REPUBLIC ACT No. 3046 "SECTION 1.

"SECTION 1. The baselines for the territorial sea of the Philippines are hereby defined and
(as amended by RA 5446) described specifically as follows:

AN ACT DEFINE THE BASELINES OF THE TERRITORIAL SEA OF THE PHILIPPINES.

WHEREAS, the Constitution of the Philippines describes the national territory as comprising all the ----diagram follows-----
territory ceded to the United States by the Treaty of Paris concluded between the United States and
Spain on December 10, 1898, the limits of which are set forth in Article III of said treaty, together with all Section 2. The definition of the baselines of the territorial sea of the Philippine Archipelago as provided
the islands embraced in the treaty concluded at Washington, between the United States and Spain on in this Act is without prejudice to the delineation of the baselines of the territorial sea around the territory
November 7, 1900, and in the treaty concluded between the United States and Great Britain on January of Sabah, situated in North Borneo, over which the Republic of the Philippines has acquired dominion
2, 1930, and all the territory over which the Government of the Philippine Islands exercised jurisdiction and sovereignty.
at the time of the adoption of the Constitution;
Section 3. This Act shall take effect upon its approval.
WHEREAS, all the waters within the limits set forth in the above-mentioned treaties have always been
regarded as part of the territory of the Philippine Islands; Approved: September 18, 1968

WHEREAS, all the waters around, between and connecting the various islands of the Philippines
archipelago, irrespective of their width or dimension, have always been considered as necessary
appurtenances of the land territory, forming part of the inland or internal waters of the Philippines;
WHEREAS, all the waters beyond the outermost islands of the archipelago but within the limits of the
boundaries set forth in the aforementioned treaties comprise the territorial sea of the Philippines;
WHEREAS, the baselines from which the territorial sea of the Philippines is determined consist of
straight lines joining appropriate points of the outermost islands of the archipelago; and
WHEREAS, the said baselines should be clarified and specifically defined and described for the
information of all concerned; Now, therefor,
Section 1. The baselines for the territorial sea of the Philippines are hereby defined and described
specifically as follows:
Republic Act No. 5446 September 18,
as amended by R.A. 9522
AN ACT TO AMEND SECTION ONE OF REPUBLIC ACT NUMBERED THIRTY HUNDRED AND
FORTY-SIX, ENTITLED "AN ACT TO DEFINE THE BASELINES OF THE TERRITORIAL SEA OF
THE PHILIPPINES"
Section 1. To correct typographical errors, Section one of Republic Act numbered thirty hundred and
forty-six is amended to read as follows:
PRESIDENTIAL DECREE No. 1599
ESTABLISHING AN EXCLUSIVE ECONOMIC ZONE AND FOR OTHER PURPOSES
WHEREAS, an exclusive economic zone extending to a distance of two hundred nautical miles from the
baselines from which the territorial sea is measured is vital to the economic survival and development of
the Republic of the Philippines;
WHEREAS, such a zone is now a recognized principle of international law;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby decree and order:
Section 1. There is hereby established a zone to be known as the exclusive economic zone of the
Philippines. The exclusive economic zone shall extend to a distance of two hundred nautical miles
beyond and from the baselines from which the territorial sea is measured: Provided, That, where the
1968 outer limits of the zone as thus determined overlap the exclusive economic zone of an adjacent or
neighboring state, the common boundaries shall be determined by agreement with the state concerned
or in accordance with pertinent generally recognized principles of international law on delimitation.
Section 2. Without prejudice to the rights of the Republic of the Philippines over it territorial sea and
continental shelf, it shall have and exercise in the exclusive economic zone established herein the
following;
(a) Sovereignty rights for the purpose of exploration and exploitation, conservation and
management of the natural resources, whether living or non-living, both renewable and non-
renewable, of the sea-bed, including the subsoil and the superjacent waters, and with regard
 to other activities for the economic exploitation and exploration of the resources of the zone,
such as the production of energy from the water, currents and winds;
(b) Exclusive rights and jurisdiction with respect to the establishment and utilization of artificial
islands, off-shore terminals, installations and structures, the preservation of the marine
environment, including the prevention and control of pollution, and scientific research;
(c) Such other rights as are recognized by international law or state practice.
Section 3. Except in accordance with the terms of any agreement entered into with the Republic of the
Philippines or of any license granted by it or under authority by the Republic of the Philippines, no
person shall, in relation to the exclusive economic zone:
(a) explore or exploit any resources;
(b) carry out any search, excavation or drilling operations:
(c) conduct any research;
(d) construct, maintain or operate any artificial island, off-shore terminal, installation or other
structure or device; or
(e) perform any act or engage in any activity which is contrary to, or in derogation of, the
sovereign rights and jurisdiction herein provided.
Nothing herein shall be deemed a prohibition on a citizen of the Philippines, whether natural or juridical,
against the performance of any of the foregoing acts, if allowed under existing laws.
Section 4. Other states shall enjoy in the exclusive economic zone freedoms with respect to navigation
and overflight, the laying of submarine cables and pipelines, and other internationally lawful uses of the
sea relating to navigation and communications.
Section 5. (a) The President may authorize the appropriate government office/agency to make and
promulgate such rules and regulations which may be deemed proper and necessary for carrying out the
purposes of this degree.
(b) Any person who shall violate any provision of this decree or of any rule or regulation
promulgated hereunder and approved by the President shall be subject to a fine which shall
not be less than two thousand pesos (P2,000.00) nor be more than one hundred thousand
pesos (100,000.00) or imprisonment ranging from six (6) months to ten (10) years, or both
such fine and imprisonment, in the discretion of the court. Vessels and other equipment or
articles used in connection therewith shall be subject to seizure and forfeiture.
Section 6. This Decree shall take effect thirty (30) days after publication in the Official Gazette.
Done in the City of Manila, this 11th day of June, in the year of Our Lord, nineteen hundred and
seventy-eight.
Republic Act No. 9522 March 10, 2009
AN ACT TO AMEND CERTAIN PROVISIONS OF REPUBLIC ACT NO. 3046, AS AMENDED
BY REPUBLIC ACT NO. 5446, TO DEFINE THE ARCHIPELAGIC BASELINE OF THE PHILIPPINES
AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
Section 1. Section 1 of Republic Act No. 3046, entitled "An Act to Define the Baselines of the Territorial
Sea of the Philippines", as amended by Section 1 of Republic Act No. 5446, is hereby amended to read
as follows:
Section 1. The baselines of the Philippines archipelago are hereby defined and described
specifically as follows:
--Diagram follows----
Section 2. The baseline in the following areas over which the Philippines likewise exercises sovereignty
and jurisdiction shall be determined as "Regime of Islands" under the Republic of the Philippines
consistent with Article 121 of the United Nations Convention on the Law of the Sea (UNCLOS):
a) The Kalayaan Island Group as constituted under Presidential Decree No. 1596; and
b) Bajo de Masinloc, also known as Scarborough Shoal.
Section 3. This Act affirms that the Republic of the Philippines has dominion, sovereignty and
jurisdiction over all portions of the national territory as defined in the Constitution and by provisions of
applicable laws including, without limitation, Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, as amended.
Section 4. This Act, together with the geographic coordinates and the chart and maps indicating the
aforesaid baselines, shall be deposited and registered with the Secretary General of the United Nations.
Section 5. The National Mapping and Resource Information Authority (NAMRIA) shall forthwith produce
and publish charts and maps of the appropriate scale clearly representing the delineation of basepoints
and baselines as set forth in this Act.
Section 6. The amount necessary to carry out the provisions of this Act shall be provided in a
supplemental budyet or included in the General Appropriations Act of the year of its enactment into law.
Section 7. If any portion or provision of this Act is declared unconstitutional or invalid the other portions
or provisions hereof which are not affected thereby shall continue to be in full force and effect.
Section 8. The provisions of Republic Act No. 3046, as amended by Republic Act No. 5446, and all
other laws, decrees, executive orders, rules and issuances inconsistent with this Act are hereby
amended or modified accordingly.
Section 9. This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in
any two (2) newspaper of general circulation.
PRESIDENTIAL DECREE No. 1445
ORDAINING AND INSTITUTING A GOVERNMENT AUDITING CODE OF THE PHILIPPINES
WHEREAS, the creation and establishment of the Commission on Audit under the new Constitution and
its recent reorganization and restructuring by virtue of Presidential Decree No. 898 have rendered more
pressing the long-felt need to codify in revised and updated form, in keeping with modern trends of
government auditing and progressive legislation on the subject, various scattered auditing laws, rules
and regulations, and to incorporate therein presidential decrees, orders, proclamations, and instructions
germane and relevant thereto for integrated effect;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby order and decree:
PRELIMINARY TITLE
GENERAL PROVISIONS
Section 1. Title. This law shall be known and cited as the "Government Auditing Code of the
Philippines."
Section 2. Declaration of Policy. It is the declared policy of the State that all resources of the
government shall be managed, expended or utilized in accordance with law and regulations, and
safeguard against loss or wastage through illegal or improper disposition, with a view to ensuring
efficiency, economy and effectiveness in the operations of government. The responsibility to take care
that such policy is faithfully adhered to rests directly with the chief or head of the government agency
concerned.
Section 3. Definition of terms. Wherever used in this Code, the following terms shall be taken and
understood in the sense indicated hereunder, unless the context otherwise requires:
1. "Fund" is a sum of money or other resources set aside for the purpose of carrying out
specific activities or attaining certain objectives in accordance with special regulations,
restrictions, or limitations, and constitutes an independent fiscal and accounting entity.
2. "Government funds" includes public moneys of every sort and other resources pertaining to
any agency of the government.
3. "Revenue Funds" comprises all funds derived from the income of any agency of the
government and available for appropriation or expenditure in accordance with law.
4. "Trust funds" refers to funds which have come officially into the possession of any agency of
the government or of a public officer as trustee, agent, or administrator, or which have been
received for the fulfillment of some obligation.
5. "Depository funds" comprises funds over which the officer accountable therefore may retain
control for the lawful purposes for which they came into his possession. It embraces moneys
in any and all depositories.
6. "Depository" means any financial institution lawfully authorized to receive government
moneys upon deposit.
7. "Resources" refers to the actual assets of any agency of the government such as cash,
instruments representing or convertible to money, receivables, lands, buildings, as well as
contingent assets such as estimated revenues applying to the current fiscal period not accrued
or collected and bonds authorized and unissued.
8. "Government agency" or "agency of the government," or "agency refers to any department,
bureau or office of the national government, or any of its branches and instrumentalities, or
any political subdivision, as well as any government-owned or controlled corporation, including
its subsidiaries, or other self-governing board or commission of the government.
Section 4. Fundamental principles. Financial transactions and operations of any government agency
shall be governed by the fundamental principles set forth hereunder, to wit:
1. No money shall be paid out of any public treasury of depository except in pursuance of an
appropriation law or other specific statutory authority.
2. Government funds or property shall be spent or used solely for public purposes.
3. Trust funds shall be available and may be spent only for the specific purpose for which the
trust was created or the funds received.
4. Fiscal responsibility shall, to the greatest extent, be shared by all those exercising authority
over the financial affairs, transactions, and operations of the government agency.
5. Disbursements or disposition of government funds or property shall invariably bear the
approval of the proper officials.
6. Claims against government funds shall be supported with complete documentation.
 7. All laws and regulations applicable to financial transactions shall be faithfully adhered to.
8. Generally accepted principles and practices of accounting as well as of sound management
and fiscal administration shall be observed, provided that they do not contravene existing laws
and regulations.
TITLE I
THE COMMISSION ON AUDIT
CHAPTER 1
ORGANIZATION
Section 5. Composition of the Commission on Audit qualifications, term, and salary of members.
1. The Commission on Audit, hereinafter referred to as the Commission, shall be composed of
a Chairman and two Commissioners, who shall be natural-born citizens of the Philippines and,
at the time of their appointment, at least forty years of age and certified public accountants or
members of the Philippine Bar for at least ten years.
2. The Chairman and the Commissioners shall be appointed by the Prime Minister for a term
of seven years without reappointment. Of the Commissioners first appointed, one shall hold
office for seven years, another for five years, and the third for three years. Appointment to any
vacancy shall only be for the unexpired portion of the term of the predecessor.
3. The Chairman and each Commissioner shall receive as annual salary of sixty thousand
pesos and fifty thousand pesos, respectively, which shall not be decreased during their
continuance in office.
Section 6. The Commission Proper.
1. For purposes of this Code and as a component of the organizational structure of the
Commission, the Chairman and the two Commissioners shall together be known as the
Commission Proper and as such shall be distinguished from the other components of the
Commission consisting of the central and regional offices which are hereinafter created.
2. The Commission Proper shall sit as a body to determine policies, promulgate rules and
regulations, and prescribe standards governing the performance by the Commission of its
powers and functions.
3. The Chairman shall act as the presiding officer of the Commission Proper and the chief
executive officer of the Commission. As such chief executive officer, he shall be responsible
for the general administration of the Commission.
4. The Chairman and each Commissioner shall have such technical and clerical personnel in
their respective offices as may be required by the exigencies of the service.
Section 7. Central and regional offices.
1. The Commission shall have the following central offices:
(a) Administrative Office
(b) Planning, Financial, and Management Office
(c) Legal Office
(d) Accountancy Office
(e) National Government Audit Office
(f) Local Government Audit Office
(g) Corporate Audit Office
(h) Performance Audit Office
(i) Manpower Development Office
(j) Technical Service Office
These offices shall perform primarily staff functions, exercise technical supervision
over the regional offices in matters pertaining to their respective functional areas,
and perform such other functions as may be assigned by the Chairman.
2. The Commission shall keep and maintain such regional offices as may be required by the
exigencies of the service in accordance with the Integrated Reorganization Plan for the
national government, or as may be provided by law, which shall serve as the immediate
representatives of the Commission in the regions under the direct control and supervision of
the Chairman.
3. The central and regional offices shall each be headed by a Manager and a Regional
Director, respectively. The Manager of the Legal Office shall also be known and shall act as
the General Counsel of the Commission.
Section 8. Commission Secretariat. There shall be a Commission Secretariat to be headed by the
Secretary to the Commission who shall have the rank and privileges of central office manager.
Section 9. The Administrative Office. The Administrative Office shall perform the following functions:
1. Develop and maintain a personnel program which shall include recruitment, selection,
appointment, performance evaluation, employee relations, and welfare services; and
2. Provide the Commission with services related to personnel, records, supplies, equipment,
medical, collections and disbursements, security, general and other related services.
Section 10. The Planning, Financial, and Management Office. The Planning, Financial, and
Management Office shall have the following functions:
1. Formulate long-range and annual plans and programs for the Commission;
 2. Formulate basic policies and guidelines for the preparation of the budget of the
Commission, coordinate with the Budget Commission and the Office of the President (Prime
Minister) in the preparation of the said budget;
3. Maintain and administer the accounting system pertaining to the accounts of the
Commission;
4. Develop and administer a system for monitoring the prices of materials supplies, and
equipment purchased by the government;
5. Develop and maintain the management information system of the Commission; and
6. Develop and administer a management improvement program, including a system for
measurement of performance of auditing units on which an annual report shall be submitted to
the Chairman not later than the thirty-first day of January each year.
Section 11. The Legal Office. The Legal Office shall be charged with the following responsibilities:
1. Perform advisory and consultative functions and render legal services with respect to the
performance of the functions of the Commission and the interpretation of pertinent laws and
auditing rules and regulations;
2. Handle the investigation of administrative cases filed against the personnel of the
Commission, evaluate and act on all reports of involvement of the said personnel in anomalies
or irregularities in government transactions, and perform any other investigative work required
by the Commission upon assignment by the Chairman;
3. Represent the Commission in preliminary investigations of malversation cases discovered
in audit, assist and collaborate with the Solicitor General and the Tanod Bayan in handling
cases involving the Chairman or any of the Commissioners, and other officials and employees
of the Commission in their official capacity; and
4. Coordinate, for the Commission and with the appropriate legal bodies of government, with
respect to legal proceedings towards the collection and enforcement of debts and claims, and
the restitution of funds and property, found to be due any government agency in the
settlement and adjustment of its accounts by the commission.
Section 12. The Accountancy Office. The Accountancy Office shall have the following functions:
1. Prepare, for the Commission, the annual financial report of the Government, its
subdivisions, agencies and instrumentalities, including government-owned or controlled
corporations, and such other financial or statistical reports as may be required by the
Commission;
2. Verify appropriations of national government agencies and control fund releases thereto;
and
3. Prepare statements on revenues and expenditures of local government units, and on their
legal borrowing and net paying capacities for reclassification and other purposes.
Section 13. The National Government Audit Office. The National Government Audit Office shall perform
the following functions;
1. Formulate and develop plans, programs, operating standards, and administrative
techniques for the implementation of auditing rules and regulations in departments, regions,
bureau, and offices of the National Government;
2. Formulate accounting rules and regulations for departments, regions, bureaus, and offices
of the National Government; and
3. Advise and assist the Chairman on matters pertaining to the audit of the departments,
regions, bureaus, and offices of the National Government.
Section 14. The Local Government Audit Office. The Local Government Audit Office shall have the
following functions;
1. Formulate and develop plans, programs, operating standards, and administrative
techniques for the implementation of auditing rules and regulations for local government units;
2. Formulate accounting rules and regulations for local government units; and
3. Advise and assist the Chairman on matters pertaining to the audit of local government units.
Section 15. The Corporate Audit Office. The Corporate Audit Office shall perform the following
functions:
1. Formulate and develop plans, programs, operating standards, and administrative
techniques for the implementation of auditing rules and regulations in government-owned or
controlled corporations and self-governing boards, commissions, or agencies of the
government, as well as for the conduct of audit of financial operations of public utilities and
franchises;
2. Formulate accounting rules and regulations for government-owned or controlled
corporations and self-governing boards, commissions, or agencies of the government;
3. Advise and assist the Chairman on matters pertaining to the audit of government-owned or
controlled corporations and self-governing boards, commissions, or agencies of the
government; and
 4. Consolidate the corporate audit reports from all the regions for inclusion in the annual report
of the Commission.
Section 16. The Performance Audit Office. The Performance Audit Office shall have the following
functions:
1. Conduct, consistently with the exercise by the Commission of its visitorial powers as
hereinafter conferred, variable scope audit of non-governmental firms subsidized by the
government or government authority, or those required to pay levies or government share
those funded by donations through the government, and those for which the government has
put up a counterpart fund: Provided, That such audits shall be limited to the funds or subsidies
coming from the government; and
2. Undertake audits of the legality of government expenditures, with particular emphasis on
the statutory authority governing the usage of appropriated funds.
Section 17. The Manpower Development Office. The Manpower Development Office shall perform the
following functions:
1. Formulate long-range plans for a comprehensive training program for all personnel of the
Commission and personnel of the agencies of government, with respect to Commission rules
and regulations and audit matters;
2. Prepare and implement annual training programs, consistent with its long-range plans;
3. Develop its capability to implement training programs;
4. Set up and maintain a library for the Commission; and
5. Publish the professional journal of the Commission.
Section 18. The Technical Service Office. The Technical Service Office shall perform the following
functions;
1. Develop and propose auditing systems for implementation in the government;
2. Render consultancy services related to the discharge of government auditing functions;
3. Assist in the formulation of accounting rules and regulations and in seeing to it that these
are observed by agencies of government, in coordination with the Accountancy Office;
4. Review and evaluate contracts, and inspect and appraise infrastructure projects; and
5. Initiate special studies on auditing matters.
Section 19. The Regional Offices. Each regional office shall perform the following functions:
1. Exercise supervision and control over the implementation of auditing rules and regulations
in any agency of the government with principal offices or place of operations within the region,
including the National Assembly;
2. Review, analyze and consolidate local, national and corporate audit reports pertaining to the
region;
3. Upon delegation by the Commission Proper, exercise authority on internal Commission
administration on personnel, planning, financial (budgetary and accounting), and legal matter
pertaining to the region; and
4.Perform such other related functions as may be assigned by the Chairman.
Section 20. Auditing units; qualifications and assignment of heads.
1. There shall be in each agency of the government an auditing unit which shall be provided
by the audited agency with a suitable and sufficient office space together with supplies,
equipment, furniture, and other necessary operating expenses for its proper maintenance,
including expenses for travel and transportation.
2. The auditing unit shall be headed by an auditor assigned by the Commission who shall be a
certified public accountant or a member of the Bar or a holder of a college degree in
commerce or business administration; major in accounting.
3. The corresponding assignment orders issued by the Commission to such auditors and their
support personnel holding core auditing positions shall be supplementary to their
appointments which are without specifications of station.
4. The Commission shall have the authority to make changes in such assignments and to
effect a periodic reshuffle of heads of auditing units as well as their support personnel
whenever the exigencies of the service so require. However, such changes and reshuffle shall
not affect the tenure of office of the incumbents of the positions involved and shall not
constitute a demotion or reduction in rank or salary, nor result in a change in status.
Section 21. Auditing units for newly-created agencies. The creation of every new agency shall be
construed to include the establishment of an auditing unit therein, and the appropriation or allotment
therefor is deemed to include the amounts necessary to provide such agency with adequate auditing
services as determined by the Commission.
Section 22. Number and compensation of auditing personnel.
1. The assignment of Commission representatives and support personnel to agencies of the
government shall be determined solely by the Commission.
 2. The salaries and other forms of compensation of the personnel of the Commission shall
follow a common position classification and compensation plan regardless of agency of
assignment, and shall be subject to P.D. No. 985.
3. All officials and employees of the Commission, including its representatives and support
personnel shall be paid their salaries, emoluments, and allowances directly by the
Commission out of its appropriations and contributions, as provided in this Code.
Section 23. Professionalization of audit service. The Commission shall develop and adopt for its
officials and employees a comprehensive and continuing manpower and development program.
Section 24. Appropriations and funding.
1. The amount of appropriations for the annual operating expenses of the Commission,
including the salaries, allowances and other emoluments of all its officials and employees and
its central and regional offices as well as in the auditing units in the various national and local
government agencies, including government-owned or controlled corporation, shall be
included in the annual general appropriations law. The usage of these funds shall be
government by the general appropriations and other budget laws;
2. All government-owned or controlled corporations, including their subsidiaries, and self-
governing boards, commissions, or agencies of the government shall appropriate in their
respective budgets and remit to the National Treasury an amount at least equivalent to the
appropriation for the salaries and allowances of the representative and staff of the
Commission during the preceding fiscal year;
3. A maximum of one-half of one per-centum (1/2 of 1%) of the collections from national
internal revenue taxes not otherwise accruing to Special Funds or Special Accounts in the
General Fund of the National Government, upon authority from the Minister (Secretary) of
Finance, shall be deducted from such collections and shall be remitted to the National
Treasury to cover the cost of auditing services rendered to local government units;
4. The amount estimated to be earned as a result for the assessments on government-owned
or controlled corporations, local government units, and other agencies as provided for in this
Section shall be taken into consideration in the preparation of the annual budget of the
Commission, in accordance with pertinent budget laws. The General Appropriations law shall
provide each year for the cost of Commission operations as may be supported by available
funds, in order to meet the audit requirements of national and local government units and of
government-owned or controlled corporations and other agencies covered by this Code.
CHAPTER 2
JURISDICTION, POWERS AND FUNCTIONS OF THE COMMISSION
Section 25. Statement of objectives. In keeping with its Constitutional mandate, the Commission
adheres to the following primary objectives:
1. To determine whether or not the fiscal responsibility that rests directly with the head of the
government agency has been properly and effectively discharged;
2. To develop and implement a comprehensive audit program that shall encompass an
examination of financial transactions, accounts, and reports, including evaluation of
compliance with applicable laws and regulations;
3. To institute control measures through the promulgation of rules and regulations governing
the receipts, disbursements, and uses of funds and property, consistent with the total
economic development effort of the government;
4. To promulgate auditing and accounting rules and regulations so as to facilitate the keeping,
and enhance the information value, of the accounts of the government;
5. To adopt measures calculated to hasten the full professionalization of its services;
6. To institute measures designed to preserve and ensure the independence of its
representatives; and
7. To endeavor to bring its operations closer to the people by the delegation of authority
through decentralization, consistent with the provisions of the new Constitution and the laws.
Section 26. General jurisdiction. The authority and powers of the Commission shall extend to and
comprehend all matters relating to auditing procedures, systems and controls, the keeping of the
general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten
years, the examination and inspection of the books, records, and papers relating to those accounts; and
the audit and settlement of the accounts of all persons respecting funds or property received or held by
them in an accountable capacity, as well as the examination, audit, and settlement of all debts and
claims of any sort due from or owing to the Government or any of its subdivisions, agencies and
instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations,
including their subsidiaries, and other self-governing boards, commissions, or agencies of the
Government, and as herein prescribed, including non-governmental entities subsidized by the
government, those funded by donations through the government, those required to pay levies or
government share, and those for which the government has put up a counterpart fund or those partly
funded by the government.
Section 27. Appointing power. The Commission Proper shall appoint, subject to Civil Service Law the
officials and employees of the Commission whenever they are stationed or assigned.
Section 28. Examining authority. The Commission shall have authority to examine books, papers, and
documents filed by individuals and corporations with, and which are in the custody of, government
offices in connection with government revenue collection operations, for the sole purpose of
ascertaining that all funds determined by the appropriate agencies as collectible and due the
government have actually been collected, except as otherwise provided in the Internal Revenue Code
of 1977.
Section 29. Visitorial Authority.
1. The Commission shall have visitorial authority over non-government entities subsidized by
the government, those required to pay levies or government share, those which have received
counterpart funds from the government or are partly funded by donations through the
government, the said authority however pertaining only to the audit of those funds or
subsidiaries coming from or through the government.
2. Upon direction of the President (Prime Minister), the Commission shall likewise exercise
visitorial authority over non-governmental entities whose loans are guaranteed by the
Government, provided that such authority shall pertain only to the audit of the government's
contingent liability.
Section 30. Fees for audit and other services.
1. The Commission shall fix and collect reasonable fees for the different services rendered to
non-government entities that shall be audited in connection with their dealings with the
government arising from subsidies, counterpart funding by government, or where audited
records become the basis for a government levy or share. Fees of this nature shall accrue to
the General Fund and shall be remitted to the Treasurer of the Philippines within 10 days
following completion of the audit.
2. Whenever the Commission contracts with any government entity, to render audit and
related services beyond the normal scope of such services, the Commission is empowered to
fix and collect reasonable fees. Such fees shall either be appropriated in the agency's current
budget, charged against its savings, or appropriated in its succeeding year's budget.
Remittance shall accrue to the General Fund and shall be made to the Treasurer of the
Philippines within the time provided for in the contract of service, or in the billing rendered by
the Commission.
Section 31. Deputization of private licensed professionals to assist government auditors.
1. The Commission may, when the exigencies of the service so require, deputize and retain in
the name of the Commission such certified public accountants and other licensed
professionals not in the public service as it may deem necessary to assist government
auditors in undertaking specialized audit engagements.
2. The deputized professionals shall be entitled to such compensation and allowances as may
be stipulated, subject to pertinent rules and regulations on compensation and fees.
Section 32. Government contracts for auditing, accounting, and related services.
1. No government agency shall enter into any contract with any private person or firm for
services to undertake studies and services relating to government auditing, including services
to conduct, for a fee, seminars or workshops for government personnel on these topics, unless
the proposed contract is first submitted to the Commission to enable it to determine if it has
the resources to undertake such studies or services. The Commission may engage the
services of experts from the public or private sector in the conduct of these studies.
2. Should the Commission decide not to undertake the study or service, it shall nonetheless
have the power to review the contract in order to determine the reasonableness of its costs.
Section 33. Prevention of irregular, unnecessary, excessive, or extravagant expenditures of funds or
uses of property; power to disallow such expenditures. The Commission shall promulgate such auditing
and accounting rules and regulations as shall prevent irregular, unnecessary, excessive, or extravagant
expenditures or uses of government funds or property.
Section 34. Settlement of accounts between agencies. The Commission shall have the power, under
such regulations as it may prescribe, to authorize and enforce the settlement of accounts subsisting
between agencies of the government.
Section 35. Collection of indebtedness due the government. The Commission shall, through proper
channels, assist in the collection and enforcement of all debts and claims, and the restitution of all funds
or the replacement or payment at a reasonable price of property, found to be due the Government, or
any of its subdivisions, agencies or instrumentalities, or any government- owned or controlled
corporation or self-governing board, commission or agency of the government, in the settlement and
adjustment of its accounts. If any legal proceeding is necessary to that end, the Commission shall refer
the case to the Solicitor General, the Government Corporate Counsel, or the legal staff of the creditor
government office or agency concerned to institute such legal proceeding. The Commission shall
extend full support in the litigation. All such moneys due and payable shall bear interest at the legal rate
from the date of written demand by the Commission.
Section 36. Power to compromise claims.
1. When the interest of the government so requires, the Commission may compromise or
release in whole or in part, any claim or settled liability to any government agency not
exceeding ten thousand pesos and with the written approval of the Prime Minister, it may
likewise compromise or release any similar claim or liability not exceeding one hundred
thousand pesos, the application for relief therefrom shall be submitted, through the
Commission and the Prime Minister, with their recommendations, to the National Assembly.
2. The respective governing bodies of government-owned or controlled corporations, and self-
governing boards, commissions or agencies of the government shall have the exclusive power
to compromise or release any similar claim or liability when expressly authorized by their
charters and if in their judgment, the interest of their respective corporations or agencies so
requires. When the charters do not so provide, the power to compromise shall be exercised by
the Commission in accordance with the preceding paragraph.
3. The Commission may, in the interest of the government, authorize the charging or crediting
to an appropriate account in the National Treasury, small discrepancies (average or shortage)
in the remittances to and disbursements of the National Treasury, subject to the rules and
regulations as it may prescribe.
Section 37. Retention of money for satisfaction of indebtedness to government. When any person is
indebted to any government agency, the Commission may direct the proper officer to withhold the
payment of any money due such person or his estate to be applied in satisfaction of the indebtedness.
Section 38. Authority to examine accounts of public utilities.
1. The Commission shall examine and audit the books, records, and accounts of public utilities
in connection with the fixing of rates of every nature, or in relation to the proceedings of the
proper regulatory agencies, for purposes of determining franchise taxes.
2. During the examination and audit, the public utility concerned shall produce all the reports,
records, books of accounts and such other papers as may be required. The Commission shall
have the power to examine under oath any official or employee of the said public utility.
3. Any public utility refusing to allow an examination and audit of its books of accounts and
pertinent records, or offering unnecessary obstruction to the examination and audit, or found
guilty of concealing any material information concerning its financial status shall be subject to
the penalties provided by law.
Section 39. Submission of papers relative to government obligations.
1. The Commission shall have the power, for purposes of inspection, to require the submission
of the original of any order, deed, contract, or other document under which any collection of, or
payment from, government funds may be made, together with any certificate, receipt, or other
evidence in connection therewith. If an authenticated copy is needed for record purposes, the
copy shall upon demand be furnished.
2. In the case of deeds to property purchased by any government agency, the Commission
shall require a certificate of title entered in favor of the government or other evidence
satisfactory to it that the title is in the government.
3. It shall be the duty of the officials or employees concerned including those in non-
government entities under audit, or affected in the audit of government and non-government
entities, to comply promptly with these requirements. Failure or refusal to do so without
justifiable cause shall constitute a ground for administrative disciplinary action as well as for
disallowing permanently a claim under examination, assessing additional levy or government
share, or withholding or withdrawing government funding or donations through the
government.
Section 40. Investigatory and inquisitorial powers; power to punish for contempt.
1. The Chairman or any Commissioner of the Commission, the central office managers, the
regional directors, the auditors of any government agency, and any other official or employee
of the Commission specially deputed in writing for the purpose by the Chairman shall, in
compliance with the requirement of due process, have the power to summon the parties to a
case brought before the Commission for resolution, issue subpoena and subpoena duces
tecum, administer oaths, and otherwise take testimony in any investigation or inquiry on any
matter within the jurisdiction of the Commission.
2. The Commission shall have the power to punish contempts provided for in the Rules of
Court, under the same procedure and with the same penalties provided therein. Any violation
of any final and executory decision, order or ruling of the Commission shall constitute
contempt of the Commission.
Section 41. Annual report of the Commission.
1. The Commission shall submit to the President, the Prime Minister, and the National
Assembly not later than the last day of September of each year an annual report on the
financial condition and results of operation of all agencies of the government which shall
include recommendations of measures necessary to improve the efficiency and effectiveness
of these agencies.
2. To carry out the purposes of this section, the chief accountant or the official in charge or
keeping the accounts of a government agency shall submit to the Commission year-end trial
balances and such other supporting or subsidiary statements as may be required by the
Commission not later than the fourteenth day of February. Trial balances returned by the
Commission for revision due to non-compliance with accounting rules and regulations, shall be
resubmitted within three days after the date of receipt by the official concerned.
3. Failure on the part of any official or employee to comply with the provisions of the
immediately preceding paragraph shall cause the automatic suspension of the payment of his
salary and other emoluments until he shall have complied therewith. The violation of these
provisions for at least three times shall subject the offender to administrative disciplinary
action.
Section 42. Statement of monthly receipts and disbursements. The Commission shall forward to the
Minister (Secretary) of Finance, as soon as practicable and within sixty days after the expiration of each
month, a statement of all receipts of the national government of whatever class, and payments of
moneys made on warrants or otherwise during the preceding month.
Section 43. Powers, functions, and duties of auditors as representatives of the Commission.
1. The auditors shall exercise such powers and functions as may be authorized by the
Commission in the examination, audit and settlement of the accounts, funds, financial
transactions, and resources of the agencies under their respective audit jurisdiction.
2. A report of audit for each calendar year shall be submitted on the last working day of
February following the close of the year, by the head of each auditing unit through the
Commission to the head or the governing body of the agency concerned, and copies thereof
shall be furnished the government officials concerned or authorized to receive them. Subject
to such rules and regulations as the Commission may prescribe from time to time, the report
shall set forth the scope of audit and shall include a statement of financial condition; a
 statement of surplus or deficit analysis; a statement of operations; a statement of changes in
financial position; and such comments and information as may be necessary together with
such recommendations with respect thereto as may be advisable, including a report of any
impairment of capital noted in the audit. It shall also show specifically any program,
expenditure, or other financial transaction or undertaking observed in the course of audit which
in the opinion of the auditor has been carried out or made without authority of law. The auditor
shall render such other reports as the Commission may require.
3. In the performance of their respective audit functions as herein specified, the auditors shall
employ such auditing procedures and techniques as are determined by the Commission under
regulations that it may promulgate.
4. The auditors in all auditing units shall have the custody, and be responsible for the
safekeeping and preservation of paid expense vouchers, journal vouchers, stubs of treasury
warrants or checks, reports of collections and disbursements and similar documents together
with their respective supporting papers, under regulations of the Commission.
Section 44. Check and audit of property or supplies. The auditor shall from time to time conduct a
careful and thorough check and audit of all property or supplies of the agency to which he is assigned.
Such check and audit shall not be confined to a mere inspection and examination of the pertinent
vouchers, inventories, and other papers but shall include an ocular verification of the existence and
condition of the property or supplies. The recommendation of the auditor shall be embodied in the
proper report.
Section 45. Annual audit and work program. Each auditor who is the head of an auditing unit shall
develop and devise an annual work program and the necessary audit program for his unit in accordance
with regulations of the Commission.
Section 46. Seizure of office by auditor.
1. The books accounts, papers and cash of any local treasurer or other accountable officer
shall at all times be open to the inspection of the Commission or its duly authorized
representative.
2. In case an examination of the accounts of a local treasurer discloses a shortage in cash
which should be on hand, it shall be the duty of the examining officer to seize the office and its
contents, notify the Commission and the local chief executive and thereupon immediately take
full possession of the office and its contents, close and render his accounts to the date of
taking possession, and temporarily continue the public business of such office.
3. The auditor who takes possession of the office of the local treasurer under this section shall
ipso facto supersede the local treasurer until the officer involved is restored, or other provision
has been lawfully made for filling the office.
Section 47. Constructive distraint of property of accountable Office.
1. Upon the discovery in audit of a shortage in the accounts of any accountable officer and
upon a finding of a prima facie case of malversation of public funds or property against him, in
order to safeguard the interest of the Government, the Commission may place under
constructive distraint personal property of the accountable officer concerned where there is
reasonable ground to believe that the said officer is retiring from the government service or
intends to leave the Philippines or remove his property therefrom or hide or conceal his
property.
The constructive distraint shall be effected by requiring the accountable officer concerned or
any other person having possession or control of the property to accomplish a receipt in the
form prescribed by the Commission, covering the property distrained and obligate himself to
preserve the same intact and unaltered and not to dispose of it in any manner whatever
without the express authority of the Commission.
2. In case the said accountable officer or other person having the possession and control of
the property sought to be placed under constructive distraint refuses or fails to accomplish the
receipt herein referred to, the representative of the Commission, effecting the constructive
distraint shall proceed to prepare a list of such property and in the presence of two witnesses
leave a copy thereof in the premises where the property distrained is located after which the
said property shall be deemed to have been placed under the constructive distraint.
CHAPTER 3
DECISIONS OF THE COMMISSION
Section 48. Appeal from decision of auditors. Any person aggrieved by the decision of an auditor of any
government agency in the settlement of an account or claim may within six months from receipt of a
copy of the decision appeal in writing to the Commission.
Section 49. Period for rendering decisions of the Commission. The Commission shall decide any case
brought before it within sixty days from the date of its submission for resolution. If the account or claim
involved in the case needs reference to other persons or offices, or to a party interested, the period
shall be counted from the time the last comment necessary to a proper decision is received by it.
Section 50. Appeal from decisions of the Commission. The party aggrieved by any decision, order or
ruling of the Commission may within thirty days from his receipt of a copy thereof appeal on certiorari to
the Supreme Court in the manner provided by law and the Rules of Court. When the decision, order, or
ruling adversely affects the interest of any government agency, the appeal may be taken by the proper
head of that agency.
Section 51. Finality of decisions of the Commission or any auditor. A decision of the Commission or of
any auditor upon any matter within its or his jurisdiction, if not appealed as herein provided, shall be
final and executory.
Section 52. Opening and revision of settled accounts.
 1. At any time before the expiration of three years after the settlement of any account by an
auditor, the Commission may motu propio review and revise the account or settlement and
certify a new balance. For that purpose, it may require any account, vouchers, or other papers
connected with the matter to be forwarded to it.
2. When any settled account appears to be tainted with fraud, collusion, or error calculation, or
when new and material evidence is discovered, the Commission may, within three years after
the original settlement, open the account, and after a reasonable time for reply or appearance
of the party concerned, may certify thereon a new balance. An auditor may exercise the same
power with respect to settled accounts pertaining to the agencies under his audit jurisdiction.
3. Accounts once finally settled shall in no case be opened or reviewed except as herein
provided.
TITLE II
GOVERNMENT AUDITING
CHAPTER 1
BASIC POLICIES AND STANDARDS
Section 53. Definition of government auditing. government Auditing is the analytical and systematic
examination and verification of financial transactions, operations, accounts, and reports of any
government agency for the purpose of determining their accuracy, integrity, and authenticity, and
satisfying the requirements of law, rules and regulations.
The conduct of government audit shall conform with the auditing standards set forth in the following
three sections.
Section 54. General standards.
1. The audit shall be performed by a person possessed with adequate technical training and
proficiency as auditor.
2. In all matters relating to the audit work, the auditor shall maintain complete independence,
impartiality and objectivity shall avoid any possible compromise of his independence or any
act which may create a presumption of lack of independence or the possibility of undue
influence in the performance of his duties.
3. The auditor shall exercise due professional care and be guided by applicable laws,
regulations and the generally accepted principles of accounting in the performance of the audit
work as well as in the preparation of audit and financial reports.
Section 55. Examination and evaluation standards.
1. The audit work shall be adequately planned and assistants shall be properly supervised.
2. A review shall be made of compliance with legal and regulatory requirements.
3. An evaluation shall be made of the system of internal control and related administrative
practices to determine the extent they can be relied upon to ensure compliance with laws and
regulations and to provide for efficient, economical and effective operations.
4. The auditor shall obtain through inspections, observation, inquiries, confirmation and other
techniques, sufficient competent evidential matter to afford himself a reasonable basis for his
opinions, judgments, conclusions, and recommendations.
Section 56. Reporting standards. 1. Audit reports shall be dated, signed manually and shall be issued
and distributed in the manner provided by regulations of the Commission.
2. Audit reports shall contain basically the transmittal statement, scope and objectives of the
audit and time period examined highlights, financial information, findings, recommendations
and conclusions as well as other data that may provide the management of the audited
agency with the necessary input for the decision-making process. Tables, charts, graphs and
other data to detail the conditions and facts shall be used in proper cases.
3. Audit reports shall meet the following reporting criteria:
(a) Factual matter must be accurately, completely and fairly presented.
(b) Findings must be presented objectively and in language as clear and simple as
the subject matter permits.
(c) Findings must be adequately supported by evidence in the audit working papers.
(d) Reports must be concise yet complete enough to be readily understood by the
users.
(e) Information on underlying causes of problems must be included so as to assist in
implementing or devising corrective actions.
4. Audit reports shall:
(a) Put primary emphasis on improvement; critical comments shall be presented in
balanced perspective, recognizing unusual difficulties or circumstances faced by
officials concerned.
(b) Identify and explain issued and questions needing further study and
consideration by the auditor, the agency or others.
(c) Include recognition or noteworthy accomplishments particularly when
management improvements in one area or activity may be applied elsewhere.
 (d) Include recognition of the views of responsible officials of the agency audited on
the auditors findings, conclusions and recommendations. Except where the
possibility of fraud or other compelling reason may require different treatment, the
auditor's tentative findings and conclusions should be reviewed with officials. When
possible, without undue delay, their view should be obtained in writing and
objectively considered and presented in the final report.
(e) State whether any significant pertinent information has been omitted because it is
deemed confidential. The nature of such information should be described and the
law or other basis under which it is withheld should be stated.
5. Audit reports accompanying financial reports shall:
(a) State whether the audit was made in accordance with generally accepted
auditing standards, and shall disclose the omission of any auditing procedure
generally recognized as normal or deemed necessary by him under the
circumstances of a particular case, as well as the reasons for the omission. Nothing
in this section, however, shall be construed to imply authority for the omission of any
procedure which auditors would ordinarily employ in the course of audit.
(b) Express the auditor's opinion with respect to
i. whether the financial report have been presented fairly in accordance
with applicable laws and regulations and the generally accepted accounting
principles applied on a consistent basis.
ii. material changes in accounting principles and practices and their effect
on the financial reports.
(c) Identity any matter to which he takes exception and shall specifically and clearly
state his exceptions together with a statement on the effect thereof, to the extent
practicable, on the related financial report.
(d) Contain appropriate supplementary explanatory information about the contents of
the financial report as may be necessary for full and informative disclosure about the
financial operations of the agency audited.
(e) Explain violations of legal or other regulatory requirements, including instances of
non-compliance.
CHAPTER 2
AUDIT OBJECTIVES
Section 57. Determination of audit procedures. In the determination of auditing procedures and
techniques to be followed and the extent of examination of vouchers and other documents by
government auditors, the Commission shall give due regard to generally accepted principles of auditing
and accounting organizations and systems, including consideration of the effectiveness of internal
control and related administrative practices of the audited agencies.
Section 58. Audit of assets. The examination and audit of assets shall be performed with a view to
ascertaining their existence ownership, valuation and encumbrances as well as the propriety of items
composing the respective asset accounts, determining their agreement with records, proving the
accuracy of such records; ascertaining if the assets were utilized economically, efficiently and
effectively; and evaluating the adequacy of controls over the accounts.
Section 59. Audit of Liabilities. In his audit of liabilities the auditor shall seek to establish that all
obligations of the agency have been accurately recorded; only bonafide obligations of the agency have
been included; the obligations incurred are properly authorized; all provisions of trust indentures or
mortgages are complied with; and mortgages and other encumbrances are fully disclosed.
Section 60. Audit of revenue accounts. The examination and audit of revenue accounts shall be
performed with a view to ascertaining that earned revenues have been duly recorded; and all recorded
revenues have been earned and appropriate classifications of revenues have been consistently
followed.
Section 61. Audit of expense accounts. The examination of expense accounts shall be undertaken to
ascertain that all expenses incurred have been duly authorized; adequately funded and documented;
properly recorded; all recorded expenses have been actually incurred; and the classifications of
expenses are appropriate and have been consistently followed.
Section 62. Audit of surplus or networth. The audit of surplus or networth shall seek to determine the
nature of the surplus, whether current or invested surplus; the amount of current surplus available to
cover appropriations for the operational expenses of the government, the propriety of the ledger
accounts and balance sheet presentation account; and the proper authority and recording of changes in
the capital structure made during the period under audit.
CHAPTER 3
RECEIPT AND DISPOSITION OF FUNDS AND PROPERTY
Section 63. Accounting for moneys and property received by public officials. Except as may otherwise
be specifically provided by law or competent authority all moneys and property officially received by a
public officer in any capacity or upon any occasion must be accounted for as government funds and
government property. Government property shall be taken up in the books of the agency concerned at
acquisition cost or an appraised value.
Section 64. Designation of collecting officers for government agencies. The head of an agency may
designate such number of collecting officers or agents may be deemed necessary. They shall render
reports of their collections, under the regulations of the Commission, to be submitted promptly to the
auditor concerned who shall conduct the necessary examination land audit within thirty days from
receipt thereof.
Section 65. Accrual of income to unappropriated surplus of the General Fund. (1) Unless otherwise
specifically provided by law, income accruing to the agencies by virtue of the provisions of law, orders
and regulations shall be deposited in the National Treasury or in any duly authorized government
depository, and shall accrue to the unappropriated surplus of the General Fund of the Government.
(2) Amounts received in trust and from business-type activities of government may be
separately recorded and disbursed in accordance with such rules and regulations as may be
determined by a Permanent Committee composed of the Secretary (Minister) of Finance as
Chairman, and the Commissioner of the Budget and the Chairman, Commission of Audit, as
members.
Section 66. Special, Fiduciary and Trust Funds. Receipts shall be recorded as income of Special
Fiduciary of Trust Funds or Funds other than the General Fund only when authorized by law as
implemented by rules and regulations issued by the Permanent Committee created in the preceding
section.
Section 67. Warrants and checks receivables in payment for taxes or other indebtedness to the
government.
1. An office charged with the collection of revenue or the receiving of moneys payable to the
government shall accept payment for taxes, dues or other indebtedness to the government in
the form of checks and warrants issued in payment of government obligations, upon proper
indorsement and identification of the payee or indorsee. Checks drawn in favor of the
government in payment of any such indebtedness shall likewise be accepted by the officer
concerned.
2. When a check drawn in favor of the government is not accepted by the drawee bank for any
reason, the drawer shall continue to be liable for the sum due and all penalties resulting from
delayed payment. Where the reason for non-acceptance by the drawee bank is insufficiency of
funds, the drawer shall be criminally liable therefore.
3. At no instance should money in the hands of the collecting officer be utilized for the purpose
of encashing private checks.
Section 68. Issuance of Official receipt..
1. No payment of any nature shall be received by a collecting officer without immediately
issuing an official receipt in acknowledgment thereof The receipt may be in the form of
postage, internal revenue or documentary stamps and the like, or officially numbered receipts,
subject to proper custody, accountability, and audit.
2. Where mechanical devices are used to acknowledge cash receipts, the Commission may
approve, upon request, exemption from the use of accountable forms.
Section 69. Deposit of moneys in the treasury.
1. Public officers authorized to receive and collect moneys arising from taxes, revenues, or
receipts of any kind shall remit or deposit intact the full amounts so received and collected by
them to the treasury of the agency concerned and credited to the particular accounts to which
the said moneys belong. The amount of the collections ultimately payable to other agencies of
the government shall thereafter be remitted to the respective treasuries of these agencies,
under regulations which the Commission and the Department (Ministry) of Finance shall
prescribe.
2. When exigencies of the service so require, under such rules and regulations as the
Commission and the Department (Ministry) of Finance may prescribe, postmasters may be
authorized to use their collections to pay money orders, telegraphic transfer and withdrawals
from the proper depository bank whenever their cash advance funds for the purpose have
been exhausted. The amount of collections so used shall be restored upon receipt by the
postmaster of the replenishment of his cash advance.
3. Pending remittance to the proper treasury, collecting officers may temporarily deposit
collections received by them with any treasury, subject to regulations of the Commission.
4. The respective treasuries of those agencies shall in turn deposit with the proper government
depository the full amount of the collections not later than the following banking day.
Section 70. Acknowledgment of receipt for funds. Under such rules and regulations as the Commission
and the Department (Ministry) of Finance may prescribe, the Treasurer of the Philippines and all
authorized depository banks shall acknowledge receipt of all funds received by them, the
acknowledgment bearing the date of actual remittance or deposit and indicating from whom and on
what account it was received.
Section 71. Creditors' unclaimed balances.
1. There shall be maintained in the books of the Commission an account designated
"Creditors' Unclaimed Balances" to the credit of which shall be deposited all moneys for which
there is no present rightful claimant. Money accruing to this account shall be held exclusively
for the payment of pertinent obligations against it, when certified by the Commission, not in
excess of the respective amounts which accrued to that account by reason of these
obligations.
2. After remaining unclaimed for a period of ten years, money in this account shall revert as
treasury funds, to the agency that made the deposit, or, in the absence thereof to the national
government.
Section 72. Shipment of government funds or property by carrier; notation of evidence of loss. When
government funds or property are transported from one place to another by carrier, it shall be upon
proper bill of lading or receipt from the carrier, it shall be the duty of the consignee or his representative
to make full notation of any evidence of loss, shortage, or damage, upon the bill of lading or receipt
before accomplishing it.
Section 73. Credit for loss occurring in transit or due to casualty or forces majeure.
1. When a loss of government funds or property occurs while they are in transit or the loss is
caused by fire, theft, or other casualty or force majeure, the officer accountable therefore or
having custody thereof shall immediately notify the Commission or the auditor concerned and,
within thirty days or such longer period as the Commission or auditor may in the particular
case allow, shall present his applicable for relief, with the available supporting evidence.
Whenever warranted by the evidence credit for the loss shall be allowed. An officer who fails
to comply with this requirement shall not be relieved of liability or allowed credit for any loss in
the settlement of his accounts.
2. The Commission shall promulgate rules and regulations to implement the provisions of this
section.
Section 74. Monthly reports of depositories to agency head. At the close of each month, depositories
shall report to the agency head, in such from as he may direct, the condition of the agency account
standing on their books. The head of the agency shall see to it that a reconciliation is made between the
balance shown in the reports and the balance found in the books of the agency.
Section 75. Transfer of funds from one officer to another. Transfer of government funds from one
officer to another shall, except as allowed by law or regulation, be made only upon prior direction or
authorization, of the Commission or its representative.
Section 76. Transfer of property between government agencies. Any government property that is no
longer serviceable or needed by the agency to which it belongs may be transferred without cost, or at
an appraised value, to other agencies of the government upon authority of the respective heads of
agencies in the national government, or of the governing bodies of government-owned or controlled
corporations, other self-governing boards or commissions or the government, or of the local legislative
bodies for local government units concerned.
Section 77. Invoice and receipt upon transfer of funds or property. When government funds or property
are transferred from one accountable officer to another, or from an outgoing officer to his successor, it
shall be done upon properly itemized invoice and receipt which shall invariably support the clearance to
be issued to the relieved or out-going officer, subject to regulations of the Commission.
Section 78. Disposition of funds or property held by deceased, incapacitated, absconding, or
superseded accountable officer.
1. When an officer, accountable for government funds or property absconds with them dies, or
becomes incapacitated in the performance of his duties, the proper agency head shall
designate a custodian to take charge of the funds or property until a successor shall have
been appointed and qualified. The agency head may appoint a committee to count the cash
and take an inventory of the property for which the officer was accountable and to determine
the responsibility for any shortage therein. One copy of the inventory and of the report of the
Committee duly certified shall be filed with the Commission but the findings of the committee
shall not be conclusive until approved by the Commission or its duly authorized representative.
2. If the absconding, deceased, incapacitated, or superseded officer is accountable for funds
or property of a province or city, the custodian and committee shall be designated by the
Minister (Secretary) of Finance, and if accountable for municipal or barrio (barangay) funds or
property, by the provincial treasurer. In all other respects, the above-prescribed proceedings
shall be observed.
3. If the absconding, deceased, incapacitated, or superseded officer is responsible to another
who is accountable, the latter may himself designate the committee or take other lawful
measures for the protection of his interest.
Section 79. Destruction or sale of unserviceable property. When government property has become
unserviceable for any cause, or is no longer needed, it shall, upon application of the officer accountable
therefor, be inspected by the head of the agency or his duly authorized representative in the presence
of the auditor concerned and, if found to be valueless or unsalable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest bidder under the
supervision of the proper committee an award or similar body in the presence of the auditor concerned
or other duly authorized representative of the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in any newspaper of general circulation, or
where the value of the property does not warrant the expense of publication, by notices posted for a like
period in at least three public places in the locality where the property is to be sold. In the event that the
public auction fails, the property may be sold at a private sale at such price as may be fixed by the
same committee or body concerned and approved by the Commission.
Section 80. Final report of accountable officers.
1. An accountable officer, upon ceasing to act in his official capacity as such, shall submit to
the auditor of the agency concerned a report of his accountability.
2. Any remaining balance of such accountability shall be deposited in the proper treasury
without unnecessary delay.
Section 81. Auditor's certificate of balance. Auditors of all government agencies, shall certify the
balances arising in the accounts settled by them to the Commission and to the proper treasurer,
collecting officer, or disbursing officer, in such form as the Commission may prescribe, within sixty days
from the date of receipt of those accounts from the treasurer, collecting officer, or disbursing officer
concerned.
Section 82. Auditor's notice to accountable officer of balance shown upon settlement. The auditor
concerned shall, at convenient intervals, send a written notice under a certificate of settlement to each
officer whose accounts have been audited and settled in whole or in part by him, stating the balances
found due thereon and certified, and the charges or differences arising from the settlement by reason of
disallowances, charges, or suspensions. The certificate shall be properly itemized and shall state the
reasons for disallowance, charge, or suspension of credit. A charge of suspension which is not
satisfactorily explained within ninety days after receipt of the certificate or notice by the accountable
officer concerned shall become a disallowance, unless the Commission or auditor concerned shall, in
writing and for good cause shown, extend the time for answer beyond ninety days.
Section 83. Transcript of auditor's record as evidence of liability. In any criminal or civil proceeding
against an officer for the embezzlement or misappropriation of government funds or property, or to
recover an amount due the government from an accountable officer it shall be sufficient, for the purpose
of showing a balance against him, to produce the working papers of the auditor concerned. A showing
in this manner of any balance against the officer shall be prima facie evidence of the misappropriation of
the funds or property unaccounted for or of civil liability of the officer as the case may be. The existence
or contents of bonds, contracts, or other papers relating to or connected with the settlement of any
account may be proved by the production of certified copies thereof but the court may require the
production of the original when this appears to be necessary for the attainment of justice.
CHAPTER 4
APPLICATION OF APPROPRIATED FUNDS
Section 84. Disbursement of government funds.
1. Revenue funds shall not be paid out of any public treasury or depository except in
pursuance of an appropriation law or other specific statutory authority.
2. Trust funds shall not be paid out of any public treasury or depository except in fulfillment of
the purpose for which the trust was created or funds received, and upon authorization of the
legislative body, or head of any other agency of the government having control thereof, and
subject to pertinent budget law, rules and regulations.
3. National revenue and trust funds shall not be withdrawn from the National Treasury except
upon warrant or other instruments of withdrawal approved by the Minister (Secretary) of
Finance as recommended by the Treasurer of the Philippines.
4. Temporary investment of investible cash in the National Treasury in any securities issued
by the National Government and its political subdivisions and instrumentalities including
government-owned or controlled corporations as authorized by the Secretary (Minister) of
Finance, shall not be construed as disbursements of funds.
Section 85. Appropriation before entering into contract.
1. No contract involving the expenditure of public funds shall be entered into unless there is an
appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient
to cover the proposed expenditure.
2. Notwithstanding this provision, contracts for the procurement of supplies and materials to be
carried in stock may be entered into under regulations of the Commission provided that when
issued, the supplies and materials shall be charged to the proper appropriation account.
Section 86. Certificate showing appropriation to meet contract. Except in the case of a contract for
personal service, for supplies for current consumption or to be carried in stock not exceeding the
estimated consumption for three months, or banking transactions of government-owned or controlled
banks no contract involving the expenditure of public funds by any government agency shall be entered
into or authorized unless the proper accounting official of the agency concerned shall have certified to
the officer entering into the obligation that funds have been duly appropriated for the purpose and that
the amount necessary to cover the proposed contract for the current fiscal year is available for
expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed
by the proper accounting official and the auditor who verified it, shall be attached to and become an
integral part of the proposed contract, and the sum so certified shall not thereafter be available for
expenditure for any other purpose until the obligation of the government agency concerned under the
contract is fully extinguished.
Section 87. Void contract and liability of officer. Any contract entered into contrary to the requirements
of the two immediately preceding sections shall be void, and the officer or officers entering into the
contract shall be liable to the government or other contracting party for any consequent damage to the
same extent as if the transaction had been wholly between private parties.
Section 88. Prohibition against advance payment on government contracts.
1. Except with the prior approval of the President (Prime Minister) the government shall not be
obliged to make an advance payment for services not yet rendered or for supplies and
materials not yet delivered under any contract therefor. No payment, partial or final, shall be
made on any such contract except upon a certification by the head of the agency concerned to
the effect that the services or supplies and materials have been rendered or delivered in
accordance with the terms of the contract and have been duly inspected and accepted.
2. Notwithstanding the foregoing paragraph, any government agency, with the approval of the
proper department head, may furnish supplies and materials to any party who has a contract
with that agency if the supplies and materials are needed in the performance of the services
being contracted for and the value thereof does not exceed in any one month ten percent of
the value of the services already rendered due and unsettled as computed by the agency
concerned.
Section 89. Limitations on cash advance. No cash advance shall be given unless for a legally
authorized specific purpose. A cash advance shall be reported on and liquidated as soon as the
purpose for which it was given has been served. No additional cash advance shall be allowed to any
official or employee unless the previous cash advance given to him is first settled or a proper
accounting thereof is made.
Section 90. Payment of rewards. When a reward becomes payable by authority of law for information
given relative to any offense or for any act done in connection with the apprehension of the offender, the
reward shall, in the absence of special provisions, be paid in such manner as shall be prescribed by
executive order. The final determination by the proper administrative authority pursuant to law or any
such order, as to whether or not the persons concerned are entitled to any reward and the amount
thereof, shall be conclusive upon the executive agencies concerned as regards the liability of the
government.
Section 91. Payments to creditors. Payments to creditors shall be made only upon the specific approval
of the head of the agency concerned or his duly authorized representative, or if there be no such officer,
upon the approval of the department head endorsed upon the warrant or check or voucher effecting the
payment.
Section 92. Persons authorized to draw warrants or checks for payment out of government funds.
1. Warrants upon the National Treasury or checks draw against duly authorized bank accounts
shall be drawn by the agency head having control of the appropriation or fund against which
the warrants or checks are chargeable, or by such subordinate officer as shall be designated
for that duty by the said agency head, who shall all be duly deputized for the purpose by the
Treasurer of the Philippines. Copies of the designation shall be furnished the Treasurer of the
Philippines and the representative of the Commission. Notice shall likewise be given to the
Treasurer of the Philippines and the Commission when the designation is revoked. No
member of the accounting unit or the internal control unit of the agency may be designated to
perform the duty.
2. Warrants chargeable to national appropriations or funds not under the control of an agency
shall be drawn by such officer as shall be specified by law, or, in the absence of that officer, by
an officer designated by the President (Prime Minister).
Section 93. To whom warrants or checks payable. Warrants chargeable to revenue or trust funds of the
national government or checks drawn against the Treasury Checking Account for Agencies maintained
with any government depository shall be made payable either directly to the creditor to whom the
money is due or to a disbursing officer for official disbursement.
Section 94. Countersigning of warrants or checks by auditors. No warrant or check shall be paid by the
Treasurer of the Philippines, local treasurer, or any government depository unless it is countersigned by
a duly authorized official of the Commission. When in the opinion of the Commission, the interest of the
service so requires the warrant or check may be paid without the countersignature under such rules and
regulations as it may prescribe from time to time.
Section 95. Treasurer's responsibility for indorsements. The Treasurer of the Philippines shall, within
three years from the date of payment by him, be responsible for the indorsements on all warrants and
checks and shall retain them in his custody, after which they shall be disposed of under pertinent
regulations: Provided, that they are not needed for pending civil, criminal or administrative proceedings.
Section 96. Payment of lost or fraudulently encashed treasury warrants or checks. When any check or
warrant is lost, stolen or destroyed, the issuing officer may issue a duplicate check or warrant which
shall be paid under regulations of the Commission in regard to issuance and payment and upon the
execution of a bond to indemnify the issuing agency in such amount and with such security as the
Commission may require.
Treasury Warrant or check encashed under forged or fraudulent indorsement shall be replaced by the
Treasurer of the Philippines even before the recovery of the equivalent amount under rules and
regulations that the Commission and the Department (Ministry) of Finance shall prescribe.
The Clearing or Payment of Treasury warrant and check paid by bank or other holder in due course and
subsequently lost may be allowed under regulations of the Commission and the Department (Ministry)
of Finance.
Section 97. Disposition of stale warrants or checks.
1. A Treasury warrant or check which remains outstanding after two years from date of its
issue shall not be paid by the Treasurer of the Philippines or by any duly authorized
depository. The issuing agency shall take up in its books of accounts the amount of this
warrant or check as surplus adjustment of the fund against which it was previously charged.
Upon presentation of a stale warrant or check, the issuing agency shall cancel it and issue to
the payee a substitute warrant or check in lieu thereof.
2. Such sum as may be necessary to meet the obligation arising out of the issuance of
substitute warrants or checks chargeable against the general fund shall be charged to the
current year's General Appropriations law, subject to pertinent budget rules and regulations.
Substitute warrants or checks payable from funds other than the general fund shall be paid
from the appropriate funds.
Section 98. Reversion of unliquidated balances of accounts payable. The Commission upon notice to
the head of agency concerned may revert to the unappropriated surplus of the general fund of the
national government, any unliquidated balance of accounts payable in the books of the national
government, which has been outstanding for two years or more and against which no actual claim,
administrative or judicial, has been filed or which is not covered by perfected contracts on record. This
section shall not apply to unliquidated balances of accounts payable in trust funds as long as the
purposes for which the funds were created have not been accomplished.
Section 99. Transfer of unexpended balances to the general fund. The Commission may transfer at any
time, from moneys appropriated for a specific purpose, to the unappropriated general fund any surplus
balance standing to the credit of any appropriation or fund when the officer having administrative control
thereof certifies to the Commission that there is a surplus in excess of the requirements, or that the
work or purpose for which the appropriation was made has been completed, indefinitely postponed or
abandoned, and that there is no outstanding obligation to be paid therefrom.
Section 100. Reports of disbursing officers in a government agency. Disbursing officers in any
government agency shall render monthly reports of their transactions pursuant to regulations of the
Commission to be submitted not later than the fifth day of the ensuing month to the auditor concerned
who shall conduct the necessary examination and audit within thirty days from receipt thereof.
CHAPTER 5
ACCOUNTABILITY AND RESPONSIBILITY FOR GOVERNMENT FUNDS AND PROPERTY.
Section 101. Accountable officers; bond requirement.
 1. Every officer of any government agency whose duties permit or require the possession or
custody of government funds or property shall be accountable therefor and for the safekeeping
thereof in conformity with law.
2. Every accountable officer shall be properly bonded in accordance with law.
Section 102. Primary and secondary responsibility.
1. The head of any agency of the government is immediately and primarily responsible for all
government funds and property pertaining to his agency.
2. Persons entrusted with the possession or custody of the funds or property under the agency
head shall be immediately responsible to him, without prejudice to the liability of either party to
the government.
Section 103. General liability for unlawful expenditures. Expenditures of government funds or uses of
government property in violation of law or regulations shall be a personal liability of the official or
employee found to be directly responsible therefor.
Section 104. Records and reports required by primarily responsible officers. The head of any agency or
instrumentality of the national government or any government-owned or controlled corporation and any
other self-governing board or commission of the government shall exercise the diligence of a good
father of a family in supervising accountable officers under his control to prevent the incurrence of loss
of government funds or property, otherwise he shall be jointly and solidarily liable with the person
primarily accountable therefore. The treasurer of the local government unit shall likewise exercise the
same degree of supervision over accountable officers under his supervision otherwise, he shall be
jointly and solidarily liable with them for the loss of government funds or property under their control.
Section 105. Measure of liability of accountable officers.
1. Every officer accountable for government property shall be liable for its money value in case
of improper or unauthorized used or misapplication thereof, by himself or any person for
whose acts he may be responsible. He shall likewise be liable for all losses, damages, or
deterioration occasioned by negligence in the keeping or use of the property whether or not it
be at the time in his actual custody.
2. Every officer accountable for government funds shall be liable for all losses resulting from
the unlawful deposit, use, or application thereof and for all losses attributable to negligence in
the keeping of the funds.
Section 106. Liability for acts done by direction of superior officer. No accountable officer shall be
relieved from liability by reason of his having acted under the direction of a superior officer in paying out,
applying, or disposing of the funds or property with which he is chargeable, unless prior to that act, he
notified the superior officer in writing of the illegality of the payment, application, or disposition. The
officer directing any illegal payment or disposition of the funds or property shall be primarily liable for the
loss, while the accountable officer who fails to serve the required notice shall be secondarily liable.
Section 107. Time and mode of rendering account. In the absence of specific provision of law, all
accountable officers shall render their accounts, submit their vouchers, and make deposits of money
collected or held by them at such times and in such manner as shall be prescribed in the regulations of
the Commission.
Section 108. Prohibition against pecuniary interest. No accountable or responsible officer shall be
pecuniary interested, directly or indirectly, in any contract or transaction of the agency in which he is
such an officer.
TITLE III
GOVERNMENT ACCOUNTING
CHAPTER 1
BASIC PRINCIPLES AND OBJECTIVES
Section 109. Definition. Government accounting encompasses the processes of analyzing, recording,
classifying, summarizing and communicating all transactions involving the receipt and disposition of
government funds and property, and interpreting the results thereof.
Section 110. Objectives of government accounting. Government accounting shall aim to
1. produce information concerning past operations and present conditions;
2. provide a basis for guidance for future operations;
3. provide for control of the acts of public bodies and officers in the receipt, disposition and
utilization of funds and property; and
4. report on the financial position and the results of operations of government agencies for the
information of all persons concerned.
CHAPTER 2
ACCOUNTS AND ACCOUNTING
Section 111. Keeping of accounts.
1. The accounts of an agency shall be kept in such detail as is necessary to meet the needs of
the agency and at the same time be adequate to furnish the information needed by fiscal or
control agencies of the government.
2. The highest standards of honesty, objectivity and consistency shall be observed in the
keeping of accounts to safeguard against inaccurate or misleading information.
Section 112. Recording of financial transaction. Each government agency shall record its financial
transactions and operations conformity with generally accepted accounting principles and in accordance
with pertinent laws and regulations.
Section 113. Chart of accounts. The chart of accounts for government agencies shall be prescribed by
the Commission and shall be so designed as to permit agency heads to review their activities according
to selected areas of responsibility; allow for a clearer definition of obligation accounting leading to more
precise budgetary control; provide for a wider range of analytical information designed for use in
management audit or legislative review; furnish information regarding the production of income and the
investment in capital items which is of value in fiscal and economic planning; enable tighter accounting
control to be exercised over agencies' financial relationship with the Treasury; permit a more simplified
preparation of trial balances and a simpler and more orderly preparation of trial balances and a simpler
and more orderly process of national consolidation and facilitate the application of mechanized
accounting procedures for more effective protection against error and irregularity and yielding
economies in operation.
Section 114. The general ledger.
1. The government accounting system shall be on a double entry basis with a general ledger
in which all financial transactions are recorded.
2. Subsidiary records shall be kept where necessary.
Section 115. Terminology and classification. A common terminology and classification shall be used
consistently throughout the budget, the accounts and the financial reports.
Section 116. Accounts classification. To permit effective budgetary control and to establish uniformity in
financial reports, accounts shall be classified in balanced fund groups. The group for each fund shall
include all accounts necessary to set forth its operations and condition. All financial statements shall
follow this classification.
Section 117. Budgetary control accounts. The general accounting system shall include budgetary
control accounts for revenues, expenditures and debt, as provided by P.D. No. 1177.
Section 118. Accounting for unrealized revenues. Estimated revenues which remain unrealized at the
close of the fiscal year shall not be booked or credited to the unappropriated surplus or any other
account.
Section 119. Accounting for obligations and expenditures. All lawful expenditures and obligations
incurred during the year shall be taken up in the accounts of that year.
CHAPTER 3
ACCOUNTING REPORTS
Section 120. Reporting requirements. The Commission shall issue the pertinent accounting rules and
regulations whenever the reporting requirements to be prescribed by the Budgetary Commission
pursuant to the budget law affect accounting functions of the various agencies of the government.
Section 121. Financial reports and statements.
1. The financial reports prepared by the agencies shall comply with the specific requirements
of applicable laws and regulations as to nature, accounting basic, content, frequency, and
distribution as well as with all applicable restrictions pertaining to information that is classified
for national security purposes.
2. The financial statements shall be based on official accounting records kept in accordance
with law and the generally accepted accounting principles and standards.
Section 122. Submission of reports. Whenever deemed necessary in the exigencies of the service, the
Commission may under regulations issued by it require the agency heads, chief accountants, budget
officers, cashiers, disbursing officers, administrative or personnel officers, and other responsible officials
of the various agencies to submit trial balances, physical inventory reports, current plantilla of
personnel, and such other reports as may be necessary for the exercise of its functions.
(2) Failure on the part of the officials concerned to submit the documents and reports
mentioned herein shall automatically cause the suspension of payment of their salaries until
they shall have complied with the requirements of the Commission.
(3) No appropriation authorized in the General Appropriations Act shall be available to pay the
salary or any official or employee who violates the provisions of this section, without prejudice
to any disciplinary action that may be instituted against such official or employee.
CHAPTER 4
INTERNAL CONTROL SYSTEMS
Section 123. Definition of internal control. Internal control is the plan of organization and all the
coordinate methods and measures adopted within an organization or agency to safeguard its assets,
check the accuracy any reliability of its accounting data, and encourage adherence to prescribed
managerial policies.
Section 124. Installation. It shall be the direct responsibility of the agency head to install, implement,
and monitor a sound system of internal control.
TITLE IV
FINAL PROVISIONS
Section 125. Transitory provisions.
 1. Until such time as the Commission shall have been fully constituted, the incumbent Section 1. Complaint against Government. Subject to the provisions of this Act, the
Chairman or his successor shall continue to exercise all the power and functions properly Government of the Philippine Islands hereby consents and submits to be sued upon any
appertaining to the Commission. moneyed claim involving liability arising from contract, expressed or implied, which could serve
as a basis of civil action between private parties.
2. Pending implementation of the provisions of Section 24, paragraph 2 of this Code, the
agencies concerned shall continue to provide the necessary amounts for the salaries, Sec. 2. A person desiring to avail himself of the privilege herein conferred must show that he
allowances and other benefits for the representative and staff of the Commission. has presented his claim to the Insular Auditor 1 and that the latter did not decide the same
within two months from the date of its presentation.
Section 126. Duty to respect the Commission's independence. It shall be the duty of every person to
respect, protect and preserve the independence of the Commission. Sec. 3. Venue. Original actions brought pursuant to the authority conferred in this Act shall
be instituted in the Court of First Instance of the City of Manila or of the province were the
claimant resides, at the option of the latter, upon which court exclusive original jurisdiction is
Section 127. Administrative disciplinary action. Subject to rules and regulations as may be approved by
hereby conferred to hear and determine such actions.
the President (Prime Minister), any unjustified failure by the public officer concerned to comply with any
requirement imposed in this Code shall constitute neglect of duty and shall be a ground for
Sec. 4. Actions instituted as aforesaid shall be governed by the same rules of procedure, both
administrative disciplinary action against the said public officer who, upon being found guilty thereof
original and appellate, as if the litigants were private parties.
after hearing, shall be meted out such penalty as is commensurate with the degree of his guilt in
accordance with the Civil Service Law. Repeated unjustified failure to comply with the requirements
Sec. 5. When the Government of the Philippine Island is plaintiff in an action instituted in any
imposed in this Code shall be conclusive proof that the public officer concerned is notoriously
court of original jurisdiction, the defendant shall have the right to assert therein, by way of set-
undesirable.
off or counterclaim in a similar action between private parties.
Section 128. Penal provision. Any violation of the provisions of Sections 67, 68, 89, 106, and 108 of Sec. 6. Process in actions brought against the Government of the Philippine Islands pursuant to
this Code or any regulation issued by the Commission implementing these sections, shall be punished the authority granted in this Act shall be served upon the Attorney-General 2 whose duty it shall
by a fine not exceeding one thousand pesos or by imprisonment not exceeding six (6) months, or both be to appear and make defense, either himself or through delegates.
such fine and imprisonment in the discretion of the court.
Sec. 7. Execution. No execution shall issue upon any judgment rendered by any court against
Section 129. Separately clause. Should any provision of this Code or any part thereof be declared the Government of the Philippine Islands under the provisions of this Act; but a copy thereof
invalid, the other provisions, so far as they are separable from the invalid one, shall remain in force and duly certified by the clerk of the Court in which judgment is rendered shall be transmitted by
effect. such clerk to the Governor-General, 3 within five days after the same becomes final.

Section 130. Repealing clause. Chapter 26 (Accounting Law) of Act 2711 is hereby repealed. All other Sec. 8. Transmittal of Decision. The Governor-General, 4 at the commencement of each
laws, executive orders, proclamations, decrees, instructions, rules and regulations, or parts thereof regular session of the Legislature, 5 shall transmit to that body for appropriate action all
which are inconsistent or in conflict with any provision of this Code shall be deemed repealed or decisions so received by him, and if said body determine that payment should be made, it shall
modified accordingly. appropriate the sum which the Government has been sentenced to pay, including the same in
the appropriations for the ensuing year.
Section 131. Effectivity clause. This Code shall take effect three months after the completion of its
publication in the Official Gazette. Sec. 9. This Act shall take effect on its approval.

Done in the City of Manila, this 11th day of June, in the year of Our Lord, nineteen hundred and Approved: March 16, 1923.
seventy-eight.

Art. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
ACT NO. 3083
AN ACT DEFINING THE CONDITIONS UNDER WHICH THE GOVERNMENT OF THE PHILIPPINE
The father and, in case of his death or incapacity, the mother, are responsible for the damages caused
ISLANDS MAY BE SUED
by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their
authority and live in their company.
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry.
The State is responsible in like manner when it acts through a special agent; but not when the damage
has been caused by the official to whom the task done properly pertains, in which case what is provided
in Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by
their pupils and students or apprentices, so long as they remain in their custody.
The responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damage. (1903a)
RA 6735 AN ACT PROVIDING FOR A SYSTEM OF INITIATIVE AND REFERENDUM AND
APPROPRIATING FUNDS THEREFOR
I. General Provisions
Sec. 1. Title. This Act shall be known as "The Initiative and Referendum Act."
Sec. 2. Statement of Policy. The power of the people under a system of initiative and referendum to
directly propose, enact, approve or reject, in whole or in part, the Constitution, laws, ordinances, or
resolutions passed by any legislative body upon compliance with the requirements of this Act is hereby
affirmed, recognized and guaranteed.
Sec. 3. Definition of Terms. For purposes of this Act, the following terms shall mean:
(a) "Initiative" is the power of the people to propose amendments to the Constitutions or to propose
and enact legislations through an election called for the purpose.
There are three (3) systems of initiative, namely:
a.1 Initiative on the Constitution which refers to a petition proposing amendments to the Constitution;
a.2 Initiative on statutes which refers to a petition proposing to enact a national legislation; and
a.3. Initiative on local legislation which refers to a petition proposing to enact a regional, provincial, city,
municipal, or barangay law, resolution or ordinance.
(b) "Indirect initiative" is exercise of initiative by the people through a proposition sent to Congress or
the local legislative body for action.
(c) "Referendum" is the power of the electorate to approve or reject a legislation through an election
called for the purpose. It may be of two classes, namely:
c.1. Referendum on statutes which refers to a petition to approve or reject an act or law, or part thereof,
passed by Congress; and
c.2. Referendum on local law which refers to a petition to approve or reject a law, resolution or
ordinance enacted by regional assemblies and local legislative bodies.
(d) "Proposition" is the measure proposed by the voters.
(e) "Plebiscite" is the electoral process by which an initiative on the Constitution is approved or rejected
by the people.
(f) "Petition" is the written instrument containing the proposition and the required number of signatories.
It shall be in a form to be determined by and submitted to the Commission on Elections, hereinafter
referred to as the Commission.
(g) "Local government units" refers to provinces , cities, municipalities and barangays.
(h) "Local legislative bodies" refers to the Sangguniang Panlalawigan, Sangguniang Panlungsod,
Sangguniang Bayan, and Sangguniang Nayon.
(i) "Local executives" refers to the Provincial Governors, City or Municipal Mayors and Punong
Barangay, as the case may be.
Sec. 4. Who may exercise. The power of initiative and referendum may be exercised by all registered
voters of the country, autonomous regions, provinces, cities, municipalities and barangays.
Sec. 5. Requirements. (a) To exercise the power of initiative or referendum, at least ten per centum
(10%) of the total number of the registered voters, of which every legislative district is represented by at
least three per centum (3%) of the registered voters thereof, shall sign a petition for the purpose and
register the same with the Commission.
(b) A petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of
the total number of registered voters as signatories, of which every legislative district must be
represented by at least three per centum (3%) of the registered voters therein. Initiative on the
Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and
only once every five (5) years thereafter.
(c) The petition shall state the following:
c.1. contents or text of the proposed law sought to be enacted, approved or rejected, amended or Sec. 9. Effectivity of Initiative or Referendum Proposition. (a) the Proposition of the enactment,
repealed, as the case may be; approval, amendment or rejection of a national law shall be submitted to and approved by a majority of
c.2. the proposition; the votes cast by all the registered voters of the Philippines.
c.3. the reason or reasons therefor;
c.4. that it is not one of the exceptions provided herein; If, as certified to by the Commission, the proposition is approved by a majority of the votes cast, the
c.5. signatures of the petitioners or registered voters; and national law proposed for enactment, approval, or amendment shall become effective fifteen (15) days
c.6. an abstract or summary in not more than one hundred (100) words which shall be legibly written or following completion of its publication in the Official Gazette or in a newspaper of general circulation in
printed at the top of every page of the petition. the Philippines. If, as certified by the Commission, the proposition to reject a national law is approved by
(d) A referendum or initiative affecting a law, resolution or ordinance passed by the legislative assembly a majority of the votes cast, the said national law shall be deemed repealed and the repeal shall
of an autonomous region, province or city is deemed validly initiated if the petition thereof is signed by become effective fifteen (15) days following the completion of publication of the proposition and the
at least ten per centum (10%) of the registered voters in the province or city, of which every legislative certification by the Commission in the Official Gazette or in newspaper of general circulation in the
district must be represented by at least three per centum (3%) of the registered voters therein; Philippines.
Provided, however, That if the province or city is composed only of one (1) legislative district, then at
least each municipality in a province or each barangay in a city should be represented by at least three However, if the majority vote is not obtained, the national law sought to be rejected or amended shall
per centum (3%) of the registered voters therein. remain in full force and effect.

(e) A referendum of initiative on an ordinance passed in a municipality shall be deemed validly initiated
if the petition therefor is signed by at least ten per centum (10%) of the registered voters in the
municipality, of which every barangay is represented by at least three per centum (3%) of the registered
voters therein.
(f) A referendum or initiative on a barangay resolution or ordinance is deemed validly initiated if signed
by at least ten per centum (10%) of the registered voters in said barangay.
Sec. 6. Special Registration. The Commission on Election shall set a special registration day at least
three (3) weeks before a scheduled initiative or referendum.
Sec. 7. Verification of Signatures. The Election Registrar shall verify the signatures on the basis of
the registry list of voters, voters' affidavits and voters identification cards used in the immediately
preceding election.
II. National Initiative and Referendum
Sec. 8. Conduct and Date of Initiative or Referendum. The Commission shall call and supervise the
conduct of initiative or referendum.
Within a period of thirty (30) days from receipt of the petition, the Commission shall, upon determining
the sufficiency of the petition, publish the same in Filipino and English at least twice in newspapers of
general and local circulation and set the date of the initiative or referendum which shall not be earlier
than forty-five (45) days but not later than ninety (90) days from the determination by the Commission of
the sufficiency of the petition.
(b) The proposition in an initiative on the Constitution approved by a majority of the votes cast in the
plebiscite shall become effective as to the day of the plebiscite.
(c) A national or local initiative propositions approved by majority of the votes cast in an election called
for the purpose shall become effective fifteen (15) days after certification and proclamation by the
Commission.
Sec. 10. Prohibited Measures. The following cannot be the subject of an initiative or referendum
petition:
(a) No petition embracing more than one (1) subject shall be submitted to the electorate; and
(b) Statutes involving emergency measures, the enactment of which are specifically vested in Congress
by the Constitution, cannot be subject to referendum until ninety (90) days after its effectivity.
Sec. 11. Indirect Initiative. Any duly accredited people's organization, as defined by law, may file a
petition for indirect initiative with the House of Representatives, and other legislative bodies. The
petition shall contain a summary of the chief purposes and contents of the bill that the organization
proposes to be enacted into law by the legislature.
The procedure to be followed on the initiative bill shall be the same as the enactment of any legislative
measure before the House of Representative except that the said initiative bill shall have precedence
over the pending legislative measures on the committee.
Sec. 12. Appeal. The decision of the Commission on the findings of the sufficiency or insufficiency of
the petition for initiative or referendum may be appealed to the Supreme Court within thirty (30) days
from notice thereof.

III. Local initiative and Referendum


Sec. 13. Procedure in Local Initiative. (a) Not less than two thousand (2,000) registered voters in
case of autonomous regions, one thousand (1,000) in case of provinces and cities, one hundred (100)
in case of municipalities, and fifty (50) in case of barangays, may file a petition with the Regional
Assembly or local legislative body, respectively, proposing the adoption, enactment, repeal, or
amendment, of any law, ordinance or resolution.
(b) If no favorable action thereon is made by local legislative body within (30) days from its presentation,
the proponents through their duly authorized and registered representative may invoke their power of
initiative, giving notice thereof to the local legislative body concerned.
(c) The proposition shall be numbered serially starting from one (1). The Secretary of Local Government
or his designated representative shall extend assistance in the formulation of the proposition.
(d) Two or more propositions may be submitted in an initiative.
(e) Proponents shall have one hundred twenty (120) days in case of autonomous regions, ninety (90)
days in case of provinces and cities, sixty (60) days in case of municipalities, and thirty (30) days in
case of barangays, from notice mentioned in subsection (b) hereof to collect the required number of
signatures.
(f) The petition shall be signed before the Election Registrar, or his designated representative, in the
presence of a representative of the proponent, and a representative of the regional assemblies and
local legislative bodies concerned in a public place in the autonomous region or local government unit,
as the case may be. Signature stations may be established in as many places as may be warranted.
(g) Upon the lapse of the period herein provided, the Commission on Elections, through its office in the
local government unit concerned shall certify as to whether or not the required number of signatures
has been obtained. Failure to obtain the required number is a defeat of the proposition.
(h) If the required number of the signatures is obtained, the Commission shall then set a date for the
initiative at which the proposition shall be submitted to the registered voters in the local government unit
concerned for their approval within ninety (90) days from the date of certification by the Commission, as
provided in subsection (g) hereof, in case of autonomous regions, sixty (60) days in case of the
provinces and cities, forty-five (45) days in case of municipalities, and thirty (30) days in case of
barangays. The initiative shall then be held on the date set, after which the results thereof shall be
certified and proclaimed by the Commission on Elections.
Sec. 14. Effectivity of Local Propositions. If the proposition is approved by a majority of the votes
cast, it shall take effect fifteen (15) days after certification by the Commission as if affirmative action
thereon had been made by the local legislative body and local executive concerned. If it fails to obtain
said number of votes, the proposition is considered defeated.
Sec. 15. Limitations on Local Initiatives. (a) The power of local initiative shall not be exercised more
than once a year.
(b) Initiative shall extend only to subjects or matters which are within the legal powers of the local
legislative bodies to enact.
(c) If at any time before the initiative is held, the local legislative body shall adopt in toto the proposition
presented, the initiative shall be canceled. However, those against such action may, if they so desire,
apply for initiative in the manner herein provided.
Sec. 16. Limitations Upon Local Legislative Bodies. Any proposition or ordinance or resolution
approved through the system of initiative and referendum as herein provided shall not be repealed,
modified or amended, by the local legislative body concerned within six (6) months from the date
therefrom, and may be amended, modified or repealed by the local legislative body within (3/4) of all its
members: Provided, however, that in case of barangays, the period shall be in (1) year after the
expiration of the first six (6) months.
Sec. 17. Local Referendum. Notwithstanding the provisions of Section 4 hereof, any local legislative
body may submit to the registered voters of autonomous region, provinces, cities, municipalities and
barangays for the approval or rejection, any ordinance or resolution duly enacted or approved.
Said referendum shall be held under the control and direction of the Commission within sixty (60) days
in case of provinces and cities, forty-five (45) days in case of municipalities and thirty (30) days in case
of barangays.
The Commission shall certify and proclaim the results of the said referendum.
Sec. 18. Authority of Courts. Nothing in this Act shall prevent or preclude the proper courts from
declaring null and void any proposition approved pursuant to this Act for violation of the Constitution or
want of capacity of the local legislative body to enact the said measure.
IV. Final Provisions
Sec. 19. Applicability of the Omnibus Election Code. The Omnibus Election Code and other election
laws, not inconsistent with the provisions of this Act, shall apply to all initiatives and referenda.
Sec. 20. Rules and Regulations. The Commission is hereby empowered to promulgate such rules and
regulations as may be necessary to carry out the purposes of this Act.
Sec. 21. Appropriations. The amount necessary to defray the cost of the initial implementation of this
Act shall be charged against the Contingent Fund in the General Appropriations Act of the current year.
Thereafter, such sums as may be necessary for the full implementation of this Act shall be included in
the annual General Appropriations Act.
Sec. 22. Separability Clause. If any part or provision of this Act is held invalid or unconstitutional, the
other parts or provisions thereof shall remain valid and effective.
Sec. 23. Effectivity. This Act shall take effect fifteen (15) days after its publication in a newspaper of
general circulation.
Approved, August 4, 1989.
RA 7941 AN ACT PROVIDING FOR THE ELECTION OF PARTY-LIST REPRESENTATIVES
THROUGH THE PARTY-LIST SYSTEM, AND APPROPRIATING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 1. Title. - This Act shall be known as the "Party-List System Act".
Section 2. Declaration of Policy. - The State shall promote proportional representation in the election
of representatives to the House of Representatives through a party-list system of registered national,
regional and sectoral parties or organizations or coalitions thereof, which will enable Filipino citizens
belonging to the marginalized and underrepresented sectors, organizations and parties, and who lack
well-defined political constituencies but who could contribute to the formulation and enactment of
appropriate legislation that will benefit the nation as a whole, to become members of the House of
Representatives. Towards this end, the State shall develop and guarantee a full, free and open party
system in order to attain the broadest possible representation of party, sectoral or group interests in the
House of Representatives by enhancing their chances to compete for and win seats in the legislature,
and shall provide the simplest scheme possible.
Section 3. Definition of Terms. -
a. The party-list system is a mechanism of proportional representation in the election of
representatives to the House of Representatives from national, regional and sectoral parties or
organizations or coalitions thereof registered with the Commission on Elections (COMELEC).
Component parties or organizations of a coalition may participate independently provided the
coalition of which they form part does not participate in the party-list system.
b. A party means either a political party or a sectoral party or a coalition of parties.
c. A political party refers to an organized group of citizens advocating an ideology or platform,
principles and policies for the general conduct of government and which, as the most
immediate means of securing their adoption, regularly nominates and supports certain of its
leaders and members as candidates for public office.
d. It is a national party when its constituency is spread over the geographical territory of at least a
majority of the regions. It is a regional party when its constituency is spread over the
geographical territory of at least a majority of the cities and provinces comprising the region.
e. A sectoral party refers to an organized group of citizens belonging to any of the sectors
enumerated in Section 5 hereof whose principal advocacy pertains to the special interests and
concerns of their sector.
f. A sectoral organization refers to a group of citizens or a coalition of groups of citizens who
share similar physical attributes or characteristics, employment, interest or concerns.
g. A coalition refers to an aggrupation of duly registered national, regional, sectoral parties or
organizations for political and/or election purposes.
Section 4. Manifestation to Participate in the Party-List System. - Any party, organization, or
coalition already registered with the Commission need not register anew. However, such party,
organization or coalition shall file with the Commission, not later than ninety (90) days before the
election, a manifestation of its desire to participate in the party-list system.
Section 5. Registration. - Any organized group of persons may register as a party, organization or
coalition for purposes of the party-list system by filing with the COMELEC not later than ninety (90) days
before the election a petition verified by its president or secretary stating its desire to participate in the
party-list system as a national, regional or sectoral party or organization or a coalition of such parties or
organizations, attaching thereto its constitution, by-laws, platform or program of government, list of
officers, coalition agreement and other relevant information as the COMELEC may require: provided,
that the sectors shall include labor, peasant, fisherfolk, urban poor, indigenous cultural communities,
elderly, handicapped, women, youth, veterans, overseas workers, and professionals.
The COMELEC shall publish the petition in at least two (2) national newspapers of general circulation.
The COMELEC shall, after due notice and hearing, resolve the petition within fifteen (15) days from the
date it was submitted for decision but in no case not later than sixty (60) days before election.
Section 6. Removal and/or Cancellation of Registration. - The COMELEC may motu proprio or upon
verified complaint of any interested party, remove or cancel, after due notice and hearing, the
registration of any national, regional or sectoral party, organization or coalition on any of the following
grounds:
1. It is a religious sect or denomination, organization or association organized for religious
purposes;
2. It advocates violence or unlawful means to seek its goal;
3. It is a foreign party or organization;
4. It is receiving support from any foreign government, foreign political party, foundation,
organization, whether directly or through any of its officers or members or indirectly through
third parties for partisan election purposes;
 5. It violates or fails to comply with laws, rules or regulations relating to elections;
6. It declares untruthful statements in its petition;
7. It has ceased to exist for at least one (1) year; or
8. It fails to participate in the last two (2) preceding elections or fails to obtain at least two
percentum (2%) of the votes cast under the party-list system in the two (2) preceding elections
for the constituency in which it has registered.
Section 7. Certified List of Registered Parties. - The COMELEC shall, not later than sixty (60) days
before election, prepare a certified list of national, regional, or sectoral parties, organizations or
coalitions which have applied or who have manifested their desire to participate under the party-list
system and distribute copies thereof to all precincts for posting in the polling places on election day. The
names of the party-list nominees shall not be shown on the certified list.
Section 8. Nominations of Party-List Representatives. - Each registered party, organization or
coalition shall submit to the COMELEC not later than forty-five (45) days before the election a list of
names, not less than five (5) from which party-list representatives shall be chosen in case it obtains the
required number of votes.
A person may be nominated in one (1) list only. Only persons who have given their consent in writing
may be named in the list. The list shall not include any candidate for any elective office or person who
has lost his bid for an elective office in the immediately preceding election. No change of names or
alteration of the order of nominees shall be allowed after the same shall have been submitted to the
COMELEC except in cases where the nominee dies, or withdraws in writing, his nomination, becomes
incapacitated in which case the name of the substitutes nominee shall be placed last in the list.
Incumbent sectoral representatives in the House of Representatives who are nominated in the party-list
system shall not be considered resigned.
Section 9. Qualification of Party-List Nominees. - No person shall be nominated as party-list
representative unless he is a natural born citizen of the Philippines, a registered voter, a resident of the
Philippines for a period of not less than one (1) year immediately preceding the day of the election, able
to read and write, bona fide member of the party or organization which he seeks to represent for at least
ninety (90) days preceding the day of the election, and is at least twenty-five (25) years of age on the
day of the election. In case of a nominee of the youth sector, he must at least be twenty-five (25) but not
more than thirty (30) years of age on the day of the election. Any youth sectoral representative who
attains the age of thirty during his term shall be allowed to continue until the expiration of his term.
Section 10. Manner of Voting. - Every voter shall be entitled to two (2) votes. The first is a vote for
candidate for member of the House of Representatives in his legislative district, and the second, a vote
for the party, organization, or coalition he wants represented in the House of Representatives: provided,
that a vote cast for a party, sectoral organization, or coalition not entitled to be voted for shall not be
counted: provided, finally that the first election under the party-list system shall be held in May 1998.
The COMELEC shall undertake the necessary information campaign for purposes of educating the
electorate on the matter of the party-list system.
Section 11. Number of Party-List Representatives. - The party-list representatives shall constitute
twenty percentum (20%) of the total number of the members of the House of Representatives including
those under the party-list. For purposes of the May 1998 elections, the first five (5) major political parties
on the basis of party representation in the House of Representatives at the start of the Tenth Congress
of the Philippines shall not be entitled to participate in the party-list system. In determining the allocation
of seats for the second vote, the following procedure shall be observed: The parties, organizations, and
coalitions shall be ranked from the highest to the lowest based on the number of votes garnered during
the elections. The parties, organizations, and coalitions receiving at least two percent (2%) of the total
votes cast for the party-list system shall be entitled to one seat each: provided, that those garnering
more than two percent (2%) of the votes shall be entitled to additional seats in proportion to their total
number of votes: provided, finally, that each party, organization, or coalition shall be entitled to not more
than three (3) seats.
Section 12. Procedure in Allocating Seats for Party-List Representatives. - The COMELEC shall
tally all the votes for the parties, organizations, or coalitions on a nationwide basis, rank them according
to the number of votes received and allocate party-list representatives proportionately according to the
percentage of votes obtained by each party, organization, or coalition as against the total nationwide
votes cast for the party-list system.
Section 13. How Party-List Representatives are Chosen. - Party-list representatives shall be
proclaimed by the COMELEC based on the list of names submitted by the respective parties,
organizations, or coalitions to the COMELEC according to their ranking in the said list.
Section 14. Term of Office. - Party-list representatives shall be elected for a term of three (3) years
which shall begin, unless otherwise provided by law, at noon on the thirtieth day of June next following
their election. No party-list representatives shall serve for more than three (3) consecutive terms.
Voluntary renunciation of the office for any length of time shall not be considered as an interruption in
the continuity of his service for the full term for which he was elected.
Section 15. Change of Affiliation Effect. - Any elected party-list representative who changes his
political party or sectoral affiliation during his term of office shall forfeit his seat: provided, that if he
changes his political party or sectoral affiliation within six (6) months before an election, he shall not be
eligible for nomination as party-list representative under his new party or organization.
Section 16. Vacancy. - In case of vacancy in seats reserved for party-list representatives, the vacancy
shall be automatically filled by the next representative from the list of nominees in the order submitted to
the COMELEC by the same party, organization, or coalition, who shall serve for the unexpired term. If
the list is exhausted, the party, organization, or coalition concerned shall submit additional nominees.
Section 17. Rights of Party-List Representatives. - Party-list representatives shall be entitled to the
same salaries and emoluments as regular members of the House of Representatives.
Section 18. Rules and Regulations. - The COMELEC shall promulgate the necessary rules and
regulations as may be necessary to carry out the purpose of this Act.

Section 19. Appropriations. - The amount necessary for the implementation of this Act shall be
provided in the regular appropriations for the Commission on Elections starting fiscal year 1996 under
the General Appropriations Act. Starting 1995, the COMELEC is hereby authorized to utilize savings
and other available funds for purposes of its information campaign on the party-list system.

Section 20. Separability Clause. - If any part of this Act is held invalid or unconstitutional, the other
parts or provisions thereof shall remain valid and effective.

Section 21. Repealing Clause. - All laws, decrees, executive orders, rules and regulations, or parts
thereof, inconsistent with the provisions of this Act are hereby repealed.

Section 22. Effectivity. - This Act shall take effect fifteen (15) days after its publication in a newspaper
of general circulation.

Approved: March 3, 1995