within thirty days from 
the end of every quarter of the calendar year, submit to the 
Congress a complete report of its decision 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, and containing other matters as may be 
provided by law." (Article VII, Section 20). 
"Subject to reasonable conditions prescribed by law, the State 
adopts and implements a policy of full public disclosure of all its 
transactions involving public interest." (Article II, Section 28). 
"Foreign loans may only be incurred in accordance with law and the 
regulation of the monetary authority. Information on foreign loans 
obtained or guaranteed by the Government shall be made available 
to the public." (Article XII, Section 21) .. 
This bill proposes to centralize the myriad of functions and responsibilities 
distributed among various agencies concerning foreign loans from negotiation to 
debt servicing to one single agency. This new Cabinet level agency, composed 
of a board as its highest policy-making body, shall be the primary agency of the 
government that will integrate and coordinate the country's debt management 
system that includes debt recording and inventory, debt monitoring and analysis, 
risk management, debt planning; debt service payments; advise on debt 
negotiations and borrowings, and formulation of debt policies and strategies. 
In view of the foregoing, immediate passage of this bill is earnestly sought. 
Senator 


SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 7 4 2 
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INTRODUCED BY SEN . .JINGGOY EJERCITO ESTRADA 
AN ACT 
CREATING THE DEBT MANAGEMENT BOARD, APPROPRIATING FUNDS 
THEREFOR, AND FOR OTHER PURPOSES 
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 the "Debt 
Management Board Charter", 
SEC, 2. Declaration of Policy. -- It is hereby declared the policy of the 
State, consistent with the mandate by the Constitution, to implement a sound and 
effective debt management system and strategies as an integral part of the 
country's overall macroeconomic management and public administration. 
SEC. 3, Definition of Terms, -- When used in this Act, the following terms 
or words and phrases shall mean or be understood as follows: 
a. 
"Debt" refers to the stock of total liabilities or obligations at any given 
time, whether of the national government or the consolidated non-
financial public sector, or both, 
b. 
"Debt management" refers to the process of establishing and 
implementing a strategy for prudently managing the government's 
debt in order to achieve the government's risk and cost objectives 
and any other sovereign debt management goals the government 
may have set. 
c. 
"Debt service" refers to the sum of loan repayments, interest 
payments, commitment· fees and other charges on foreign and 
domestic borrowings, 
d. 
"Consolidated public sector debt" refers to the total indebtedness, 
whether foreign or domestic, of the National Government, Local 
Government, Government Owned and Controlled Corporations and 
Financial Institutions. 
e, 
"Government Owned and Controlled Corporations (GOCCs)" refer to 
a stock or non-stock corporation, whether performing governmental 
or propriety functions, which is directly chartered by a special law, or 
if organized under the general corporation law is owned or controlled 
1 


by the governrnent directly or through a parent corporation or 
subsidiary corporation, to the extent of at least a majority of its 
outstanding capital stock or of its outstanding voting capital stock. 
f. 
"National Government" refers to the executive, legislative, and 
judiciary branches of the government, including the constitutional 
offices. 
g. 
"National government debt" refers to all security issuances and loans 
of the National Government. 
SEC. 
4. 
Creation of the Debt Management Board and its 
Composition. - To carry out the above-declared policy, there is hereby created, 
within thirty (30) days after the effectivity of this Act, a Debt Management Board, 
hereinafter referred to as the Board. 
The Board, which shall be a Cabinet level agency, shall be the primary 
agency of the government that will integrate and coordinate the country's debt 
management system that includes debt recording and inventory, debt monitoring 
and analysis, risk management, debt planning; debt service payments; advise on 
debt negotiations and borrowings, and formulation of debt policies and strategies. 
The Board shall be composed of the following: 
a. The President as its Chairperson; 
b. Director-General of the Board's Secretariat as its Vice-Chairperson 
c. Executive Secretary: 
d. Secretary of Finance: 
e. Secretary of Budget and Management; 
f. 
Secretary of Foreign Affairs; 
g. Secretary of Trade & Industry; 
h. Governor of the Bangko Sentral ng Pilipinas; 
i. 
Director-General of the National Economic and Development Authority 
(NEDA); 
j. 
One representative from the academe: 
k. Two representatives from civil society organizations actively engaged in 
socia-economic activities; and, 
I. 
One representative from the business sector; 
Provided, That members from the last three groups as stated above shall 
be apPOinted by the President and shall perform the fUnctions of the office for two 
(2) years. 
The Board shall meet at least once a month or as frequently as is 
necessary to discharge its responsibilities as determined by the President. The 
members of the Board shall not receive additional compensation, allowances or 
emoluments for services rendered thereto except traveling and other necessary 
expenses to attain its goals and objectives. 
SEC. 5. Powers and Functions of the Board. -The Board shall have the 
following powers and functions: 
a. 
Formulate 
and 
recommend 
well-defined 
and 
feasible 
debt 
management strategies and policies in order to maintain the 
2 


country's debt at a sustainable level in accordance with the medium-
term and long-term Philippine Development Plan; 
b. 
Provide an inventory and audit of all loans acquired by the Philippine 
government, 
government owned 
and 
controlled 
corporations 
(GOCCs), local government units (LGUs), government financial 
institutions (GFls), and other public and private entities that constitute 
the country's public sector debt; 
c. 
Develop, recommend and implement policies, guidelines and control 
mechanisms and ceilings on foreign and domestic borrowings to 
ensure debt sustainability; 
d. 
Conduct debt sustainability analyses and risk management to assess 
optimal borrowing levels and conduct studies or review and 
recommend policies and regulations governing external borrowings, 
foreign investments and other foreign exchange transactions; 
e. 
Study and recommend for approval by the Monetary Board different 
debt transactions such as negotiations for new borrowings, utilization 
and monitoring of loan proceeds, and debt servicing; 
f. 
Formulate and recommend policies for the establishment and 
continuous review of the legal, administrative and institutional 
arrangements for centralized and well-coordinated debt management 
operations; 
g. 
Provide adequate resources for an effective debt management such 
as, but not limited to, competent and qualified staff, technical experts 
in the area of debt management, communication equipment, and 
others; 
h. 
Prepare proposals for discussion in 
bilateral, 
regional 
and 
international fora and promote active and appropriate representation 
of the country's interests and concerns; 
i. 
Adopt operational guidelines and internal rules of procedure and cite 
for contempt violations thereof; 
j. 
Conduct hearings and a public audit of all loans and receive 
testimonies, reports and technical advice; 
k. 
Invite or summon by subpoena any public official, private citizen or 
any other person to testify before it or require any person by 
subpoena duces tecum to produce before it such records, reports, 
documents or other materials as it may require; and, 
I. 
Perform such other functions which, in the opinion of the Board, are 
required for the effective implementation of its functions under this 
Act. 
SEC. 6. The Debt Management Office. - There is hereby created the 
Debt Management Office, hereinafter referred to as the Office, which shall have 
the following powers and functions: 
a. Serve as the research and technical support arm of the Board; 
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b. Provide technical staff support and assistance, including the conduct of 
studies 
and 
development 
of 
policy 
measures 
and 
other 
recommendations, on the various aspects of the functions of debt 
management, and coordination, evaluation and monitoring of all 
foreign and domestic borrowings. 
c. Serve as the Secretariat of the Board; 
d. Regularly publish different debt transactions such as negotiation for 
new borrowings, utilization and monitoring of loan proceeds, and debt 
servicing; and, 
e. Perform such other functions as may be assigned to it by the Board to 
achieve its goals and objectives. 
SEC. 7. The Office of the Director General. -- The Office shall be 
headed by a Director-General who shall be the Vice Chairperson of the Debt 
Management Board, and shall be appointed by the President. The Director-
General shall be a member of the Cabinet. 
As chief executive officer of the Board Secretariat, the Director-General 
shall exercise general supervision and control over its technical and 
administrative personnel. 
SEC. 8. Duties and Responsibilities of the Director General. - The 
Director General shall have the following duties and responsibilities: 
a. 
Advise the President on the promulgation of rules, regulations and 
other issuances relative to debt and risk management; 
b. 
Submit regular reports to the President and the Congress; 
c. 
Ensure public transparency on all matters regarding public and 
private loans, debt payments and other transactions of the Board; 
d. 
Establish policies and standards for the efficient and effective 
operations of the Board in accordance with the programs of the 
Government; 
e. 
Promulgate rules, regulations and other issuances necessary in 
carrying out the Board's mandate, objectives, policies, plans, 
programs and projects; 
f. 
Perform other functions as may be provided by law or aSSigned by 
the President. 
SEC. 9. The Deputy Director Generals. -- The Board shall have two (2) 
Deputy Director Generals who shall be appointed by the President and shall 
have the rank of Undersecretary. 
Each Deputy Director General shall directly supervise and manage a unit 
under the Board as enumerated under Section 10 hereof. 
4 


Each Deputy Director General shall have the following functions; 
a. 
Advise the Director General in the promulgation of department 
.orders, administrative orders and other issuance; 
b. 
Exercise supervision over the offices, departments, operating units 
and officers and employees under his responsibility; 
c. 
Promulgate rules and regulations, consistent with Office policies that 
will efficiently and effectively govem the activities under his/her 
responsibility; 
d. 
Coordinate the functions and activities of the units under his/her 
responsibility with those of other units under the responsibility of 
other Deputy Director Generals; 
e. 
Exercise authority on substantive and administrative matiers related 
to the functions and activities of units under his responsibility as may 
be delegated by the Director General; and, 
f. 
Perform ether functions as may be provided by law or aSSigned by 
the Director General. 
SEC. 10. Support Units. -- There shall be two main support units under 
the Office as follows: 
a. Debt Monitoring and Analysis Unit. The Debt Monitoring and Analysis 
Unit shall be directly responsible for the inventory and audit of all foreign and 
domestic loans of the National govemment and its guarantees to all other 
corporations, national government agencies, local government units or any other 
entities. 
The Debt Monitoring and Analysis Unit shall have the following specific 
functions: 
1. 
Maintain records/files of government securities, individual loan 
agreement and other pertinent documents on public debt; 
2. 
Generate various periodic reports/statements on external and 
domestic debt such as monthly consolidated 
national 
government debt burden, consolidated public debt, annually or 
quarterly status of public debt, yearly and/or medium-term 
debt service estimates and monthly actual debt service; 
3. 
Submit such reports to higher planning, fiscal, monetary 
authorities, the Congress and Commission on Audit for 
planning 
purposes, 
operational 
decisions 
and 
audit 
requirements; 
4. 
Generate debt sustainability analyses and debt service 
forecasts; 
5. 
Provide analysis and explore various debt management 
options taking into consideration the economic and market 
conditions, and future structure of public debt; 
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6. 
Recommend appropriate terms for new borrowings based on 
debt sustainability and credit risk exposure analyses; and, 
7. 
Perform other functions as may be provided by law or 
assigned by the Director General or Deputy Director General. 
b. Policy and Risk Management Unit. The Policy and Risk Management 
Unit shall have the following specific functions: 
1. 
Develop and update guidelines for Debt Management through 
conduct of research, management of information technology 
systems, and perform administration functions; 
2. 
Develop the methods to reduce the costs of the debt; 
3. 
Propose risk management framework; 
4. 
Develop debt management strategy; 
5. 
Evaluate the performance. and risks of the debt portfolio and 
its impact on government resources; 
6. 
Report and manage credit risk exposure to Congress and to 
higher fiscal and monetary authorities for planning; 
7. 
Identify possible sources of funds; and, 
8. 
Identify the range of instruments that can be used to access 
possible sources for borrowings. 
SEC. 11. Appropriations. The initial sum of one hundred million pesos 
(PhP 100,000,000.00) is hereby allocated to be charged against the current 
appropriation for the President's contingent fund and the savings of the 
Department of Finance as provided for by General Appropriations Act for fiscal 
year 2007. Its regular appropriation shall thereafter be under that of the 
Department of Finance. 
SEC. 12. Implementing Rules and Regulations. -Within sixty (60) days 
from the effectivity of this Act, the Board shall promulgate the necessary rules 
and regulations for the proper implementation of the provisions of this Act. 
SEC. 13. Transitory Provision. Any existing government office or 
program dealing with or performing the functions as mentioned in this Act shall 
be integrated with the Board or Office, as the case may be, pursuant to the 
power of the President to reorganize the executive offices. 
For staffing and hiring purposes, the existing employees or officials of the 
Department of Finance or Bangko Sentral ng Pllipinas performing essentially the 
same tasks and functions as enumerated herein shall be prioritized without any 
diminution in rank, seniority, salary and other emoluments. 
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SEC. 14. Repealing Clause. - All laws, rules, regulations, orders, 
circulars and memoranda inconsistent with this Act are hereby repealed or 
modified accordingly. 
SEC. 15. Separability Clause. - If, for any reason, any portion or 
provision of this Act or the application thereof shall be declared invalid or 
unconstitutional, the validity of other parts or provisions not affected thereby shall 
continue to be in full force and effect. 
SEC. 16. Effectivity. -This Act shall take effect fifteen (15) days after its 
publication in a newspaper of general circulation. 
Approved, 
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