THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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EXPLANATORY NOTE 
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The increasind share of debt service payments in the yearly national government 
of a decreasing allotment for social services and infrastructure 
economic growth. 
Instead of attending significantly to the 
the Philippine government has to use up 40% of its 
debt servicing. 
debt itself was already at 77% of GDP in 
2003 - up from 59% just five years ago in 1999. 
Since 1986, upon the assumption into power of a people's government, calls for 
a reviewlof the debts acquired by the governments of the country already took place. 
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. 
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In: 1998, a British bank, the Standard Chartered Bank, warned of Afgentine-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. 
senator I 
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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
TO 
TREAT 
THE 
SENATE 
AN !ACT CREATING A COUNCIL FOR DEBT RELIEF 
~ E V I E W  
BILATERAL AND MULTILATERAL LOAN AGREEMENTS AND 
ES ENTERED INTO BY THE PHILIPPINE GOVERNMENTS AND INVOKE 
RELEVANT PRIVILEGES THAT WOULD FACILITATE CANCELLATION OF 
Section I. 
Title. - This shall be known as the,"Debt Relief Act of 2005," 
Section 2. Pdrpose. - 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 andlor restructuring of 
public sector debts. 1 
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. 
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Section 4. Definitions. -As used in this Act, the following shall mean: 
a) 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. 
b) Debt relief is the, reduction of principal or interest payments on developing country 
loans. 
c) Debt repudiation is a unilateral cancellation of a liability by a debtor. 
d) 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 
cannot have benefited the public in that state, and (3) debt 
of the Council. - The Council shall be headed by the 
Authority (NEDA) Secretary-General and 
have been aware of the two preceding conditions. 
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community in the country, with proven track record in international loan 
negotiations and study 
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lnternational finance experf (7) - nominated by the international finance 
following qualifications: 


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Development economist (f) - nominated by the local social sciences 
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academe, with proven track record in debt studies and fiscal management 
Banking sector representative (?) - nominated by the Bankers Association 
of the Philippines, with proven track record in international loan reaulations 
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and policies 
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Corpor+te lawyer (I) - nominated by the Integrated Bar of the Philippines, 
with proven track record in contract review and due-diligence practice 
Goverhent representatives (2) - nominees from the Department of 
Finance and the Bangko Sentral ng Pilipinas. 
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Section 6. Term of Ofice. 
- The Council shall have a term of three years in 
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 GAA for 
the succeeding two years of operations. 
/&nplementing Rules and Regulations. - The NEDA is tasked to 
formulate the implementing rules and regulations within thirty days of signing of this Act, 
and to convene the Council within 60 days of the signing of this Act. 
Section 9. Repealing Clause. - All laws, decrees, rules and regulations or portion 
thereof inconsistent with this Act are hereby repealed or modified accordingly. 
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which to achieve their mandate. 
Section 8. 
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Section I O .  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, 
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