FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
Introduced by Sen. Manny Villar 
EXPLANATORY NOTE 
The increasing share of debt service payments in the yearly national 
government budget is at the expense of a decreasing allotment for social 
services and infrastructure that could propel real economic growth. Instead of 
attending significantly to education and health sectors, the Philippine government 
has to use up 40% of its expected revenues this 2008 for debt servicing. 
The Bureau of the Treasury has reported that the National government's 
outstanding debt as of June 2008 stood at P3.964 trillion, up by 0.9% from the 
May 2008 level. Of this amount, forty-two percent (42%) or P1.661 trillion is 
owed to foreign creditors while fifty-eight percent (58%) or P2.303 trillion is 
attributed to domestic creditors. 
Since 1986, upon the assumption into power of a people's government, 
there is a continuing clamor to review the debts we incurred. The calls fell on 
deaf ears and the odious debt doctrine merely became a slogan mouthed, 
amongst street parliamentarians, but undiscussed in the real halls of 
government. 
In 1998, a British bank, the Standard Chartered Bank, warned of 
Argentine-like conditions already present in the Philippines as far as its debt 
dilemma is concerned. 
Calls on government started once more - from the 
extreme debt repudiation to a less hostile debt restructuring. 
This bill seeks to act once and for all on the calls for debt relief in the 
country. A Council for Debt Relief is proposed to be established and operational 
within a specific time period to review all loan agreements entered into by past 
and present Philippine governments with the end-view of enabling the invoking of 
relevant clauses and provisions that would allow debt relief to the country. It is 
the goal of this Bill that after the period of operation of the Council, the debt 
service burden of the country would finally be eased. 
The prompt and immediate passage of this bill deserves utmost attention. 


FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
i~~~~~~~~ Bb'." -. 
SENATE 
Senate Bill No. 2649 
Introduced by Sen. Manny Villar 
AN ACT 
TO PROMOTE ACCOUNTABILITY AND TRANSPARENCY ON FOREIGN 
LOANS OBTAINED BY THE COUNTRY CREATING FOR THE PURPOSE A 
COUNCIL FOR DEBT RELIEF TO REVIEW AND ASSESS BILATERAL AND 
MULTILATERAL LOAN AGREEMENTS, TREATIES AND CONTRACTUAL 
OBLIGATIONS ENTERED INTO BY THE PHILIPPINE GOVERNMENT 
Be it enacted by the Senate and House of Representatives of the 
Section I. Title. - This shall be known as the "Debt Relief Act of 2008." 
Section 2. Purpose. - The purpose of this Act is to ease debt burden of the 
country by invoking rights and privileges possible under international loan 
agreements and treaties for the cancellation of odious public sector debts and/or 
restructuring of public sector debts. 
Philippines in Congress assembled: 
Section 3. Scope. - This Act covers the creation of a Debt Relief Council 
that shall review and negotiate for the invoking of certain rights and privileges 
under bilateral and multilateral loan agreements and treaties that would result in 
the cancellation of odious debts and/or restructuring of the debts of the 
Philippines. 
Section 4. Definitions. -As used in this Act, the following shall mean: 
Debt cancellation is a bilateral agreement between a creditor and a 
debtor to cancel or to forgive part or all of a liability outstanding, the 
debt, incurred by the debtor to the creditor. It will no longer exist after 
the cancellation. 
Debt relief is the reduction of principal or interest payments on 
developing country loans. 
Debt repudiation is a unilateral cancellation of a liability by a debtor 
Odious debts as defined in the 1927 Doctrine of Odious Debts and as 
advanced by International Standards, are (1) debt incurred without the 
consent of the people of the state, (2) debt which cannot have 
benefited the public in that state, and (3) debt whereby the lender must 
have been aware of the two preceding conditions. 


Section 5. Composition of the Council. - The Council shall be headed by 
the National Economic and Development Authority (NEDA) Secretary-General 
and composed of six (6) more members with the following qualifications: 
International finance expert (1) - nominated by the international 
finance community in the country, with proven track record in 
international loan negotiations and study; 
Development economist (1) - nominated by the local social sciences 
academe, with proven track record in debt studies and fiscal 
management; 
Banking sector representative (I) 
- nominated by the Bankers 
Association of the Philippines, with proven track record in international 
loan regulations and policies; 
Corporate lawyer (1) - nominated by the Integrated Bar of the 
Philippines, with proven track record in contract review and due- 
diligence practice; and 
Government representatives (2) - nominees from the Department of 
Finance and the Bangko Sentral ng Pilipinas. 
Section 6. Term of Office. - The Council shall have a term of three (3) 
Section 7. Assignment of Funds. - The Council shall hold office within the 
premises of the National Economic and Development Authority offices. Operating 
funds on the first year shall be allotted for the Council from the Special Provisions 
Fund under the Office of the President. Appropriations shall be made for the 
Council in the General Appropriations Act (GAA) for the succeeding two years of 
operations. 
years in which to achieve their mandate. 
Section 8. Implementing Rules and Regulations. - The NEDA is tasked to 
formulate the implementing rules and regulations within thirty (3) days of signing 
of this Act, and to convene the Council within sixty (60) days of the signing of this 
Act. 
Section 9. Repealing Clause. - AI1 laws, decrees, rules and regulations or 
portion thereof inconsistent with this Act are hereby repealed or modified 
accordingly. 
Section 10 , Effectivity Clause. - This Act shall take effect on the fifteenth 
day following the publication in at least one (1) national paper of general 
circulation. 
Approved,