Difference between revisions of "Philippines NGO Sector"
From NGO Handbook
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==Self-regulation and Tax-Exempt Status of NGOs in the Philippines== | ==Self-regulation and Tax-Exempt Status of NGOs in the Philippines== | ||
| − | The rapid increase in the number of NGOs in the Philippines has raised concerns about the ability of the government to regulate the many organizations and to be sure that they are legitimate and use their resources according to their stated goals and objectives. The Philippine Department of Finance (DOF) challenged the NGO community to establish a mechanism to certify the accountability, legitimacy, and transparency of NGOs. It was further stipulated that only those NGOs that are so certified would receive a status as donee institutions with tax breaks for donors to these institutions. | + | The rapid increase in the number of NGOs in the Philippines has raised concerns about the ability of the government to regulate the many organizations and to be sure that they are legitimate and use their resources according to their stated goals and objectives. The Philippine Department of Finance (DOF) challenged the NGO community to establish a mechanism to certify the accountability, legitimacy, and transparency of NGOs. It was further stipulated that only those NGOs that are so certified would receive a status as donee institutions with tax breaks for donors to these institutions.<ref>Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/background.php PCNC: Background and Rationale</ref> |
| − | In 1998, the Philippine Council for NGO Certification (PCNC) was thus formed for this purpose. It was organized by six of the nation’s largest national networks of NGOs. A Memorandum of Agreement between the DOF and the PCNC authorized the PCNC to certify NGOs applying for donee institution status based on the NGO meeting certain minimum standards for financial management and accountability. Such a certification was the basis for the Bureau of Internal Revenue (BIR) to grant donee institution status. The PCNC also works to promote professionalism, transparency, and accountability among Philippine NGOs. | + | In 1998, the Philippine Council for NGO Certification (PCNC) was thus formed for this purpose. It was organized by six of the nation’s largest national networks of NGOs. A Memorandum of Agreement between the DOF and the PCNC authorized the PCNC to certify NGOs applying for donee institution status based on the NGO meeting certain minimum standards for financial management and accountability. Such a certification was the basis for the Bureau of Internal Revenue (BIR) to grant donee institution status. The PCNC also works to promote professionalism, transparency, and accountability among Philippine NGOs.<ref>Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/background.php PCNC: Background and Rationale</ref> |
| − | The PCNC is one of the few government recognized NGO certification systems in the world. | + | The PCNC is one of the few government recognized NGO certification systems in the world.<ref>Danilo A. Songco. 2006. http://www.hapinternational.org/pool/files/philippines-evolution-of-ngo-accountability-implications.pdf. The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs: A literature review and options paper for the Philippine Council for NGO Certification</ref> |
| − | As of December of 2008, there were 485 NGOs on the PCNC’s certified list of NGOs | + | As of December of 2008, there were 485 NGOs on the PCNC’s certified list of NGOs,<ref>Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/aboutUS.php PCNC: About US</ref> although Songco stated in 2006 that the PCNC has certified 1,000 NGOs in total.<ref>Danilo A. Songco. 2006. http://www.hapinternational.org/pool/files/philippines-evolution-of-ngo-accountability-implications.pdf. The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs: A literature review and options paper for the Philippine Council for NGO Certification</ref> |
Tax-exempt status is given to all entities enumerated under Section 30 of the Philippine Tax Code. This section does not require the NGOs to secure certification from an accrediting body to receive income tax exemption. However, to achieve Donee Institution status, there are some additional qualifications. Donee Institution status allows donations to these institutions to be tax-deductible and/or exempt from donor’s tax. That is, local donors (individuals or corporations) are not only exempt form donor’s tax, but also can deduct the amount they have donated from their taxable income (up to a certain extent). Certification by the PCNC also acts as a “seal of good housekeeping” that prospective donors and funders may consider in their selection of organizations to support. Once an organization has been judged to have met the minimum criteria for certification, the board of the PCNC offers a 3-year or 5-year certification to the organization and informs the Bureau of the Internal Revenue (BIR), which can then issue the organization a Certificate of Registration as Qualified Donor Institution. | Tax-exempt status is given to all entities enumerated under Section 30 of the Philippine Tax Code. This section does not require the NGOs to secure certification from an accrediting body to receive income tax exemption. However, to achieve Donee Institution status, there are some additional qualifications. Donee Institution status allows donations to these institutions to be tax-deductible and/or exempt from donor’s tax. That is, local donors (individuals or corporations) are not only exempt form donor’s tax, but also can deduct the amount they have donated from their taxable income (up to a certain extent). Certification by the PCNC also acts as a “seal of good housekeeping” that prospective donors and funders may consider in their selection of organizations to support. Once an organization has been judged to have met the minimum criteria for certification, the board of the PCNC offers a 3-year or 5-year certification to the organization and informs the Bureau of the Internal Revenue (BIR), which can then issue the organization a Certificate of Registration as Qualified Donor Institution. | ||
Revision as of 11:29, 9 March 2009
Charity and welfare work in the Philippines dates back to the beginning of colonization.[1] The motivation behind Kawanggawa (“charity”) is based on the notion of Pakikipagkapwa, meaning “to holistically interact with others” and Kapwa, meaning “shared inner self.”[2] When charity and volunteer work are carried out, it is implied that there is “an equal status between the provider of assistance and the recipient,” as exemplified by Damayan—the assisting of peers when in crisis—and Pagtutulungan, which means “mutual self-help.”[3]
These conceptions have acted as a backdrop to the successful development of the large number of non-governmental organizations (NGOs) in the country today.
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