Private Security Agency Financial Capacity Act

Sentate Office of the Secretty TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 26 JAN 12 P1:26 First Regular Session RECEIVED BY: SENATE S. No. 1658 Introduced by Senator Raffy T. Tulfo AN ACT INCREASING THE MINIMUM CAPITAL REQUIREMENT FOR PRIVATE SECURITY AGENCIES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 11917, OTHERWISE KNOWN AS THE "PRIVATE SECURITY SERVICES INDUSTRY ACT" EXPLANATORY NOTE Private security agencies play an integral role in maintaining peace and order, as well as protecting life and property. Security guards serve as the first line of defense and foster a sense of security in various environments, such as businesses and hospitals. They are essential in preventing breaches, assisting personnel, and providing immediate help during emergencies to ensure a safe and lawful atmosphere. Despite their vital role, there have been reports of ongoing unfair labor practices in security agencies, including paying below the minimum wage, withholding 13th-month pay, failing to provide mandated benefits such as holiday pay, overtime pay, night differential, rest day pay, and uniform allowances, and charging excessive interest on cash advances due to delayed salaries. Such practices violate labor laws and compromise the welfare of security guards. The minimum capitalization requirement for private security agencies is prescribed by the Philippine National Police (PNP), specifically through its Supervisory Office for Security and Investigation Agencies (SOSIA), and is currently set at One Million Pesos (P1,000,000.00). However, this requirement has become inadequate given the present economic situation, including rising labor costs and statutory benefit obligations. Common

problems among undercapitalized security agencies include delayed payment of wages, non-remittance of mandatory contributions, and abrupt cessation of operations, which negatively affect both security guards and the public. The proposed measure seeks to professionalize the industry, eliminate fly-by-night operators, and ensure adequate protection for security personnel and the public by establishing a statutory minimum paid-up capital of Ten Million Pesos (P10,000,000.00) for private security agencies. This measure also aims to guarantee that, even if clients delay payments, security agencies will still be able to pay their employees on time. It is for this purpose that the approval of this bill is earnestly sought. RAFFY I. TULF

Senate 'Office of the Secetarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 26 JAN 12 P1:26 First Regular Session RECEIVED BY: SENATE. S. No. 1658 Introduced by Senator Raffy T. Tulfo AN ACT INCREASING THE MINIMUM CAPITAL REQUIREMENT FOR PRIVATE SECURITY AGENCIES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 11917, OTHERWISE KNOWN AS THE "PRIVATE SECURITY SERVICES INDUSTRY ACT" Be it enacted by the Senate and the House of Representatives of the Philippines, in Congress assembled:

SECTION 1. Short Title - This Act shall be known as the "Private Security Agency

Financial Capacity Act".

Sec. 2. Section 5 of Republic Act No. 11917 is hereby amended to read as follows:

Section 5. PSA Operator or Licensee. - No applicant shall be granted a license to

operate a PSA unless the applicant possesses the following qualifications: XXX (f) Must be physically and mentally fit, and passed the neuro-psychiatric test and drug test administered by the PNP or other similar government centers and facilities: (G) NO PRIVATE SECURITY AGENCY SHALL BE PERMITTED TO = OBTAIN A LICENSE TO OPERATE UNLESS IT HAS A MINIMUM PAID-UP CAPITAL OF TEN MILLION PESOS (P10,000,000.00),

FULLY SUBSCRIBED AND PAID. THE AFOREMENTIONED SHALL EXCLUDE FIREARMS, AMMUNITION, UNIFORMS, VEHICLES, EQUIPMENT, AND OTHER OPERATIONAL ASSETS. FOR CORPORATIONS, THE CAPITAL REQUIREMENT SHALL BE REFLECTED IN THE ARTICLES OF INCORPORATION AND SUPPORTED BY PROOF OF PAYMENT. FOR SOLE PROPRIETORSHIPS AND PARTNERSHIPS, THE EQUIVALENT NET WORTH SHALL BE SUPPORTED BY AUDITED FINANCIAL STATEMENTS. XXX

Sec. 3. Separability Clause. - If any provision of this Act is subsequently declared

invalid or unconstitutional, the other provisions hereof which are not affected thereby shall remain in full force and effect.

Sec. 4. Repealing Clause. - All other laws, executive orders, rules and regulations, or

parts thereof inconsistent with any provisions hereof are hereby repealed or modified accordingly.

Sec. 5. Effectivity clause. - This Act shall take effect fifteen (15) days after its

publication in two (2) national newspapers of general circulation. Approved,