MANILA, Philippines — A House of Representatives panel has approved a bill empowering the Securities and Exchange Commission (SEC) to purge out bogus foundations from registration.
The Bank and Financial Intermediaries committee approved House Bill 4449 titled “An Act granting the SEC the authority to monitor and/or investigate nongovernment organizations (NGOs), foundations, and similar institutions.”
The bill advances to the plenary for debate after committee approval.
In the bill’s introductory note, author Laguna Representative Joaquin Chipeco Jr. said NGOs have been used by unscrupulous individuals and corrupt politicians to pillage public funds.
He referred to the alleged pork barrel scam, by which public funds were coursed through the bogus NGOs linked to accused mastermind Janet Lim-Napoles only to be implemented in ghost projects for kickbacks. The case has resulted in the detention of Napoles, three senators and other government and private individuals accused in the scam.
The Commission on Audit, in a comprehensive report, was the first one to raise the red flags on the Priority Development Assistance Funds (PDAF) transactions involving 82 NGOs from 2007 to 2009. The report later served as the basis for the filing of plunder and graft charges against the pork scam-tainted suspects
“While the 1987 Constitution has laudably enshrined people’s organizations, cooperatives, and NGOs as the fleshing out of the ‘people power’ legacy of the Filipino nation, it was not long before a number of these organizations were corrupted by predatory individuals in collusion with certain self-serving politicians,” Chipeco said.
“Registered as non-stock, non-profit organizations, these fraudulent organizations have put honest-to-goodness foundations and NGOs as whole into disrepute,” he added.
Chipeco said he authored the bill because the SEC has said it does not have the mandate to investigate NGOs under the law.
“The bill aims to address this deficiency in our laws by empowering the SEC to monitor charitable organizations, foundations and NGOs with the end in view of protecting the general public from unscrupulous practices,” he said.
According to the bill, the SEC is tasked to investigate the acts of questionable NGOs “where there exists probable cause to believe that such organizations are committing or attempting or conspiring to commit, or participating in or facilitating an act in violation of existing laws, rules and regulations.”
The bill also wants the SEC to review its budgetary requirements to address and upgrade its services through computer-assisted monitoring.
Chipeco said the law would also address the scarce resources and personnel of the commission.
He said the SEC only has eight processors to take on at least 21,000 registered foundations
“The current SEC practice of performing random examinations of around six to 10 percent of the active foundations in a year is not enough to cleanse the slate of illegitimate foundations,” Chipeco said.
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