DOJ Opinion No. 047, s. 2000

DOJ OPINION NO. 047 , s. 2000 June 13, 2000 Mr. Thomas G. Aquino Officer-in-Charge Board of Investments 385 Sen. Gil J. Puyat Avenue Makati City Sir : This has reference to your request for confirmation of the view that the Board of Investments (BOI) can, under existing laws, accept donations from private entities in the absence of an express grant of such power in its Charter, Executive Order No. 226, as amended, otherwise known as the Omnibus Investments Code. Corollarily, you ask whether the BOI may donate the donated property to a tax-exempt entity like a non-stock, non-profit organization. cdlex You state that the New Energy and Industrial Technology Development Organization of Japan (NEDO), an instrumentality of the Japanese Government, has expressed its intent to donate a manufacturing facility to the BOI on the condition that the donee will donate such facility to a foundation that is engaged in research and development in the cement industry and which foundation will in turn allow a private entity engaged in the cement industry to use gratuitously such facility over an agreed period of time. You also state that this Department's opinion will provide the legal basis for foreign and domestic entities to donate to the BOI certain assets, including manufacturing facilities, subject to certain conditions, such as that described above. This Department confirms the view that the BOI can accept donations from private entities despite the absence of an express grant of such power in its Charter. Section 12 of the General Provisions of the General Appropriations Act for the Fiscal Year 2000 (Republic Act No. 8760), expressly allows a government agency to accept donations, in cash or in kind, from various sources, under certain conditions. It provides: "SECTION 12. Donations . Departments, bureaus, offices or agencies may accept donations , contributions, grants, bequests or gifts, in cash or in kind, from various sources, domestic or foreign, for purposes relevant to their functions: PROVIDED, That in cases of donations from foreign governments , acceptance thereof shall be subject to the prior clearance and approval of the President of the Philippines upon recommendation of the Secretary of Foreign Affairs : . . . Receipts from donations shall be accounted for in the books of the government in accordance with pertinent accounting and auditing rules and regulations. Such donations, whether in cash or in kind, shall be deemed automatically appropriated for purposes specified by the donor . . . . The agency concerned shall submit to the Department of Budget and Management, the Senate Committee on Finance, the House Committee on Appropriations, and to the Commission on Audit a quarterly report of all donations whether in cash or in kind, as well as expenditures or disbursements of the amount released. xxx xxx xxx" (Emphasis supplied) Pursuant to the aforequoted provisions of law, the BOI, a government agency, can accept donations, in cash or in kind, from various sources, whether domestic or foreign, provided, however, that in cases of donations from foreign governments, acceptance thereof shall be subject to the prior clearance and approval of the President of the Philippines upon recommendation of the Secretary of Foreign Affairs. Since the donor in this case is an instrumentality of the Government of Japan, the donation must first be cleared and approved by the President upon the recommendation of the Secretary of Foreign Affairs. On whether the BOI may donate the donated property to a tax-exempt entity, Sections 47, 48 and 49, Chapter 12, Book I of E.O. No. 292 (Administrative Code of 1987) are relevant: cdll "SECTION 47. Contracts and Conveyances . Contracts or conveyances may be executed for and in behalf of the Government or of any of its branches, subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations, whenever demanded by the exigencies of the service and as long as the same are not prohibited by law." "SECTION 48. Official Authorized to Convey Real property . Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: (1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless the authority therefor is expressly vested by law in another officer. (2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality." "SECTION 49. Authority to Convey other Property . Whenever property other than real is authorized to be conveyed, the contract or deed shall be executed by the head of the agency with the approval of the department head. Where the operations of the agency regularly involve the sale or other disposition of personal property, the deed shall be executed by any officer or employee expressly authorized for that purpose. The term "contracts or conveyances" in Section 47, supra , includes deeds of donation made by, or in favor of, the Government or any of its branches, subdivisions, agencies or instrumentalities, including government-owned or controlled corporations. Based on this provision, the BOI may donate the donated property if demanded by the exigencies of the service and if not prohibited by law. As to the official who shall execute the deed of donation, if real property is involved, it should be the President of the Philippines pursuant to Section 48, paragraph (1), also supra . While the donee is the BOI, the actual recipient and, therefore, owner of the donated property is the Republic of the Philippines. This is because the BOI is an unincorporated agency of the government, and as such, it is a mere extension of the Government of the Republic of the Philippines. The BOI, however, may be authorized by the President to execute the contract for and in behalf of the Republic. In case the donated property consists of property other than real property, the deed of conveyance by way of donation shall be executed by the BOI head as provided for in Section 49, abovequoted The foregoing resolves the question of whether the BOI may donate the donated property. As to whether the BOI may donate the said property to a tax-exempt entity is an issue which should properly be addressed to, and resolved by, the Department of Finance. Please be guided accordingly. cdlex Very truly yours, (SGD.) ARTEMIO G. TUQUERO Acting Secretary