(September 2006)


Estimates on the size and economic value of the NGO sector:

See below.

Different types of NGOs that exist:

As defined and allowed under existing laws of the Philippines. Please see definitions below.

Legal definition(s) of the different types of NGOs that exist:

Corporation Code, Sec. 87. Definition. - For the purposes of this Code, a non-stock corporation is one
where no part of its income is distributable as dividends to its members, trustees, or officers, subject to the
provisions of this Code on dissolution: Provided, That any profit which a non-stock corporation may obtain
as an incident to its operations shall, whenever necessary or proper, be used for the furtherance of the
purpose or purposes for which the corporation was organized, subject to the provisions of this Title.

The provisions governing stock corporation, when pertinent, shall be applicable to non-stock corporations,
except as may be covered by specific provisions of this Title. (n)

 Sec. 88. Purposes. - Non-stock corporations may be formed or organized for charitable, religious,
educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, like
trade, industry, agricultural and like chambers, or any combination thereof, subject to the special provisions
of this Title governing particular classes of non-stock corporations. (n)

Cooperative Code: Cooperative is a duly registered association of persons, with a common bond of
interest, who have voluntarily joined together to achieve a lawful common social or economic end,
making equitable distributions to the capital required and accepting fair share of the risks and benefits of the
undertaking in accordance with universally accepted cooperative principles.

However, specific laws, charters and rules and regulations of different government agencies further define
or regulate particular NGOs according to activities undertaken. For example: social welfare agencies under
DSWD, peoples’ organizations, under DENR, DILG, and foundations under SEC.

Requirements for creating an NGO:

1. In order for an NGO to be able to do and transact business and thus have a legal personality, it must
secure registration either with the Securities and Exchange Commission (non-stock corporation) or the
Cooperatives Development Authority (cooperative). Licensing requirements apply depending on purposes
and activities, e.g. social welfare agencies (DSWD), environmental NGOs (DENR), labor organizations
(Dept. of Labor), among others; Accreditation by Local Government Units, Accreditation by Philippine
Council for NGO Certification (PCNC) for donee-institutions status.

2. In the Philippines, trusts and donations are covered under specific provisions of the Civil Code. There
are no statistics on whether trusts or endowments have been created in favor of NGOs.

3. Restrictions in the creation of NGOs (i.e. as a legal entity) are provided for under the Corporation Code
and Cooperatives Code, as to authorized capitalization, trustees, term of existence, dissolution, and
liquidation and distribution of assets.

4. Assistance is provided through office help desks (personal) or through phone calls) to answer questions
relative to the registration process. Both also provide on-line assistance through their website. At SEC, on-
line registration can be availed of by the public.


NGOs which are required to register and details of the agencies they must register with
(including contact details):

Registration for legal personality and to be able to do business.

Securities and Exchange Commission (corporations)
Corporate Registration and Monitoring Department
SEC Building, EDSA, Greenhills, Mandaluyong City, Philippines
Tel: +632 727-2011; +632 724 1319 (Office of the Director)

Cooperative Development Authority (cooperatives)
Registration Division
5F Benlor Bldg.
1184 Quezon Avenue, Philippines
Tel: +632 951 7125
Fax: +632 931 3181

Special Licensing Approval – among others

Department of Social Welfare and Development (social welfare agencies)
Batasan Hills, Quezon City, Philippines
Standards Bureau
Tel: +632 951 7125
Fax: +632 931 3181
Website: www.

Department of Environment and Natural Resources (environmental NGOs)
Special Concerns Office
DENR Bldg., Visayas Avenue
Quezon City, Philippines
Tel: +632 927 6336
Fax: +632 929 1857

Certification and Accreditation

Philippine Council for NGO Certification (for donee-institution status)
6F SCC Bldg. CFA-MA Compound
4427 Interior Old Sta. Mesa Road
Sta. Mesa 1016, Manila, Philippines
Tel: +632 715 9594; +632 715 2756
Fax: +632 715 2783

NGOs which may register voluntarily and details of the agencies they can register with
(including contact details:

In a sense, registration with SEC and CDA is voluntary. If they don’t want to, they don’t have to but they
cannot use a corporate or cooperative name to transact business. Such business dealings will have to be
done under an individual’s name.

However, if they do use a corporate or cooperative name, and third party interests are involved, the
unregistered entity will be considered as a corporation or cooperative de facto.

The registration process:

 Information required for registration:

    A. Securities and Exchange Commission:                  Corporation Code: Contents of Articles of

1. The name of the corporation;
2. The specific purpose or purposes for which the corporation is being incorporated. Where a corporation has
more than one stated purpose, the articles of incorporation shall state which is the primary purpose and which
is/are he secondary purpose or purposes: Provided, That a non-stock corporation may not include a purpose
which would change or contradict its nature as such;
3. The place where the principal office of the corporation is to be located, which must be within the Philippines;
4. The term for which the corporation is to exist;
5. The names, nationalities and residences of the incorporators;
6. The number of trustees, which can be more than fifteen (15);
7. The names, nationalities and residences of persons who shall act as trustees until the first regular trustees
are duly elected and qualified in accordance with this Code;
8. If it be a non-stock corporation, the amount of its capital, the names, nationalities and residences of the
contributors and the amount contributed by each; and
10. Such other matters as are not inconsistent with law and which the incorporators may deem necessary and

Contents of By-Laws

1. The time, place and manner of calling and conducting regular or special meetings of the trustees; (*which
can be other than principal place of business as long as specified in By Laws).
2. The time and manner of calling and conducting regular or special meetings of the stockholders or members;
3. The required quorum in meetings of members and the manner of voting therein;
4. The form for proxies of members and the manner of voting them; (*should be expressly provided in the By-
5. The qualifications, duties and compensation of trustees, officers and employees;
6. The time for holding the annual election of trustees and the mode or manner of giving notice thereof;
7. The manner of election or appointment and the term of office of all officers other than trustees
8. The penalties for violation of the by-laws;
9. Such other matters as may be necessary for the proper or convenient transaction of its corporate business
and affairs.

SEC Registration Fees: 1,020.00 = P500.00 for AOI plus 10.00 legal research fee + P500.00 for BL plus
10.00 legal research fee

How long: 24 working hours or 3 working days

Right of appeal: Appeal may be made to the Commission En Banc and thereafter to the Court of Appeals

Penalty: P10,000.00, for late filing and for failure to file required reports, including Audited Financial
Statements, the SEC has Guidelines on Penalties, based of fund balance as of date of actual filing.

    B. Cooperatives Development Authority –Cooperative Code

Information required Upon registration

Section 15: Articles of Cooperation
Section 16: Contents of By Laws
Section 17: Certificate of Registration

Appeal: to the Office of the President

Penalties: Section 124: Penal provisions: Use of the word “cooperative” without approval from CDA has
penalties of imprisonment for one year and/or fins of P1,000.00.


Requirements for governing documents:

SEC registered NGOs: Articles of Incorporation and the By-Laws

Minimum Requirements : as mandated by the Corporation Code ; Qualifications of board of trustees are
provided for; restrictions applicable to stock corporations, where appropriate, apply to Non-stock as well
(imposition of liabilities, conflicts of interest, self-dealing directors).

Additional For the SEC, e.g. The Board of trustees are elected by the members. And the Officers are elected
from among them. However, election of the officers by the members directly is allowed if explicitly stated in
the By-Laws.

Registered NGOs must keep a Membership Book, and register the same with the SEC within 30 days from
issuance of the Certificate of Incorporation. They should also maintain all of the documents submitted to the

CDA registered NGOs: Certificate of registration and By-Laws

Minimum requirements: as mandated under the and Cooperatives Code; Copy of Coop Code, CDA
regulations, AOI and Bylaws, register of members, minutes of GA, board and committee meetings, share
books, financial statements. Policies and guidelines and special operating procedures; Compensation. No
compensation allowed to directors, officers and committee members other than reasonable per diem;
limitations on dealings of the cooperative to its directors, officers and committee members, bond of
accountable officers, avoidance of conflicts of interest, imposition of liabilities on part of directors, officers and
committee members

What responsibilities and/or liabilities are imposed upon governing bodies of NGOs?

SEC registered NGOs: All applicable provisions in the Corporation Code pertaining to stockholders,
trustees, directors and officers. Penal provisions are found in Sec. 144 of the Corporation Code.

    1. Doctrine of corporate entity will not be allowed to be availed of by trustees and officers to avoid liability
       for patently illegal acts
    2. Doctrine of Corporate opportunity ensures that all benefits derived from activities conducted by
       trustees or officers which conflict with the interests of the non-stock corporation accrue to the
    3. Administrative Penalties for corporations up to maximum of P10,000.00, without prejudice to the filing
       of criminal cases, at the discretion of the SEC.

CDA Registered Cooperatives: All applicable provisions in the Cooperative Code pertaining to
directors, officers and members. Penal provisions are found in Section 124.

Regulations relating to payments and distribution of profits:

Profits are to be used in accordance with the requirements of the National internal revenue Code. In general,
and no part of its income is distributable as dividends to its members, trustees, or officers, subject to the
provisions of this Code on dissolution.


Collecting information:

SEC: Corporation Code Sec. 141. Annual report or corporations. - Every corporation, domestic or foreign,
lawfully doing business in the Philippines shall submit to the Securities and Exchange Commission an annual
report of its operations, together with a financial statement of its assets and liabilities, certified by any
independent certified public accountant in appropriate cases, covering the preceding fiscal year and such

    other requirements as the Securities and Exchange Commission may require. Such report shall be submitted
    within such period as may be prescribed by the Securities and Exchange Commission. (n)
    CDA : Cooperative Profiles/Officers, Membership Profiles/Officers, Audited Financial Statements, AOI,
    Bylaws, Policies and Guidelines, Special Operating Procedures, Sources of Funds and Allocations, Share
    books, Others prescribed by law

    DSWD: SEC Certificate of Registration, AOI, Bylaws, Programs and Activities, Sources and Uses of Funds,
    General Information Sheet, Audited Financial Statements, Area /Coverage and Nature of Operation, Target
    Clientele, Networking and alliances

    DENR: Certificate of good community standing from any two of the following:
              Community resolution involving Indigenous Peoples
              Local leaders (e.g. Mayor, Governor)
              Head of religious organizations
              Other network organizations accepted by the NGO Desks concerned

           Accomplished NGO data sheet with organizational set-up
           SEC, CDA or DSWD registration
           Audited financial statements
           Community activities undertaken
           Bio-data of key implementing staff

    PCNC: Upon application and renewal of accreditation:

            Financial Projections for 1 2 years or 2 years Audited Financial Statements
           Articles of Incorporation and By-Laws
           SEC Certificate of Registration
           Affidavit of Modus Operandi
           Minutes of Board meetings
           Table of Organization
           Policy Manual

    Analysis of information:

    SEC: Upon complaint for Violations of the Corporation Code
          Foundations are required to submit certifications from local government officials with respect to
                 the projects for fund raising and beneficiaries.
          The financial statements must show in sufficient detail the break down of the accounts with the proper
              nomenclature and the necessary material disclosure thereto pursuant to accepted standards of

    DSWD        Annually to determine compliance with purposes, as well as sources and uses of funds

    CDA         Cooperatives submit Annual report to the CDA together with Audited Financial Statements and
                general Information Sheet, 60 days after the end of its fiscal year. Technical staff conduct
                evaluation of their financial statements upon submission. The evaluation may include allocation
                and utilization of the cooperatives’ net surplus.

    DENR        Review of the documents cited in Item No. 3 during the application for accreditation and annual

    BIR-PCNC Evaluation for renewal of accreditation by PCNC every year (for new NGOs), 3 years or 5 years,
             (for existing NGOs depending on quality of services as evaluated by PCNC)

 Section 15 (Articles of Cooperation); Article 16 (By-Laws) and Article 17 (Certificate of registration) of the
Cooperative Code

    Making information publicly available:

    SEC     All documents submitted by NGOs and NPOs are made available to the public subject to photocopying
    fees and certification fees.

    DSWD All documents submitted by NGOs and NPOs are made available to the public.

    CDA The cooperative is required to post and/or publish the audited financial statements. CDA also issues a
    Certificate of Operation and Certificate of Good Standing to inform the public and other stakeholders of the
    current status of the cooperative.

    DENR A directory of NGOs formally working on ENR related activities, list of on-going and completed projects
    and basic information.


    Requirements and standards:

    SEC: Annual Reports include General Information Sheet and Audited Financial Statements with stamp of
    receipt of BIR. Generally Accepted Accounting and Auditing standards are required to be adopted. They are
    required to keep Books of Accounts. SEC now required Management responsibility for reports, i.e. any
    misrepresentation in the financial statements will render liable senior management and not just the auditors
    and/or accountants. SEC requires auditors to indicate their Board of Accountancy Number from the
    Professional Regulatory Commission and be updated on PRC requirements.

    For SEC registered NGOs, those with total assets of P500,000.00 or more or with gross receipts of
    P100,000.00 or more, for the fiscal year covered must be duly audited and certified by an independent
    Certified Public Accountant. In other cases where the total assets are less than P500,000.00 or with gross
    receipts of less than P100,000.00, the said financial statements, may instead, be attested and sworn to by the
    Treasurer of the corporation.

    In the case of CDA, cooperatives adopt the Statements of Financial Accounting Standards (SFAS). However,
    in cases where there are differences between the CDA regulations and SFAS, the option to limit prescribed by
    CDA shall be adopted by cooperatives. Cooperatives engaging in credit services are also required to adopt
    with the Standard Chart of Accounts for Credit Cooperatives and its corresponding Performance Standards

    Cooperatives are subject to Standard Audit System for Cooperatives (SASC). As mandated under Article
    81 of RA 6938, all cooperatives shall be annually subjected to a financial audit by an external and independent
    auditor duly accredited and recognized by the Authority.

    Analysis of information:

    SEC     The financial statements must show in sufficient detail the break down of the accounts with the proper
            nomenclature and the necessary material disclosure thereto pursuant to accepted standards of

    DSWD Annually to determine compliance with purposes, as well as sources and uses of funds

    CDA     Cooperatives submit Annual report to the CDA together with Audited Financial Statements and
            general Information Sheet, 60 days after the end of its fiscal year. Technical staff conduct evaluation
            of their financial statements upon submission. The evaluation may include allocation and utilization of
            the cooperatives’ net surplus.

  COOP – PESOS – a tool to determine Performance Standards of Cooperatives with Credit Services as to
compliance to administrative requirements and on Financial Performance (C-Compliance with legal and
administrative requirement, O –Organizational Structure & Linkages, O – Operation & Management, P-Plans &
Programs , P-Portfolio Quality, E- Efficiency, S- Stability, O- Operations, S- Structure of Assets)

    DENR Review of the documents cited in Item No. 3 during the application for accreditation and annual
         renewal. Evaluation for renewal of accreditation by PCNC every year (for new NGOs), 3 years or 5
         years, (for existing NGOs depending on quality of services as evaluated by PCNC)


    Regulatory intervention:
    Each of the registering authorities (SEC , CDA, DSWD) have inherent powers under their respective charters
    to investigate complaints of wrongdoings to or by NGOs. SEC has powers of subpoena duces tecum
    (documents) and ad testificandum (witnesses).
                                               4       5
    Each of the registering authorities (SEC , CDA, DSWD) have inherent powers under their respective charters
    ranging from filing of criminal complaints and imposing administrative and civil sanctions, including fines and
    cancellation or revocation of registration and/or accreditation.

 Presidential Decree 902-A, as amended: Sec. 6. In order to effectively exercise such jurisdiction, the Commission
shall possess the following powers:
(a) To issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has
jurisdiction, and in which cases the pertinent provisions of the Rules of Court shall apply;
(b) To punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent provisions of,
and penalties prescribed by, the Rules of Court;
(c) To compel the officers of any corporation or association registered by it to call meetings of stockholders or
members thereof under its supervision;
(d) To pass upon the validity of the issuance and use of proxies and voting trust agreements for absent stockholders or
(e) To issue subpoena duces tecum and summon witnesses to appear in any proceedings of the Commission and in
appropriate cases order search and seizure or cause the search and seizure of all documents, papers, files and records as
well as books of accounts of any entity or person under investigation as may be necessary for the proper disposition of
the cases before it;
(f) To impose fines and/or penalties for violation of this Decree or any other laws being implemented by the
Commission, the pertinent rules and regulations, its orders, decisions and/or rulings;
(g) To authorize the establishment and operation of stock exchanges, commodity exchanges and such other similar
organization and to supervise and regulate the same; including the authority to determine their number, size and
location, in the light of national or regional requirements for such activities with the view to promote, conserve or
rationalize investment;
   (h) To pass upon, refuse or deny, after consultation with the Board of Investments, Department of Industry, National
   Economic and Development Authority or any other appropriate government agency, the application for registration
   of any corporation, partnership or association or any form of organization falling within its jurisdiction, if their
   establishment, organization or operation will not be consistent with the declared national economic policies.
   (i) To suspend, or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations,
   partnerships or associations, upon any of the grounds provided by law, including the following:
   [1] Fraud in procuring its certificate of registration;
   [2] Serious misrepresentation as to what the corporation can do or is doing to the great prejudice of or damage to the
   general public;
   [3] Refusal to comply or defiance of any lawful order of the Commission restraining commission of acts which
   would amount to a grave violation of its franchise;
   [4] Continuous in operation for a period of at least five (5) years;
   [5] Failure to file by-laws within the required period;
   [6] Failure to file required reports in appropriate forms as determined by the Commission within the prescribed
   (j) To exercise such other powers as implied, necessary or incidental to the carrying out the express powers granted
   to the Commission or to achieve the objectives and purposes of this Decree.
      Corporation Code Sec. 144. Violations of the Code. - Violations of any of the provisions of this Code or its
    amendments not otherwise specifically penalized therein shall be punished by a fine of not less than one thousand
    (P1,000.00) pesos but not more than ten thousand (P10,000.00) pesos or by imprisonment for not less than thirty

Right of appeal:

   1. Appeal to the Commission En Banc, thereafter to the Court of Appeals
   2. Funds from dissolution accrue to a similar organization or to government, as stated in the By-Laws. If
      it is not provided for in the By-Laws, a plan of distribution can be adopted after dissolution by the
      Board of Trustees.

  1. Appeal to the Office of the President.
  2. Funds from dissolution are conveyed to trustees, members, creditors and other persons in interest
     (section 70, Cooperative Code)

(30) days but not more than five (5) years, or both, in the discretion of the court. If the violation is committed by a
corporation, the same may, after notice and hearing, be dissolved in appropriate proceedings before the Securities
and Exchange Commission: Provided, That such dissolution shall not preclude the institution of appropriate action
against the director, trustee or officer of the corporation responsible for said violation: Provided, further, That
nothing in this section shall be construed to repeal the other causes for dissolution of a corporation provided in this
  Section 124, Cooperative Code provides for criminal and civil penalties for violations enumerated under said


     Tax exemptions:
     NIRC for Qualified Donee Non-Stock, Non-Profit corporations,/NGO institutions :

                Donations, contributions or gifts actually paid or made within the taxable year to accredited
                non-stock, non-profit corporations shall be allowed limited deductibility in an amount not in
                excess of 10% for an individual donor, and 5% for a corporate donor, of the donor’s income
                derived from trade, business or profession as computed without the benefit of this

     CDA Code, Sec. 61 state that duly registered cooperatives which do not transact business with non-
     members or the general public shall not be subject to any government taxes or fees under the Internal
     Revenue Laws and other tax laws. Sec. 62 provides that cooperatives transacting business with both
     members and non-members shall not be subject to tax on their transactions with members. Other tax
     exemptions are provided under Sec. 62.


     SEC:       NGOs can trade where such is necessary or incidental to their purposes and objectives. The profits
                 derived from such trading are subject to NIRC requirements: Use of funds: 70%-60% for
                 charitable and social welfare purposes and 30%-40% for administrative purposes

     DSWD         On the assumption that “trading” is similarly used in commercial transactions, Philippine policies
                  on this matter are currently unavailing specially if it deals with operations of non-profit, non-stock
                  corporations with commercial activities as an income generating source. For tax purposes, those
                  may be regulated as income tax subject to prevailing tax rates provided by law.

     CDA          Coops are social organizations and are also business enterprises. Whenever applicable, trading
                  is not restricted with cooperatives.

     DENR         Forest, mining, wildlife and environmental laws apply in the harvesting, processing and trading of
                  products from the natural resource base.


     PD 1564 is known as the Solicitation Permit Law. DSWD has issued Administrative Order No. 79, Series of
     2003 – Omnibus Rules and Regulations on Public Solicitations:

        a. Sworn application form – name, address, telephone, fax, email address, head of organization,
           number of years operation, registration/permit no. and date of issuance, specific objectives of the
           organization, information on the proposed national fund raising campaign, list of authorized solicitors
           (if applicable). Written commitment of applicant and/or officers who assume full responsibility for
           total funds granted.

        b. Certificate of registration including AOI and Bylaws

   Section 101, NIRC: Gifts in favor of an educational and/or charitable, religious, cultural or social welfare
 corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research
 institution or organization: Provided, however, That not more than thirty percent (30%) of said gifts shall be used by
 such donee for administration purposes. For the purpose of the exemption, a 'non-profit educational and/or
 charitable corporation, institution, accredited nongovernment organization, trust or philanthropic organization and/or
 research institution or organization' is a school, college or university and/or charitable corporation, accredited
 nongovernment organization, trust or philanthropic organization and/or research institution or organization,
 incorporated as a nonstock entity, paying no dividends, governed by trustees who receive no compensation, and
 devoting all its income, whether students' fees or gifts, donation, subsidies or other forms of philanthropy, to the
 accomplishment and promotion of the purposes enumerated in its Articles of Incorporation.

    c.   List of current members of governing board certified by corporate secretary, with place of business
         and current residence address of each member

    d. Approved resolution to conduct fund-raising campaign with pledge that 70% shall be spent for
       proposed project and 30% for administration expenses.

    e. Other requirements depending on:

             i)       methods of solicitation – tickets, ballots cards and similar forms, coin banks and other
                     similar methods, photo exhibits, written solicitations, text messages, others using
                     electronic devices as email, media campaign, newspaper and billboard ads
             ii)     eligibility of applicants
             iii)    territorial requirements

    f.   Evaluation and assessment by DSWD within 5 working days upon receipt

    g. approval of Authority to Solicit by Secretary, which is non-transferable

    h. authority may be renewed with requirement to submit financial report of proceeds and expenditures
       of previous fund campaign including list of beneficiaries and audited by certified public accountant.

    i.   DSWD has a monitoring procedure requiring submission of quarterly reports from date of issuance
         of authority

    j.   Violations are punished by imprisonment of not more than 1 year or a fine of not more than
         P1,000.00 or both.

CDA imposes a 20% of the share capital of the cooperatives as the individual share limitation.

Funds from Foreign Sources:

    a.    If money is sent via bank to bank transactions, application by banks of Customer Identification
         Requirements and Customer Due Diligence under RA 9160, as amended (AMLA) re sources of
         funds, which banks are required to obtain from client-NGOs

    b. Reportorial requirements by registering and licensing authorities re Sources and Uses of Funds
       which NGOs must declare

What assistance, advice or guidance is provided to NGOs to assist them in meeting
regulations relating to income?

SEC      The NGOs are free to seek advice and guidance from local and international sources. The SEC
         provides advice or guidance to the NGOs on framing their AOIs specifically with respect to the
         purpose/s. It also provides resource speakers for trainings and seminars conducted by the NGO
         upon request through the training institute of the SEC – the Philsec.

DSWD DSWD has initiated the creation of the Area-Based Standards Network (ABSNET) all throughout the
     Philippines. The members of ABSNET are NGOs duly recognized by the DSWD and operating
     within the Philippine territory. ABSNET was created for consolidation of services which may also
     create a venue where administrative programs and technical issues on NGO operation are
     addressed not only by the DSWD but by the members of the network as well.
CDA Cooperatives can freely seek advice to the Cooperative Federation and Union which they are
     affiliated, and to other government agencies that has cooperative programs.

DENR Through networking and direct working relationship with other organizations and communities


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