Human Security Act of 2007 RA 9372

[REPUBLIC ACT NO. 9372]

AN ACT TO SECURE THE STATE AND PROTECT OUR PEOPLE FROM TERRORISM
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
SECTION 1. Short Title. This Act shall henceforth be known as the Human Security Act of 2007.
SEC. 2. Declaration of Policy. It is declared a policy of the State to protect life, liberty, and property from
acts of terrorism, to condemn terrorism as inimical and dangerous to the national security of the country
and to the welfare of the people, and to make terrorism a crime against the Filipino people, against
humanity, and against the law of nations.
In the implementation of the policy stated above, the State shall uphold the basic rights and fundamental
liberties of the people as enshrined in the Constitution.
The State recognizes that the fight against terrorism requires a comprehensive approach, comprising
political, economic, diplomatic, military, and legal means duly taking into account the root causes of
terrorism without acknowledging these as justifications for terrorist and/or criminal activities. Such
measures shall include conflict management and post-conflict peace-building, addressing the roots of
conflict by building state capacity and promoting equitable economic development.
Nothing in this Act shall be interpreted as a curtailment, restriction or diminution of constitutionally
recognized powers of the executive branch of the government. It is to be understood, however that the
exercise of the constitutionally recognized powers of the executive department of the government shall not
prejudice respect for human rights which shall be absolute and protected at all times.
SEC. 3. Terrorism. Any person who commits an act punishable under any of the following provisions of
the Revised Penal Code:
a. Article 122 (Piracy in General and Mutiny in the High Seas or in the Philippine Waters);
b. Article 134 (Rebellion or Insurrection);
c. Article 134-a (Coup dEtat), including acts committed by private persons;
d. Article 248 (Murder);
e. Article 267 (Kidnapping and Serious Illegal Detention);
f. Article 324 (Crimes Involving Destruction), or under
(1) Presidential Decree No. 1613 (The Law on Arson);
(2) Republic Act No. 6969 (Toxic Substances and Hazardous and Nuclear Waste Control Act of 1990);
(3) Republic Act No. 5207, (Atomic Energy Regulatory and Liability Act of 1968);
(4) Republic Act No. 6235 (Anti-Hijacking Law);
(5) Presidential Decree No. 532 (Anti-Piracy and Anti-Highway Robbery Law of 1974); and,
(6) Presidential Decree No. 1866, as amended (Decree Codifying the Laws on Illegal and Unlawful
Possession, Manufacture, Dealing in, Acquisition or Disposition of Firearms, Ammunitions or Explosives)
thereby sowing and creating a condition of widespread and extraordinary fear and panic among the
populace, in order to coerce the government to give in to an unlawful demand shall be guilty of the crime
of terrorism and shall suffer the penalty of forty (40) years of imprisonment, without the benefit of parole
as provided for under Act No. 4103, otherwise known as the Indeterminate Sentence Law, as amended.
SEC. 4. Conspiracy to Commit Terrorism. Persons who conspire to commit the crime of terrorism shall
suffer the penalty of forty (40) years of imprisonment.
There is conspiracy when two or more persons come to an agreement concerning the commission of the
crime of terrorism as defined in Section 3 hereof and decide to commit the same.

SEC. 5. Accomplice. Any person who, not being a principal under Article 17 of the Revised Penal Code or
a conspirator as defined in Section 4 hereof, cooperates in the execution of either the crime of terrorism or
conspiracy to commit terrorism by previous or simultaneous acts shall suffer the penalty of from seventeen
(17) years, four months one day to twenty (20) years of imprisonment.
SEC. 6. Accessory. Any person who, having knowledge of the commission of the crime of terrorism or
conspiracy to commit terrorism, and without having participated therein, either as principal or accomplice
under Articles 17 and 18 of the Revised Penal Code, takes part subsequent to its commission in any of the
following manner: (a) by profiting himself or assisting the offender to profit by the effects of the crime; (b)
by concealing or destroying the body of the crime, or the effects, or instruments thereof, in order to
prevent its discovery; (c) by harboring, concealing, or assisting in the escape of the principal or conspirator
of the crime, shall suffer the penalty of ten (10) years and one day to twelve (12) years of imprisonment.
Notwithstanding the above paragraph, the penalties prescribed for accessories shall not be imposed upon
those who are such with respect to their spouses, ascendants, descendants, legitimate, natural, and
adopted brothers and sisters, or relatives by affinity within the same degrees, with the single exception of
accessories falling within the provisions of subparagraph (a).
SEC. 7. Surveillance of Suspects and Interception and Recording of Communications. The provisions of
Republic Act No. 4200 (Anti-Wire Tapping Law) to the contrary notwithstanding, a police or law
enforcement official and the members of his team may, upon a written order of the Court of Appeals, listen
to, intercept and record, with the use of any mode, form, kind or type of electronic or other surveillance
equipment or intercepting and tracking devices, or with the use of any other suitable ways and means for
that purpose, any communication, message, conversation, discussion, or spoken or written words between
members of a judicially declared and outlawed terrorist organization, association, or group of persons or of
any person charged with or suspected of the crime of terrorism or conspiracy to commit terrorism.
Provided, That surveillance, interception and recording of communications between lawyers and clients,
doctors and patients, journalists and their sources and confidential business correspondence shall not be
authorized.
SEC. 8. Formal Application for Judicial Authorization. The written order of the authorizing division of the
Court of Appeals to track down, tap, listen to, intercept, and record communications, messages,
conversations, discussions, or spoken or written words of any person suspected of the crime of terrorism or
the crime of conspiracy to commit terrorism shall only be granted by the authorizing division of the Court
of Appeals upon an ex parte written application of a police or of a law enforcement official who has been
duly authorized in writing by the Anti-Terrorism Council created in Section 53 of this Act to file such ex
parte application, and upon examination under oath or affirmation of the applicant and the witnesses he
may produce to establish: (a) that there is probable cause to believe based on personal knowledge of facts
or circumstances that the said crime of terrorism or conspiracy to commit terrorism has been committed,
or is being committed, or is about to be committed; (b) that there is probable cause to believe based on
personal knowledge of facts or circumstances that evidence, which is essential to the conviction of any
charged or suspected person for, or to the solution or prevention of, any such crimes, will be obtained;
and, (c) that there is no other effective means readily available for acquiring such evidence.
SEC. 9. Classification and Contents of the Order of the Court. The written order granted by the
authorizing division of the Court of Appeals as well as its order, if any, to extend or renew the same, the
original application of the applicant, including his application to extend or renew, if any, and the written
authorizations of the Anti-Terrorism Council shall be deemed and are hereby declared as classified
information: Provided, That the person being surveilled or whose communications, letters, papers,
messages, conversations, discussions, spoken or written words and effects have been monitored, listened
to, bugged or recorded by law enforcement authorities has the right to be informed of the acts done by the
law enforcement authorities in the premises or to challenge, if he or she intends to do so, the legality of
the interference before the Court of Appeals which issued the written order. The written order of the
authorizing division of the Court of Appeals shall specify the following: (a) the identity, such as name and
address, if known, of the charged or suspected person whose communications, messages, conversations,
discussions, or spoken or written words are to be tracked down, tapped, listened to, intercepted, and
recorded and, in the case of radio, electronic, or telephonic (whether wireless or otherwise)
communications, messages, conversations, discussions, or spoken or written words, the electronic
transmission systems or the telephone numbers to be tracked down, tapped, listened to, intercepted, and
recorded and their locations or if the person suspected of the crime of terrorism or conspiracy to commit
terrorism is not fully known, such person shall be subject to continuous surveillance provided there is a
reasonable ground to do so; (b) the identity (name, address, and the police or law enforcement
organization) of the police or of the law enforcement official, including the individual identity (names,
addresses, and the police or law enforcement organization) of the members of his team, judicially
authorized to track down, tap, listen to, intercept, and record the communications, messages,
conversations, discussions, or spoken or written words; (c) the offense or offenses committed, or being
committed, or sought to be prevented; and, (d) the length of time within which the authorization shall be
used or carried out.
SEC. 10. Effective Period of Judicial Authorization. Any authorization granted by the authorizing division
of the Court of Appeals, pursuant to Section 9(d) of this Act, shall only be effective for the length of time

specified in the written order of the authorizing division of the Court of Appeals, which shall not exceed a
period of thirty (30) days from the date of receipt of the written order of the authorizing division of the
Court of Appeals by the applicant police or law enforcement official.
The authorizing division of the Court of Appeals may extend or renew the said authorization for another
non-extendible period, which shall not exceed thirty (30) days from the expiration of the original period:
Provided, That the authorizing division of the Court of Appeals is satisfied that such extension or renewal is
in the public interest: and Provided, further, That the ex parte application for extension or renewal, which
must be filed by the original applicant, has been duly authorized in writing by the Anti-Terrorism Council.
In case of death of the original applicant or in case he is physically disabled to file the application for
extension or renewal, the one next in rank to the original applicant among the members of the team
named in the original written order of the authorizing division of the Court of Appeals shall file the
application for extension or renewal: Provided, That, without prejudice to the liability of the police or law
enforcement personnel under Section 20 hereof, the applicant police or law enforcement official shall have
thirty (30) days after the termination of the period granted by the Court of Appeals as provided in the
preceding paragraphs within which to file the appropriate case before the Public Prosecutors Office for any
violation of this Act.
If no case is filed within the thirty (30)-day period, the applicant police or law enforcement official shall
immediately notify the person subject of the surveillance, interception and recording of the termination of
the said surveillance, interception and recording. The penalty of ten (10) years and one day to twelve (12)
years of imprisonment shall be imposed upon the applicant police or law enforcement official who fails to
notify the person subject of the surveillance, monitoring, interception and recording as specified above.
SEC. 11. Custody of Intercepted and Recorded Communications. All tapes, discs, and recordings made
pursuant to the authorization of the authorizing division of the Court of Appeals, including all excerpts and
summaries thereof as well as all written notes or memoranda made in connection therewith, shall, within
forty-eight (48) hours after the expiration of the period fixed in the written order of the authorizing division
of the Court of Appeals or within forty-eight (48) hours after the expiration of any extension or renewal
granted by the authorizing division of the Court of Appeals, be deposited with the authorizing Division of
the Court of Appeals in a sealed envelope or sealed package, as the case may be, and shall be
accompanied by a joint affidavit of the applicant police or law enforcement official and the members of his
team.
In case of death of the applicant or in case he is physically disabled to execute the required affidavit, the
one next in rank to the applicant among the members of the team named in the written order of the
authorizing division of the Court of Appeals shall execute with the members of the team that required
affidavit.
It shall be unlawful for any person, police officer or any custodian of the tapes, discs and recording, and
their excerpts and summaries, written notes or memoranda to copy in whatever form, to remove, delete,
expunge, incinerate, shred or destroy in any manner the items enumerated above in whole or in part
under any pretext whatsoever.
Any person who removes, deletes, expunges, incinerates, shreds or destroys the items enumerated above
shall suffer a penalty of not less than six years and one day to twelve (12) years of imprisonment.
SEC. 12. Contents of Joint Affidavit. The joint affidavit of the police or of the law enforcement official and
the individual members of his team shall state: (a) the number of tapes, discs, and recordings that have
been made, as well as the number of excerpts and summaries thereof and the number of written notes
and memoranda, if any, made in connection therewith; (b) the dates and times covered by each of such
tapes, discs, and recordings; (c) the number of tapes, discs, and recordings, as well as the number of
excerpts and summaries thereof and the number of written notes and memoranda made in connection
therewith that have been included in the deposit; and (d) the date of the original written authorization
granted by the Anti-Terrorism Council to the applicant to file the ex parte application to conduct the
tracking down, tapping, intercepting, and recording, as well as the date of any extension or renewal of the
original written authority granted by the authorizing division of the Court of Appeals.
The joint affidavit shall also certify under oath that no duplicates or copies of the whole or any part of any
of such tapes, discs, and recordings, and that no duplicates or copies of the whole or any part of any of
such excerpts, summaries, written notes, and memoranda, have been made, or, if made, that all such
duplicates and copies are included in the sealed envelope or sealed package, as the case may be,
deposited with the authorizing division of the Court of Appeals.
It shall be unlawful for any person, police or law enforcement official to omit or exclude from the joint
affidavit any item or portion thereof mentioned in this Section.
Any person, police or law enforcement officer who violates any of the acts prescribed in the preceding
paragraph shall suffer the penalty of not less than ten (10) years and one day to twelve (12) years of
imprisonment.

SEC. 13. Disposition of Deposited Material. The sealed envelope or sealed package and the contents
thereof, which are deposited with the authorizing division of the Court of Appeals, shall be deemed and are
hereby declared classified information, and the sealed envelope or sealed package shall not be opened
and its contents (including the tapes, discs, and recordings and all the excerpts and summaries thereof
and the notes and memoranda made in connection therewith) shall not be divulged, revealed, read,
replayed, or used as evidence unless authorized by written order of the authorizing division of the Court of
Appeals, which written order shall be granted only upon a written application of the Department of Justice
filed before the authorizing division of the Court of Appeals and only upon a showing that the Department
of Justice has been duly authorized in writing by the Anti-Terrorism Council to file the application with
proper written notice the person whose conversation, communication, message discussion or spoken or
written words have been the subject of surveillance, monitoring, recording and interception to open,
reveal, divulge, and use the contents of the sealed envelope or sealed package as evidence.
Any person, law enforcement official or judicial authority who violates his duty to notify in writing the
persons subject of the surveillance as defined above shall suffer the penalty of six years and one day to
eight years of imprisonment.
SEC. 14. Application to Open Deposited Sealed Envelope or Sealed Package. The written application with
notice to the party concerned to open the deposited sealed envelope or sealed package shall clearly state
the purpose or reason: (a) for opening the sealed envelope or sealed package; (b) for revealing or
disclosing its classified contents; (c) for replaying, divulging, and or reading any of the listened to,
intercepted, and recorded communications, messages, conversations, discussions, or spoken or written
words (including any of the excerpts and summaries thereof and any of the notes or memoranda made in
connection therewith); and, (d) for using any of said listened to, intercepted, and recorded
communications, messages, conversations, discussions, or spoken or written words (including any of the
excerpts and summaries thereof and any of the notes or memoranda made in connection therewith) as
evidence.
Any person, law enforcement official or judicial authority who violates his duty to notify as defined above
shall suffer the penalty of six years and one day to eight years of imprisonment.
SEC. 15. Evidentiary Value of Deposited Materials. Any listened to, intercepted, and recorded
communications, messages, conversations, discussions, or spoken or written words, or any part or parts
thereof, or any information or fact contained therein, including their existence, content, substance,
purport, effect, or meaning, which have been secured in violation of the pertinent provisions of this Act,
shall absolutely not be admissible and usable as evidence against anybody in any judicial, quasi-judicial,
legislative, or administrative investigation, inquiry, proceeding, or hearing.
SEC. 16. Penalty for Unauthorized or Malicious Interceptions and/or Recordings. Any police or law
enforcement personnel who, not being authorized to do so by the authorizing division of the Court of
Appeals, tracks down, taps, listens to, intercepts, and records in whatever manner or form any
communication, message, conversation, discussion, or spoken or written word of a person charged with or
suspected of the crime of terrorism or the crime of conspiracy to commit terrorism shall be guilty of an
offense and shall suffer the penalty of ten (10) years and one day to twelve (12) years of imprisonment.
In addition to the liability attaching to the offender for the commission of any other offense, the penalty of
ten (10) years and one day to twelve (12) years of imprisonment and the accessory penalty of perpetual
absolute disqualification from public office shall be imposed upon any police or law enforcement personnel
who maliciously obtained an authority from the Court of Appeals to track down, tap, listen to, intercept,
and record in whatever manner or form any communication, message, conversation, discussion, or spoken
or written words of a person charged with or suspected of the crime of terrorism or conspiracy to commit
terrorism: Provided, That notwithstanding Section 13 of this Act, the party aggrieved by such authorization
shall be allowed access to the sealed envelope or sealed package and the contents thereof as evidence for
the prosecution of any police or law enforcement personnel who maliciously procured said authorization.
SEC. 17. Proscription of Terrorist Organizations, Association, or Group of Persons. Any organization,
association, or group of persons organized for the purpose of engaging in terrorism, or which, although not
organized for that purpose, actually uses the acts to terrorize mentioned in this Act or to sow and create a
condition of widespread and extraordinary fear and panic among the populace in order to coerce the
government to give in to an unlawful demand shall, upon application of the Department of Justice before a
competent Regional Trial Court, with due notice and opportunity to be heard given to the organization,
association, or group of persons concerned, be declared as a terrorist and outlawed organization,
association, or group of persons by the said Regional Trial Court.
SEC. 18. Period of Detention Without Judicial Warrant of Arrest. The provisions of Article 125 of the
Revised Penal Code to the contrary notwithstanding, any police or law enforcement personnel, who, having
been duly authorized in writing by the Anti-Terrorism Council has taken custody of a person charged with or
suspected of the crime of terrorism or the crime of conspiracy to commit terrorism shall, without incurring
any criminal liability for delay in the delivery of detained persons to the proper judicial authorities, deliver
said charged or suspected person to the proper judicial authority within a period of three days counted
from the moment the said charged or suspected person has been apprehended or arrested, detained, and
taken into custody by the said police, or law enforcement personnel: Provided, That the arrest of those

suspected of the crime of terrorism or conspiracy to commit terrorism must result from the surveillance
under Section 7 and examination of bank deposits under Section 27 of this Act.
The police or law enforcement personnel concerned shall, before detaining the person suspected of the
crime of terrorism, present him or her before any judge at the latters residence or office nearest the place
where the arrest took place at any time of the day or night. It shall be the duty of the judge, among other
things, to ascertain the identity of the police or law enforcement personnel and the person or persons they
have arrested and presented before him or her, to inquire of them the reasons why they have arrested the
person and determine by questioning and personal observation whether or not the suspect has been
subjected to any physical, moral or psychological torture by whom and why. The judge shall then submit a
written report of what he/she had observed when the subject was brought before him to the proper court
that has jurisdiction over the case of the person thus arrested. The judge shall forthwith submit his/her
report within three calendar days from the time the suspect was brought to his/her residence or office.
Immediately after taking custody of a person charged with or suspected of the crime of terrorism or
conspiracy to commit terrorism, the police or law enforcement personnel shall notify in writing the judge of
the court nearest the place of apprehension or arrest: Provided, That where the arrest is made during
Saturdays, Sundays, holidays or after office hours, the written notice shall be served at the residence of
the judge nearest the place where the accused was arrested.
The penalty of ten (10) years and one day to twelve (12) years of imprisonment shall be imposed upon the
police or law enforcement personnel who fails to notify and judge as provided in the preceding paragraph.
SEC. 19. Period of Detention in the Event of an Actual or Imminent Terrorist Attack. In the event of an
actual or imminent terrorist attack, suspects may not be detained for more than three days without the
written approval of a municipal, city, provincial or regional official of a Human Rights Commission or judge
of the municipal, regional trial court, the Sandiganbayan or a justice of the Court of Appeals nearest the
place of the arrest. If the arrest is made during Saturdays, Sundays, holidays or after office hours, the
arresting police or law enforcement personnel shall bring the person thus arrested to the residence of any
of the officials mentioned above that is nearest the place where the accused was arrested. The approval in
writing of any of the said officials shall be secured by the police or law enforcement personnel concerned
within five days after the date of the detention of the persons concerned: Provided, however, That within
three days after the detention the suspects, whose connection with the terror attack or threat is not
established, shall be released immediately.
SEC. 20. Penalty for Failure to Deliver Suspect to the Proper Judicial Authority within Three Days. The
penalty of ten (10) years and one day to twelve (12) years of imprisonment shall be imposed upon any
police or law enforcement personnel who has apprehended or arrested, detained and taken custody of a
person charged with or suspected of the crime of terrorism or conspiracy to commit terrorism and fails to
deliver such charged or suspected person to the proper judicial authority within the period of three days.
SEC. 21. Rights of a Person under Custodial Detention. The moment a person charged with or suspected
of the crime of terrorism or the crime of conspiracy to commit terrorism is apprehended or arrested and
detained, he shall forthwith be informed, by the arresting police or law enforcement officers or by the
police or law enforcement officers to whose custody the person concerned is brought, of his or her right:
(a) to be informed of the nature and cause of his arrest, to remain silent and to have competent and
independent counsel preferably of his choice. If the person cannot afford the services of counsel of his or
her choice, the police or law enforcement officers concerned shall immediately contact the free legal
assistance unit of the Integrated Bar of the Philippines (IBP) or the Public Attorneys Office (PAO). It shall be
the duty of the free legal assistance unit of the IBP or the PAO thus contacted to immediately visit the
person(s) detained and provide him or her with legal assistance. These rights cannot be waived except in
writing and in the presence of the counsel of choice; (b) informed of the cause or causes of his detention in
the presence of his legal counsel; (c) allowed to communicate freely with his legal counsel and to confer
with them at any time without restriction; (d) allowed to communicate freely and privately without
restrictions with the members of his family or with his nearest relatives and to be visited by them; and, (e)
allowed freely to avail of the service of a physician or physicians of choice.
SEC. 22. Penalty for Violation of the Rights of a Detainee. Any police or law enforcement personnel, or
any personnel of the police or other law enforcement custodial unit that violates any of the aforesaid rights
of a person charged with or suspected of the crime of terrorism or the crime of conspiracy to commit
terrorism shall be guilty of an offense and shall suffer the penalty of ten (10) years and one day to twelve
(12) years of imprisonment.
Unless the police or law enforcement personnel who violated the rights of a detainee or detainees as
stated above is duly identified, the same penalty shall be imposed on the police officer or hear or leader of
the law enforcement unit having custody of the detainee at the time the violation was done.
SEC. 23. Requirement for an Official Custodial Logbook and its Contents. The police or other law
enforcement custodial unit in whose care and control the person charged with or suspected of the crime of
terrorism or the crime of conspiracy to commit terrorism has been placed under custodial arrest and
detention shall keep a securely and orderly maintained official logbook, which is hereby declared as a
public document and opened to and made available for the inspection and scrutiny of the lawyer or

lawyers of the person under custody or any member of his or her family or relative by consanguinity or
affinity within the fourth civil degree or his or her physician at any time of the day or night without any
form of restriction. The logbook shall contain a clear and concise record of: (a) the name, description, and
address of the detained person; (b) the date and exact time of his initial admission for custodial arrest and
detention; (c) the name and address of the physician or physicians who examined him physically and
medically; (d) the state of his health and physical condition at the time of his initial admission for custodial
detention; (e) the date and time of each removal of the detained person from his cell for interrogation or
for any purpose; (f) the date and time of his return to his cell; (g) the name and address of the physician or
physicians who physically and medically examined him after each interrogation; (h) a summary of the
physical and medical findings on the detained person after each of such interrogation; (i) the names and
addresses of his family members and nearest relatives, if any and if available; (j) the names and addresses
of persons who visit the detained person; (k) the date and time of each of such visits; (1) the date and time
of each request of the detained person to communicate and confer with his legal counsel or counsels; (m)
the date and time of each visit, and date and time of each departure of his legal counsel or counsels; and,
(n) all other important events bearing on and all relevant details regarding the treatment of the detained
person while under custodial arrest and detention.
The said police or law enforcement custodial unit shall upon demand of the aforementioned lawyer or
lawyers or members of the family or relatives within the fourth civil degree of consanguinity or affinity of
the person under custody or his or her physician issue a certified true copy of the entries of the logbook
relative to the concerned detained person without delay or restriction or requiring any fees whatsoever
including documentary stamp tax, notarial fees, and the like. This certified true copy may be attested by
the person who has custody of the logbook or who allowed the party concerned to scrutinize it at the time
the demand for the certified true copy is made.
The police or other law enforcement custodial unit who fails to comply with the preceding paragraph to
keep an official logbook shall suffer the penalty of ten (10) years and one day to twelve (12) years of
imprisonment.
SEC. 24. No Torture or Coercion in Investigation and Interrogation. No threat, intimidation, or coercion,
and no act which will inflict any form of physical pain or torment, or mental, moral, or psychological
pressure, on the detained person, which shall vitiate his free-will, shall be employed in his investigation
and interrogation for the crime of terrorism or the crime of conspiracy to commit terrorism; otherwise, the
evidence obtained from said detained person resulting from such threat, intimidation, or coercion, or from
such inflicted physical pain or torment, or mental, moral, or psychological pressure, shall be, in its entirety,
absolutely not admissible and usable as evidence in any judicial, quasi-judicial, legislative, or
administrative, investigation, inquiry, proceeding, or hearing.
SEC. 25. Penalty for Threat, Intimidation, Coercion, or Torture in the Investigation and Interrogation of a
Detained Person. Any person or persons who use threat, intimidation, or coercion, or who inflict physical
pain or torment, or mental, moral, or psychological pressure, which shall vitiate the free-will of a charged
or suspected person under investigation and interrogation for the crime of terrorism or the crime of
conspiracy to commit terrorism shall be guilty of an offense and shall suffer the penalty of twelve (12)
years and one day to twenty (20) years of imprisonment.
When death or serious permanent disability of said detained person occurs as a consequence of the use of
such threat, intimidation, or coercion, or as a consequence of the infliction on him of such physical pain or
torment, or as a consequence of the infliction on him of such mental, moral, or psychological pressure, the
penalty shall be twelve (12) years and one day to twenty (20) years of imprisonment.
SEC. 26. Restriction on Travel. In cases where evidence of guilt is not strong, and the person charged
with the crime of terrorism or conspiracy to commit terrorism is entitled to bail and is granted the same,
the court, upon application by the prosecutor, shall limit the right of travel of the accused to within the
municipality or city where he resides or where the case is pending, in the interest of national security and
public safety, consistent with Article III, Section 6 of the Constitution. Travel outside of said municipality or
city, without the authorization of the court, shall be deemed a violation of the terms and conditions of his
bail, which shall then be forfeited as provided under the Rules of Court.
He/she may also be placed under house arrest by order of the court at his or her usual place of residence.
While under house arrest, he or she may not use telephones, cellphones, e-mails, computers, the internet
or other means of communications with people outside the residence until otherwise ordered by the court.
The restrictions abovementioned shall be terminated upon the acquittal of the accused or of the dismissal
of the case filed against him or earlier upon the discretion of the court on motion of the prosecutor or of
the accused.
SEC. 27. Judicial Authorization Required to Examine Bank Deposits, Accounts, and Records. The
provisions of Republic Act No. 1405 as amended, to the contrary notwithstanding, the justices of the Court
of Appeals designated as a special court to handle anti-terrorism cases after satisfying themselves of the
existence of probable cause in a hearing called for that purpose that: (1) a person charged with or
suspected of the crime of terrorism or conspiracy to commit terrorism, (2) of a judicially declared and

outlawed terrorist organization, association, or group of persons; and (3) of a member of such judicially
declared and outlawed organization, association, or group of persons, may authorize in writing any police
or law enforcement officer and the members of his/her team duly authorized in writing by the antiterrorism council to: (a) examine, or cause the examination of, the deposits, placements, trust accounts,
assets and records in a bank or financial institution; and (b) gather or cause the gathering of any relevant
information about such deposits, placements, trust accounts, assets, and records from a bank or financial
institution. The bank or financial institution concerned shall not refuse to allow such examination or to
provide the desired information, when so ordered by and served with the written order of the Court of
Appeals.
SEC. 28. Application to Examine Bank Deposits, Accounts, and Records. The written order of the Court of
Appeals authorizing the examination of bank deposits, placements, trust accounts, assets, and records: (1)
of a person charged with or suspected of the crime of terrorism or conspiracy to commit terrorism; (2) of
any judicially declared and outlawed terrorist organization, association, or group of persons, or (3) of any
member of such organization, association, or group of persons in a bank or financial institution, and the
gathering of any relevant information about the same from said bank or financial institution, shall only be
granted by the authorizing division of the Court of Appeals upon an ex parte application to that effect of a
police or of a law enforcement official who has been duly authorized in writing to file such ex parte
application by the Anti-Terrorism Council created in Section 53 of this Act to file such ex parte application,
and upon examination under oath or affirmation of the applicant and the witnesses he may produce to
establish the facts that will justify the need and urgency of examining and freezing the bank deposits,
placements, trust accounts, assets, and records: (1) of the person charged with or suspected of the crime
of terrorism or conspiracy to commit terrorism; (2) of a judicially declared and outlawed terrorist
organization, association or group of persons; or (3) of any member of such organization, association, or
group of persons.
SEC. 29. Classification and Contents of the Court Order Authorizing the Examination of Bank Deposits,
Accounts, and Records. The written order granted by the authorizing division of the Court of Appeals as
well as its order, if any, to extend or renew the same, the original ex parte application of the applicant,
including his ex parte application to extend or renew, if any, and the written authorizations of the AntiTerrorism Council, shall be deemed and are hereby declared as classified information: Provided, That the
person whose bank deposits, placements, trust accounts, assets, and records have been examined, frozen,
sequestered and seized by law enforcement authorities has the right to be informed of the acts done by
the law enforcement authorities in the premises or to challenge, if he or she intends to do so, the legality
of the interference. The written order of the authorizing division of the Court of Appeals designated to
handle cases involving terrorism shall specify: (a) the identify of the said: (1) person charged with or
suspected of the crime of terrorism or conspiracy to commit terrorism; (2) judicially declared and outlawed
terrorist organization, association, or group of persons; and (3) member of such judicially declared and
outlawed organization, association, or group of persons, as the case may be, whose deposits, placements,
trust accounts, assets, and records are to be examined or the information to be gathered; (b) the identity
of the bank or financial institution where such deposits, placements, trust accounts, assets, and records
are held and maintained; (c) the identity of the persons who will conduct the said examination and the
gathering of the desired information; and, (d) the length of time the authorization shall be carried out.
SEC. 30. Effective Period of Court Authorization to Examine and Obtain Information on Bank Deposits,
Accounts, and Records. The authorization issued or granted by the authorizing division of the Court of
Appeals to examine or cause the examination of and to freeze bank deposits, placements, trust accounts,
assets, and records, or to gather information about the same, shall be effective for the length of time
specified in the written order of the authorizing division of the Court of Appeals, which shall not exceed a
period of thirty (30) days from the date of receipt of the written order of the authorizing division of the
Court of Appeals by the applicant police or law enforcement official.
The authorizing division of the Court of Appeals may extend or renew the said authorization for another
period, which shall not exceed thirty (30) days renewable to another thirty (30) days from the expiration of
the original period: Provided, That the authorizing division of the Court of Appeals is satisfied that such
extension or renewal is in the public interest: and, Provided, further, That the application for extension or
renewal, which must be filed by the original applicant, has been duly authorized in writing by the AntiTerrorism Council.
In case of death of the original applicant or in case he is physically disabled to file the application for
extension or renewal, the one next in rank to the original applicant among the members of the ream
named in the original written order of the authorizing division of the Court of Appeals shall file the
application for extension or renewal: Provided, That, without prejudice to the liability of the police or law
enforcement personnel under Section 19 hereof, the applicant police or law enforcement official shall have
thirty (30) days after the termination of the period granted by the Court of Appeals as provided in the
preceding paragraphs within which to file the appropriate case before the Public Prosecutors Office for any
violation of this Act.
If no case is filed within the thirty (30)-day period, the applicant police or law enforcement official shall
immediately notify in writing the person subject of the bank examination and freezing of bank deposits,
placements, trust accounts, assets and records. The penalty of ten (10) years and one day to twelve (12)
years of imprisonment shall be imposed upon the applicant police or law enforcement official who fails to

notify in writing the person subject of the bank examination and freezing of bank deposits, placements,
trust accounts, assets and records.
Any person, law enforcement official or judicial authority who violates his duty to notify in writing as
defined above shall suffer the penalty of six years and one day to eight years of imprisonment.
SEC. 31. Custody of Bank Data and Information Obtained after Examination of Deposits, Placements, Trust
Accounts, Assets and Records. All information, data, excerpts, summaries, notes, memoranda, working
sheets, reports, and other documents obtained from the examination of the bank deposits, placements,
trust accounts, assets and records of: (1) a person charged with or suspected of the crime of terrorism or
the crime of conspiracy to commit terrorism; (2) a judicially declared and outlawed terrorist organization,
association, or group of persons; or (3) a member of any such organization, association, or group of
persons shall, within forty-eight (48) hours after the expiration of the period fixed in the written order of
the authorizing division of the Court of Appeals or within forty-eight (48) hours after the expiration of the
extension or renewal granted by the authorizing division of the Court of Appeals, be deposited with the
authorizing division of the Court of Appeals in a sealed envelope or sealed package, as the case may be,
and shall be accompanied by a joint affidavit of the applicant police or law enforcement official and the
persons who actually conducted the examination of said bank deposits, placements, trust accounts, assets
and records.
SEC. 32. Contents of Joint Affidavit. The joint affidavit shall state: (a) the identifying marks, numbers, or
symbols of the deposits, placements, trust accounts, assets, and records examined; (b) the identity and
address of the bank or financial institution where such deposits, placements, trust accounts, assets, and
records are held and maintained; (c) the number of bank deposits, placements, trust accounts, assets, and
records discovered, examined, and frozen; (d) the outstanding balances of each of such deposits,
placements, trust accounts, assets; (e) all information, data, excerpts, summaries, notes, memoranda,
working sheets, reports, documents, records examined and placed in the sealed envelope or sealed
package deposited with the authorizing division of the Court of Appeals; (f) the date of the original written
authorization granted by the Anti-Terrorism Council to the applicant to file the ex parte application to
conduct the examination of the said bank deposits, placements, trust accounts, assets and records, as well
as the date of any extension or renewal of the original written authorization granted by the authorizing
division of the Court of Appeals; and (g) that the items enumerated were all that were found in the bank or
financial institution examined at the time of the completion of the examination.
The joint affidavit shall also certify under oath that no duplicates or copies of the information, data,
excerpts, summaries, notes, memoranda, working sheets, reports, and documents acquired from the
examination of the bank deposits, placements, trust accounts, assets and records have been made, or, if
made, that all such duplicates and copies are placed in the sealed envelope or sealed package deposited
with the authorizing division of the Court of Appeals.
It shall be unlawful for any person, police officer or custodian of the bank data and information obtained
after examination of deposits, placements, trust accounts, assets and records to copy, to remove, delete,
expunge, incinerate, shred or destroy in any manner the items enumerated above in whole or in part
under any pretext whatsoever.
Any person who copies, removes, deletes, expunges, incinerates, shreds or destroys the items enumerated
above shall suffer a penalty of not less than six years and one day to twelve (12) years of imprisonment.
SEC. 33. Disposition of Bank Materials. The sealed envelope or sealed package and the contents thereof,
which are deposited with the authorizing division of the Court of Appeals, shall be deemed and are hereby
declared classified information and the sealed envelope or sealed package shall not be opened and its
contents shall not be divulged, revealed, read, or used as evidence unless authorized in a written order of
the authorizing division of the Court of Appeals, which written order shall be granted only upon a written
application of the Department of Justice filed before the authorizing division of the Court of Appeals and
only upon a showing that the Department of Justice has been duly authorized in writing by the AntiTerrorism Council to file the application, with notice in writing to the party concerned not later than three
days before the scheduled opening, to open, reveal, divulge, and use the contents of the sealed envelope
or sealed package as evidence.
Any person, law enforcement official or judicial authority who violates his duty to notify in writing as
defined above shall suffer the penalty of six years and one day to eight years of imprisonment.
SEC. 34. Application to Open Deposited Bank Materials. The written application, with notice in writing to
the party concerned not later than three days of the scheduled opening, to open the sealed envelope or
sealed package shall clearly state the purpose and reason: (a) for opening the sealed envelope or sealed
package; (b) for revealing and disclosing its classified contents; and, (c) for using the classified
information, data, excerpts, summaries, notes, memoranda, working sheets, reports, and documents as
evidence.
SEC. 35. Evidentiary Value of Deposited Bank Materials. Any information, data, excerpts, summaries,
notes, memoranda, work sheets, reports, or documents acquired from the examination of the bank
deposits, placements, trust accounts, assets and records of: (1) a person charged or suspected of the

crime of terrorism or the crime of conspiracy to commit terrorism: (2) a judicially declared and outlawed
terrorist organization, association, or group of persons; or (3) a member of such organization, association,
or group of persons, which have been secured in violation of the provisions of this Act, shall absolutely not
be admissible and usable as evidence against anybody in any judicial, quasi-judicial, legislative, or
administrative investigation, inquiry, proceeding, or hearing.
SEC. 36. Penalty for Unauthorized or Malicious Examination of a Bank or a Financial Institution. Any
person, police or law enforcement personnel who examines the deposits, placements, trust accounts,
assets, or records in a bank or financial institution of: (1) a person charged with or suspected of the crime
of terrorism or the crime of conspiracy to commit terrorism; (2) a judicially declared and outlawed terrorist
organization, association, or group of persons; or (3) a member of such organization, association, or group
of persons, without being authorized to do so by the Court of Appeals, shall be guilty of an offense and
shall suffer the penalty of ten (10) years and one day to twelve (12) years of imprisonment.
In addition to the liability attaching to the offender for the commission of any other offense, the penalty of
ten (10) years and one day to twelve (12) years of imprisonment shall be imposed upon any police or law
enforcement personnel, who maliciously obtained an authority from the Court of Appeals to examine the
deposits, placements, trust accounts, assets, or records in a bank or financial institution of: (1) a person
charged with or suspected of the crime of terrorism or conspiracy to commit terrorism; (2) a judicially
declared and outlawed terrorist organization, association, or group of persons; or (3) a member of such
organization, association, or group of persons: Provided, That notwithstanding Section 33 of this Act, the
party aggrieved by such authorization shall upon motion duly filed be allowed access to the sealed
envelope or sealed package and the contents thereof as evidence for the prosecution of any police or law
enforcement personnel who maliciously procured said authorization.
SEC. 37. Penalty of Bank Officials and Employees Defying a Court Authorization. An employee, official, or
a member of the board of directors of a bank or financial institution, who refuses to allow the examination
of the deposits, placements, trust accounts, assets, and records of: (1) a person charged with or suspected
of the crime of terrorism or the crime of conspiracy to commit terrorism; (2) a judicially declared and
outlawed organization, association, or group of persons; or (3) a member of such judicially declared and
outlawed organization, association, or group of persons in said bank or financial institution, when duly
served with the written order of the authorizing division of the Court of Appeals, shall be guilty of an
offense and shall suffer the penalty of ten (10) years and one day to twelve (12) years of imprisonment.
SEC. 38. Penalty for False or Untruthful Statement or Misrepresentation of Material Fact in Joint Affidavits.
Any false or untruthful statement or misrepresentation of material fact in the joint affidavits required
respectively in Section 12 and Section 32 of this Act shall constitute a criminal offense and the affiants
shall suffer individually the penalty of ten (10) years and one day to twelve (12) years of imprisonment.
SEC. 39. Seizure and Sequestration. The deposits and their outstanding balances, placements, trust
accounts, assets, and records in any bank or financial institution, moneys, businesses, transportation and
communication equipment, supplies and other implements, and property of whatever kind and nature
belonging: (1) to any person suspected of or charged before a competent Regional Trial Court for the crime
of terrorism or the crime of conspiracy to commit terrorism; (2) to a judicially declared and outlawed
organization, association, or group of persons; or (3) to a member of such organization, association, or
group of persons shall be seized, sequestered, and frozen in order to prevent their use, transfer, or
conveyance for purposes that are inimical to the safety and security of the people or injurious to the
interest of the State.
The accused or a person suspected of may withdraw such sums as may be reasonably needed by the
monthly needs of his family including the services of his or her counsel and his or her familys medical
needs upon approval of the court. He or she may also use any of his property that is under seizure or
sequestration or frozen because of his/her indictment as a terrorist upon permission of the court for any
legitimate reason.
Any person who unjustifiably refuses to follow the order of the proper division of the Court of Appeals to
allow the person accused of the crime of terrorism or of the crime of conspiracy to commit terrorism to
withdraw such sums from sequestered or frozen deposits, placements, trust accounts, assets and records
as may be necessary for the regular sustenance of his/her family or to use any of his/her property that has
been seized, sequestered or frozen for legitimate purposes while his/her case is pending shall suffer the
penalty of ten (10) years and one day to twelve (12) years of imprisonment.
SEC. 40. Nature of Seized, Sequestered and Frozen Bank Deposits, Placements, Trust Accounts, Assets and
Records. The seized, sequestered and frozen bank deposits, placements, trust accounts, assets and
records belonging to a person suspected of or charged with the crime of terrorism or conspiracy to commit
terrorism shall be deemed as property held in trust by the bank or financial institution for such person and
the government during the pendency of the investigation of the person suspected of or during the
pendency of the trial of the person charged with any of the said crimes, as the case may be and their use
or disposition while the case is pending shall be subject to the approval of the court before which the case
or cases are pending.

SEC. 41. Disposition of the Seized, Sequestered and Frozen Bank Deposits, Placements, Trust Accounts,
Assets and Record. If the person suspected of or charged with the crime of terrorism or conspiracy to
commit terrorism is found, after his investigation, to be innocent by the investigating body, or is acquitted,
after his arraignment or his case is dismissed before his arraignment by a competent court, the seizure,
sequestration and freezing of his bank deposits, placements, trust accounts, assets and records shall
forthwith be deemed lifted by the investigating body or by the competent court, as the case may be, and
his bank deposits, placements, trust accounts, assets and records shall be deemed released from such
seizure, sequestration and freezing, and shall be restored to him without any delay by the bank or financial
institution concerned without any further action on his part. The filing of any appeal on motion for
reconsideration shall not state the release of said funds from seizure, sequestration and freezing.
If the person charged with the crime of terrorism or conspiracy to commit terrorism is convicted by a final
judgment of a competent trial court, his seized, sequestered and frozen bank deposits, placements, trust
accounts, assets and records shall be automatically forfeited in favor of the government.
Upon his or her acquittal or the dismissal of the charges against him or her, the amount of Five hundred
thousand pesos (P500,000.00) a day for the period in which his properties, assets or funds were seized
shall be paid to him on the concept of liquidated damages. The amount shall be taken from the
appropriations of the police or law enforcement agency that caused the filing of the enumerated charges
against him/her.
SEC. 42. Penalty for Unjustified Refusal to Restore or Delay in Restoring Seized, Sequestered and Frozen
Bank Deposits, Placements, Trust Accounts, Assets and Records. Any person who unjustifiably refuses to
restore or delays the restoration of seized, sequestered and frozen bank deposits, placements, trust
accounts, assets and records of a person suspected of or charged with the crime of terrorism or conspiracy
to commit terrorism after such suspected person has been found innocent by the investigating body or
after the case against such charged person has been dismissed or after he is acquitted by a competent
court shall suffer the penalty of ten (10) years and one day to twelve (12) years of imprisonment.
SEC. 43. Penalty for the Loss, Misuse, Diversion or Dissipation of Seized, Sequestered and Frozen Bank
Deposits, Placements, Trust Accounts, Assets and Records. Any person who is responsible for the loss,
misuse, diversion, or dissipation of the whole or any part of the seized, sequestered and frozen bank
deposits, placements, trust accounts, assets and records of a person suspected of or charged with the
crime of terrorism or conspiracy to commit terrorism shall suffer the penalty of ten (10) years and one day
to twelve (12) years of imprisonment.
SEC. 44. Infidelity in the Custody of Detained Persons. Any public officer who has direct custody of a
detained person or under the provisions of this Act and who by his deliberate act, misconduct, or
inexcusable negligence causes or allows the escape of such detained person shall be guilty of an offense
and shall suffer the penalty of: (a) twelve (12) years and one day to twenty (20) years of imprisonment, if
the detained person has already been convicted and sentenced in a final judgment of a competent court;
and (b) six years and one day to twelve (12) years of imprisonment, if the detained person has not been
convicted and sentenced in a final judgment of a competent court.
SEC. 45. Immunity and Protection of Government Witnesses. The provisions of Republic Act No. 6981
(Witness Protection, Security and Benefits Act) to the contrary notwithstanding, the immunity of
government witnesses testifying under this Act shall be governed by Sections 17 and 18 of Rule 119 of the
Rules of Court: Provided, however, That said witnesses shall be entitled to benefits granted to witnesses
under said Republic Act No. 6981.
SEC. 46. Penalty for Unauthorized Revelation of Classified Materials. The penalty of ten (10) years and
one day to twelve (12) years of imprisonment shall be imposed upon any person, police or law
enforcement agent, judicial officer or civil servant who, not being authorized by the Court of Appeals to do
so, reveals in any manner or form any classified information under this Act.
SEC. 47. Penalty for Furnishing False Evidence, Forged Document, or Spurious Evidence. The penalty of
twelve (12) years and one day to twenty (20) years of imprisonment shall be imposed upon any person
who knowingly furnishes false testimony, forged document or spurious evidence in any investigation or
hearing under this Act.
SEC. 48. Continuous Trial. In cases of terrorism or conspiracy to commit terrorism, the judge shall set the
continuous trial on a daily basis from Monday to Friday or other short-term trial calendar so as to ensure
speedy trial.
SEC. 49. Prosecution Under This Act Shall be a Bar to Another Prosecution under the Revised Penal Code or
any Special Penal Laws. When a person has been prosecuted under a provision of this Act, upon a valid
complaint or information or other formal charge sufficient in form and substance to sustain a conviction
and after the accused had pleaded to the charge, the acquittal of the accused or the dismissal of the case
shall be a bar to another prosecution for any offense or felony which is necessarily included in the offense
charged under this Act.

SEC. 50. Damages for Unproven Charge of Terrorism. Upon acquittal, any person who is accused of
terrorism shall be entitled to the payment of damages in the amount of Five hundred thousand pesos
(P500,000.00) for every day that he or she has been detained or deprived of liberty or arrested without a
warrant as a result of such an accusation. The amount of damages shall be automatically charged against
the appropriations of the police agency or the Anti-Terrorism Council that brought or sanctioned the filing of
the charges against the accused. It shall also be released within fifteen (15) days from the date of the
acquittal of the accused. The award of damages mentioned above shall be without prejudice to the right of
the acquitted accused to file criminal or administrative charges against those responsible for charging him
with the case of terrorism.
Any officer, employee, personnel, or person who delays the release or refuses to release the amounts
awarded to the individual acquitted of the crime of terrorism as directed in the paragraph immediately
preceding shall suffer the penalty of six months of imprisonment.
If the deductions are less than the amounts due to the detained persons, the amount needed to complete
the compensation shall be taken from the current appropriations for intelligence, emergency, social or
other funds of the Office of the President.
In the event that the amount cannot be covered by the current budget of the police or law enforcement
agency concerned, the amount shall be automatically included in the appropriations of the said agency for
the coming year.
SEC. 51. Duty to Record and Report the Name and Address of the Informant. The police or law
enforcement officers to whom the name or a suspect in the crime of terrorism was first revealed shall
record the real name and the specific address of the informant.
The police or law enforcement officials concerned shall report the informants name and address to their
superior officer who shall transmit the information to the Congressional Oversight Committee or to the
proper court within five days after the suspect was placed under arrest or his properties were sequestered,
seized or frozen.
The name and address of the informant shall be considered confidential and shall not be unnecessarily
revealed until after the proceedings against the suspect shall have been terminated.
SEC. 52. Applicability of the Revised Penal Code. The provisions of Book I of the Revised Penal Code shall
be applicable to this Act.
SEC. 53. Anti-Terrorism Council. An Anti-Terrorism Council, hereinafter referred to, for brevity, as the
Council, is hereby created. The members of the Council are: (1) the Executive Secretary, who shall be its
Chairperson; (2) the Secretary of Justice, who shall be its Vice Chairperson; and (3) the Secretary of Foreign
Affairs; (4) the Secretary of National Defense; (5) the Secretary of the Interior and Local Government; (6)
the Secretary of Finance; and (7) the National Security Advisor, as its other members.
The Council shall implement this Act and assume the responsibility for the proper and effective
implementation of the anti-terrorism policy of the country. The Council shall keep records of its proceedings
and decisions. All records of the Council shall be subject to such security classifications as the Council may,
in its judgment and discretion, decide to adopt to safeguard the safety of the people, the security of the
Republic, and the welfare of the nation.
The National Intelligence Coordinating Agency shall be the Secretariat of the Council. The Council shall
define the powers, duties, and functions of the National Intelligence Coordinating Agency as Secretariat of
the Council. The National Bureau of Investigation, the Bureau of Immigration, the Office of Civil Defense,
the Intelligence Service of the Armed Forces of the Philippines, the Anti-Money Laundering Council, the
Philippine Center on Transnational Crime, and the Philippine National Police intelligence and investigative
elements shall serve as support agencies for the Council.
The Council shall formulate and adopt comprehensive, adequate, efficient, and effective anti-terrorism
plans, programs, and counter-measures to suppress and eradicate terrorism in the country and to protect
the people from acts of terrorism. Nothing herein shall be interpreted to empower the Anti-Terrorism
Council to exercise any judicial or quasi-judicial power or authority.
SEC. 54. Functions of the Council. In pursuit of its mandate in the previous Section, the Council shall
have the following functions with due regard for the rights of the people as mandated by the Constitution
and pertinent laws.
1. Formulate and adopt plans, programs and counter-measures against terrorists and acts of terrorism in
the country;
2. Coordinate all national efforts to suppress and eradicate acts of terrorism in the country and mobilize
the entire nation against terrorism prescribed in this Act;

3. Direct the speedy investigation and prosecution of all persons accused or detained for the crime of
terrorism or conspiracy to commit terrorism and other offenses punishable under this Act, and monitor the
progress of their cases;
4. Establish and maintain comprehensive data-base information system on terrorism, terrorist activities,
and counter-terrorism operations;
5. Freeze the funds property, bank deposits, placements, trust accounts, assets and records belonging to a
person suspected of or charged with the crime of terrorism or conspiracy to commit terrorism, pursuant to
Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001, as amended;
6. Grant monetary rewards and other incentives to informers who give vital information leading to the
apprehension, arrest, detention, prosecution, and conviction of person or persons who are liable for the
crime of terrorism or conspiracy to commit terrorism;
7. Establish and maintain coordination with and the cooperation and assistance of other nations in the
struggle against international terrorism; and
8. Request the Supreme Court to designate specific divisions of the Court of Appeals and Regional Trial
Courts in Manila, Cebu City and Cagayan de Oro City, as the case may be, to handle all cases involving the
crime of terrorism or conspiracy to commit terrorism and all matters incident to said crimes. The Secretary
of Justice shall assign a team of prosecutors from: (a) Luzon to handle terrorism cases filed in the Regional
Trial Court in Manila; (b) from the Visayas to handle cases filed in Cebu City; and (c) from Mindanao to
handle cases filed in Cagayan de Oro City.
SEC. 55. Role of the Commission on Human Rights. The Commission on Human Rights shall give the
highest priority to the investigation and prosecution of violations of civil and political rights of persons in
relation to the implementation of this Act; and for this purpose, the Commission shall have the concurrent
jurisdiction to prosecute public officials, law enforcers, and other persons who may have violated the civil
and political rights of persons suspected of, or detained for the crime of terrorism or conspiracy to commit
terrorism.
SEC. 56. Creation of a Grievance Committee. There is hereby created a Grievance Committee composed
of the Ombudsman, as chair, and the Solicitor General, and an undersecretary from the Department of
Justice (DOJ), as members, to receive and evaluate complaints against the actuations of the police and law
enforcement officials in the implementation of this Act. The Committee shall hold office in Manila.
The Committee shall have three subcommittees that will be respectively headed by the Deputy,
Ombudsmen in Luzon, the Visayas and Mindanao. The subcommittees shall respectively hold office at the
Offices of Deputy Ombudsman. Three Assistant Solicitors General designated by the Solicitor General, and
the regional prosecutors of the DOJ assigned to the regions where the Deputy Ombudsmen hold office shall
be members thereof. The three subcommittees shall assist the Grievance Committee in receiving,
investigating and evaluating complaints against the police and other law enforcement officers in the
implementation of this Act. If the evidence warrants it, they may file the appropriate cases against the
erring police and law enforcement officers. Unless seasonably disowned or denounced by the
complainants, decisions or judgments in the said cases shall preclude the filing of other cases based on the
same cause or causes of action as those that were filed with the Grievance Committee or its branches.
SEC. 57. Ban on Extraordinary Rendition. No person suspected or convicted of the crime of terrorism
shall be subjected to extraordinary rendition to any country unless his or her testimony is needed for
terrorist related police investigations or judicial trials in the said country and unless his or her human
rights, including the right against torture, and right to counsel, are officially assured by the requesting
country and transmitted accordingly and approved by the Department of Justice.
SEC. 58. Extra-Territorial Application of this Act. Subject to the provision of an existing treaty of which
the Philippines is a signatory and to any contrary provision of any law of preferential application, the
provisions of this Act shall apply: (1) to individual persons who commit any of the crimes defined and
punished in this Act within the terrestrial domain, interior waters, maritime zone, and airspace of the
Philippines; (2) to individual persons who, although physically outside the territorial limits of the
Philippines, commit, conspire or plot to commit any of the crimes defined and punished in this Act inside
the territorial limits of the Philippines; (3) to individual persons who, although physically outside the
territorial limits of the Philippines, commit any of the said crimes on board Philippine ship or Philippine
airship; (4) to individual persons who commit any of said crimes within any embassy, consulate, or
diplomatic premises belonging to or occupied by the Philippine government in an official capacity; (5) to
individual persons who, although physically outside the territorial limits of the Philippines, commit said
crimes against Philippine citizens or persons of Philippines descent, where their citizenship or ethnicity was
a factor in the commission of the crime; and (6) to individual persons who, although physically outside the
territorial limits of the Philippines, commit said crimes directly against the Philippine government.
SEC. 59. Joint Oversight Committee. There is hereby created a Joint Oversight Committee to oversee the
implementation of this Act.

The Oversight Committee shall be composed of five members each from the Senate and the House in
addition to the Chairs of the Committees of Public Order of both Houses who shall also Chair the Oversight
Committee in the order specified herein. The membership of the Committee for every House shall at least
have two opposition or minority members. The Joint Oversight Committee shall have its own independent
counsel.
The Chair of the Committee shall rotate every six months with the Senate chairing it for the first six
months and the House for the next six months. In every case, the ranking opposition or minority member
of the Committee shall be the Vice Chair.
Upon the expiration of one year after this Act is approved by the President, the Committee shall review the
Act particularly the provisions that authorize the surveillance of suspects of or persons charged with the
crime of terrorism. To that end, the Committee shall summon the police and law enforcement officers and
the members of the Anti-Terrorism Council and require them to answer questions from the members of
Congress and to submit a written report of the acts they have done in the implementation of the law
including the manner in which the persons suspected of or charged with the crime of terrorism have been
dealt with in their custody and from the date when the movements of the latter were subjected to
surveillance and his or her correspondences, messages, conversations and the like were listened to or
subjected to monitoring, recording and tapping.
Without prejudice to its submitting other reports, the Committee shall render a semi-annual report to both
Houses of Congress. The report may include where necessary a recommendation to reassess the effects of
globalization on terrorist activities on the people, provide a sunset clause to or amend any portion of the
Act or to repeal the Act in its entirety.
The courts dealing with anti-terrorism cases shall submit to Congress and the President a report every six
months of the status of anti-terrorism cases that have been filed with them starting from the date this Act
is implemented.
SEC. 60. Separability Clause. If for any reason any part or provision of this Act is declared
unconstitutional or invalid, the other parts or provisions hereof which are not affected thereby shall remain
and continue to be in full force and effect.
SEC. 61. Repealing Clause. All laws, decrees, executive orders, rules or regulations or parts thereof,
inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.
SEC. 62. Special Effectivity Clause. After the bill shall have been signed into law by the President, the
Act shall be published in three newspapers of national circulation; three newspapers of local circulation,
one each in Ilocos Norte, Baguio City and Pampanga; three newspapers of local circulation, one each in
Cebu, Iloilo and Tacloban; and three newspapers of local circulation, one each in Cagayan de Oro, Davao
and General Santos city.
The title of the Act and its provisions defining the acts of terrorism that are punished shall be aired
everyday at primetime for seven days, morning, noon and night over three national television and radio
networks; three radio and television networks, one each in Cebu, Tacloban and Iloilo; and in five radio and
television networks, one each in Lanao del Sur, Cagayan de Oro, Davao City, Cotabato City and
Zamboanga City. The publication in the newspapers of local circulation and the announcements over local
radio and television networks shall be done in the dominant language of the community.
After the publication required above shall have been done, the Act shall take effect two months after the
elections are held in May 2007.
Thereafter, the provisions of this Act shall be automatically suspended one month before and two months
after the holding of any election.
Approved,

(Sgd.) JOSE DE VENECIA, JR.

Speaker of the House
of Representatives

(Sgd.) MANNY VILLAR

President of the Senate

This Act, which is a consolidation of Senate Bill No. 2137 and House Bill No. 4839 was finally passed by the
Senate and the House of Representatives on February 8, 2007 and February 19, 2007, respectively.

(Sgd.) ROBERTO P. NAZARENO

Secretary General

(Sgd.) OSCAR G. YABES

House of Representatives

Secretary of the Senate

Approved: MAR 06 2007

(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines

Philippine Competition Act RA 10667

[Republic Act No. 10667]
AN ACT PROVIDING FOR A NATIONAL COMPETITION POLICY PROHIBITING ANTI-COMPETITIVE AGREEMENTS,
ABUSE OF DOMINANT POSITION AND ANTI-COMPETITIVE MERGERS AND ACQUISITIONS, ESTABLISHING THE
PHILIPPINE COMPETITION COMMISSION AND APPROPRIATING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
CHAPTER I
GENERAL PROVISIONS
SECTION 1. Short Title. This Act shall be known as the Philippine Competition Act.
SEC. 2. Declaration of Policy. The efficiency of market competition as a mechanism for allocating goods
and services is a generally accepted precept. The State recognizes that past measures undertaken to
liberalize key sectors in the economy need to be reinforced by measures that safeguard competitive
conditions. The State also recognizes that the provision of equal opportunities to all promotes
entrepreneurial spirit, encourages private investments, facilitates technology development and transfer
and enhances resource productivity. Unencumbered market competition also serves the interest of
consumers by allowing them to exercise their right of choice over goods and services offered in the
market.
Pursuant to the constitutional goals for the national economy to attain a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by
the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of
life for all, especially the underprivileged and the constitutional mandate that the State shall regulate or
prohibit monopolies when the public interest so requires and that no combinations in restraint of trade or
unfair competition shall be allowed, the State shall:
(a) Enhance economic efficiency and promote free and fair competition in trade, industry and all
commercial economic activities, as well as establish a National Competition Policy to be implemented by
the Government of the Republic of the Philippines and all of its political agencies as a whole;

(b) Prevent economic concentration which will control the production, distribution, trade, or industry that
will unduly stifle competition, lessen, manipulate or constrict the discipline of free markets; and
(c) Penalize all forms of anti-competitive agreements, abuse of dominant position and anti-competitive
mergers and acquisitions, with the objective of protecting consumer welfare and advancing domestic and
international trade and economic development.
Sec. 3. Scope and Application. This Act shall be enforceable against any person or entity engaged in any
trade, industry and commerce in the Republic of the Philippines. It shall likewise be applicable to
international trade having direct, substantial, and reasonably foreseeable effects in trade, industry, or
commerce in the Republic of the Philippines, including those that result from acts done outside the
Republic of the Philippines.
This Act shall not apply to the combinations or activities of workers or employees nor to agreements or
arrangements with their employers when such combinations, activities, agreements, or arrangements are
designed solely to facilitate collective bargaining in respect of conditions of employment.
Sec. 4. Definition of Terms. As used in this Act:
(a) Acquisition refers to the purchase of securities or assets, through contract or other means, for the
purpose of obtaining control by:
(1) One (1) entity of the whole or part of another;
(2) Two (2) or more entities over another; or
(3) One (1) or more entities over one (1) or more entities;
(b) Agreement refers to any type or form of contract, arrangement, understanding, collective
recommendation, or concerted action, whether formal or informal, explicit or tacit, written or oral;
(c) Conduct refers to any type or form of undertaking, collective recommendation, independent or
concerted action or practice, whether formal or informal;
(d) Commission refers to the Philippine Competition Commission created under this Act;
(e) Confidential business information refers to information which concerns or relates to the operations,
production, sales, shipments, purchases, transfers, identification of customers, inventories, or amount or
source of any income, profits, losses, expenditures;
(f) Control refers to the ability to substantially influence or direct the actions or decisions of an entity,
whether by contract, agency or otherwise;
(g) Dominant position refers to a position of economic strength that an entity or entities hold which makes
it capable of controlling the relevant market independently from any or a combination of the following:
competitors, customers, suppliers, or consumers;
(h) Entity refers to any person, natural or juridical, sole proprietorship, partnership, combination or
association in any form, whether incorporated or not, domestic or foreign, including those owned or
controlled by the government, engaged directly or indirectly in any economic activity;
(i) Market refers to the group of goods or services that are sufficiently interchangeable or substitutable and
the object of competition, and the geographic area where said goods or services are offered;
(j) Merger refers to the joining of two (2) or more entities into an existing entity or to form a new entity;
(k) Relevant market refers to the market in which a particular good or service is sold and which is a
combination of the relevant product market and the relevant geographic market, defined as follows:
(1) A relevant product market comprises all those goods and/or services which are regarded as
interchangeable or substitutable by the consumer or the customer, by reason of the goods and/or services
characteristics, their prices and their intended use; and
(2) The relevant geographic market comprises the area in which the entity concerned is involved in the
supply and demand of goods and services, in which the conditions of competition are sufficiently

homogenous and which can be distinguished from neighboring areas because the conditions of
competition are different in those areas.
CHAPTER II
PHILIPPINE COMPETITION COMMISSION
Sec. 5. Philippine Competition Commission. To implement the national competition policy and attain the
objectives and purposes of this Act, an independent quasi-judicial body is hereby created, which shall be
known as the Philippine Competition Commission (PCC), hereinafter referred to as the Commission, and
which shall be organized within sixty (60) days after the effectivity of this Act. Upon establishment of the
Commission, Executive Order No. 45 designating the Department of Justice as the Competition Authority is
hereby amended. The Office for Competition (OFC) under the Office of the Secretary of Justice shall
however be retained, with its powers and functions modified pursuant to Section 13 of this Chapter.
The Commission shall be an attached agency to the Office of the President.
Sec. 6. Composition of the Commission. The Commission shall be composed of a Chairperson and four (4)
Commissioners. The Chairperson and the Commissioners shall be citizens and residents of the Philippines,
of good moral character, of recognized probity and independence and must have distinguished themselves
professionally in public, civic or academic service in any of the following fields: economics, law, finance,
commerce or engineering. They must have been in the active practice of their professions for at least ten
(10) years, and must not have been candidates for any elective national or local office in the immediately
preceding elections, whether regular or special: Provided, That at least one (1) shall be a member of the
Philippine Bar with at least ten (10) years of experience in the active practice of law, and at least one (1)
shall be an economist. The Chairperson and the Commissioners who shall have the rank equivalent of
cabinet secretary and undersecretary, respectively, shall be appointed by the President.
Sec. 7. Term of Office. The term of office of the Chairperson and the Commissioners shall be seven (7)
years without reappointment. Of the first set of appointees, the Chairperson shall hold office for seven (7)
years and of the first four (4) Commissioners, two (2) shall hold office for a term of seven (7) years and two
(2) for a term of five (5) years. In case a vacancy occurs before the expiration of the term of office, the
appointment to such vacancy shall only be for the unexpired term of the predecessor.
The Chairperson and the Commissioners shall enjoy security of tenure and shall not be suspended or
removed from office except for just cause as provided by law.
Sec. 8. Prohibitions and Disqualifications. The Commissioners shall not, during their tenure, hold any
other office or employment. They shall not, during their tenure, directly or indirectly practice any
profession, except in a teaching capacity, participate in any business, or be financially interested in any
contract with, or any franchise, or special privileges granted by the government or any subdivision,
agency, or instrumentality thereof, including government-owned and -controlled corporations or their
subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office. They shall not be
qualified to run for any office in the election immediately succeeding their cessation from office: Provided,
That the election mentioned hereof is not a Barangay election or a Sangguniang Kabataan election.
Provided, they shall not be allowed to personally appear or practice as counsel or agent on any matter
pending before the Commission for two (2) years following their cessation from office.
No spouse or relative by consanguinity or affinity within the fourth civil degree of any of the
Commissioners, the Chairperson and the Executive Director of the Commission may appear as counsel nor
agent on any matter pending before the Commission or transact business directly or indirectly therein
during incumbency and within two (2) years from cessation of office.
Sec. 9. Compensation and Other Emoluments for Members and Personnel of the Commission. The
compensation and other emoluments for the members and personnel of the Commission shall be
exempted from the coverage of Republic Act No. 6758, otherwise known as the Salary Standardization
Act. For this purpose, the salaries and other emoluments of the Chairperson, the Commissioners, and
personnel of the Commission shall be set based on an objective classification system, taking into
consideration the importance and responsibilities attached to the respective positions, and shall be
submitted to the President of the Philippines for his approval.
Sec. 10. Quorum. Three (3) members of the Commission shall constitute a quorum and the affirmative
vote of three (3) members shall be necessary for the adoption of any rule, ruling, order, resolution,
decision or other acts of the Commission.
Sec. 11. Staff. The Commission shall appoint, fix the compensation, and determine the status,
qualifications, and duties of an adequate staff, which shall include an Executive Director of the
Commission. The Executive Director shall be appointed by the Commission and shall have relevant

experience in any of the fields of law, economics, commerce, management, finance or engineering for at
least ten (10) years. The members of the technical staff, except those performing purely clerical functions,
shall possess at least a Bachelors Degree in any of the following lines of specialization: economics, law,
finance, commerce, engineering, accounting, or management.
Sec. 12. Powers and Functions. The Commission shall have original and primary jurisdiction over the
enforcement and implementation of the provisions of this Act, and its implementing rules and regulations.
The Commission shall exercise the following powers and functions:
(a) Conduct inquiry, investigate, and hear and decide on cases involving any violation of this Act and other
existing competition laws motu proprio or upon receipt of a verified complaint from an interested party or
upon referral by the concerned regulatory agency, and institute the appropriate civil or criminal
proceedings;
(b) Review proposed mergers and acquisitions, determine thresholds for notification, determine the
requirements and procedures for notification, and upon exercise of its powers to review, prohibit mergers
and acquisitions that will substantially prevent, restrict, or lessen competition in the relevant market;
(c) Monitor and undertake consultation with stakeholders and affected agencies for the purpose of
understanding market behavior;
(d) Upon finding, based on substantial evidence, that an entity has entered into an anti-competitive
agreement or has abused its dominant position after due notice and hearing, stop or redress the same, by
applying remedies, such as, but not limited to, issuance of injunctions, requirement of divestment, and
disgorgement of excess profits under such reasonable parameters that shall be prescribed by the rules and
regulations implementing this Act;
(e) Conduct administrative proceedings, impose sanctions, fines or penalties for any noncompliance with
or breach of this Act and its implementing rules and regulations (IRR) and punish for contempt;
(f) Issue subpoena duces tecum and subpoena ad testificandum to require the production of books,
records, or other documents or data which relate to any matter relevant to the investigation and personal
appearance before the Commission, summon witnesses, administer oaths, and issue interim orders such
as show cause orders and cease and desist orders after due notice and hearing in accordance with the
rules and regulations implementing this Act;
(g) Upon order of the court, undertake inspections of business premises and other offices, land and
vehicles, as used by the entity, where it reasonably suspects that relevant books, tax records, or other
documents which relate to any matter relevant to the investigation are kept, in order to prevent the
removal, concealment, tampering with, or destruction of the books, records, or other documents;
(h) Issue adjustment or divestiture orders including orders for corporate reorganization or divestment in
the manner and under such terms and conditions as may be prescribed in the rules and regulations
implementing this Act. Adjustment or divestiture orders, which are structural remedies, should only be
imposed:
(1) Where there is no equally effective behavioral remedy; or
(2) Where any equally effective behavioral remedy would be more burdensome for the enterprise
concerned than the structural remedy. Changes to the structure of an enterprise as it existed before the
infringement was committed would only be proportionate to the substantial risk of a lasting or repeated
infringement that derives from the very structure of the enterprise;
(i) Deputize any and all enforcement agencies of the government or enlist the aid and support of any
private institution, corporation, entity or association, in the implementation of its powers and functions;
(j) Monitor compliance by the person or entities concerned with the cease and desist order or consent
judgment;
(k) Issue advisory opinions and guidelines on competition matters for the effective enforcement of this Act
and submit annual and special reports to Congress, including proposed legislation for the regulation of
commerce, trade, or industry;
(l) Monitor and analyze the practice of competition in markets that affect the Philippine economy;
implement and oversee measures to promote transparency and accountability; and ensure that
prohibitions and requirements of competition laws are adhered to;

(m) Conduct, publish, and disseminate studies and reports on anti-competitive conduct and agreements to
inform and guide the industry and consumers;
(n) Intervene or participate in administrative and regulatory proceedings requiring consideration of the
provisions of this Act that are initiated by government agencies such as the Securities and Exchange
Commission, the Energy Regulatory Commission and the National Telecommunications Commission;
(o) Assist the National Economic and Development Authority, in consultation with relevant agencies and
sectors, in the preparation and formulation of a national competition policy;
(p) Act as the official representative of the Philippine government in international competition matters;
(q) Promote capacity building and the sharing of best practices with other competition-related bodies;
(r) Advocate pro-competitive policies of the government by:
(1) Reviewing economic and administrative regulations, motu proprio or upon request, as to whether or not
they adversely affect relevant market competition, and advising the concerned agencies against such
regulations; and
(2) Advising the Executive Branch on the competitive implications of government actions, policies and
programs; and
(s) Charging reasonable fees to defray the administrative cost of the services rendered.
Sec. 13. Office for Competition (OFC), Powers and Functions. The OFC under the Department of Justice
(DOJ-OFC) shall only conduct preliminary investigation and undertake prosecution of all criminal offenses
arising under this Act and other competition-related laws in accordance with Section 31 of Chapter VI of
this Act. The OFC shall be reorganized and allocated resources as may be required therefor to effectively
pursue such mandate.
CHAPTER III
PROHIBITED ACTS
Sec. 14. Anti-Competitive Agreements.
(a) The following agreements, between or among competitors, are per se prohibited:
(1) Restricting competition as to price, or components thereof, or other terms of trade;
(2) Fixing price at an auction or in any form of bidding including cover bidding, bid suppression, bid
rotation and market allocation and other analogous practices of bid manipulation;
(b) The following agreements, between or among competitors which have the object or effect of
substantially preventing, restricting or lessening competition shall be prohibited:
(1) Setting, Kmiting, or controlling production, markets, technical development, or investment;
(2) Dividing or sharing the market, whether by volume of sales or purchases, territory, type of goods or
services, buyers or sellers or any other means;
(c) Agreements other than those specified in (a) and (b) of this section which have the object or effect of
substantially preventing, restricting or lessening competition shall also be prohibited: Provided, Those
which contribute to improving the production or distribution of goods and services or to promoting
technical or economic progress, while allowing consumers a fair share of the resulting benefits, may not
necessarily be deemed a violation of this Act.
An entity that controls, is controlled by, or is under common control with another entity or entities, have
common economic interests, and are not otherwise able to decide or act independently of each other, shall
not be considered competitors for purposes of this section.
SEC. 15. Abuse of Dominant Position. It shall be prohibited for one or more entities to abuse their
dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition:
(a) Selling goods or services below cost with the object of driving competition out of the relevant market:
Provided, That in the Commissions evaluation of this fact, it shall consider whether the entity or entities

have no such object and the price established was in good faith to meet or compete with the lower price of
a competitor in the same market selling the same or comparable product or service of like quality;
(b) Imposing barriers to entry or committing acts that prevent competitors from growing within the market
in an anti-competitive manner except those that develop in the market as a result of or arising from a
superior product or process, business acumen, or legal rights or laws;
(c) Making a transaction subject to acceptance by the other parties of other obligations which, by their
nature or according to commercial usage, have no connection with the transaction;
(d) Setting prices or other terms or conditions that discriminate unreasonably between customers or sellers
of the same goods or services, where such customers or sellers are contemporaneously trading on similar
terms and conditions, where the effect may be to lessen competition substantially: Provided, That the
following shall be considered permissible price differentials:
(1) Socialized pricing for the less fortunate sector of the economy;
(2) Price differential which reasonably or approximately reflect differences in the cost of manufacture, sale,
or delivery resulting from differing methods, technical conditions, or quantities in which the goods or
services are sold or delivered to the buyers or sellers;
(3) Price differential or terms of sale offered in response to the competitive price of payments, services or
changes in the facilities furnished by a competitor; and
(4) Price changes in response to changing market conditions, marketability of goods or services, or volume;
(e) Imposing restrictions on the lease or contract for sale or trade of goods or services concerning where,
to whom, or in what forms goods or services may be sold or traded, such as fixing prices, giving
preferential discounts or rebate upon such price, or imposing conditions not to deal with competing
entities, where the object or effect of the restrictions is to prevent, restrict or lessen competition
substantially: Provided, That nothing contained in this Act shall prohibit or render unlawful:
(1) Permissible franchising, licensing, exclusive merchandising or exclusive distributorship agreements
such as those which give each party the right to unilaterally terminate the agreement; or
(2) Agreements protecting intellectual property rights, confidential information, or trade secrets;
(f) Making supply of particular goods or services dependent upon the purchase of other goods or services
from the supplier which have no direct connection with the main goods or services to be supplied;
(g) Directly or indirectly imposing unfairly low purchase prices for the goods or services of, among others,
marginalized agricultural producers, fisherfolk, micro-, small-, medium-scale enterprises, and other
marginalized service providers and producers;
(h) Directly or indirectly imposing unfair purchase or selling price on their competitors, customers,
suppliers or consumers, provided that prices that develop in the market as a result of or due to a superior
product or process, business acumen or legal rights or laws shall not be considered unfair prices; and
(i) Limiting production, markets or technical development to the prejudice of consumers, provided that
limitations that develop in the market as a result of or due to a superior product or process, business
acumen or legal rights or laws shall not be a violation of this Act:
Provided, That nothing in this Act shall be construed or interpreted as a prohibition on having a dominant
position in a relevant market or on acquiring, maintaining and increasing market share through legitimate
means that do not substantially prevent, restrict or lessen competition:
Provided, further, That any conduct which contributes to improving production or distribution of goods or
services within the relevant market, or promoting technical and economic progress while allowing
consumers a fair share of the resulting benefit may not necessarily be considered an abuse of dominant
position:
Provided, finally, That the foregoing shall not constrain the Commission or the relevant regulator from
pursuing measures that would promote fair competition or more competition as provided in this Act.
CHAPTER IV
MERGERS AND ACQUISITIONS

SEC. 16. Review of Mergers and Acquisitions. The Commission shall have the power to review mergers
and acquisitions based on factors deemed relevant by the Commission.
SEC. 17. Compulsory Notification. Parties to the merger or acquisition agreement referred to in the
preceding section wherein the value of the transaction exceeds one billion pesos (P1,000,000,000.00) are
prohibited from consummating their agreement until thirty (30) days after providing notification to the
Commission in the form and containing the information specified in the regulations issued by the
Commission: Provided, That the Commission shall promulgate other criteria, such as increased market
share in the relevant market in excess of minimum thresholds, that may be applied specifically to a sector,
or across some or all sectors, in determining whether parties to a merger or acquisition shall notify the
Commission under this Chapter.
An agreement consummated in violation of this requirement to notify the Commission shall be considered
void and subject the parties to an administrative fine of one percent (1%) to five percent (5%) of the value
of the transaction.
Should the Commission deem it necessary, it may request further information that are reasonably
necessary and directly relevant to the prohibition under Section 20 hereof from the parties to the
agreement before the expiration of the thirty (30)-day period referred. The issuance of such a request has
the effect of extending the period within which the agreement may not be consummated for an additional
sixty (60) days, beginning on the day after the request for information is received by the parties: Provided,
That, in no case shall the total period for review by the Commission of the subject agreement exceed
ninety (90) days from initial notification by the parties.
When the above periods have expired and no decision has been promulgated for whatever reason, the
merger or acquisition shall be deemed approved and the parties may proceed to implement or
consummate it. All notices, documents and information provided to or emanating from the Commission
under this section shall be subject to confidentiality rule under Section 34 of this Act except when the
release of information contained therein is with the consent of the notifying entity or is mandatorily
required to be disclosed by law or by a valid order of a court of competent jurisdiction, or of a government
or regulatory agency, including an exchange.
In the case of the merger or acquisition of banks, banking institutions, building and loan associations, trust
companies, insurance companies, public utilities, educational institutions and other special corporations
governed by special laws, a favorable or no-objection ruling by the Commission shall not be construed as
dispensing of the requirement for a favorable recommendation by the appropriate government agency
under Section 79 of the Corporation Code of the Philippines.
A favorable recommendation by a governmental agency with a competition mandate shall give rise to a
disputable presumption that the proposed merger or acquisition is not violative of this Act.
SEC. 18. Effect of Notification. If within the relevant periods stipulated in the preceding section, the
Commission determines that such agreement is prohibited under Section 20 and does not qualify for
exemption under Section 21 of this Chapter, the Commission may:
(a) Prohibit the implementation of the agreement;
(b) Prohibit the implementation of the agreement unless and until it is modified by changes specified by
the Commission.
(c) Prohibit the implementation of the agreement unless and until the pertinent party or parties enter into
legally enforceable agreements specified by the Commission.
SEC. 19. Notification Threshold. The Commission shall, from time to time, adopt and publish regulations
stipulating:
(a) The transaction value threshold and such other criteria subject to the notification requirement of
Section 17 of this Act;
(b) The information that must be supplied for notified merger or acquisition;
(c) Exceptions or exemptions from the notification requirement; and
(d) Other rules relating to the notification procedures.

SEC. 20. Prohibited. Mergers and Acquisitions. Merger or acquisition agreements that substantially
prevent, restrict or lessen competition in the relevant market or in the market for goods or services as may
be determined by the Commission shall be prohibited.
SEC. 21. Exemptions from Prohibited. Mergers and Acquisitions. Merger or acquisition agreement
prohibited under Section 20 of this Chapter may, nonetheless, be exempt from prohibition by the
Commission when the parties establish either of the following:
(a) The concentration has brought about or is likely to bring about gains in efficiencies that are greater
than the effects of any limitation on competition that result or likely to result from the merger or
acquisition agreement; or
(b) A party to the merger or acquisition agreement is faced with actual or imminent financial failure, and
the agreement represents the least anti-competitive arrangement among the known alternative uses for
the failing entitys assets:
Provided, That an entity shall not be prohibited from continuing to own and hold the stock or other share
capital or assets of another corporation which it acquired prior to the approval of this Act or acquiring or
maintaining its market share in a relevant market through such means without violating the provisions of
this Act:
Provided, further, That the acquisition of the stock or other share capital of one or more corporations solely
for investment and not used for voting or exercising control and not to otherwise bring about, or attempt to
bring about the prevention, restriction, or lessening of competition in the relevant market shall not be
prohibited.
SEC. 22. Burden of Proof. The burden of proof under Section 21 lies with the parties seeking the
exemption. A party seeking to rely on the exemption specified in Section 21(a) must demonstrate that if
the agreement were not implemented, significant efficiency gains would not be realized.
SEC. 23. Finality of Ridings on Mergers and Acquisitions. Merger or acquisition agreements that have
received a favorable ruling from the Commission, except when such ruling was obtained on the basis of
fraud or false material information, may not be challenged under this Act.
CHAPTER V
DISPOSITION OF CASES
Sec 24. Relevant Market. For purposes of determining the relevant market, the following factors, among
others, affecting the substitutability among goods or services constituting such market and the geographic
area delineating the boundaries of the market shall be considered:
(a) The possibilities of substituting the goods or services in question, with others of domestic or foreign
origin, considering the technological possibilities, extent to which substitutes are available to consumers
and time required for such substitution;
(b) The cost of distribution of the good or service, its raw materials, its supplements and substitutes from
other areas and abroad, considering freight, insurance, import duties and non-tariff restrictions; the
restrictions imposed by economic agents or by their associations; and the time required to supply the
market from those areas;
(c) The cost and probability of users or consumers seeking other markets; and
(d) National, local or international restrictions which limit access by users or consumers to alternate
sources of supply or the access of suppliers to alternate consumers.
SEC. 25. Control of an Entity. In determining the control of an entity, the Commission may consider the
following:
Control is presumed to exist when the parent owns directly or indirectly, through subsidiaries, more than
one half (1/2) of the voting power of an entity, unless in exceptional circumstances, it can clearly be
demonstrated that such ownership does not constitute control. Control also exists even when an entity
owns one half (1/2) or less of the voting power of another entity when:
(a) There is power over more than one half (1/2) of the voting rights by virtue of an agreement with
investors;

(b) There is power to direct or govern the financial and operating policies of the entity under a statute or
agreement;
(c) There is power to appoint or remove the majority of the members of the board of directors or
equivalent governing body;
(d) There is power to cast the majority votes at meetings of the board of directors or equivalent governing
body;
(e) There exists ownership over or the right to use all or a significant part of the assets of the entity;
(f) There exist rights or contracts which confer decisive influence on the decisions of the entity.
SEC. 26. Determination of Anti-Competitive Agreement or Conduct. In determining whether anticompetitive agreement or conduct has been committed, the Commission shall:
(a) Define the relevant market allegedly affected by the anti-competitive agreement or conduct, following
the principles laid out in Section 24 of this Chapter;
(b) Determine if there is actual or potential adverse impact on competition in the relevant market caused
by the alleged agreement or conduct, and if such impact is substantial and outweighs the actual or
potential efficiency gains that result from the agreement or conduct;
(c) Adopt a broad and forward-looking perspective, recognizing future market developments, any
overriding need to make the goods or services available to consumers, the requirements of large
investments in infrastructure, the requirements of law, and the need of our economy to respond to
international competition, but also taking account of past behavior of the parties involved and prevailing
market conditions;
(d) Balance the need to ensure that competition is not prevented or substantially restricted and the risk
that competition efficiency, productivity, innovation, or development of priority areas or industries in the
general interest of the country may be deterred by overzealous or undue intervention; and
(e) Assess the totality of evidence on whether it is more likely than not that the entity has engaged in anticompetitive agreement or conduct including whether the entitys conduct was done with a reasonable
commercial purpose such as but not limited to phasing out of a product or closure of a business, or as a
reasonable commercial response to the market entry or conduct of a competitor.
SEC. 27. Market Dominant Position. In determining whether an entity has market dominant position for
purposes of this Act, the Commission shall consider the following:
(a) The share of the entity in the relevant market and whether it is able to fix prices unilaterally or to
restrict supply in the relevant market;
(b) The existence of barriers to entry and the elements which could foreseeably alter both said barriers and
the supply from competitors;
(c) The existence and power of its competitors;
(d) The possibility of access by its competitors or other entities to its sources of inputs;
(e) The power of its customers to switch to other goods or services;
(f) Its recent conducts; and
(g) Other criteria established by the regulations of this Act.
There shall be a rebuttable presumption of market dominant position if the market share of an entity in the
relevant market is at least fifty percent (50%), unless a new market share threshold is determined by the
Commission for that particular sector.
The Commission shall from time to time determine and publish the threshold for dominant position or
minimum level of share in the relevant market that could give rise to a presumption of dominant position.
In such determination, the Commission would consider the structure of the relevant market, degree of
integration, access to end-users, technology and financial resources, and other factors affecting the control
of a market, as provided in subsections (a) to (g) of this section.

The Commission shall not consider the acquiring, maintaining and increasing of market share through
legitimate means not substantially preventing, restricting, or lessening competition in the market such as
but not limited to having superior skills, rendering superior service, producing or distributing quality
products, having business acumen, and the enjoyment and use of protected intellectual property rights as
violative of this Act.
SEC. 28. Forbearance. The Commission may forbear from applying the provisions of this Act, for a limited
time, in whole or in part, in all or specific cases, on an entity or group of entities, if in its determination:
(a) Enforcement is not necessary to the attainment of the policy objectives of this Act;
(b) Forbearance will neither impede competition in the market where the entity or group of entities seeking
exemption operates nor in related markets; and
(c) Forbearance is consistent with public interest and the benefit and welfare of the consumers.
A public hearing shall be held to assist the Commission in making this determination.
The Commissions order exempting the relevant entity or group of entities under this section shall be made
public. Conditions may be attached to the forbearance if the Commission deems it appropriate to ensure
the long-term interest of consumers.
In the event that the basis for the issuance of the exemption order ceases to be valid, the order may be
withdrawn by the Commission.
CHAPTER VI
FINES AND PENALTIES
Sec. 29. Administrative Penalties.
(a) Administrative Fines. In any investigation under Chapter III, Sections 14 and 15, and Chapter IV,
Sections 17 and 20 of this Act, after due notice and hearing, the Commission may impose the following
schedule of administrative fines on any entity found to have violated the said sections:
First offense: Fine of up to one hundred million pesos (P100,000,000.00);
Second offense: Fine of not less than one hundred million pesos (P100,000,000.00) but not more than two
hundred fifty million pesos (P250,000,000.00).
In fixing the amount of the fine, the Commission shall have regard to both the gravity and the duration of
the violation.
(b) Failure to Comply With an Order of the Commission. An entity which fails or refuses to comply with a
ruling, order or decision issued by the Commission shall pay a penalty of not less than fifty thousand pesos
(P50,000.00) up to two million pesos (P2,000,000.00) for each violation and a similar amount of penalty for
each day thereafter until the said entity fully complies. Provided that these fines shall only accrue daily
beginning forty-five (45) days from the time that the said decision, order or ruling was received.
(c) Supply of Incorrect or Misleading Information. The Commission may likewise impose upon any entity
fines of up to one million pesos (PI,000,000.00) where, intentionally or negligently, they supply incorrect or
misleading information in any document, application or other paper filed with or submitted to the
Commission or supply incorrect or misleading information in an application for a binding ruling, a proposal
for a consent judgment, proceedings relating to a show cause order, or application for modification of the
Commissions ruling, order or approval, as the case may be.
(d) Any other violations not specifically penalized under the relevant provisions of this Act shall be
penalized by a fine of not less than fifty thousand pesos (P50,000.00) up to two million pesos
(P2,000,000.00).
Provided that the schedule of fines indicated in this section shall be increased by the Commission every
five (5) years to maintain their real value from the time it was set.
SEC. 30. Criminal Penalties. An entity that enters into any anti-competitive agreement as covered by
Chapter III, Section 14(a) and 14(b) under this Act shall, for each and every violation, be penalized by
imprisonment from two (2) to seven (7) years, and a fine of not less than fifty million pesos

(P50,000,000.00) but not more than two hundred fifty million pesos (P250,000,000.00). The penalty of
imprisonment shall be imposed upon the responsible officers, and directors of the entity.
When the entities involved are juridical persons, the penalty of. imprisonment shall be imposed on its
officers, directors, or employees holding managerial positions, who are knowingly and willfully responsible
for such violation.

CHAPTER VII
ENFORCEMENT
Sec. 31. Fact Finding; Preliminary Inquiry. The Commission, motu proprio, or upon the filing of a verified
complaint by an interested party or upon referral by a regulatory agency, shall have the sole and exclusive
authority to initiate and conduct a fact-finding or preliminary inquiry for the enforcement of this Act based
on reasonable grounds.
The Commission, after considering the statements made, or documents or articles produced in the course
of the fact-finding or preliminary inquiry, shall terminate the same by:
(a) Issuing a resolution ordering its closure if no violation or infringement of this Act is found; or
(b) Issuing a resolution to proceed, on the basis of reasonable grounds, to the conduct of a full
administrative investigation.
The Commission, after due notice and hearing, and on the basis of facts and evidence presented, may
issue an order for the temporary cessation or desistance from the performance of certain acts by the
respondent entity, the continued performance of which would result in a material and adverse effect on
consumers or competition in the relevant market.
If the evidence so warrants, the Commission may file before the DOJ criminal complaints for violations of
this Act or relevant laws for preliminary investigation and prosecution before the proper court. The DOJ
shall conduct such preliminary investigation in accordance with the Revised Rules of Criminal Procedure.
The preliminary inquiry shall, in all cases, be completed by the Commission within ninety (90) days from
submission of the verified complaint, referral, or date of initiation by the Commission, motu proprio, of the
same.
Except as provided in Section 12(i) of Chapter II of this Act, no law enforcement agency shall conduct any
kind of fact-finding, inquiry or investigation into any competition-related matters.
Sec. 32. Relationship With Sector Regulators. The Commission shall have original and primary jurisdiction
in the enforcement and regulation of all competition-related issues.
The Commission shall still have jurisdiction if the issue involves both competition and noncompetition
issues, but the concerned sector regulator shall be consulted and afforded reasonable opportunity to
submit its own opinion and recommendation on the matter before the Commission makes a decision on
any case.
Where appropriate, the Commission and the sector regulators shall work together to issue rules and
regulations to promote competition, protect consumers, and prevent abuse of market power by dominant
players within their respective sectors.
Sec. 33. Power to Investigate and Enforce Orders and Resolutions. The Commission shall conduct
inquiries by administering oaths, issuing subpoena duces tecum and summoning witnesses, and
commissioning consultants or experts. It shall determine if any provision of this Act has been violated,
enforce its orders and carry out its resolutions by making use of any available means, provisional or
otherwise, under existing laws and procedures including the power to punish for contempt and to impose
fines.
Sec. 34. Confidentiality of Information. Confidential business information submitted by entities, relevant
to any inquiry or investigation being conducted pursuant to this Act as well as any deliberation in relation
thereto, shall not, in any manner, be directly or indirectly disclosed, published, transferred, copied, or
disseminated. Likewise, the Commission shall, to the extent possible, subject such information to the
confidentiality rule provided under this section when it issues notices, bulletins, rulings and other
documents: Piovided., That the confidentiality rule shall not apply if the notifying entity consents to the
disclosure, or the document or information is mandatorily required to be disclosed by law or by a valid

order of a court of competent jurisdiction or of a government or regulatory agency, including an exchange.

The identity of the persons who provide information to the Commission under condition of anonymity, shall
remain confidential, unless such confidentiality is expressly waived by these persons.
Any violation of this provision shall be imposed a fine of not less than one million pesos (PI,000,000.00) but
not more than five million pesos (P5,000,000.00).
Sec. 35. Leniency Program. The Commission shall develop a Leniency Program to be granted to any
entity in the form of immunity from suit or reduction of any fine which would otherwise be imposed on a
participant in an anti-competitive agreement as provided in Section 14(a) and 14(b) of this Act in exchange
for the voluntary disclosure of information regarding such an agreement which satisfies specific criteria
prior to or during the fact-finding or preliminary inquiry stage of the case.
Immunity from suit will be granted to an entity reporting illegal anti-competitive activity before a factfinding or preliminary inquiry has begun if the following conditions are met:
(a) At the time the entity comes forward, the Commission has not received information about the activity
from any other source;
(b) Upon the entitys discovery of illegal activity, it took prompt and effective action to terminate its
participation therein;
(c) The entity reports the wrongdoing with candor and completeness and provides full, continuing, and
complete cooperation throughout the investigation; and
(d) The entity did not coerce another party to participate in the activity and clearly was not the leader in,
or the originator of, the activity.
Even after the Commission has received information about the illegal activity after a fact-finding or
preliminary inquiry has commenced, the reporting entity will be granted leniency, provided preceding
conditions (b) and (c) and the following additional requirements are complied with:
(1) The entity is the first to come forward and qualify for leniency;
(2) At the time the entity comes forward, the Commission does not have evidence against the entity that is
likely to result in a sustainable conviction; and
(3) The Commission determines that granting leniency would not be unfair to others.
Such program shall include the immunity from any suit or charge of affected parties and third parties,
exemption, waiver, or gradation of fines and/or penalties giving precedence to the entity submitting such
evidence. An entity cooperating or furnishing information, document or data to the Commission in
connection to an investigation being conducted shall not be subjected to any form of reprisal or
discrimination. Such reprisal or discrimination shall be considered a violation of this Act subject to the
sanctions provided in this Act.
Nothing in this section shall preclude prosecution for entities that report to the Commission false,
misleading, or malicious information, data or documents damaging to the business or integrity of the
entities under inquiry as a violation of said section. An entity found to have reported false, misleading or
malicious information, data, or document may be penalized by a fine not less than the penalty imposed in
the section reported to have been violated by the entity complained of.
The DOJ-OFC may likewise grant leniency or immunity as provided in this section in the event that there is
already a preliminary investigation pending before it.
SEC. 36. Nolo Contendere. An entity charged in a criminal proceeding pursuant to Section 14(a) and
14(b) of this Act may enter a plea of Nolo Contendere, in which he does not accept nor deny responsibility
for the charges but agrees to accept punishment as if he had pleaded guilty. The plea cannot be used
against the defendant entity to prove liability in a civil suit arising from the criminal action nor in another
cause of action: Provided, That a plea of Nolo Contendere may be entered only up to arraignment and
subsequently, only with the permission of the court which shall accept it only after weighing its effect on
the parties, the public and the administration of justice.
SEC. 37. Non-Adversarial Remedies. As an implementing and enforcement policy, the Commission shall,
under such rules and regulations it may prescribe, encourage voluntary compliance with this Act and other
competition laws by making available to the parties concerned the following and other analogous nonadversarial administrative remedies, before the institution of administrative, civil or criminal action:

(a) Binding Ruling. Where no prior complaint or investigation has been initiated, any entity that is in
doubt as to whether a contemplated act, course of conduct, agreement, or decision, is in compliance with,
is exempt from, or is in violation of any of the provisions of this Act, other competition laws, or
implementing rules and regulations thereof, may request the Commission, in writing, to render a binding
ruling thereon: Provided, That the ruling is for a specified period, subject to extension as may be
determined by the Commission, and based on substantial evidence.
In the event of an adverse binding ruling on an act, course or conduct, agreement, or decision, the
applicant shall be provided with a reasonable period, which in no case shall be more than ninety (90) days,
to abide by the ruling of the Commission and shall not be subject to administrative, civil, or criminal action
unless the applicant fails to comply with the provisions of this Act;
(b) Show Cause Order. Upon preliminary findings motu proprio or on written complaint under oath by an
interested party that any entity is conducting its business, in whole or in part in a manner that may not be
in accord with the provisions of this Act or other competition laws, and it finds that the issuance of a show
cause order would be in the interest of the public, the Commission shall issue and serve upon such entity
or entities a written description of its business conduct complained of, a statement of the facts, data, and
information together with a summary of the evidence thereof, with an order requiring the said entity or
entities to show cause, within the period therein fixed, why no order shall issue requiring such person or
persons to cease and desist from continuing with its identified business conduct, or pay the administrative
fine therein specified, or readjust its business conduct or practices;
(c) Consent Order. At any time prior to the conclusion by the Commission of its inquiry, any entity under
inquiry may, without in any manner admitting a violation of this Act or any other competition laws, submit
to the Commission a written proposal for the entry of a consent order, specifying therein the terms and
conditions of the proposed consent order which shall include among others the following:
(1) The payment of an amount within the range of fines provided for under this Act;
(2) The required compliance report as well as an entity to submit regular compliance reports;
(3) Payment of damages to any private party/parties who may have suffered injury; and
(4) Other terms and conditions that the Commission deems appropriate and necessary for the effective
enforcement of this Act or other Competition Laws:
Provided, That a consent order shall not bar any inquiry for the same or similar acts if continued or
repeated;
(d) Monitoring of Compliance. The Commission shall monitor the compliance by the entity or entities
concerned, their officers, and employees, with the final and executory binding ruling, cease and desist
order, or approval of a consent judgment. Upon motion of an interested party/parties, the Commission
shall issue a certification or resolution to the effect that the entity or entities concerned have, or have not,
as the case may be, complied with a final and executory ruling, order, or approval.
(e) Inadmissibility of Evidence in Criminal Proceedings. The request for a binding ruling, the show cause
order, or the proposal for consent order; the facts, data, and information therein contained or subsequently
supplied by the entity or entities concerned; admissions, oral or written, made by them against their
interest; all other documents filed by them, including their evidence presented in the proceedings before
the Commission; and the judgment or order rendered thereon; shall not be admissible as evidence in any
criminal proceedings arising from the same act subject of the binding ruling, show cause order or consent
order against such entity or entities, their officers, employees, and agents.
Sec. 38. Contempt. The Commission may summarily punish for contempt by imprisonment not
exceeding thirty (30) days or by a fine not exceeding one hundred thousand pesos (P 100,000.00), or both,
any entity guilty of such misconduct in the presence of the Commission in its vicinity as to seriously
interrupt any hearing, session or any proceeding before it, including cases in which an entity willfully fails
or refuses, without just cause, to comply with a summons, subpoena or subpoena duces tecum legally
issued by the Commission being present at a hearing, proceeding, session or investigation, refused to be
sworn as a witness or to answer questions or to furnish information when lawfully required to do so.
Sec. 39. Appeals of the Decisions of the Commission. Decisions of the Commission shall be appealable to
the Court of Appeals in accordance with the Rules of Court. The appeal shall not stay the order, ruling or
decision sought to be reviewed, unless the Court of Appeals shall direct otherwise upon such terms and
conditions it may deem just. In the appeal, the Commission shall be included as a party respondent to the
case.

Sec. 40. Writ of Execution. Upon the finality of its binding ruling, order, resolution, decision, judgment, or
rule or regulation, collectively, the Commission may issue a writ of execution to enforce its decision and
the payment of the administrative fines provided in the preceding sections.
SEC. 41. Basic Necessities and Prime Commodities. If the violation involves the trade or movement of
basic necessities and prime commodities as defined by Republic Act No. 7581, as amended, the fine
imposed by the Commission or the courts, as the case may be, shall be tripled.
Sec. 42. Immunity from Suit. The Chairperson,the Commissioners, officers, employees and agents of the
Commission shall not be subject to any action, claim or demand in connection with any act done or
omitted by them in the performance of their duties and exercise of their powers except for those actions
and omissions done in evident bad faith or gross negligence.
Sec. 43. Indemnity. Unless the actions of the Commission or its Chairperson, any of its Commissioners,
officers, employees and agents are found to be in willful violation of this Act, performed with evident bad
faith or gross negligence, the Commission, its Chairperson, Commissioners, officers, employees and agents
are held free and harmless to the fullest extent permitted by law from any liability, and they shall be
indemnified for any and all liabilities, losses, claims, demands, damages, deficiencies, costs and expenses
of whatsoever kind and nature that may arise in connection with the exercise of their powers and
performance of their duties and functions.
The Commission shall underwrite or advance litigation costs and expenses, including legal fees and other
expenses of external counsel, or provide legal assistance to its Chairperson, Commissioners, officers,
employees, or agents in connection with any civil, criminal, administrative or any other action or
proceeding, to which they are made a party by reason of, or in connection with, the exercise of authority or
performance of duties and functions under this Act: Provided, That such legal protection shall not apply to
any civil, criminal, administrative, or any action or proceeding that may be initiated by the Commission,
against such Chairperson, Commissioners, officers, employees, or agents: Provided, further, That the
Chairperson, Commissioners, officers, employees, or agents, who shall resign, retire, transfer to another
agency or be separated from the service, shall continue to be provided with such legal protection in
connection with any act done or omitted to be done by them in good faith during their tenure or
employment with the Commission: Provided, finally, That in the event of a settlement or compromise,
indemnification shall be provided only in connection with such matters covered by the settlement as to
which the Commission is advised by counsel that the persons to be indemnified did not commit any
negligence or misconduct.
The costs and expenses incurred in defending the aforementioned action, suit or proceeding may be paid
by the Commission in advance of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the Chairperson, Commissioner, officer, employee, or agent to repay the
amount advanced should it ultimately be determined by the Commission that one is not entitled to be
indemnified as provided in this section.
Sec. 44. Jurisdiction of the Regional Trial Court. The Regional Trial Court of the city or province where the
entity or any of the entities whose business act or conduct Constitutes the subject matter of a case,
conducts its principal place of business, shall have original and exclusive jurisdiction, regardless of the
penalties and fines herein imposed, of all criminal and civil cases involving violations of this Act and other
competition-related laws. If the defendant or anyone is charged in the capacity of a director, officer,
shareholder, employee, or agent of a corporation or other juridical entity who knowingly and willfully
authorized the commission of the offense charged, the Regional Trial Court of the city or province where
such corporation or juridical entity conducts its principal place of business, shall have jurisdiction.
Sec. 45. Private Action. Any person who suffers direct injury by reason of any violation of this Act may
institute a separate and independent civil action after the Commission has completed the preliminary
inquiry provided under Section 31.
CHAPTER VIII
OTHER PROVISIONS
Sec. 46. Statute of Limitations. Any action arising from a violation of any provision of this Act shall be
forever barred unless commenced within five (5) years from:

For criminal actions, the time the violation is discovered by the offended party, the authorities, or
their agents; and

For administrative and civil actions, the time the cause of action accrues.

Sec. 47. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and
Preliminary Mandatory Injunctions. Except for the Court of Appeals and the Supreme Court, no other
court shall issue any temporary restraining order, preliminary injunction or preliminary mandatory
injunction against the Commission in the exercise of its duties or functions: Provided, That, this prohibition
shall apply in all cases, disputes or controversies instituted by a private party, including, but not limited to,
cases filed by entities or those claiming to have rights through such entities: Provided, however, That, this
prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such
that the non-issuance of a temporary restraining order will result in grave injustice and irreparable injury to
the public: Provided, further, That, the applicant shall file a bond, in an amount to be fixed by the Court,
but in no case shall it exceed twenty percent (20%) of the imposable fines provided for under Chapter VI,
Section 29 of this Act: Provided, finally, That in the event that the court finally decides that the applicant
was not entitled to the relief applied for, the bond shall accrue in favor of the Commission.
Any temporary restraining order, preliminary injunction or preliminary mandatory injunction issued in
violation of this section is void and of no force and effect. Any judge who violates this section shall be
penalized by suspension of at least one (1) year without pay in addition to other criminal, civil or
administrative penalties.
SEC. 48. Trade Associations. Nothing contained in this Act shall be construed to prohibit the existence
and operation of trade associations organized to promote quality standards and safety issues: Piovided,
That, these associations shall not in any way be used to justify any violation of this Act: Provided, however,
That it shall not be illegal to use the association as a forum to discuss or promote quality standards,
efficiency, safety, security, productivity, competitiveness and other matters of common interest involving
the industry: Provided, further, That such is done without any anti-competitive intent or effect.
SEC. 49. Congressional Oversight Committee. To oversee the implementation of this Act, there shall be
created a Congressional Oversight Committee on Competition (COCC) to be composed of the Chairpersons
of the Senate Committees on Trade and Commerce, Economic Affairs, and Finance, the Chairpersons of the
House of Representatives Committees on Economic Affairs, Trade and Industry, and Appropriations and two
(2) members each from the Senate and the House of Representatives who shall be designated by the
Senate President and the Speaker of the House of Representatives: Provided, That one (1) of the two (2)
Senators and one (1) of the two (2) House Members shall be nominated by the respective Minority Leaders
of the Senate and the House of Representatives. The Congressional Oversight Committee shall be jointly
chaired by the Chairpersons of the Senate Committee on Trade and Commerce and the House of
Representatives Committee on Economic Affairs. The Vice Chairperson of the Congressional Oversight
Committee shall be jointly held by the Chairpersons of the Senate Committee on Economic Affairs and the
House of Representatives Committee on Trade and Industry.
The Secretariat of the COCC shall be drawn from the existing personnel of the Senate and House of
Representatives committees comprising the Congressional Oversight Committee.
CHAPTER IX
FINAL PROVISIONS
Sec. 50. Implementing Rules and Regulations. Within one hundred eighty (180) days from the effectivity
of this Act, the Commission, in consultation with the DOJ-OFC and concerned sector regulators shall
promulgate the necessary implementing rules and regulations for the implementation of this Act: Provided,
That, the Commission may revise such implementing rules and regulations as it deems necessary:
Provided, however, That such revised implementing rules and regulations shall only take effect fifteen (15)
days following its publication in two (2) newspapers of general circulation.
Sec. 51. Appropriations and Use of Fees, Charges and Penalties. The initial budgetary requirements of the
Commission of three hundred million pesos (P300,000,000.00) is hereby appropriated.
. All fees, fines, penalties collected by the Commission shall not be retained by the Commission, but will be
remitted to the National Treasury and shall accrue to the general funds.
Such funds necessary for the continuous and effective operation of the Commission shall be included in
the annual General Appropriations Act.
Sec. 52. Transparency Clause. Final decisions, orders and rulings of the Commission shall be published
on the official website subject to Section 34 of this Act.
Records of public proceedings shall be made available to the public subject to Section 34 of this Act.
Sec. 53. Transitional Clause. In order to allow affected parties time to renegotiate agreements or
restructure their business to comply with the provisions of this Act, an existing business structure, conduct,

practice or any act that may be in violation of this Act shall be subject to the administrative, civil and
criminal penalties prescribed herein only if it is not cured or is continuing upon the expiration of two (2)
years after the effectivity of this Act: Provided, That this section shall not apply to administrative, civil and
criminal proceedings against anticompetitive agreement or conduct, abuse of dominant position, and anticompetitive mergers and acquisitions, initiated prior to the entry into force of this Act: Provided, further,
That during the said two (2)-year period, the government shall undertake an advocac program to inform
the general public of the provisions of this Act.
Sec. 54. Separability Clause. If any clause, sentence, section or part of this Act shall be adjudged by a
court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the
remainder of this Act, but shall be confined in its operation to the clause, sentence, paragraph, section, or
part thereof directly involved in the controversy.
Sec. 55. Repealing Clause. The following laws, and all other laws, decrees, executive orders and
regulations, or part or parts thereof inconsistent with any provision of this Act, are hereby repealed,
amended or otherwise modified accordingly:
(a) Article 186 of Act No. 3815, otherwise known as the Revised Penal Code: Provided, That violations of
Article 186 of the Revised Penal Code committed before the effectivity of this Act may continue to be
prosecuted unless the same have been barred by prescription, and subject to the procedure under Section
31 of this Act;
(b) Section 4 of Commonwealth Act No. 138;
(c) Section 43(u) on Functions of the ERC of Republic Act No. 9136, entitled An Act Ordaining Reforms in
the Electric Power Industry, Amending for the Purpose Certain Laws and for Other Purposes, otherwise
known as the Electric Power Industry Reform Act of2001, insofar as the provision thereof is inconsistent
with this Act;
(d) Section 24 on Illegal Acts of Price Manipulation and Section 25 on Penalty for Illegal Acts of Price
Manipulation of Republic Act No. 9502, entitled An Act Providing for Cheaper and Quality Medicines,
Amending for the Purpose Republic Act No. 8293 or the Intellectual Property Code, Republic Act No. 6675
or the Generics Act of 1988, and Republic Act No. 5921 or the Pharmacy Law, and for Other Purposes,
otherwise known as the Universally Accessible Cheaper and Quabrty Medicines Act of 2008. insofar as
the provisions thereof are inconsistent with this Act; and
(e) Executive Order No. 45, Series of 2011, Designating the Department of Justice as the Competition
Authority, Department of Justice Circular 005 Series of 2015, and other related issuances, insofar as they
are inconsistent with the provisions of this Act.
Sec. 56. Effectivity Clause. This Act shall take effect fifteen (15) days following its publication in the
Official Gazette or at least two (2) national newspapers of general circulation. Notwithstanding any
provision herein, this Act shall have no retroactive effect.
Approved,
(Sgd) FELICIANO BELMONTE JR.
Speaker of the House
of Representatives

(Sgd.) FRANKLIN M. DRILON

President of the Senate

This Act which is a consolidation of Senate Bill No. 2282 and House Bill No. 5286 was finally passed by the
Senate and the House of Representatives on June 10, 2015.
(Sgd) MARILYN B. BARUA-YAP
Secretary General
House of Representatives
Approved: JULY 21, 2015
(Sgd) BENIGNO S. AQUINO III
President of the Philippines

(Sgd.) FRANKLIN M. DRILON

President of the Senate

Renewable Energy Act RA 9513

Republic Act No. 9513
December 16, 2008
AN ACT PROMOTING THE DEVELOPMENT, UTILIZATION AND COMMERCIALIZATION OF
RENEWABLE ENERGY RESOURCES AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
CHAPTER I
TITLE AND DECLARATION OF POLICIES
Section 1. Short Title. This Act shall be known as the Renewable Energy Act of 2008. It shall
hereinafter be referred to as the Act.
Section 2. Declaration of Policies. It is hereby declared the policy of the State to:
(a) Accelerate the exploration and development of renewable energy resources such as, but not limited to,
biomass, solar, wind, hydro, geothermal and ocean energy sources, including hybrid systems, to achieve
energy self-reliance, through the adoption of sustainable energy development strategies to reduce the
countrys dependence on fossil fuels and thereby minimize the countrys exposure to price fluctuations in
the international markets, the effects of which spiral down to almost all sectors of the economy;
(b) Increase the utilization of renewable energy by institutionalizing the development of national and local
capabilities in the use of renewable energy systems, and promoting its efficient and cost-effective
commercial application by providing fiscal and nonfiscal incentives;
(c) Encourage the development and utilization of renewable energy resources as tools to effectively
prevent or reduce harmful emissions and thereby balance the goals of economic growth and development
with the protection of health and the environment; and
(d) Establish the necessary infrastructure and mechanism to carry out the mandates specified in this Act
and other existing laws.
Section 3. Scope. This Act shall establish the framework for the accelerated development and
advancement of renewable energy resources, and the development of a strategic program to increase its
utilization.
Section 4. Definition of Terms. As used in this Act, the following terms are herein defined:
(a) Biomass energy systems refer to energy systems which use biomass resources to produce heat,
steam, mechanical power or electricity through either thermochemical, biochemical or physico-chemical

processes, or through such other technologies which shall comply with prescribed environmental standards
pursuant to this Act;
(b) Biomass resources refer to non-fossilized, biodegradable organic material originating from naturally
occurring or cultured plants, animals and micro-organisms, including agricultural products, by-products and
residues such as, but not limited to, biofuels except corn, soya beans and rice but including sugarcane and
coconut, rice hulls, rice straws, coconut husks and shells, corn cobs, corn stovers, bagasse, biodegradable
organic fractions of industrial and municipal wastes that can be used in bioconversion process and other
processes, as well as gases and liquids recovered from the decomposition and/or extraction of nonfossilized and biodegradable organic materials;
(c) Board of Investments (BOI) refers to an attached agency of the Department of Trade and Industry
created under Republic Act No. 5186, as amended;
(d) Co-generation systems refer to facilities which produce electrical and/or mechanical energy and
forms of useful thermal energy such as heat or steam which are used for industrial, commercial heating or
cooling purposes through the sequential use of energy;
(e) Department of Energy (DOE) refers to the government agency created pursuant to Republic Act No.
7638 whose functions are expanded in Republic Act No. 9136 and further expanded in this Act;
(f) Department of Environment and Natural Resources (DENR) refers to the government agency created
pursuant to Executive Order No. 192;
(g) Department of Finance (DOF) refers to the government agency created pursuant to Executive Order
No. 127, as amended;
(h) Department of Science and Technology (DOST) refers to the government agency created pursuant to
Executive Order No. 128;
(i) Department of Trade and Industry (DTI) refers to the government agency created pursuant to
Executive Order No. 133;
(j) Distributed generation refers to a system of small generation entities supplying directly to the
distribution grid, any one of which shall not exceed one hundred kilowatts (100 kW) in capacity;
(k) Distribution of Electricity refers to the conveyance of electricity by a Distribution Utility through its
distribution system pursuant to the provision of Republic Act No. 9136;
(l) Distribution Utility (DU) refers to any electric cooperative, private corporation, government-owned
utility or existing local government unit which has an exclusive franchise to operate a distribution system
in accordance with its franchise and Republic Act No. 9136;
(m) Electric Power Industry Reform Act of 2001 or Republic Act No. 9136 refers to the law mandating the
restructuring of the electric power sector and the privatization of the National Power Corporation;
(n) Energy Regulatory Commission (ERC) refers to the independent quasi-judicial regulatory agency
created pursuant to Republic Act No. 9136;
(o) Generation Company refers to any person or entity authorized by the ERC to operate facilities used in
the generation of electricity;
(p) Generation Facility refers to a facility for the production of electricity and/or thermal energy such as,
but not limited to, steam, hot or cold water;
(q) Geothermal energy as used herein and in the context of this Act, shall be considered renewable and
the provisions of this Act is therefore applicable thereto if geothermal energy, as a mineral resource, is
produced through: (1) natural recharge, where the water is replenished by rainfall and the heat is
continuously produced inside the earth; and/or (2) enhanced recharge, where hot water used in the
geothermal process is re-injected into the ground to produce more steam as well as to provide additional
recharge to the convection system;
(r) Geothermal Energy Systems refer to machines or other equipment that converts geothermal energy
into useful power;
(s) Geothermal Resources refer to mineral resources, classified as renewable energy resource, in the
form of: (i) all products of geothermal processes, embracing indigenous steam, hot water, and hot brines;
(ii) steam and other gases, hot water, and hot brines resulting from water, gas, or other fluids artificially
introduced into geothermal formations; (iii) heat or associated energy found in geothermal formations; and
(iv) any by-product derived from them;

(t) Government Share refers to the amount due the National Government and Local Government Units
from the exploitation, development, and utilization of naturally-occurring renewable energy resources such
as geothermal, wind, solar, ocean and hydro excluding biomass;
(u) Green Energy Option refers to the mechanism to empower end-users to choose renewable energy in
meeting their energy requirements;
(v) Grid refers to the high voltage backbone system of interconnected transmission lines, substations,
and related facilities, located in each of Luzon, Visayas, and Mindanao, or as may otherwise be determined
by the ERC in accordance with Republic Act No. 9136;
(w) Hybrid Systems refer to any power or energy generation facility which makes use of two or more
types of technologies utilizing both conventional and/or renewable fuel sources, such as, but not limited to,
integrated solar/wind systems, biomass/fossil fuel systems, hydro/fossil fuel systems, integrated
solar/biomass systems, integrated wind/fossil fuel systems, with a minimum of ten (10) megawatts or ten
percent (10%) of the annual energy output provided by the RE component;
(x) Hydroelectric Power Systems or Hydropower Systems refer to water-based energy systems which
produce electricity by utilizing the kinetic energy of falling or running water to turn a turbine generator;
(y) Hydroelectric Power Development or Hydropower Development refers to the construction and
installation of a hydroelectric power-generating plant and its auxiliary facilities, such as diversion structure,
headrace, penstock, substation, transmission, and machine shop, among others;
(z) Hydroelectric Power Resources or Hydropower Resources refer to water resources found technically
feasible for development of hydropower projects which include rivers, lakes, waterfalls, irrigation canals,
springs, ponds, and other water bodies;
(aa) Local government share refers to the amount due the LGUs from the exploitation, development and
utilization of naturally-occurring renewable energy resources;
(bb) Micro-scale Project refers to an RE project with capacity not exceeding one hundred (100) kilowatts;
(cc) Missionary Electrification refers to the provision of basic electricity service in unviable areas with the
aim of bringing the operations in these areas to viability levels;
(dd) National government share refers to the amount due the national government from the exploitation,
development and utilization of naturally-occurring renewable energy resources;
(ee) National Power Corporation (NPC) refers to the government corporation created under Republic Act
No. 6395, as amended by Republic Act No. 9136;
(ff) National Transmission Corporation (TRANSCO) refers to the corporation created pursuant to Republic
Act No. 9136 responsible for the planning, construction, and centralized operation and maintenance of
high voltage transmission facilities, including grid interconnection and ancillary services;
(gg) Net Metering refers to a system, appropriate for distributed generation, in which a distribution grid
user has a two-way connection to the grid and is only charged for his net electricity consumption and is
credited for any overall contribution to the electricity grid;
(hh) Non-power applications refer to renewable energy systems or facilities that produce mechanical
energy, combustible products such as methane gas, or forms of useful thermal energy such as heat or
steam, that are not used for electricity generation, but for applications such as, but not limited to,
industrial/commercial cooling, and fuel for cooking and transport;
(ii) Ocean Energy Systems refer to energy systems which convert ocean or tidal current, ocean thermal
gradient or wave energy into electrical or mechanical energy;
(jj) Off-Grid Systems refer to electrical systems not connected to the wires and related facilities of the
On-Grid Systems of the Philippines;
(kk) On-Grid System refers to electrical systems composed of interconnected transmission lines,
distribution lines, substations, and related facilities for the purpose of conveyance of bulk power on the
grid of the Philippines;
(ll) Philippine Electricity Market Corporation (PEMC) refers to the Corporation incorporated upon the
initiative of the DOE composed of all Wholesale Electricity Spot Market (WESM) Members and whose Board
of Directors will be the PEM Board;

(mm) Philippine National Oil Company (PNOC) refers to the government agency created pursuant to
Presidential Decree No. 334, as amended;
(nn) Power applications refer to renewable energy systems or facilities that produce electricity;
(oo) Registered RE Developer refers to a RE Developer duly registered with the DOE;
(pp) Renewable Energy (Systems) Developers or RE Developers refer to individual/s or a group of
individuals formed in accordance with existing Philippine Laws engaged in the exploration, development
and utilization of RE resources and actual operation of RE systems/facilities;
(qq) Renewable Energy Market (REM) refers to the market where the trading of the RE certificates
equivalent to an amount of power generated from RE resources is made;
(rr) Renewable Energy Policy Framework (REPF) refers to the long-term policy developed by the DOE
which identifies among others, the goals and targets for the development and utilization of renewable
energy in the country;
(ss) Renewable Portfolio Standards refer to a market-based policy that requires electricity suppliers to
source an agreed portion of their energy supply from eligible RE resources;
(tt) Renewable Energy Service (Operating) Contract (RE Contract) refers to the service agreement
between the Government, through the DOE, and RE Developer over a period in which the RE Developer
has the exclusive right to a particular RE area for exploration and development. The RE Contract shall be
divided into two (2) stages: the pre-development stage and the development/commercial stage. The
preliminary assessment and feasibility study up to financial closing shall refer to the pre-development
stage. The construction and installation of facilities up to operation phase shall refer to the development
stage;
(uu) Renewable Energy Resources (RE Resources) refer to energy resources that do not have an upper
limit on the total quantity to be used. Such resources are renewable on a regular basis, and whose renewal
rate is relatively rapid to consider availability over an indefinite period of time. These include, among
others, biomass, solar, wind, geothermal, ocean energy, and hydropower conforming with internationally
accepted norms and standards on dams, and other emerging renewable energy technologies;
(vv) Renewable Energy Systems (RE Systems) refer to energy systems which convert RE resources into
useful energy forms, like electrical, mechanical, etc.;
(ww) Rural Electrification refers to the delivery of basic electricity services, consisting of power
generation, sub-transmission, and/or extension of associated power delivery system that would bring
about important social and economic benefits to the countryside;
(xx) Solar Energy refers to the energy derived from solar radiation that can be converted into useful
thermal or electrical energy;
(yy) Solar Energy Systems refer to energy systems which convert solar energy into thermal or electrical
energy;
(zz) Small Power Utilities Group (SPUG) refers to the functional unit of the NPC mandated under Republic
Act No. 9136 to pursue missionary electrification function;
(aaa) Supplier refers to any person or entity authorized by the ERC to sell, broker, market or aggregate
electricity to the end-users;
(bbb) Transmission of Electricity refers to the conveyance of electric power through transmission lines as
defined under Republic Act No. 9136 by TRANSCO or its buyer/concessionaire in accordance with its
franchise and Republic Act No. 9136;
(ccc) Wind Energy refers to the energy that can be derived from wind that is converted into useful
electrical or mechanical energy;
(ddd) Wind Energy Systems refer to the machines or other related equipment that convert wind energy
into useful electrical or mechanical energy;
(eee) Wholesale Electricity Spot Market (WESM) refers to the wholesale electricity spot market created
pursuant to Republic Act No. 9136;

CHAPTER II

Organization
Section 5. Lead Agency. The DOE shall be the lead agency mandated to implement the provisions of
this Act.
CHAPTER III
ON-GRID RENEWABLE ENERGY DEVELOPMENT
Section 6. Renewable Portfolio Standard (RPS). All stakeholders in the electric power industry shall
contribute to the growth of the renewable energy industry of the country. Towards this end, the National
Renewable Energy Board (NREB), created under Section 27 of this Act, shall set the minimum percentage
of generation from eligible renewable energy resources and determine to which sector RPS shall be
imposed on a per grid basis within one (1) year from the effectivity of this Act.
Section 7. Feed-In Tariff System. To accelerate the development of emerging renewable energy
resources, a feed-in tariff system for electricity produced from wind, solar, ocean, run-of-river hydropower
and biomass is hereby mandated. Towards this end, the ERC in consultation with the National Renewable
Energy Board (NREB) created under Section 27 of this Act shall formulate and promulgate feed-in tariff
system rules within one (1) year upon the effectivity of this Act which shall include, but not limited to the
following:
(a) Priority connections to the grid for electricity generated from emerging renewable energy resources
such as wind, solar, ocean, run-of-river hydropower and biomass power plants within the territory of the
Philippines;
(b) The priority purchase and transmission of, and payment for, such electricity by the grid system
operators;
(c) Determine the fixed tariff to be paid to electricity produced from each type of emerging renewable
energy and the mandated number of years for the application of these rates, which shall not be less than
twelve (12) years;
(d) The feed-in tariff to be set shall be applied to the emerging renewable energy to be used in compliance
with the renewable portfolio standard as provided for in this Act and in accordance with the RPS rules that
will be established by the DOE.
Section 8. Renewable Energy Market (REM). To facilitate compliance with Section 6 of this Act, the
DOE shall establish the REM and shall direct PEMC to implement changes to the WESM Rules in order to
incorporate the rules specific to the operation of the REM under the WESM.
The PEMC shall, under the supervision of the DOE, establish a Renewable Energy Registrar within one (1)
year from the effectivity of this Act and shall issue, keep and verify RE Certificates corresponding to energy
generated from eligible RE facilities. Such certificates will be used for compliance with the RPS. For this
purpose, a transaction fee, equal to half of what PEMC currently charges regular WESM players, may be
imposed by PEMC.
Section 9. Green Energy Option. The DOE shall establish a Green Energy Option program which
provides end-users the option to choose RE resources as their sources of energy. In consultation with the
NREB, the DOE shall promulgate the appropriate implementing rules and regulations which are necessary,
incidental or convenient to achieve the objectives set forth herein.
Upon the determination of the DOE of its technical viability and consistent with the requirements of the
green energy option program, end users may directly contract from RE facilities their energy requirements
distributed through their respective distribution utilities.
Consistent herewith, TRANSCO or its successors-in-interest, DUs, PEMC and all relevant parties are hereby
mandated to provide the mechanisms for the physical connection and commercial arrangements
necessary to ensure the success of the Green Energy Option. The end-user who will enroll under the
energy option program should be informed by way of its monthly electric bill, how much of its monthly
energy consumption and generation charge is provided by RE facilities.
Section 10. Net-metering for Renewable Energy. Subject to technical considerations and without
discrimination and upon request by distribution end-users, the distribution utilities shall enter into netmetering agreements with qualified end-users who will be installing RE system.
The ERC, in consultation with the NREB and the electric power industry participants, shall establish net
metering interconnection standards and pricing methodology and other commercial arrangements
necessary to ensure success of the net-metering for renewable energy program within one (1) year upon
the effectivity of this Act.

The distribution utility shall be entitled to any Renewable Energy Certificate resulting from net-metering
arrangement with the qualified end-user who is using an RE resource to provide energy and the
distribution utility shall be able to use this RE certificate in compliance with its obligations under RPS.
The DOE, ERC, TRANSCO or its successors-in-interest, DUs, PEMC and all relevant parties are hereby
mandated to provide the mechanisms for the physical connection and commercial arrangements
necessary to ensure the success of the Net-metering for Renewable Energy program, consistent with the
Grid and Distribution Codes.
Section 11. Transmission and Distribution System Development. TRANSCO or its successors-ininterest or its buyer/concessionaire and all DUs, shall include the required connection facilities for REbased power facilities in the Transmission and Distribution Development Plans: Provided, That such
facilities are approved by the DOE. The connection facilities of RE power plants, including the extension of
transmission and distribution lines, shall be subject only to ancillary services covering such connections.
CHAPTER IV
OFF-GRID RENEWABLE ENERGY DEVELOPMENT
Section 12. Off-Grid Areas. Within one (1) year from the effectivity of this Act, NPC-SPUG or its
successors-in-interest and/or qualified third parties in off-grid areas shall, in the performance of its
mandate to provide missionary electrification, source a minimum percentage of its total annual generation
upon recommendation of the NREB from available RE resources in the area concerned, as may be
determined by the DOE.
As used in this Act, successors-in-interest refer to entities deemed technically and financially capable to
serve/take over existing NPC-SPUG areas.
Eligible RE generation in off-grid and missionary areas shall be eligible for the provision of RE Certificates
defined in Section 8 of this Act. In the event there are no viable RE resources in the off-grid and missionary
areas, the relevant electricity supplier in the off-grid and missionary areas shall still be obligated under
Section 6 of this Act.
CHAPTER V
GOVERNMENT SHARE
Section 13. Government Share. The government share on existing and new RE development projects
shall be equal to one percent (1%) of the gross income of RE resource developers resulting from the sale of
renewable energy produced and such other income incidental to and arising from the renewable energy
generation, transmission, and sale of electric power except for indigenous geothermal energy, which shall
be at one and a half percent (1.5%) of gross income.
To further promote the development of RE projects, the government hereby waives its share from the
proceeds of micro-scale projects for communal purposes and non-commercial operations, which are not
greater than one hundred (100) kilowatts.

CHAPTER VI
ENVIRONMENTAL COMPLIANCE
Section 14. Compliance with Environmental Regulations. All RE explorations, development,
utilization, and RE systems operations shall be conducted in accordance with existing environmental
regulations as prescribed by the DENR and/or any other concerned government agency.
CHAPTER VII
GENERAL INCENTIVES
Section 15. Incentives for Renewable Energy Projects and Activities. RE developers of renewable
energy facilities, including hybrid systems, in proportion to and to the extent of the RE component, for both
power and non-power applications, as duly certified by the DOE, in consultation with the BOI, shall be
entitled to the following incentives:

(a) Income Tax Holiday (ITH) For the first seven (7) years of its commercial operations, the duly registered
RE developer shall be exempt from income taxes levied by the national government.
Additional investments in the project shall be entitled to additional income tax exemption on the income
attributable to the investment: Provided, That the discovery and development of new RE resource shall be
treated as a new investment and shall therefore be entitled to a fresh package of incentives: Provided,
further, That the entitlement period for additional investments shall not be more than three (3) times the
period of the initial availment of the ITH.
(b) Duty-free Importation of RE Machinery, Equipment and Materials Within the first ten (10) years upon
the issuance of a certification of an RE developer, the importation of machinery and equipment, and
materials and parts thereof, including control and communication equipment, shall not be subject to tariff
duties: Provided, however, That the said machinery, equipment, materials and parts are directly and
actually needed and used exclusively in the RE facilities for transformation into energy and delivery of
energy to the point of use and covered by shipping documents in the name of the duly registered operator
to whom the shipment will be directly delivered by customs authorities: Provided, further, That
endorsement of the DOE is obtained before the importation of such machinery, equipment, materials and
parts are made.
Endorsement of the DOE must be secured before any sale, transfer or disposition of the imported capital
equipment, machinery or spare parts is made: Provided, That if such sale, transfer or disposition is made
within the ten (10)-year period from the date of importation, any of the following conditions must be
present:
(i) If made to another RE developer enjoying tax and duty exemption on imported capital equipment;
(ii) If made to a non-RE developer, upon payment of any taxes and duties due on the net book value of the
capital equipment to be sold;
(iii) Exportation of the used capital equipment, machinery, spare parts or source documents or those
required for RE development; and
(iv) For reasons of proven technical obsolescence.
When the aforementioned sale, transfer or disposition is made under any of the conditions provided for in
the foregoing paragraphs after ten (10) years from the date of importation, the sale, transfer or disposition
shall no longer be subject to the payment of taxes and duties;
(c) Special Realty Tax Rates on Equipment and Machinery. Any law to the contrary notwithstanding, realty
and other taxes on civil works, equipment, machinery, and other improvements of a Registered RE
Developer actually and exclusively used for RE facilities shall not exceed one and a half percent (1.5%) of
their original cost less accumulated normal depreciation or net book value: Provided, That in case of an
integrated resource development and generation facility as provided under Republic Act No. 9136, the real
property tax shall only be imposed on the power plant;
(d) Net Operating Loss Carry-Over (NOLCO). The NOLCO of the RE Developer during the first three (3)
years from the start of commercial operation which had not been previously offset as deduction from gross
income shall be carried over as a deduction from gross income for the next seven (7) consecutive taxable
years immediately following the year of such loss: Provided, however, That operating loss resulting from
the availment of incentives provided for in this Act shall not be entitled to NOLCO;
(e) Corporate Tax Rate. After seven (7) years of income tax holiday, all RE Developers shall pay a
corporate tax of ten percent (10%) on its net taxable income as defined in the National Internal Revenue
Act of 1997, as amended by Republic Act No. 9337. Provided, That the RE Developer shall pass on the
savings to the end-users in the form of lower power rates.
(f) Accelerated Depreciation. If, and only if, an RE project fails to receive an ITH before full operation, it
may apply for Accelerated Depreciation in its tax books and be taxed based on such: Provided, That if it
applies for Accelerated Depreciation, the project or its expansions shall no longer be eligible for an ITH.
Accelerated depreciation of plant, machinery, and equipment that are reasonably needed and actually
used for the exploration, development and utilization of RE resources may be depreciated using a rate not
exceeding twice the rate which would have been used had the annual allowance been computed in
accordance with the rules and regulations prescribed by the Secretary of the Department of Finance and
the provisions of the National Internal Revenue Code (NIRC) of 1997, as amended. Any of the following
methods of accelerated depreciation may be adopted:
i) Declining balance method; and
ii) Sum-of-the years digit method

(g) Zero Percent Value-Added Tax Rate. The sale of fuel or power generated from renewable sources of
energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy and other
emerging energy sources using technologies such as fuel cells and hydrogen fuels, shall be subject to zero
percent (0%) value-added tax (VAT), pursuant to the National Internal Revenue Code (NIRC) of 1997, as
amended by Republic Act No. 9337.
All RE Developers shall be entitled to zero-rated value added tax on its purchases of local supply of goods,
properties and services needed for the development, construction and installation of its plant facilities.
This provision shall also apply to the whole process of exploring and developing renewable energy sources
up to its conversion into power, including but not limited to the services performed by subcontractors
and/or contractors.
(h) Cash Incentive of Renewable Energy Developers for Missionary Electrification. A renewable energy
developer, established after the effectivity of this Act, shall be entitled to a cash generation-based
incentive per kilowatt hour rate generated, equivalent to fifty percent (50%) of the universal charge for
power needed to service missionary areas where it operates the same, to be chargeable against the
universal charge for missionary electrification;
(i) Tax Exemption of Carbon Credits. All proceeds from the sale of carbon emission credits shall be
exempt from any and all taxes;
(j) Tax Credit on Domestic Capital Equipment and Services. A tax credit equivalent to one hundred
percent (100%) of the value of the value-added tax and custom duties that would have been paid on the
RE machinery, equipment, materials and parts had these items been imported shall be given to an RE
operating contract holder who purchases machinery, equipment, materials, and parts from a domestic
manufacturer for purposes set forth in this Act: Provided, That prior approval by the DOE was obtained by
the local manufacturer: Provided, further, That the acquisition of such machinery, equipment, materials,
and parts shall be made within the validity of the RE operating contract.
Section 16. Environmental Compliance Certificate (ECC). Notwithstanding Section 17 (b) (3) (iii) of
Republic Act No. 7160, it would be sufficient for the renewable energy developer to secure the
Environmental Compliance Certificate (ECC) from the corresponding regional office of the DENR.
Section 17. Exemption from the Universal Charge. Power and electricity generated through the RES
for the generators own consumption and/or for free distribution in the off-grid areas shall be exempted
from the payment of the universal charge provided for under Section 34 of Republic Act No. 9136.
Section 18. Payment of Transmission Charges. A registered renewable energy developer producing
power and electricity from an intermittent RE resource may opt to pay the transmission and wheeling
charges of TRANSCO or its successors-in-interest on a per kilowatt-hour basis at a cost equivalent to the
average per kilowatt-hour rate of all other electricity transmitted through the grid.
Section 19. Hybrid and Cogeneration Systems. The tax exemptions and/or incentives provided for in
Section 15 of this Act shall be availed of by registered RE Developer of hybrid and cogeneration systems
utilizing both RE sources and conventional energy: Provided, however, That the tax exemptions and
incentives shall apply only to the equipment, machinery and/or devices utilizing RE resources.
Section 20. Intermittent RE Resources. TRANSCO or its successors-in-interest, in consultation with
stakeholders, shall determine the maximum penetration limit of the Intermittent RE-based power plants to
the Grid, through technical and economic analysis. Qualified and registered RE generating units with
intermittent RE resources shall be considered must dispatch based on available energy and shall enjoy
the benefit of priority dispatch. All provisions under the WESM Rules, Distribution and Grid Codes which do
not allow must dispatch status for intermittent RE resources shall be deemed amended or modified. The
PEMC and TRANSCO or its successors-in-interest shall implement technical mitigation and improvements in
the system in order to ensure safety and reliability of electricity transmission.
As used in this Act, RE generating unit with intermittent RE resources refers to a RE generating unit or
group of units connected to a common connection point whose RE energy resource is location-specific
naturally difficult to precisely predict the availability of RE energy resource thereby making the energy
generated variable, unpredictable and irregular and the availability of the resource inherently
uncontrollable, which include plants utilizing wind, solar, run-of-river hydro or ocean energy.
Section 21. Incentives for RE Commercialization. All manufacturers, fabricators and suppliers of
locally-produced RE equipment and components duly recognized and accredited by the DOE, in
consultation with DOST, DOF and DTI, shall, upon registration with the BOI, be entitled to the privileges set
forth under this section.
Consistent with Article 7, Item (20) of EO No. 226, the registration with the BOI, as provided for in Section
15 and Section 21 of this Act, shall be carried out through an agreement and an administrative
arrangement between the BOI and the DOE, with the end-view of facilitating the registration of qualified RE

facilities based on the implementing rules and regulations that will be developed by DOE. It is further
mandated that the applications for registration will be positively acted upon by BOI on the basis of the
accreditation issued by DOE.
The Renewable Energy Sector is hereby declared a priority investment sector that will regularly form part
of the countrys Investment Priority Plan, unless declared otherwise by law. As such, all entities duly
accredited by the DOE under this Act shall be entitled to all the incentives provided herein.
(a) Tax and Duty-free Importation of Components, Parts and Materials. All shipments necessary for the
manufacture and/or fabrication of RE equipment and components shall be exempted from importation
tariff and duties and value added tax: Provided, however, That the said components, parts and materials
are: (i) not manufactured domestically in reasonable quantity and quality at competitive prices; (ii) directly
and actually needed and shall be used exclusively in the manufacture/fabrication of RE equipment; and (iii)
covered by shipping documents in the name of the duly registered manufacturer/fabricator to whom the
shipment will be directly delivered by customs authorities: Provided, further, That prior approval of the
DOE was obtained before the importation of such components, parts and materials;
(b) Tax Credit on Domestic Capital Components, Parts and Materials. A tax credit equivalent to one
hundred percent (100%) of the amount of the value-added tax and customs duties that would have been
paid on the components, parts and materials had these items been imported shall be given to an RE
equipment manufacturer, fabricator, and supplier duly recognized and accredited by the DOE who
purchases RE components, parts and materials from a domestic manufacturer: Provided, That such
components, and parts are directly needed and shall be used exclusively by the RE manufacturer,
fabricator and supplier for the manufacture, fabrication and sale of the RE equipment: Provided, further,
That prior approval by the DOE was obtained by the local manufacturer;
(c) Income Tax Holiday and Exemption. For seven (7) years starting from the date of
recognition/accreditation, an RE manufacturer, fabricator and supplier of RE equipment shall be fully
exempt from income taxes levied by the National Government on net income derived only from the sale of
RE equipment, machinery, parts and services; and
(d) Zero-rated value added tax transactions All manufacturers, fabricators and suppliers of locally
produced renewable energy equipment shall be subject to zero-rated value added tax on its transactions
with local suppliers of goods, properties and services.
Section 22. Incentives for Farmers Engaged in the Plantation of Biomass Resources. For a
period of ten (10) years after the effectivity of this Act, all individuals and entities engaged in the
plantation of crops and trees used as biomass resources such as but not limited to jatropha, coconut, and
sugarcane, as certified by the Department of Energy, shall be entitled to duty-free importation and be
exempted from Value-Added Tax (VAT) on all types of agricultural inputs, equipment and machinery such
as, but not limited to, fertilizer, insecticide, pesticide, tractor, trailers, trucks, farm implements and
machinery, harvesters, threshers, hybrid seeds, genetic materials, sprayers, packaging machinery and
materials, bulk handling facilities, such as conveyors and mini-loaders, weighing scales, harvesting
equipment, and spare parts of all agricultural equipment.
Section 23. Tax Rebate for Purchase of RE Components. To encourage the adoption of RE
technologies, the DOF, in consultation with DOST, DOE, and DTI, shall provide rebates for all or part of the
tax paid for the purchase of RE equipment for residential, industrial, or community use. The DOF shall also
prescribe the appropriate period for granting the tax rebates.
Section 24. Period of Grant of Fiscal Incentives. The fiscal incentives granted under Section 15 of
this Act shall apply to all RE capacities upon the effectivity of this Act. The National Renewable Energy
Board, in coordination with the Department of Energy, shall submit a yearly report on the implementation
of this Act to the Philippine Congress, through the Joint Congressional Power Commission, every January of
each year following the period in review, indicating among others, the progress of RE development in the
country and the benefits and impact generated by the development and utilization of its renewable energy
resources in the context of its energy security and climate change imperatives. This shall serve as basis for
the Joint Congressional Power Commission review of the incentives as provided for in this Act towards
ensuring the full development of the countrys RE capacities under a rationalized market and incentives
scheme.
Section 25. Registration of RE Developers and local manufacturers, fabricators and suppliers
of locally-produced renewable energy equipment. RE Developers and local manufacturers,
fabricators and suppliers of locally-produced renewable energy equipment shall register with the
Department of Energy, through the Renewable Energy Management Bureau. Upon registration, a
certification shall be issued to each RE Developer and local manufacturer, fabricator and supplier of locallyproduced renewable energy equipment to serve as the basis of their entitlement to incentives provided
under Chapter VII of this Act.
Section 26. Certification from the Department of Energy. All certifications required to qualify RE
developers to avail of the incentives provided for under this Act shall be issued by the DOE through the
Renewable Energy Management Bureau.

The Department of Energy, through the Renewable Energy Management Bureau shall issue said
certification fifteen (15) days upon request of the renewable energy developer or manufacturer, fabricator
or supplier.
Provided, That the certification issued by the Department of Energy shall be without prejudice to any
further requirements that may be imposed by the concerned agencies of the government charged with the
administration of the fiscal incentives abovementioned.
CHAPTER VIII
GENERAL PROVISIONS
Section 27. Creation of the National Renewable Energy Board (NREB). The NREB is hereby
created. It shall be composed of a Chairman and one (1) representative each from the following agencies:
DOE, DTI, DOF, DENR, NPC, TRANSCO or its successors-in-interest, PNOC and PEMC who shall be
designated by their respective secretaries on a permanent basis; and one (1) representative each from the
following sectors: RE Developers, Government Financial Institutions (GFIs), private distribution utilities,
electric cooperatives, electricity suppliers and non-governmental organizations, duly endorsed by their
respective industry associations and all to be appointed by the President of the Republic of the Philippines.
The Chairman shall, within one (1) month from the effectivity of this Act, convene the NREB.
The NREB shall be assisted by a Technical Secretariat from the Renewable Energy Management Bureau of
the DOE, created under Section 32 hereof, and shall directly report to the Office of the Secretary or the
Undersecretary of the Department, as the case maybe, on matters pertaining to the activities of the NREB.
The number of staff of the Technical Secretariat and the creation of corresponding positions necessary to
complement and/or augment the existing plantilla of the REMB shall be determined by the Board, subject
to approval by the Department of Budget and Management (DBM) and to existing civil service rules and
regulations.
The NREB shall have the following powers and functions:
(a) Evaluate and recommend to the DOE the mandated RPS and minimum RE generation capacities in offgrid areas, as it deems appropriate;
(b) Recommend specific actions to facilitate the implementation of the National Renewable Energy
Program (NREP) to be executed by the DOE and other appropriate agencies of government and to ensure
that there shall be no overlapping and redundant functions within the national government departments
and agencies concerned;
(c) Monitor and review the implementation of the NREP, including compliance with the RPS and minimum
RE generation capacities in off-grid areas;
(d) Oversee and monitor the utilization of the Renewable Energy Trust Fund created pursuant to Section 28
of this Act and administered by the DOE; and
(e) Perform such other functions, as may be necessary, to attain the objectives of this Act.
Section 28. Renewable Energy Trust Fund (RETF). A Renewable Energy Trust Fund is hereby
established to enhance the development and greater utilization of renewable energy. It shall be
administered by the DOE as a special account in any of the GFIs. The RETF shall be exclusively used to:
(a) Finance the research, development, demonstration, and promotion of the widespread and productive
use of RE systems for power and non-power applications, as well as to provide funding for R & D
institutions engaged in renewable energy studies undertaken jointly through public-private sector
partnership, including provision for scholarship and fellowship for energy studies;
(b) Support the development and operation of new RE resources to improve their competitiveness in the
market: Provided, That the grant thereof shall be done through a competitive and transparent manner;
(c) Conduct nationwide resource and market assessment studies for the power and non-power applications
of renewable energy systems;
(d) Propagate RE knowledge by accrediting, tapping, training, and providing benefits to institutions,
entities and organizations which can extend the promotion and dissemination of RE benefits to the national
and local levels; and
(e) Fund such other activities necessary or incidental to the attainment of the objectives of this Act.

Use of the fund may be through grants, loans, equity investments, loan guarantees, insurance, counterpart
fund or such other financial arrangements necessary for the attainment of the objectives of this Act:
Provided, That the use or allocation thereof shall, as far as practicable, be done through a competitive and
transparent manner.
The RETF shall be funded from:
(a) Proceeds from the emission fees collected from all generating facilities consistent with Republic Act No.
8749 or the Philippine Clean Air Act;
(b) One and 1/2 percent (1.5%) of the net annual income of the Philippine Charity Sweepstakes Office;
(c) One and 1/2 percent (1.5%) of the net annual income of the Philippine Amusement and Gaming
Corporation;
(d) One and 1/2 percent (1.5%) of the net annual dividends remitted to the National Treasury of the
Philippine National Oil Company and its subsidiaries;
(e) Contributions, grants and donations: Provided, That all contributions, grants and donations made to the
RETF shall be tax deductible subject to the provisions of the National Internal Revenue Code. Towards this
end, the BIR shall assist the DOE in formulating the Rules and Regulations to implement this provision;
(f) One and 1/2 percent (1.5%) of the proceeds of the Government share collected from the development
and use of indigenous non-renewable energy resources;
(g) Any revenue generated from the utilization of the RETF; and
(h) Proceeds from the fines and penalties imposed under this Act.
Section 29. Financial Assistance Program. Government financial institutions such as the
Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP), Phil-Exim Bank and other
government financial institutions shall, in accordance with and to the extent allowed by the enabling
provisions of their respective charters or applicable laws, provide preferential financial packages for the
development, utilization and commercialization of RE projects as duly recommended and endorsed by the
DOE.
Section 30. Adoption of Waste-To-Energy Technologies. The DOE shall, where practicable,
encourage the adoption of waste-to-energy facilities such as, but not limited to, biogas systems. The DOE
shall, in coordination with the DENR, ensure compliance with this provision.
As used in this Act, waste-to-energy technologies shall refer to systems which convert to biodegradable
materials such as, but not limited to, animal manure or agricultural waste, into useful energy through
processes such as anaerobic digestion, fermentation and gasification, among others, subject to the
provisions and intent of Republic Act No. 8749 (Clean Air Act of 1999) and Republic Act No. 9003
(Ecological Solid Waste Management Act of 2000).
Section 31. Incentives for RE Host Communities/LGUs. Eighty percent (80%) of the share from
royalty and/or government share of RE host communities/LGUs from RE projects and activities shall be
used directly to subsidize the electricity consumption of end users in the RE host communities/LGUs whose
monthly consumption do not exceed one hundred (100) kwh. The subsidy may be in the form of rebates,
refunds and/or any other forms as may be determined by DOE, DOF and ERC, in coordination with NREB.
The DOE, DOF and ERC, in coordination with the NREB and in consultation with the distribution utilities
shall promulgate the mechanisms to implement this provision within six months from the effectivity of this
Act.
Section 32. Creation of the Renewable Energy Management Bureau. For the purpose of
implementing the provisions of this Act, a Renewable Energy Management Bureau (REMB) under the DOE
is hereby established, and the existing Renewable Energy Management Division of the Energy Utilization
Management Bureau of the DOE, whose plantilla shall form the nucleus of REMB, is hereby dissolved. The
organizational structure and staffing complement of the REMB shall be determined by the Secretary of the
DOE, in consultation with the Department of Budget and Management, in accordance with existing civil
service rules and regulations. The budgetary requirements necessary for the creation of the REMB shall be
taken from the current appropriations of the DOE. Thereafter, the funding for the REMB shall be included in
the annual General Appropriations Act.
The REMB shall have the following powers and functions:
(a) Implement policies, plans and programs related to the accelerated development, transformation,
utilization and commercialization of renewable energy resources and technologies;

(b) Develop and maintain a centralized, comprehensive and unified data and information base on
renewable energy resources to ensure the efficient evaluation, analysis, and dissemination of data and
information on renewable energy resources, development, utilization, demand and technology application;
(c) Promote the commercialization/application of renewable energy resources including new and emerging
technologies for efficient and economical transformation, conversion, processing, marketing and
distribution to end users;
(d) Conduct technical research, socio-economic and environmental impact studies of renewable energy
projects for the development of sustainable renewable energy systems;
(e) Supervise and monitor activities of government and private companies and entities on renewable
energy resources development and utilization to ensure compliance with existing rules, regulations,
guidelines and standards;
(f) Provide information, consultation and technical training and advisory services to developers,
practitioners and entities involved in renewable energy technology and develop renewable energy
technology development strategies; and
(g) Perform other functions that may be necessary for the effective implementation of this Act and the
accelerated development and utilization of the renewable energy resources in the country.
CHAPTER IX
FINAL PROVISIONS
Section 33. Implementing Rules and Regulations (IRR). Within six (6) months from the effectivity of
this Act, the DOE shall, in consultation with the Senate and House Committees on Energy, relevant
government agencies and RE stakeholders, promulgate the IRR of this Act.
Section 34. Congressional Oversight. Upon the effectivity of this Act, the Joint Congressional Power
Commission created under Section 62 of Republic Act No. 9136, otherwise known as the Electric Power
Industry Reform Act of 2001 shall exercise oversight powers over the implementation of this Act.
Section 35. Prohibited Acts. The following acts shall be prohibited:
(a) Non-compliance or violation of the RPS rules;
(b) Willful refusal to undertake net metering arrangements with qualified distribution grid users;
(c) Falsification or tampering of public documents or official records to avail of the fiscal and non-fiscal
incentives provided under this Act;
(d) Failure and willful refusal to issue the single certificate referred to in Section 26 of this Act; and
(e) Non-compliance with the established guidelines that DOE will adopt for the implementation of this Act.
Section 36. Penalty Clause. Any person who willfully commits any of the prohibited acts enumerated
under this Act, shall be imposed with the penalties provided herein. Any person, who willfully aids or abets
the commission of a crime prohibited herein or who causes the commission of any such act by another
shall be liable in the same manner as the principal.
In the case of association, partnership or corporations, the penalty shall be imposed on the partner,
president, chief operating officer, chief executive officer, directors or officers responsible for the violation.
The commission of any prohibited acts provided for under Section 35, upon conviction thereof, shall suffer
the penalty of imprisonment of from one (1) year to five (5) years, or a fine ranging from a minimum of
One Hundred Thousand Pesos (P100,000.00) to One Hundred Million Pesos (P100,000,000.00), or twice the
amount of damages caused or costs avoided for non-compliance, whichever is higher, or both upon the
discretion of the court.
The DOE is further empowered to impose administrative fines and penalties for any violation of the
provisions of this Act, its IRR and other issuances relative to this Act.
This is without prejudice to the penalties provided for under existing environmental regulations prescribed
by the DENR and/or any other concerned government agency.

Section 37. Appropriations. Such sums as may be necessary for the initial implementation of this Act
shall be taken from the current appropriations of the DOE. Thereafter, the fund necessary to carry out the
provisions of this Act shall be included in the annual General Appropriations Act.
Section 38. Separability Clause. If any provision of this Act is held invalid unconstitutional, the
remainder of the Act or the provision not otherwise affected shall remain valid and subsisting.
Section 39. Repealing Clause. Any law, presidential decree or issuance, executive order, letter of
instruction, administrative rule or regulation contrary to or inconsistent with the provisions of this Act is
hereby repealed, modified or amended accordingly.
Consistent with the foregoing paragraph and Section 13 of this Act, Section 1 of Presidential Decree No.
1442 or the Geothermal Resources Exploration and Development Act, insofar as the exploration of
geothermal resources by the government, and Section 10 (1) of Republic Act No. 7156 otherwise known as
the Mini-Hydro Electric Power Incentive Act, insofar as the special privilege tax rate of two percent (2%)
are hereby repealed, modified or amended accordingly.
Section 40. Effectivity Clause. This Act shall take effect fifteen (15) days after its publication in at
least two (2) newspapers of general circulation.
Approved,
(Sgd.) PROSPERO C.
NOGRALES
Speaker of the House of
Representative

(Sgd.) MANNY VILLAR

President of the Senate

This Act which is a consolidation of Senate Bill No. 2046 and House Bill No. 41935 was finally passed by the
Senate and the House of Representative on October 8, 2008.
(Sgd.) MARILYN B. BARUA-YAP
Secretary General
House of Representative

(Sgd.) EMMA LIRIO-REYES

Secretary of the Senate

Approved: DEC 16, 2008

(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines

Procurement Act RA 9184

[REPUBLIC ACT NO. 9184]
AN ACT PROVIDING FOR THE MODERNIZATION, STANDARDIZATION AND
PROCUREMENT ACTIVITIES OF THE GOVERNMENT AND FOR OTHER PURPOSES

REGULATION

OF

THE

Be it enacted by the Senate and House of Representatives of Philippines in Congress assembled:

ARTICLE I
General Provisions
SECTION 1. Short Title. This Act shall be known as the Government Procurement Reform Act.
SEC. 2. Declaration of Policy. It is the declared policy of the State to promote the ideals of good
governance in all its branches, departments, agencies, subdivisions, and instrumentalities, including
government-owned and/or -controlled corporations and local government units.
SEC. 3. Governing Principles on Government Procurement. All procurement of the national government,
its departments, bureaus, offices and agencies, including state universities and colleges, governmentowned and/or -controlled corporations, government financial institutions and local government units, shall,
in all cases, be governed by these principles:
(a) Transparency in the procurement process and in the implementation of procurement contracts.
(b) Competitiveness by extending equal opportunity to enable private contracting parties who are eligible
and qualified to participate in public bidding.
(c) Streamlined procurement process that will uniformly apply to all government procurement. The
procurement process shall be simple and made adaptable to advances in modern technology in order to
ensure an effective and efficient method.
(d) System of accountability where both the public officials directly or indirectly involved in the
procurement process as well as in the implementation of procurement contracts and the private parties
that deal with government are, when warranted by circumstances, investigated and held liable for their
actions relative thereto.
(e) Public monitoring of the procurement process and the implementation of awarded contracts with the
end in view of guaranteeing that these contracts are awarded pursuant to the provisions of this Act and its
implementing rules and regulations, and that all these contracts are performed strictly according to
specifications.

SEC. 4. Scope and Application. This Act shall apply to the Procurement of Infrastructure Projects, Goods
and Consulting Services, regardless of source of funds, whether local or foreign, by all branches and
instrumentalities of government, its departments, offices and agencies, including government-owned
and/or -controlled corporations and local government units, subject to the provisions of Commonwealth Act
No. 138. Any treaty or international or executive agreement affecting the subject matter of this Act to
which the Philippine government is a signatory shall be observed.
SEC. 5. Definition of Terms. For purposes of this Act, the following terms or words and phrases shall mean
or be understood as follows:
(a) Approved Budget for the Contract (ABC) refers to the budget for the contract duly approved by the
Head of the Procuring Entity, as provided for in the General Appropriations Act and/or continuing
appropriations, in the case of National Government Agencies; the Corporate Budget for the contract
approved by the governing Boards, pursuant to E.O. No. 518, series of 1979, in the case of GovernmentOwned and/or Controlled Corporations, Government Financial Institutions and State Universities and
Colleges; and the Budget for the contract approved by the respective Sanggunian, in the case of Local
Government Units.
(b) BAC refers to the Bids and Awards Committee established in accordance with Article V of this Act.
(c) Bidding Documents refer to documents issued by the Procuring Entity as the basis for Bids, furnishing
all information necessary for a prospective bidder to prepare a bid for the Goods, Infrastructure Projects,
and Consulting Services to be provided.
(d) Bid refers to a signed offer or proposal submitted by a supplier, manufacturer, distributor, contractor
or consultant in response to the Bidding Documents.
(e) Competitive Bidding refers to a method of procurement which is open to participation by any
interested party and which consists of the following processes: advertisement, pre-bid conference,
eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, postqualification, and award of contract, the specific requirements and mechanics of which shall be defined in
the IRR to be promulgated under this Act.
(f) Consulting Services refer to services for Infrastructure Projects and other types of projects or activities
of the Government requiring adequate external technical and professional expertise that are beyond the
capability and/or capacity of the government to undertake such as, but not limited to: (i) advisory and
review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v)
management and related services; and (vi) other technical services or special studies. SEIDAC
(g) G-EPS refers to the Government Electronic Procurement System as provided in Section 8 of this Act.
(h) Goods refer to all items, supplies, materials and general support services, except consulting services
and infrastructure projects, which may be needed in the transaction of public businesses or in the pursuit
of any government undertaking, project or activity, whether in the nature of equipment, furniture,
stationery, materials for construction, or personal property of any kind, including non-personal or
contractual services such as the repair and maintenance of equipment and furniture, as well as trucking,
hauling, janitorial, security, and related or analogous services, as well as procurement of materials and
supplies provided by the procuring entity for such services.
(i) GPPB refers to the Government Procurement Policy Board established in accordance with Article XX of
this Act.
(j) Head of the Procuring Entity refers to: (i) the head of the agency or his duly authorized official, for
national government agencies; (ii) the governing board or its duly authorized official, for governmentowned and/or -controlled corporations; or (iii) the local chief executive, for local government units.
Provided, That in a department, office or agency where the procurement is decentralized, the Head of each
decentralized unit shall be considered as the Head of the Procuring Entity subject to the limitations and
authority delegated by the head of the department, office or agency.
(k) Infrastructure Projects include the construction, improvement, rehabilitation, demolition, repair,
restoration or maintenance of roads and bridges, railways, airports, seaports, communication facilities, civil
works components of information technology projects, irrigation, flood control and drainage, water supply,
sanitation, sewerage and solid waste management systems, shore protection, energy/power and
electrification facilities, national buildings, school buildings, hospital buildings and other related
construction projects of the government.
(l) IRR refer to the implementing rules and regulations to be promulgated in accordance with Section 75
of this Act.
(m) Portal refers to a website that aggregates a wide variety of content for the purpose of attracting a
large number of users.

(n) Procurement refers to the acquisition of Goods, Consulting Services, and the contracting for
Infrastructure Projects by the Procuring Entity. Procurement shall also include the lease of goods and real
estate. With respect to real property, its procurement shall be governed by the provisions of Republic Act
No. 8974, entitled An Act to Facilitate the Acquisition of Right-of-Way Site or Location for National
Government Infrastructure Projects and for Other Purposes, and other applicable laws, rules and
regulations.
(o) Procuring Entity refers to any branch, department, office, agency, or instrumentality of the
government, including state universities and colleges, government-owned and/or -controlled corporations,
government financial institutions, and local government units procuring Goods, Consulting Services and
Infrastructure Projects.
SEC. 6. Standardization of Procurement Process and Forms. To systematize the procurement process,
avoid confusion and ensure transparency, the procurement process, including the forms to be used, shall
be standardized insofar as practicable. SEIDAC
For this purpose, the GPPB shall pursue the development of generic procurement manuals and standard
bidding forms, the use of which once issued shall be mandatory upon all Procuring Entities.
ARTICLE II
Procurement Planning
SEC. 7. Procurement Planning and Budgeting Linkage. All procurement should be within the approved
budget of the Procuring Entity and should be meticulously and judiciously planned by the Procuring Entity
concerned. Consistent with government fiscal discipline measures, only those considered crucial to the
efficient discharge of governmental functions shall be included in the Annual Procurement Plan to be
specified in the IRR.
No government Procurement shall be undertaken unless it is in accordance with the approved Annual
Procurement Plan of the Procuring Entity. The Annual Procurement Plan shall be approved by the Head of
the Procuring Entity and must be consistent with its duly approved yearly budget. The Annual Procurement
Plan shall be formulated and revised only in accordance with the guidelines set forth in the IRR. In the case
of Infrastructure Projects, the Plan shall include engineering design and acquisition of right-of-way.
ARTICLE III
Procurement by Electronic Means
SEC. 8. Procurement By Electronic Means. To promote transparency and efficiency, information and
communications technology shall be utilized in the conduct of procurement procedures. Accordingly, there
shall be a single portal that shall serve as the primary source of information on all government
procurement. The G-EPS shall serve as the primary and definitive source of information on government
procurement. Further, the GPPB is authorized to approve changes in the procurement process to adapt to
improvements in modern technology, provided that such modifications are consistent with the provisions
of Section 3 of this Act.
To take advantage of the significant built-in efficiencies of the G-EPS and the volume discounts inherent in
bulk purchasing, all Procuring Entities shall utilize the G-EPS for the procurement of common supplies in
accordance with the rules and procedures to be established by the GPPB. With regard to the procurement
of non-common use items, infrastructure projects and consulting services, agencies may hire service
providers to undertake their electronic procurement provided these service providers meet the minimum
requirements set by the GPPB.
SEC. 9. Security, Integrity and Confidentiality. The G-EPS shall ensure the security, integrity and
confidentiality of documents submitted through the system. It shall include a feature that provides for an
audit trail for on-line transactions and allow the Commission on Audit to verify the security and integrity of
the systems at any time. SEIDAC
ARTICLE IV
Competitive Bidding
SEC. 10. Competitive Bidding. All Procurement shall be done through Competitive Bidding, except as
provided for in Article XVI of this Act.
ARTICLE V
Bids and Awards Committee

SEC. 11. The BAC and its Composition. Each procuring entity shall establish a single BAC for its
procurement. The BAC shall have at least five (5) members, but not more than seven (7) members. It shall
be chaired by at least a third ranking permanent official of the procuring entity other than its head, and its
composition shall be specified in the IRR. Alternatively, as may be deemed fit by the head of the procuring
entity, there may be separate BACs where the number and complexity of the items to be procured shall so
warrant. Similar BACs for decentralized and lower level offices may be formed when deemed necessary by
the head of the procuring entity. The members of the BAC shall be designated by the Head of Procuring
Entity. However, in no case shall the approving authority be a member of the BAC.
Unless sooner removed for a cause, the members of the BAC shall have a fixed term of one (1) year
reckoned from the date of appointment, renewable at the discretion of the Head of the Procuring Entity. In
case of resignation, retirement, separation, transfer, re-assignment, removal, the replacement shall serve
only for the unexpired term: Provided, That in case of leave or suspension, the replacement shall serve
only for the duration of the leave or suspension. For justifiable causes, a member shall be suspended or
removed by the Head of the Procuring Entity.
SEC. 12. Functions of the BAC. The BAC shall have the following functions: advertise and/or post the
invitation to bid, conduct pre-procurement and pre-bid conferences, determine the eligibility of prospective
bidders, receive bids, conduct the evaluation of bids, undertake post-qualification proceedings,
recommend award of contracts to the Head of the Procuring Entity or his duly authorized representative:
Provided, That in the event the Head of the Procuring Entity shall disapprove such recommendation, such
disapproval shall be based only on valid, reasonable and justifiable grounds to be expressed in writing,
copy furnished the BAC; recommend the imposition of sanctions in accordance with Article XXIII, and
perform such other related functions as may be necessary, including the creation of a Technical Working
Group from a pool of technical, financial and/or legal experts to assist in the procurement process.
In proper cases, the BAC shall also recommend to the Head of the Procuring Entity the use of Alternative
Methods of Procurement as provided for in Article XVI hereof.
The BAC shall be responsible for ensuring that the Procuring Entity abides by the standards set forth by
this Act and the IRR, and it shall prepare a procurement monitoring report that shall be approved and
submitted by the Head of the Procuring Entity to the GPPB on a semestral basis. The contents and
coverage of this report shall be provided in the IRR.
SEC. 13. Observers. To enhance the transparency of the process, the BAC shall, in all stages of the
procurement process, invite, in addition to the representative of the Commission on Audit, at least two (2)
observers to sit in its proceedings, one (1) from a duly recognized private group in a sector or discipline
relevant to the procurement at hand, and the other from a non-government organization: Provided,
however, That they do not have any direct or indirect interest in the contract to be bid out. The observers
should be duly registered with the Securities and Exchange Commission and should meet the criteria for
observers as set forth in the IRR.
SEC. 14. BAC Secretariat. To assist the BAC in the conduct of its functions, the Head of the Procuring
Entity shall create a Secretariat that will serve as the main support unit of the BAC. The Head of the
Procuring Entity may also designate an existing organic office within the agency to serve as the
Secretariat.
SEC. 15. Honoraria of BAC Members. The Procuring Entity may grant payment of honoraria to the BAC
members in an amount not to exceed twenty-five percent (25%) of their respective basic monthly salary
subject to availability of funds. For this purpose, the Department of Budget and Management (DBM) shall
promulgate the necessary guidelines. SEIDAC
SEC. 16. Professionalization of BAC, BAC Secretariat and Technical Working Group Members. The GPPB
shall establish a sustained training program for developing the capacity of the BACs, BAC Secretariats and
Technical Working Groups of Procuring Entities, and professionalize the same.
ARTICLE VI
Preparation of Bidding Documents
SEC. 17. Form and Contents of Bidding Documents. The Bidding Documents shall be prepared by the
Procuring Entity following the standard forms and manuals prescribed by the GPPB. The Bidding
Documents shall include the following:
(a) Approved Budget for the Contract;
(b) Instructions to Bidders, including criteria for eligibility, bid evaluation and post-qualification, as well as
the date, time and place of the pre-bid Conference (where applicable), submission of bids and opening of
bids;
(c) Terms of Reference;

(d) Eligibility Requirements;

(e) Plans and Technical Specifications;
(f) Form of Bid, Price Form, and List of Goods or Bill of Quantities;
(g) Delivery Time or Completion Schedule;
(h) Form and Amount of Bid Security;
(i) Form and Amount of Performance Security and Warranty; and,
(j) Form of Contract, and General and Special Conditions of Contract.
The Procuring Entity may require additional document requirements or specifications necessary to
complete the information required for the bidders to prepare and submit their respective bids.
SEC. 18. Reference to Brand Names. Specifications for the Procurement of Goods shall be based on
relevant characteristics and/or performance requirements. Reference to brand names shall not be allowed.
SEC. 19. Access to Information. In all stages of the preparation of the Bidding Documents, the Procuring
Entity shall ensure equal access to information. Prior to their official release, no aspect of the Bidding
Documents shall be divulged or released to any prospective bidder or person having direct or indirect
interest in the project to be procured. SEIDAC
ARTICLE VII
Invitation to Bid
SEC. 20. Pre-Procurement Conference. Prior to the issuance of the Invitation to Bid, the BAC is mandated
to hold a pre-procurement conference on each and every procurement, except those contracts below a
certain level or amount specified in the IRR, in which case, the holding of the same is optional.
The pre-procurement conference shall assess the readiness of the procurement in terms of confirming the
certification of availability of funds, as well as reviewing all relevant documents in relation to their
adherence to law. This shall be attended by the BAC, the unit or officials who prepared the bidding
documents and the draft Invitation to Bid, as well as consultants hired by the agency concerned and the
representative of the end-user.
SEC. 21. Advertising and Contents of the Invitation to Bid. In line with the principle of transparency and
competitiveness, all Invitations to Bid for contracts under competitive bidding shall be advertised by the
Procuring Entity in such manner and for such length of time as may be necessary under the circumstances,
in order to ensure the widest possible dissemination thereof, such as, but not limited to, posting in the
Procuring Entitys premises, in newspapers of general circulation, the G-EPS and the website of the
Procuring Entity, if available. The details and mechanics of implementation shall be provided in the IRR to
be promulgated under this Act.
The Invitation to Bid shall contain, among others:
(a) A brief description of the subject matter of the Procurement;
(b) A general statement on the criteria to be used by the Procuring Entity for the eligibility check, the short
listing of prospective bidders, in the case of the Procurement of Consulting Services, the examination and
evaluation of Bids, and post-qualification;
(c) The date, time and place of the deadline for the submission and receipt of the eligibility requirements,
the pre-bid conference if any, the submission and receipt of bids, and the opening of bids;
(d) The Approved Budget for the Contract to be bid;
(e) The source of funds;
(f) The period of availability of the Bidding Documents, and the place where these may be secured;
(g) The contract duration; and,
(h) Such other necessary information deemed relevant by the Procuring Entity.

SEC. 22. Pre-bid Conference. At least one pre-bid conference shall be conducted for each procurement,
unless otherwise provided in the IRR. Subject to the approval of the BAC, a pre-bid conference may also be
conducted upon the written request of any prospective bidder. SEIDAC
The pre-bid conference(s) shall be held within a reasonable period before the deadline for receipt of bids to
allow prospective bidders to adequately prepare their bids, which shall be specified in the IRR.
ARTICLE VIII
Receipt and Opening of Bids
SEC. 23. Eligibility Requirements for the Procurement of Goods and Infrastructure Projects. The BAC or,
under special circumstances specified in the IRR, its duly designated organic office shall determine the
eligibility of prospective bidders for the procurement of Goods and Infrastructure Projects, based on the
bidders compliance with the eligibility requirements within the period set forth in the Invitation to Bid. The
eligibility requirements shall provide for fair and equal access to all prospective bidders. The documents
submitted in satisfaction of the eligibility requirements shall be made under oath by the prospective bidder
or by his duly authorized representative certifying to the correctness of the statements made and the
completeness and authenticity of the documents submitted.
A prospective bidder may be allowed to submit his eligibility requirements electronically. However, said
bidder shall later on certify under oath as to correctness of the statements made and the completeness
and authenticity of the documents submitted.
SEC. 24. Eligibility Requirements and Short Listing for Consulting Services. The eligibility of prospective
bidders for the Procurement of Consulting Services shall be determined by their compliance with the
eligibility requirements prescribed for the Competitive Bidding concerned, within the period stated in the
Invitation to Bid. The eligibility requirements shall provide for fair and equal access to all prospective
bidders. The prospective bidder shall certify under oath as to the correctness of the statements made, and
the completeness and authenticity of the documents submitted.
A prospective bidder may be allowed to submit his eligibility requirements electronically. However, said
bidder shall later on certify under oath as to correctness of the statements made and the completeness
and authenticity of the documents submitted.
The eligible prospective bidders shall then be evaluated using numerical ratings on the basis of the short
listing requirements prescribed for the Competitive Bidding concerned, within the period stated in the
Invitation to Bid to determine the short list of bidders who shall be allowed to submit their respective bids.
SEC. 25. Submission and Receipt of Bids. A bid shall have two (2) components, namely the technical and
financial components which should be in separate sealed envelopes, and which shall be submitted
simultaneously. The bids shall be received by the BAC on such date, time and place specified in the
invitation to bid. The deadline for the receipt of bids shall be fixed by the BAC, giving it sufficient time to
complete the bidding process and giving the prospective bidders sufficient time to study and prepare their
bids. The deadline shall also consider the urgency of the procurement involved.
Bids submitted after the deadline shall not be accepted.
Notwithstanding the provisions of this Section and Section 26 of this Act, the GPPB may prescribe
innovative procedures for the submission, receipt and opening of bids through the G-EPS.
SEC. 26. Modification and Withdrawal of Bids. A bidder may modify his bid, provided that this is done
before the deadline for the receipt of bids. The modification shall be submitted in a sealed envelope duly
identified as a modification of the original bid and stamped received by the BAC.
A bidder may, through a letter, withdraw his bid or express his intention not to participate in the bidding
before the deadline for the receipt of bids. In such case, he shall no longer be allowed to submit another
Bid for the same contract either directly or indirectly.
SEC. 27. Bid Security. All Bids shall be accompanied by a Bid security, which shall serve as a guarantee
that, after receipt of the Notice of Award, the winning bidder shall enter into contract with the Procuring
Entity within the stipulated time and furnish the required performance security. The specific amounts and
allowable forms of the Bid security shall be prescribed in the IRR.
SEC. 28. Bid Validity. Bids and Bid securities shall be valid for such reasonable period of time indicated in
the Bidding Documents. The duration for each undertaking shall take into account the time involved in the
process of Bid evaluation and award of contract.

SEC. 29. Bid Opening. The BAC shall publicly open all bids at the time, date, and place specified in the
bidding documents. The minutes of the bid opening shall be made available to the public upon written
request and payment of a specified fee.
ARTICLE IX
Bid Evaluation
SEC. 30. Preliminary Examination of Bids. Prior to Bid evaluation, the BAC shall examine first the
technical components of the bids using pass/fail criteria to determine whether all required documents
are present. Only bids that are determined to contain all the bid requirements of the technical component
shall be considered for opening and evaluation of their financial component.
SEC. 31. Ceiling for Bid Prices. The ABC shall be the upper limit or ceiling for the Bid prices. Bid prices
that exceed this ceiling shall be disqualified outright from further participating in the bidding. There shall
be no lower limit to the amount of the award.
SEC. 32. Bid for the Procurement of Goods and Infrastructure Projects. For the procurement of Goods and
Infrastructure Projects, the BAC shall evaluate the financial component of the bids. The bids that passed
the preliminary examination shall be ranked from lowest to highest in terms of their corresponding
calculated prices. The bid with the lowest calculated price shall be referred to as the Lowest Calculated
Bid.
SEC. 33. Bid Evaluation of Short Listed Bidders for Consulting Services. For the Procurement of Consulting
Services, the Bids of the short listed bidders shall be evaluated and ranked using numerical ratings in
accordance with the evaluation criteria stated in the Bidding Documents, which shall include factors such
as, but not limited to, experience, performance, quality of personnel, price and methodology. The Bids shall
be ranked from highest to lowest in terms of their corresponding calculated ratings. The Bid with the
highest calculated rating shall be the Highest Rated Bid. After approval by the Head of the Procuring
Entity of the Highest Rated Bid, the BAC shall invite the bidder concerned for negotiation and/or
clarification on the following items: financial proposal submitted by the bidder, terms of reference, scope of
services, methodology and work program, personnel to be assigned to the job, services/facilities/data to be
provided by the Procuring Entity concerned, and provisions of the contract. When negotiations with the
first-in-rank bidder fails, the financial proposal of the second rank bidder shall be opened for negotiations:
Provided, That the amount indicated in the financial envelope shall be made as the basis for negotiations
and the total contract amount shall not exceed the amount indicated in the envelope and the ABC.
Whenever necessary, the same process shall be repeated until the bid is awarded to the winning bidder.
ARTICLE X
Post-Qualification
SEC. 34. Objective and Process of Post-qualification. Post-qualification is the stage where the bidder with
the Lowest Calculated Bid, in the case of Goods and Infrastructure Projects, or the Highest Rated Bid, in the
case of Consulting Services, undergoes verification and validation whether he has passed all the
requirements and conditions as specified in the Bidding Documents.
If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all the criteria for postqualification, his Bid shall be considered the Lowest Calculated Responsive Bid, in the case of Goods and
Infrastructure or the Highest Rated Responsive Bid, in the case of Consulting Services. However, if a
bidder fails to meet any of the requirements or conditions, he shall be post-disqualified and the BAC shall
conduct the post-qualification on the bidder with the second Lowest Calculated Bid or Highest Rated Bid. If
the bidder with the second Lowest Calculated Bid or Highest Rated Bid is post-disqualified, the same
procedure shall be repeated until the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid is
finally determined.
In all cases, the contract shall be awarded only to the bidder with the Lowest Calculated Responsive Bid or
Highest Rated Responsive Bid.
SEC. 35. Failure of Bidding. There shall be a failure of bidding if:
(a) No bids are received;
(b) No bid qualifies as the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid; or,
(c) Whenever the bidder with the highest rated/lowest calculated responsive bid refuses, without justifiable
cause to accept the award of contract, as the case may be.
Under any of the above instances, the contract shall be re-advertised and re-bid. The BAC shall observe
the same process and set the new periods according to the same rules followed during the first bidding.

After the second failed bidding, however, the BAC may resort to negotiated procurement as provided for in
Section 53 of this Act.
SEC. 36. Single Calculated/Rated and Responsive Bid Submission. A single calculated/rated and
responsive bid shall be considered for award if it falls under any of the following circumstances:
(a) If after advertisement, only one prospective bidder submits a Letter of Intent and/or applies for
eligibility check, and meets the eligibility requirements or criteria, after which it submits a bid, which is
found to be responsive to the bidding requirements;
(b) If after the advertisement, more than one prospective bidder applies for eligibility check, but only one
bidder meets the eligibility requirements or criteria, after which it submits a bid which is found to be
responsive to the bidding requirements; or
(c) If after the eligibility check, more than one bidder meets the eligibility requirements, but only one
bidder submits a bid, and its bid is found to be responsive to the bidding requirements.
In all instances, the Procuring Entity shall ensure that the ABC reflects the most advantageous prevailing
price for the government.
ARTICLE XI
Award, Implementation and Termination of the Contract
SEC. 37. Notice and Execution of Award. Within a period not exceeding fifteen (15) calendar days from
the determination and declaration by the BAC of the Lowest Calculated Responsive Bid or Highest Rated
Responsive Bid, and the recommendation of the award, the Head of the Procuring Entity or his duly
authorized representative shall approve or disapprove the said recommendation. In case of approval, the
Head of the Procuring Entity or his duly authorized representative shall immediately issue the Notice of
Award to the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid. SEIDAC
Within ten (10) calendar days from receipt of the Notice of Award, the winning bidder shall formally enter
into contract with the Procuring Entity. When further approval of higher authority is required, the approving
authority for the contract shall be given a maximum of twenty (20) calendar days to approve or disapprove
it.
In the case of government-owned and/or -controlled corporations, the concerned board shall take action on
the said recommendation within thirty (30) calendar days from receipt thereof.
The Procuring Entity shall issue the Notice to Proceed to the winning bidder not later than seven (7)
calendar days from the date of approval of the contract by the appropriate authority. All notices called for
by the terms of the contract shall be effective only at the time of receipt thereof by the contractor.
SEC. 38. Period of Action on Procurement Activities. The procurement process from the opening of bids
up to the award of contract shall not exceed three (3) months, or a shorter period to be determined by the
procuring entity concerned. Without prejudice to the provisions of the preceding section, the different
procurement activities shall be completed within reasonable periods to be specified in the IRR.
If no action on the contract is taken by the head of the procuring entity, or by his duly authorized
representative, or by the concerned board, in the case of government-owned and/or -controlled
corporations, within the periods specified in the preceding paragraph, the contract concerned shall be
deemed approved.
SEC. 39. Performance Security. Prior to the signing of the contract, the winning bidder shall, as a measure
of guarantee for the faithful performance of and compliance with his obligations under the contract
prepared in accordance with the Bidding Documents, be required to post a performance security in such
form and amount as specified in the Bidding Documents.
SEC. 40. Failure to Enter into Contract and Post Performance Security. If, for justifiable causes, the bidder
with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid fails, refuses or is otherwise
unable to enter into contract with the Procuring Entity, or if the bidder fails to post the required
performance security within the period stipulated in the Bidding Documents, the BAC shall disqualify the
said bidder and shall undertake post-qualification for the next-ranked Lowest Calculated Bid or Highest
Rated Bid. This procedure shall be repeated until an award is made. However, if no award is possible, the
contract shall be subjected to a new bidding.
In the case of a failure to post the required performance security, the bid security shall be forfeited without
prejudice to the imposition of sanctions prescribed under Article XXIII.

SEC. 41. Reservation Clause. The Head of the Agency reserves the right to reject any and all Bids, declare
a failure of bidding, or not award the contract in the following situations:
(a) If there is prima facie evidence of collusion between appropriate public officers or employees of the
Procuring Entity, or between the BAC and any of the bidders, or if the collusion is between or among the
bidders themselves, or between a bidder and a third party, including any act which restricts, suppresses or
nullifies or tends to restrict, suppress or nullify competition;
(b) If the BAC is found to have failed in following the prescribed bidding procedures; or
(c) For any justifiable and reasonable ground where the award of the contract will not redound to the
benefit of the government as defined in the IRR.
SEC. 42. Contract Implementation and Termination. The rules and guidelines for the implementation and
termination of contracts awarded pursuant to the provisions of this Act shall be prescribed in the IRR. The
rules and guidelines shall include standard general and special conditions for contracts.
ARTICLE XII
Domestic and Foreign Procurement
SEC. 43. Procurement of Domestic and Foreign Goods. Consistent with the countrys obligations under
international treaties or agreements, Goods may be obtained from domestic or foreign sources and the
procurement thereof shall be open to all eligible suppliers, manufacturers and distributors. However, in the
interest of availability, efficiency and timely delivery of Goods, the Procuring Entity may give preference to
the purchase of domestically-produced and manufactured goods, supplies and materials that meet the
specified or desired quality.
ARTICLE XIII
Bidding of Provincial Projects
SEC. 44. Bidding of Provincial Projects. Priority programs and infrastructure projects funded out of the
annual General Appropriations Act which are intended for implementation within the province shall be
subject to the same public bidding and to the procurement processes prescribed under this Act. For
purposes of this Article, Engineering District civil works projects, subject to consultation with the concerned
Members of Congress, are included and subsumed in the term provincial projects and shall be governed
by this Section and Section 45 hereof.
SEC. 45. Provincial Bidders. Within five (5) years from the effectivity of this Act, a contractor who
participates in the bidding of provincial priority programs and infrastructure projects, whose principal office
is within the same province, and who submits the lowest bid among the provincial bidders which is higher
than the lowest bid made by a contractor with principal office outside the said province shall be granted
the privilege to match the bid made by the latter: Provided, however, That the release of funds for said
projects shall be published in a local newspaper with the widest circulation and the website of the DBM, the
mechanisms of which shall be spelled-out in the IRR.
ARTICLE XIV
Lease of Computers, Communications, Information and Other Equipment
SEC. 46. Lease Contracts. Lease of construction and office equipment, including computers,
communication and information technology equipment are subject to the same public bidding and to the
processes prescribed under this Act.
ARTICLE XV
Disclosure of Relations
SEC. 47. Disclosure of Relations. In addition to the proposed contents of the Invitation to Bid as
mentioned under Section 21 of this Act, all bidding documents shall be accompanied by a sworn affidavit
of the bidder that he or she or any officer of their corporation is not related to the Head of the Procuring
Entity by consanguinity or affinity up to the third civil degree. Failure to comply with the aforementioned
provision shall be a ground for the automatic disqualification of the bid in consonance with Section 30 of
this Act.
ARTICLE XVI
Alternative Methods of Procurement

SEC. 48. Alternative Methods. Subject to the prior approval of the Head of the Procuring Entity or his duly
authorized representative, and whenever justified by the conditions provided in this Act, the Procuring
Entity may, in order to promote economy and efficiency, resort to any of the following alternative methods
of Procurement:
(a) Limited Source Bidding, otherwise known as Selective Bidding a method of Procurement that involves
direct invitation to bid by the Procuring Entity from a set of pre-selected suppliers or consultants with
known experience and proven capability relative to the requirements of a particular contract;
(b) Direct Contracting, otherwise known as Single Source Procurement a method of Procurement that
does not require elaborate Bidding Documents because the supplier is simply asked to submit a price
quotation or a pro-forma invoice together with the conditions of sale, which offer may be accepted
immediately or after some negotiations;
(c) Repeat Order a method of Procurement that involves a direct Procurement of Goods from the previous
winning bidder, whenever there is a need to replenish Goods procured under a contract previously
awarded through Competitive Bidding;
(d) Shopping a method of Procurement whereby the Procuring Entity simply requests for the submission
of price quotations for readily available off-the-shelf Goods or ordinary/regular equipment to be procured
directly from suppliers of known qualification; or
(e) Negotiated Procurement a method of Procurement that may be resorted under the extraordinary
circumstances provided for in Section 53 of this Act and other instances that shall be specified in the IRR,
whereby the Procuring Entity directly negotiates a contract with a technically, legally and financially
capable supplier, contractor or consultant.
In all instances, the Procuring Entity shall ensure that the most advantageous price for the government is
obtained.
SEC. 49. Limited Source Bidding. Limited Source Bidding may be resorted to only in any of the following
conditions:
(a) Procurement of highly specialized types of Goods and Consulting Services which are known to be
obtainable only from a limited number of sources; or
(b) Procurement of major plant components where it is deemed advantageous to limit the bidding to
known eligible bidders in order to maintain an optimum and uniform level of quality and performance of
the plant as a whole.
SEC. 50. Direct Contracting. Direct Contracting may be resorted to only in any of the following conditions:
(a) Procurement of Goods of proprietary nature, which can be obtained only from the proprietary source,
i.e. when patents, trade secrets and copyrights prohibit others from manufacturing the same item;
(b) When the Procurement of critical components from a specific manufacturer, supplier or distributor is a
condition precedent to hold a contractor to guarantee its project performance, in accordance with the
provisions of his contract; or,
(c) Those sold by an exclusive dealer or manufacturer, which does not have sub-dealers selling at lower
prices and for which no suitable substitute can be obtained at more advantageous terms to the
government.
SEC. 51. Repeat Order. When provided for in the Annual Procurement Plan, Repeat Order may be allowed
wherein the Procuring Entity directly procures Goods from the previous winning bidder whenever there
arises a need to replenish goods procured under a contract previously awarded through Competitive
Bidding, subject to post-qualification process prescribed in the Bidding Documents and provided all the
following conditions are present:
(a) The unit price must be equal to or lower than that provided in the original contract;
(b) The repeat order does not result in splitting of requisitions or purchase orders;
(c) Except in special circumstances defined in the IRR, the repeat order shall be availed of only within six
(6) months from the date of the Notice to Proceed arising from the original contract; and,
(d) The repeat order shall not exceed twenty-five percent (25%) of the quantity of each item of the original
contract.
SEC. 52. Shopping. Shopping may be resorted to under any of the following instances:

(a) When there is an unforeseen contingency requiring immediate purchase: Provided, however, That the
amount shall not exceed Fifty thousand pesos (P50,000); or
(b) Procurement of ordinary or regular office supplies and equipment not available in the Procurement
Service involving an amount not exceeding Two hundred fifty thousand pesos (P250,000): Provided,
however, That the Procurement does not result in Splitting of Contracts: Provided, further, That at least
three (3) price quotations from bona fide suppliers shall be obtained.
The above amounts shall be subject to a periodic review by the GPPB. For this purpose, the GPPB shall be
authorized to increase or decrease the said amount in order to reflect changes in economic conditions and
for other justifiable reasons.
SEC. 53. Negotiated Procurement. Negotiated Procurement shall be allowed only in the following
instances:
(a) In cases of two (2) failed biddings, as provided in Section 35 hereof;
(b) In case of imminent danger to life or property during a state of calamity, or when time is of the essence
arising from natural or man-made calamities or other causes where immediate action is necessary to
prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and
other public utilities;
(c) Take-over of contracts, which have been rescinded or terminated for causes provided for in the contract
and existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or
to restore vital public services, infrastructure facilities and other public utilities;
(d) Where the subject contract is adjacent or contiguous to an on-going infrastructure project, as defined in
the IRR: Provided, however, That the original contract is the result of a Competitive Bidding; the subject
contract to be negotiated has similar or related scopes of work; it is within the contracting capacity of the
contractor; the contractor uses the same prices or lower unit prices as in the original contract less
mobilization cost; the amount involved does not exceed the amount of the ongoing project; and, the
contractor has no negative slippage: Provided, further, That negotiations for the procurement are
commenced before the expiry of the original contract. Whenever applicable, this principle shall also govern
consultancy contracts, where the consultants have unique experience and expertise to deliver the required
service; or,
(e) Subject to the guidelines specified in the IRR, purchases of Goods from another agency of the
government, such as the Procurement Service of the DBM, which is tasked with a centralized procurement
of commonly used Goods for the government in accordance with Letter of Instruction No. 755 and
Executive Order No. 359, series of 1989.
SEC. 54. Terms and Conditions for the use of Alternative Methods. The specific terms and conditions,
including the limitations and restrictions, for the application of each of the alternative methods mentioned
in this Article shall be specified in the IRR.
ARTICLE XVII
Protest Mechanism
SEC. 55. Protests on Decisions of the BAC. Decisions of the BAC in all stages of procurement may be
protested to the head of the procuring entity and shall be in writing. Decisions of the BAC may be
protested by filing a verified position paper and paying a non-refundable protest fee. The amount of the
protest fee and the periods during which the protests may be filed and resolved shall be specified in the
IRR.
SEC. 56. Resolution of Protests. The protests shall be resolved strictly on the basis of records of the BAC.
Up to a certain amount to be specified in the IRR, the decisions of the Head of the Procuring Entity shall be
final.
SEC. 57. Non-interruption of the Bidding Process. In no case shall any protest taken from any decision
treated in this Article stay or delay the bidding process. Protests must first be resolved before any award is
made.
SEC. 58. Report to Regular Courts; Certiorari. Court action may be resorted to only after the protests
contemplated in this Article shall have been completed. Cases that are filed in violation of the process
specified in this Article shall be dismissed for lack of jurisdiction. The regional trial court shall have
jurisdiction over final decisions of the head of the procuring entity. Court actions shall be governed by Rule
65 of the 1997 Rules of Civil Procedure.

This provision is without prejudice to any law conferring on the Supreme Court the sole jurisdiction to issue
temporary restraining orders and injunctions relating to Infrastructure Projects of Government.
ARTICLE XVIII
Settlement of Disputes
SEC. 59. Arbitration. Any and all disputes arising from the implementation of a contract covered by this
Act shall be submitted to arbitration in the Philippines according to the provisions of Republic Act No. 876,
otherwise known as the Arbitration Law: Provided, however, That, disputes that are within the
competence of the Construction Industry Arbitration Commission to resolve shall be referred thereto. The
process of arbitration shall be incorporated as a provision in the contract that will be executed pursuant to
the provisions of this Act: Provided, That by mutual agreement, the parties may agree in writing to resort
to alternative modes of dispute resolution.
SEC. 60. Appeals. The arbitral award and any decision rendered in accordance with the foregoing Section
shall be appealable by way of a petition for review to the Court of Appeals. The petition shall raise pure
questions of law and shall be governed by the Rules of Court. SEIDAC
ARTICLE XIX
Contract Prices and Warranties
SEC. 61. Contract Prices. For the given scope of work in the contract as awarded, all bid prices shall be
considered as fixed prices, and therefore not subject to price escalation during contract implementation,
except under extraordinary circumstances and upon prior approval of the GPPB.
For purposes of this Section, extraordinary circumstances shall refer to events that may be determined
by the National Economic and Development Authority in accordance with the Civil Code of the Philippines,
and upon the recommendation of the procuring entity concerned.
SEC. 62. Warranty. (a) For the procurement of Goods, in order to assure that manufacturing defects shall
be corrected by the supplier, manufacturer, or distributor, as the case may be, for a specific time after
performance of the contract, a warranty shall be required from the contract awardee for such period of
time as may be provided in the IRR, the obligation for which shall be covered by either retention money in
the amount equivalent to a percentage of every progress payment, or a special bank guarantee
equivalent to a percentage of the total contract price, to be provided in the IRR. The said amounts shall
only be released after the lapse of the warranty period, provided that the Goods supplied are free from
defects and all the conditions imposed under the contract have been fully met.
(b) For the procurement of infrastructure projects, the contractor shall assume full responsibility for the
contract work from the time project construction commenced up to a reasonable period as defined in the
IRR taking into consideration the scale and coverage of the project from its final acceptance by the
government and shall be held responsible for any damage or construction of works except those
occasioned by force majeure. The contractor shall be fully responsible for the safety, protection, security,
and convenience of his personnel, third parties, and the public at large, as well as the works, equipment,
installation and the like to be affected by his construction work and shall be required to put up a warranty
security in the form of cash, bank guarantee, letter of credit, Government Service Insurance System bond,
or callable surety bond.
The contractor shall undertake the repair works, at his own expense, of any defect or damage to the
infrastructure projects on account of the use of materials of inferior quality within ninety (90) days from
the time the Head of the Procuring Entity has issued an order to undertake repair. In case of failure or
refusal to comply with this mandate, the government shall undertake such repair works and shall be
entitled to full reimbursement of expenses incurred therein upon demand.
Any contractor who fails to comply with the preceding paragraph shall suffer perpetual disqualification
from participating in any public bidding and his property or properties shall be subject to attachment or
garnishment proceedings to recover the costs. All payables of government in his favor shall be offset to
recover the costs.
ARTICLE XX
The Government Procurement Policy Board
SEC. 63. Organization and Functions. A Government Procurement Policy Board (GPPB) is hereby
established to: (a) protect national interest in all matters affecting public Procurement, having due regard
to the countrys regional and international obligations; (b) formulate and amend, whenever necessary, the
IRR and the corresponding standard forms for Procurement; (c) ensure that Procuring Entities regularly
conduct Procurement training programs and prepare a Procurement operations manual for all offices and

agencies of government; and (d) conduct an annual review of the effectiveness of this Act and recommend
any amendments thereto, as may be necessary.
The GPPB shall convene within fifteen (15) days from the effectivity of this Act to formulate the IRR and for
other related purposes. The GPPB shall be supported by a technical support office.
In addition to the powers granted under this Act, the GPPB shall absorb all the powers, functions and
responsibilities of the Procurement Policy Board created under Executive Order No. 359, series of 1989. All
affected functions of the Infrastructure Committee of the National Economic and Development Authority
Board are hereby transferred to the GPPB.
SEC. 64. Membership. The GPPB shall be composed of the Secretary of the Department of Budget and
Management, as Chairman, the Director-General of the National Economic and Development Authority, as
Alternate Chairman, with the following as Members; the Secretaries of the Departments of Public Works
and Highways, Finance, Trade and Industry, Health, National Defense, Education, Interior and Local
Government, Science and Technology, Transportation and Communications, and Energy, or their duly
authorized representatives and a representative from the private sector to be appointed by the President
upon the recommendation of the GPPB. The GPPB may invite a representative from the Commission on
Audit to serve as a resource person.
ARTICLE XXI
Penal Clause
SEC. 65. Offenses and Penalties. (a) Without prejudice to the provisions of Republic Act No. 3019,
otherwise known as the Anti-Graft and Corrupt Practices Act and other penal laws, public officers who
commit any of the following acts shall suffer the penalty of imprisonment of not less than six (6) years and
one (1) day, but not more than fifteen (15) years:
(1) Open any sealed Bid including but not limited to Bids that may have been submitted through the
electronic system and any and all documents required to be sealed or divulging their contents, prior to the
appointed time for the public opening of Bids or other documents.
(2) Delaying, without justifiable cause, the screening for eligibility, opening of bids, evaluation and post
evaluation of bids, and awarding of contracts beyond the prescribed periods of action provided for in the
IRR.
(3) Unduly influencing or exerting undue pressure on any member of the BAC or any officer or employee of
the procuring entity to take a particular action which favors, or tends to favor a particular bidder.
(4) Splitting of contracts which exceed procedural purchase limits and competitive bidding.
(5) When the head of the agency abuses the exercise of his power to reject any and all bids as mentioned
under Section 41 of this Act with manifest preference to any bidder who is closely related to him in
accordance with Section 47 of this Act.
When any of the foregoing acts is done in collusion with private individuals, the private individuals shall
likewise be liable for the offense.
In addition, the public officer involved shall also suffer the penalty of temporary disqualification from public
office, while the private individual shall be permanently disqualified from transacting business with the
government.
(b) Private individuals who commit any of the following acts, including any public officer, who conspires
with them, shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not
more than fifteen (15) years:
(1) When two or more bidders agree and submit different Bids as if they were bona fide, when they knew
that one or more of them was so much higher than the other that it could not be honestly accepted and
that the contract will surely be awarded to the pre-arranged lowest Bid.
(2) When a bidder maliciously submits different Bids through two or more persons, corporations,
partnerships or any other business entity in which he has interest to create the appearance of competition
that does not in fact exist so as to be adjudged as the winning bidder.
(3) When two or more bidders enter into an agreement which call upon one to refrain from bidding for
Procurement contracts, or which call for withdrawal of Bids already submitted, or which are otherwise
intended to secure an undue advantage to any one of them.

(4) When a bidder, by himself or in connivance with others, employ schemes which tend to restrain the
natural rivalry of the parties or operates to stifle or suppress competition and thus produce a result
disadvantageous to the public.
In addition, the persons involved shall also suffer the penalty of temporary or perpetual disqualification
from public office and be permanently disqualified from transacting business with the government.
(c) Private individuals who commit any of the following acts, and any public officer conspiring with them,
shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than
fifteen (15) years:
(1) Submit eligibility requirements of whatever kind and nature that contain false information or falsified
documents calculated to influence the outcome of the eligibility screening process or conceal such
information in the eligibility requirements when the information will lead to a declaration of ineligibility
from participating in public bidding.
(2) Submit Bidding Documents of whatever kind and nature that contain false information or falsified
documents or conceal such information in the Bidding Documents, in order to influence the outcome of the
public bidding.
(3) Participate in a public bidding using the name of another or allow another to use ones name for the
purpose of participating in a public bidding.
(4) Withdraw a Bid, after it shall have qualified as the Lowest Calculated Bid/Highest Rated Bid, or refuse to
accept an award, without just cause or for the purpose of forcing the Procuring Entity to award the contract
to another bidder. This shall include the non-submission within the prescribed time, or delaying the
submission of requirements such as, but not limited to, performance security, preparatory to the final
award of the contract.
(d) When the bidder is a juridical entity, criminal liability and the accessory penalties shall be imposed on
its directors, officers or employees who actually commit any of the foregoing acts.
SEC. 66. Jurisdiction. Jurisdiction over the offenses defined under this Article shall belong to the
appropriate courts, according to laws existing at the time of the commission of the offenses.
ARTICLE XXII
Civil Liability
SEC. 67. Civil Liability in Case of Conviction. Without prejudice to administrative sanctions that may be
imposed in proper cases, a conviction under this Act or Republic Act No. 3019 shall carry with it civil
liability, which may either consist of restitution for the damage done or the forfeiture in favor of the
government of any unwarranted benefit derived from the act or acts in question or both, at the discretion
of the courts.
SEC. 68. Liquidated Damages. All contracts executed in accordance with this Act shall contain a provision
on liquidated damages which shall be payable in case of breach thereof. The amount thereof shall be
specified in the IRR.
ARTICLE XXIII
Administrative Sanctions
SEC. 69. Imposition of Administrative Penalties. (a) In addition to the provisions of Articles XXI and XXII of
this Act, the Head of the Procuring Entity, subject to the authority delegated to the BAC, if any, shall
impose on bidders or prospective bidders, the administrative penalty of suspension for one (1) year for the
first offense, and suspension of two (2) years for the second offense from participating in the public
bidding process, for the following violations:
(1) Submission of eligibility requirements containing false information or falsified documents. SEIDAC
(2) Submission of Bids that contain false information or falsified documents, or the concealment of such
information in the Bids in order to influence the outcome of eligibility screening or any other stage of the
public bidding.
(3) Allowing the use of ones name, or using the name of another for purposes of public bidding.
(4) Withdrawal of a Bid, or refusal to accept an award, or enter into contract with the government without
justifiable cause, after he had been adjudged as having submitted the Lowest Calculated Responsive Bid or
Highest Rated Responsive Bid.

(5) Refusal or failure to post the required performance security within the prescribed time.
(6) Termination of the contract due to the default of the bidder.
Refusal to clarify or validate in writing its Bid during post-qualification within a period of seven (7) calendar
days from receipt of the request for clarification.
Any documented unsolicited attempt by a bidder to unduly influence the outcome of the bidding in his
favor.
All other acts that tend to defeat the purpose of the Competitive Bidding.
(b) In addition to the penalty of suspension, the Bid security or the performance security posted by the
concerned bidder or prospective bidder shall also be forfeited.
(c) The Head of the Procuring Entity may delegate to the BAC the authority to impose the aforementioned
administrative penalties.
SEC. 70. Preventive Suspension. The head of the procuring entity may preventively suspend any member
of the Technical Working Group or the Secretariat, or the BAC if there are strong reasons or prima facie
evidence showing that the officials or employees concerned are guilty of the charges filed against them
under Articles XXI and XXII of this Act or for dishonesty as defined by the Civil Service Laws. In all cases,
procedural and substantive due process as mandated by the Constitution and Civil Service Laws, rules and
regulations, shall be strictly observed.
SEC. 71. Lifting of Suspension and Removal of Administrative Disabilities. Lifting of preventive suspension
pending administrative investigation, as well as removal of administrative penalties and disabilities shall
be in accordance with the provisions of Sections 52 and 53, Chapter 6 (Civil Service Commission), Book V
of Executive Order No. 292, the Administrative Code of 1987.
ARTICLE XXIV
Legal Assistance and Indemnification of BAC Members
SEC. 72. Private Legal Assistance. All the members of the BAC are hereby authorized to engage the
services of private lawyers or extend counsel immediately upon receipt of Court Notice that a civil or
criminal action, suit or proceeding is filed against them. The lawyers fee shall be part of the
indemnification package for the BAC members, subject to the provisions of Section 73 hereof.
SEC. 73. Indemnification of BAC Members. The GPPB shall establish an equitable indemnification package
for public officials providing services in the BAC, which may be in the form of free legal assistance, liability
insurance, and other forms of protection and indemnification for all costs and expenses reasonably
incurred by such persons in connection with any civil or criminal action, suit or proceeding to which they
may be, or have been made, a party by reason of the performance of their functions or duties, unless they
are finally adjudged in such action or proceeding to be liable for gross negligence or misconduct or grave
abuse of discretion.
In the event of a settlement or compromise, indemnification shall be confined only on matters covered by
the settlement, as to which the Procuring Entity had been advised by counsel that the public officials to be
indemnified have not committed gross negligence or misconduct in the performance of their functions and
duties.
The members of the BAC and the BAC Secretariat shall also be entitled to medical assistance for injuries
incurred in the performance of their functions.
ARTICLE XXV
Final Provisions
SEC. 74. Oversight Committee. There is hereby created a Joint Congressional Oversight Committee to
oversee the implementation of this Act for a period not exceeding five (5) years from the effectivity of this
Act. The Committee shall be composed of the Chairman of the Senate Committee on Constitutional
Amendments and Revision of Laws and two (2) members thereof appointed by the Senate President, and
the Chairman of the House Committee on Appropriations, and two (2) members thereof to be appointed by
the Speaker of the House of Representatives.
SEC. 75. Implementing Rules and Regulations and Standard Forms. Within sixty (60) days from the
promulgation of this Act, the necessary rules and regulations for the proper implementation of its
provisions shall be formulated by the GPPB, jointly with the members of the Oversight Committee created
under Section 74 hereof. The said rules and regulations shall be approved by the President of the

Philippines. For a period not later than thirty (30) days upon the approval of the implementing rules and
regulations, the standard forms for Procurement shall be formulated and approved.
SEC. 76. Repealing Clause. This law repeals Executive Order No. 40, series of 2001, entitled
Consolidating Procurement Rules and Procedures for All National Government Agencies, GovernmentOwned-or-Controlled Corporations and/or Government Financial Institutions, and Requiring the Use of the
Government Electronic Procurement System; Executive Order No. 262, series of 2000, entitled Amending
Executive Order No. 302, series of 1996, entitled Providing Policies, Guidelines, Rules and Regulations for
the Procurement of Goods/Supplies by the National Government and Section 3 of Executive Order No.
201, series of 2000, entitled Providing Additional Policies and Guidelines in the Procurement of
Goods/Supplies by the National Government; Executive Order No. 302, series of 1996, entitled Providing
Policies, Guidelines, Rules and Regulations for the Procurement of Goods/Supplies by the National
Government and Presidential Decree No. 1594 dated June 11, 1978, entitled Prescribing Policies,
Guidelines, Rules and Regulations for Government Infrastructure Contracts. This law amends Title Six,
Book Two of Republic Act No. 7160, otherwise known as the Local Government Code of 1991; the
relevant provisions of Executive Order No. 164, series of 1987, entitled Providing Additional Guidelines in
the Processing and Approval of Contracts of the National Government; and the relevant provisions of
Republic Act No. 7898 dated February 23, 1995, entitled An Act Providing for the Modernization of the
Armed Forces of the Philippines and for Other Purposes. Any other law, presidential decree or issuance,
executive order, letter of instruction, administrative order, proclamation, charter, rule or regulation and/or
parts thereof contrary to or inconsistent with the provisions of this Act is hereby repealed, modified or
amended accordingly.
SEC. 77. Separability Clause. If any provision of this Act is declared invalid or unconstitutional, the other
provisions not affected thereby shall remain valid and subsisting.
SEC. 78. Effectivity Clause. This Act shall take effect fifteen (15) days following its publication in the
Official Gazette or in two (2) newspapers of general circulation.
Approved,
(Sgd.) FRANKLIN M. DRILON
President of the Senate

(Sgd.) JOSE DE VENECIA JR.

Speaker of the House
of Representatives

This Act which is a consolidation of House Bill No. 4809 and Senate Bill No. 2248 was finally passed by the
House of Representatives and the Senate on December 18, 2002.
(Sgd.) OSCAR G. YABES
Secretary of the Senate

(Sgd.) ROBERTO P. NAZARENO

Secretary General
House of Representatives

Approved: JAN 10 2003

(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines

Build-Operate-Transfer Law RA 6957 amended by RA 7718

REPUBLIC ACT NO. 7718
AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO. 6957, ENTITLED AN ACT
AUTHORIZING THE FINANCING, CONSTRUCTION, OPERATION AND MAINTENANCE OF
INFRASTRUCTURE PROJECTS BY THE PRIVATE SECTOR, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SEC. 1. Section 1 of Republic Act no. 6957 is hereby amended to read as follows:
SEC. 1. Declaration of Policy. It is the declared policy of the State to recognize the indispensable role of
the private sector as the main engine for national growth and development and provide the most
appropriate incentives to mobilize private resources for the purpose of financing the construction,
operation and maintenance of infrastructure and development projects normally financed and undertaken
by the Government. Such incentives, aside from financial incentives as provided by law, shall include
providing a climate of minimum government regulations and procedures and specific government
undertakings in support of the private sector.
SEC. 2. Section 2 of the same Act is hereby amended to read as follows:
SEC. 2. Definition of Terms. The following terms used in this Act shall have the meanings stated below:
(a) Private sector infrastructure or development projects The general description of infrastructure or
development projects normally financed and operated by the public sector but which will now be wholly or
partly implemented by the private sector, including but not limited to, power plants, highways, ports,
airports, canals, dams, hydropower projects, water supply, irrigation, telecommunications, railroads and
railways, transport systems, land reclamation projects, industrial estates or townships, housing,
government buildings, tourism projects, markets, slaughterhouses, warehouses, solid waste management,
information technology networks and database infrastructure, education and health facilities, sewerage,
drainage, dredging, and other infrastructure and development projects as may be authorized by the
appropriate agency/LGU pursuant to this Act. Such projects shall be undertaken through contractual
arrangements as defined hereunder and such other variations as may be approved by the President of the
Philippines.
For the construction stage of these infrastructure projects, the project proponent may obtain financing
from foreign and/or domestic sources and/or engage the services of a foreign and/or Filipino contractor:
Provided, That, in case an infrastructure or a development facilitys operation requires a public utility
franchise, the facility operator must be a Filipino or if a corporation, it must be duly registered with the
Securities and Exchange Commission and owned up to at least sixty percent (60%) by Filipinos: Provided,
further, That in the case of foreign contractors, Filipino labor shall be employed or hired in the different
phases of construction where Filipino skills are available: Provided, finally, That projects which would have
difficulty in sourcing funds may be financed partly from direct government appropriations and/or from
Official Development Assistance (ODA) of foreign governments or institutions not exceeding fifty percent
(50%) of the project cost, and the balance to be provided by the project proponent.
(b) Build-operate-and-transfer A contractual arrangement whereby the project proponent undertakes the
construction, including financing, of a given infrastructure facility, and the operation maintenance thereof.
The project proponent operates the facility over a fixed term during which it is allowed to charge facility
users appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid or as negotiated
and incorporated in the contract to enable the project proponent to recover its investment, and operating
and maintenance expenses in the project. The project proponent transfers the facility to the government
agency or local government unit concerned at the end of the fixed term which shall not exceed fifty (50)
years: Provided, That in case of an infrastructure or development facility whose operation requires a public
utility franchise, the proponent must be Filipino or, if a corporation, must be duly registered with the
Securities and Exchange Commission and owned up to at least sixty percent (60%) by Filipinos.
The build-operate-and-transfer shall include a supply-and-operate situation which is a contractual
arrangement whereby the supplier of equipment and machinery for a given infrastructure facility, if the
interest of the Government so requires, operates the facility providing in the process technology transfer
and training to Filipino nationals.
(c) Build-and-transfer A contractual arrangement whereby the project proponent undertakes the
financing and construction of a given infrastructure or development facility and after its completion turns it
over to the government agency or local government unit concerned, which shall pay the proponent on an
agreed schedule its total investments expended on the project, plus a reasonable rate of return thereon.
This arrangement may be employed in the construction of any infrastructure or development project,
including critical facilities which, for security or strategic reasons, must be operated directly by the
Government.
(d) Build-own-and-operate A contractual arrangement whereby a project proponent is authorized to
finance, construct, own, operate and maintain an infrastructure or development facility from which the
proponent is allowed to recover its total investment, operating and maintenance costs plus a reasonable
return thereon by collecting tolls, fees, rentals or other charges from facility users: Provided, That all such
projects, upon recommendation of the Investment Coordination Committee (ICC) of the National Economic
and Development Authority (NEDA), shall be approved by the President of the Philippines. Under this
project, the proponent which owns the assets of the facility may assign its operation and maintenance to a
facility operator.
(e) Build-lease-and-transfer A contractual arrangement whereby a project proponent is authorized to
finance and construct an infrastructure or development facility and upon its completion turns it over to the

government agency or local government unit concerned on a lease arrangement for a fixed period after
which ownership of the facility is automatically transferred to the government agency or local government
unit concerned.
(f) Build-transfer-and-operate A contractual arrangement whereby the public sector contracts out the
building of an infrastructure facility to a private entity such that the contractor builds the facility on a turnkey basis, assuming cost overrun, delay and specified performance risks.
Once the facility is commissioned satisfactorily, title is transferred to the implementing agency/LGU. The
private entity, however, operates the facility on behalf of the implementing agency/LGU under an
agreement.
(g) Contract-add-and-operate A contractual arrangement whereby the project proponent adds to an
existing infrastructure facility which it is renting from the government. It operates the expanded project
over an agreed franchise period. There may, or may not be, a transfer arrangement in regard to the facility.
(h) Develop-operate-and-transfer A contractual arrangement whereby favorable conditions external to a
new infrastructure project which is to be built by a private project proponent are integrated into the
arrangement by giving that entity the right to develop adjoining property, and thus, enjoy some of the
benefits the investment creates such as higher property or rent values.
(i) Rehabilitate-operate-and-transfer A contractual arrangement whereby an existing facility is turned
over to the private sector to refurbish, operate and maintain for a franchise period, at the expiry of which
the legal title to the facility is turned over to the government. The term is also used to describe the
purchase of an existing facility from abroad, importing, refurbishing, erecting and consuming it within the
host country.
(j) Rehabilitate-own-and-operate A contractual arrangement whereby an existing facility is turned over
to the private sector to refurbish and operate with no time limitation imposed on ownership. As long as the
operator is not in violation of its franchise, it can continue to operate the facility in perpetuity.
(k) Project proponent The private sector entity which shall have contractual responsibility for the project
and which shall have an adequate financial base to implement said project consisting of equity and firm
commitments from reputable financial institutions to provide, upon award, sufficient credit lines to cover
the total estimated cost of the project.
(l) Contractor Any entity accredited under the Philippine laws which may or may not be the project
proponent and which shall undertake the actual construction and/or supply of equipment for the project.
(m) Facility operator A company registered with the Securities and Exchange Commission, which may or
may not be the project proponent, and which is responsible for all aspects of operation and maintenance of
the infrastructure or development facility, including but not limited to the collection of tolls, fees, rentals or
charges from facility users: Provided, That in case the facility requires a public utility franchise, the facility
operator shall be Filipino or at least sixty per centum (60%) owned by Filipino.
(n) Direct government guarantee An agreement whereby the government or any of its agencies or local
government units assume responsibility for the repayment of debt directly incurred by the project
proponent in implementing the project in case of a loan default.
(o) Reasonable rate of return on investments and operating and maintenance cost The rate of return
that reflects the prevailing cost of capital in the domestic and international markets: Provided, That in case
of negotiated contracts, such rate of return shall be determined by ICC of NEDA prior to the negotiation
and/or call for proposals: Provided, further, That for negotiated contracts for public utility projects which
are monopolies, the rate of return on rate base shall be determined by existing laws, which in no case shall
exceed twelve per centum (12%).
(p) Construction Refers to new construction, rehabilitation, improvement, expansion, alteration and
related works and activities including the necessary supply of equipment, materials, labor and services and
related items.
SEC. 3. Section 3 of the same Act is hereby amended to read as follows:
SEC. 3. Private Initiative in Infrastructure. All government infrastructure agencies, including governmentowned and-controlled corporations (GOCC) and local government units (LGUs) are hereby authorized to
enter into contract with any duly pre-qualified project proponent for the financing, construction, operation
and maintenance of any financially viable infrastructure or development facility through any of the projects
authorized in this Act. Said agencies, when entering into such contracts, are enjoined to solicit the
expertise of individuals, groups, or corporations in the private sector who have extensive experience in
undertaking infrastructure or development projects.
SEC. 4. Section 4 of the same act is hereby amended to read as follows:

SEC. 4. Priority Projects. All concerned government agencies, including government-owned andcontrolled corporations and local government units, shall include in their development programs those
priority projects that may be financed, constructed, operated and maintained by the private sector under
the provisions of this Act. It shall be the duty of all concerned government agencies to give wide publicity
to all projects eligible for financing under this Act, including publication in national and, where applicable,
international newspapers of general circulation once every six (6) months and official notification of project
proponents registered with them.
The list of all such national projects must be part of the development programs of the agencies
concerned. The list of projects costing up to Three hundred million pesos (P300,000,000) shall be
submitted to ICC of NEDA for its approval and to the NEDA Board for projects costing more than Three
hundred million pesos (P300,000,000). The list of projects submitted to ICC of the NEDA Board shall be
acted upon within thirty (30) working days.
The list of local projects to be implemented by the local government units concerned shall be submitted,
for confirmation, to the municipal development council for projects costing up to Twenty million pesos;
those costing above Twenty up to Fifty million pesos, to the provincial development council; those costing
up to Fifty million, to the city development council; above Fifty million up to Two hundred million pesos, to
the regional development councils; and those above Two hundred million pesos, to ICC of NEDA.
SEC. 5. A new section is hereby added after Section 4 of the same Act and numbered as Section 4-A, to
read as follows:
SEC. 4-A. Unsolicited Proposals. Unsolicited proposals for projects may be accepted by any government
agency or local government unit on a negotiated basis: Provided, That, all the following conditions are met:
(1) such projects involve a new concept or technology and/or are not part of the list of priority projects, (2)
no direct government guarantee, subsidy or equity is required, and (3) the government agency or local
government unit has invited by publication, for three (3) consecutive weeks, in a newspaper of general
circulation, comparative or competitive proposals and no other proposal is received for a period of sixty
(60) working days: Provided, further, That in the event another proponent submits a lower price proposal,
the original proponent shall have the right to match that price within thirty (30) working days.
SEC. 6. Section 5 of the same Act is hereby amended to read as follows:
SEC. 5. Public Bidding of Projects. Upon approval of the projects mentioned in Section 4 of this Act, the
head of the infrastructure agency or local government unit concerned shall forthwith cause to be
published, once every week for three (3) consecutive weeks, in at least two (2) newspapers of general
circulation and in at least one (1) local newspaper which is circulated in the region, province, city or
municipality in which the project is to be constructed, a notice inviting all prospective infrastructure or
development project proponents to participate in a competitive public bidding for the projects so approved.
In the case of a build-operate-and-transfer arrangement, the contract shall be awarded to the bidder who,
having satisfied the minimum financial, technical, organizational and legal standards required by this Act,
has submitted the lowest bid and most favorable terms for the project, based on the present value of its
proposed tolls, fees, rentals and charges over a fixed term for the facility to be constructed, rehabilitated,
operated and maintained according to the prescribed minimum design and performance standards, plans
and specifications. For this purpose, the winning project proponent shall be automatically granted by the
appropriate agency the franchise to operate and maintain the facility, including the collection of tolls, fees,
rentals, and charges in accordance with Section 5 hereof.
In the case of build-and-transfer or build-lease-and-transfer arrangement, the contract shall be awarded
to the lowest complying bidder based on the present value of its proposed schedule of amortization
payments for the facility to be constructed according to the prescribed minimum design and performance
standards, plans, and specifications: Provided, however, That a Filipino contractor who submits an equally
advantageous bid with exactly the same price and technical specifications as those of a foreign contractor
shall be given preference.
In all cases, a consortium that participates in a bid must present proof that the members of the
consortium have bound themselves jointly and severally to assume responsibility for any project. The
withdrawal of any member of the consortium prior to the implementation of the project could be a ground
for the cancellation of the contract.
The public bidding must be conducted under a two-envelope/two-stage system: the first envelope to
contain the technical proposal and the second envelope to contain the financial proposal. The procedures
for this system shall be outlined in the implementing rules and regulations of this Act.
A copy of each contract involving a project entered into under this Act shall forthwith be submitted to
Congress for its information.
SEC. 7. A new section is hereby added after Section 5 of the same Act and numbered as section 5-A, to
read as follows:

SEC. 5-A. Direct Negotiation of Contracts. Direct negotiation shall be resorted to when there is only one
complying bidder left as defined hereunder:
(a) If, after advertisement, only one contractor applies for pre-qualification and it meets the prequalification requirements, after which it is required to submit a bid/proposal which is subsequently found
by the agency/local government unit (LGU) to be complying.
(b) If, after advertisement, more than one contractor applied for pre-qualification but only one meets the
pre-qualification requirements, after which it submits bid/proposal which is found by the agency/LGU to be
complying.
(c) If, after pre-qualification of more than one contractor, only one submits a bid which is found by the
agency/LGU to be complying.
(d) If, after pre-qualification, more than one contractor submit bids but only one is found by the
agency/LGU to be complying: Provided, That any of the disqualified prospective bidder may appeal the
decision of the implementing agencys/LGUs Pre-qualification Bids and Awards Committee within fifteen
(15) working days to the head of the agency, in case of national projects; to the Department of the Interior
and Local Government (DILG), in case of local projects from the date the disqualification was made known
to the disqualified bidder: Provided, furthermore, That the implementing agency concerned or DILG should
act on the appeal within forty-five (45) working days from receipt thereof.
SEC. 8. Section 6 of the same Act is hereby amended to read as follows:
SEC. 6. Repayment Scheme. For the financing, construction, operation and maintenance of any
infrastructure project undertaken through the Build-Operate-and-Transfer arrangement or any of its
variations pursuant to the provisions of this Act, the project proponent shall be repaid by authorizing it to
charge and collect reasonable tolls, fees, and rentals for the use of the project facility not exceeding those
incorporated in the contract and, where applicable, the proponent may likewise be repaid in the form of a
share in the revenue of the project or other non-monetary payments, such as, but not limited to, the grant
of a portion or percentage of the reclaimed land, subject to the constitutional requirements with respect to
the ownership of land: Provided, That for negotiated contracts, and for projects which have been granted a
natural monopoly or where the public has no access to alternative facilities, the appropriate government
regulatory bodies, shall approve the tolls, fees, rentals, and charges based on a reasonable rate of return:
Provided, further, That the imposition and collection of tolls, fees, rentals, and charges shall be for a fixed
term as proposed in the bid and incorporated in the contract but in no case shall this term exceed fifty (50)
years: Provided, furthermore, That the tolls, fees, rentals, and charges may be subject to adjustment
during the life of the contract, based on a predetermined formula using official price indices and included
in the instructions to bidders and in the contract: Provided, also, That all tolls, fees, rentals, and charges
and adjustments thereof shall take into account the reasonableness of said rates to the end-users of
private sector-built infrastructure: Provided, finally, That during the lifetime of the franchise, the project
proponent shall undertake the necessary maintenance and repair of the facility in accordance with
standards prescribed in the bidding documents and in the contract. In the case of a Build-and-Transfer
arrangement, the repayment scheme is to be effected through amortization payments by the government
agency or local government unit concerned to the project proponent according to the scheme proposed in
the bid and incorporated in the contract.
SEC. 9. Section 7 of the same Act is hereby amended to read as follows:
SEC. 7. Contract Termination. In the event that a project is revoked, cancelled or terminated by the
Government through no fault of the project proponent or by mutual agreement, the Government shall
compensate the said project proponent for its actual expenses incurred in the project plus a reasonable
rate of return thereon not exceeding that stated in the contract as of the date of such revocation,
cancellation or termination: Provided, That the interest of the Government in these instances shall be duly
insured with the Government Service Insurance System (GSIS) or any other insurance entity duly
accredited by the Office of the Insurance Commissioner: Provided, finally, That the cost of the insurance
coverage shall be included in the terms and conditions of the bidding referred to above.
In the event that the government defaults on certain major obligations in the contract and such failure is
not remediable or if remediable shall remain unremedied for an unreasonable length of time, the project
proponent/contractor may, by prior notice to the concerned national government agency or local
government unit specifying the turn-over date, terminate the contract. The project proponent/contractor
shall be reasonably compensated by the Government of equivalent or proportionate contract cost as
defined in the contract.
SEC. 10. Section 8 of the same Act is hereby amended to read as follows:
SEC. 8. Regulatory Boards. The Toll Regulatory Board which was created by Presidential Decree No. 1112
is hereby attached to the Department of Public Works and Highways with the Secretary of Public Works and
Highways as Chairman.

SEC. 11. Section 9 of the same Act is hereby amended to read as follows:
SEC. 9. Project Supervision. Every infrastructure project undertaken under the provisions of this Act shall
be in accordance with the plans, specifications, standards, and costs approved by the concerned
government agency and shall be under the supervision of the said agency or local government unit in the
case of local projects.
SEC. 12. A new section to be numbered as Section 10 is hereby added to read as follows:
SEC. 10. Investment Incentives. Among other incentives, projects in excess of One billion pesos
(P1,000,000,000) shall be entitled to incentives as provided by the Omnibus Investment Code, upon
registration with the Board of Investments.
SEC. 13. Section 10 of the same Act is hereby renumbered as Section 11 to read as follows:
SEC. 11. Implementing Rules and Regulations. A committee composed of one (1) representative from
the Department of Public Works and Highways (DPWH), the Department of Transportation and
Communications (DOTC), the Department of Energy (DOE), the Department of Environment and National
Resources (DENR), the Department of Agriculture (DA), the Department of Trade and Industry (DTI), the
Department of Finance (DOF), the Department of Interior and Local Government (DILG), the National
Economic and Development Authority (NEDA), the Coordinating Council of the Philippine Assistance
Program (CCPAP), and other concerned government agencies shall, within sixty (60) days from the
effectivity of this Act, formulate and prescribe, after public hearing and publication as required by law, the
implementing rules and regulations including, among others, the criteria and guidelines for evaluation of
bid proposals, list of financial incentives and arrangements that the Government may provide for the
project, in order to carry out the provisions of this Act in the most expeditious manner.
The Chairman of this committee shall be appointed by the President of the Philippines from its members.
From time to time the Committee may conduct, formulate and prescribe after due public hearing and
publication, amendments to the implementing rules and regulations, consistent with the provisions of this
Act.
SEC. 14. A new section to be numbered as Section 12 is hereby added to read as follows:
SEC. 12. Coordination and Monitoring of Projects. The Coordinating Council of the Philippine Assistance
Program (CCPAP) shall be responsible for the coordination and monitoring of projects implemented under
this Act. Regional development councils and local government units shall periodically submit to CCPAP
information on the status of said projects.
At the end of every calendar year, the CCPAP shall report to the President and to Congress on the progress
of all projects implemented under this Act.
SEC. 15. Sections 11, 12 and 13 of the same Act are hereby renumbered as Sections 13, 14 and
15respectively.
SEC. 16. Repealing Clause. All laws or parts of any law inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.
SEC. 17. Separability Clause. If any provision of this Act is held invalid, the other provisions not affected
thereby shall continue in operation.
SEC. 18. Effectivity Clause. This Act shall take effect fifteen (15) days after its publication in at least two
(2) newspapers of general circulation.
EDGARDO J. ANGARA

JOSE DE VENECIA JR.

President of the Senate

Speaker of the House of Representative

This Act which is a consolidation of House Bill No. 10943 and Senate Bill No. 1586 was finally passed by the
House of Representatives and the Senate on April 12, 1994 and April 27, 1994, respectively.
EDGARDO E. TUMANGAN

ROBERTO P. NAZARENO

Secretary of the Senate

Acting Secretary General House of

Representative
FIDEL V. RAMOS

President of the Philippines

Approved: 5 MAY 1994