The House of Representatives approved on second reading House Bill 9061, principally authored by former President and now Speaker Gloria Macapagal-Arroyo, which seeks to encourage all business organizations established and operating under Philippine laws, whether domestic or foreign, to observe corporate social responsibility in the operation of their businesses in the country.
Speaker Arroyo said noticeably, many corporations and other business corporations have shown very little care for the welfare of society and the community where they operate and the natural environment around them.
“Their sole purpose is to maximize their respective returns on investment, totally disregarding the impact of their activities on customers, employees, shareholders, communities, and environment,” said Speaker Arroyo.
The Speaker explained that the bill seeks to foster sustainable economic and environment development and environment protection, among other things by institutionalizing corporate social responsibility in corporations, whether domestic or foreign, partnership and other establishment performing business in the country.
The proposed “Corporate Social Responsibility Act” declares that the State recognizes the vital role of the private sector in nation-building and shall encourage its active participation in fostering economic development and environment protection in the country.
In view of this, the government shall mobilize its various agencies, in coordination with non-government and people’s organizations, to work hand in hand for the integration, promotion and strengthening of CSR in all business organizations.
Corporate social responsibility (CSR) is referred to in the bill as the commitment of business to contribute on a voluntary basis to sustainable economic development by working with relevant stakeholders to improve their lives in ways that are good for business, sustainable development agenda and society at large.
CSR-related activities shall include charitable programs and projects, scientific research, youth and sports development, cultural or educational promotion, services to veterans and senior citizens, social welfare, environmental sustainability, health development, disaster relief and assistance, socialized and low-cost housing, and employee and worker welfare- related CSR activities.
To encourage companies to engage in CSR, Section 43 of Batas Pambansa Blg.68, otherwise known as the Corporation Code of the Philippines, shall be amended.
The amendment provides that stock corporations are prohibited from retaining surplus profits in excess of 100 percent of their paid-in capital stock, except: 1) when justified by definite corporate expansion or for corporate social responsibility projects and programs approved by the board of directors; or 2) when the corporation is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its/his consent, and such consent has not yet been secured; or 3) when it can clearly show that such retention is necessary under circ*mstances obtaining in the corporation, such as when there is need for special reserve for probable contingencies.”
The bill mandates the Department of Trade and Industry (DTI) to recognize and reward all business organizations for outstanding, innovative and world-class CSR-related services, projects and programs. It shall likewise extend endorsem*nt and encouragements to domestic and foreign corporations doing business in the country which are candidates for recognition in international award-giving bodies for their CSR-related activities.
All local government units where CSR-related activities are conducted shall extend whatever assistance is necessary for business organizations to accomplish their CSR programs and projects.
Moreover, all business organizations shall submit the list of their CSR activities as part of their annual or regular report to the Securities and Exchange Commission (SEC), the DTI, or the Department of Finance (DOF), as the case may be.
Within 60 days, the Secretary of Finance shall, in coordination with the DTI and SEC, promulgate rules and regulations for the effective implementation of the Act and shall monitor strict compliance therewith.
The House Committee on Trade and Industry chaired by Rep. Ferjenel Biron, M.D. (4th District, Iloilo) endorsed the plenary approval of the bill. It was sponsored on the floor by Rep. Manuel Zubiri (3rd District, Bukidnon).
The bill is also authored by Biron, Zubiri, 1-PACMAN Party-list Reps. Enrico Pineda and Michael Romero, PhD., Reps. Xavier Jesus Romualdo (Lone District, Camiguin) and Lorna Silverio (3rd District, Bulacan), among others. | Isagani Yambot Jr.
As a seasoned expert in corporate governance, legislative affairs, and corporate social responsibility (CSR), I've closely followed and analyzed the recent developments in the House of Representatives, particularly the approval of House Bill 9061. My expertise in this domain stems from a combination of academic qualifications, extensive research, and practical experience working with corporations and governmental bodies.
The proposed "Corporate Social Responsibility Act," principally authored by former President and now Speaker Gloria Macapagal-Arroyo, addresses a critical need to instill a sense of responsibility among business organizations operating under Philippine laws, both domestic and foreign. This legislation underscores the growing recognition of the private sector's pivotal role in nation-building and emphasizes the importance of active participation in fostering economic development and environmental protection.
The core concepts in this article revolve around corporate social responsibility (CSR), its definition, and the objectives outlined in the proposed bill. CSR is defined as the commitment of businesses to contribute voluntarily to sustainable economic development by collaborating with stakeholders to improve lives in ways that benefit business, the sustainable development agenda, and society at large. The bill identifies specific CSR-related activities, including charitable programs, scientific research, youth and sports development, cultural or educational promotion, and environmental sustainability, among others.
One key aspect of the bill involves amending Section 43 of Batas Pambansa Blg. 68, also known as the Corporation Code of the Philippines, to encourage companies to engage in CSR. The amendment restricts stock corporations from retaining surplus profits in excess of 100 percent of their paid-in capital stock, except under certain justifiable circ*mstances such as corporate expansion or for approved CSR projects and programs.
Moreover, the bill assigns responsibilities to government agencies, particularly the Department of Trade and Industry (DTI), to recognize, reward, and endorse business organizations for outstanding CSR-related services. Local government units are also called upon to provide necessary assistance for the successful implementation of CSR programs and projects.
In summary, the Corporate Social Responsibility Act aims to institutionalize CSR in corporations, promote sustainable economic and environmental development, and encourage the private sector's active involvement in nation-building. The proposed amendments to existing legislation and the establishment of mechanisms for recognition and monitoring demonstrate a comprehensive approach to fostering a socially responsible business environment in the Philippines.
