On May 7, President Ferdinand R. Marcos, Jr. signed Executive Order (EO) No. 117, Series of 2026, streamlining the accreditation system for Donee Institutions, and designating the Department of Social Welfare and Development (DSWD) as the sole accrediting entity for social welfare and development agencies (SWDAs).
The order amends EO No. 720 (2008) and effectively removes the Philippine Council for NGO Certification (PCNC) from the accreditation chain for SWDAs, which are non-stock, non-profit organizations that provide social welfare and development programs and services to vulnerable Filipinos.
Under the new policy, the DSWD’s Certificate of Registration and Accreditation will now be recognized by the Bureau of Internal Revenue (BIR) as sufficient basis to grant SWDAs donee-institution status, which entitles donors to tax deductions and exemptions under the National Internal Revenue Code.
WHAT IS PCNC?
PCNC is a private, voluntary, non-stock, non-profit corporation established on Jan. 29, 1997, by six of the country’s largest national NGO networks (Association of Foundations, CODE-NGO, the League of Corporate Foundations, and Philippine Business for Social Progress). It was born out of the NGO community’s response to government concerns about accountability, following the rapid proliferation of NGOs in the post-EDSA era.
The PCNC was formally designated by the Department of Finance (DoF) as the sole accrediting body for donee-institutions through a 1998 Memorandum of Agreement, a role later reinforced by EO No. 720 in 2008. Its core mandate was to certify that non-profit organizations meet minimum standards for financial management and accountability. It uses a peer-review model staffed by volunteer evaluators; these are professionals from civil society assessing their own sector. For nearly three decades, the PCNC served as the gateway through which SWDAs gained BIR recognition as donee-institutions.
WHY THE CHANGE?
Prior to EO No. 117, SWDAs were required to obtain accreditation from both the DSWD (for regulatory compliance) and the PCNC (as a prerequisite for BIR registration to achieve donee-institution status).
This dual-accreditation requirement made document submission more tedious, as both the DSWD and the PCNC had to verify the legitimacy of registering agencies and prevent fly-by-night organizations. While these safeguards reinforced accountability, they also contributed to longer processing times and increased administrative complexity.
The EO cites Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, as its legal basis — underscoring the government’s broader policy direction to simplify procedures, reduce red tape, and improve the delivery of public services.
MAIN BENEFITS AND DRAWBACKS
As we welcome any move to ease the bureaucratic challenges of NGOs, it is important to examine the main benefits as well as the potential drawbacks of this recent reform.
1. Reduced bureaucratic burden
SWDAs now deal with a single accrediting body, cutting down on time, paperwork, and administrative costs. This is particularly significant for small, grassroots organizations that have historically struggled with compliance overhead.
2. Cost efficient
The removal of the PCNC accreditation fee frees up funds that organizations can redirect toward program implementation and direct service delivery — a clear win for communities they serve.
3. Simplified process aligned with law
The EO operationalizes the Ease of Doing Business Act within the social welfare sector. A streamlined pathway may also encourage more legitimate organizations to formalize their operations and seek donee-institution status.
4. Transition protection
Existing SWDAs retain their current donee-institution status until their accreditation expires, preventing disruption to ongoing programs and donor relationships.
POTENTIAL CONCERNS
While at face value, the new EO provides relief to SWDAs, some potential concerns are worth noting.
1. DSWD’s capacity and readiness
The DSWD will now absorb the full accreditation load for all SWDAs, on top of its core mandate of delivering social welfare services. Whether the department has the staffing, systems, and technical capacity to effectively manage this expanded role, without causing delays or backlogs, remains to be seen.
2. Loss of civil society peer review
The PCNC’s strength lies in its peer-review model: NGOs evaluating NGOs. This approach carries a degree of sector credibility and independence. Transferring accreditation entirely to a government body may raise questions among donors, international partners, and other stakeholders about the neutrality and rigor of the process.
Its strict process, often misconstrued as a drawback, is necessary to ensure agencies comply with basic regulatory requirements and to verify that they are properly managed and operated.
3. Potential regulatory conflict of interest
Under EO No. 117, the DSWD acts both as a service provider and as the sole accreditor of organizations that may complement or, at times, even critique government programs. This dual role warrants the need for clear structural safeguards, such as independent oversight mechanisms or functional separation, to preserve credibility and mitigate risks. Additionally, consolidating the accreditation authority under a single government agency may weaken the checks and balances between the public and private sectors. Without adequate oversight mechanisms, this could increase the risk of misuse or abuse of funds — echoing past controversies that highlighted vulnerabilities in the system. Absent third-party certification, the government may consider implementing a more transparent and risk-based post-accreditation monitoring system to maintain public trust in donee organizations.
4. Pending implementing rules
The DoF and BIR have yet to issue the Implementing Rules and Regulations (IRR), leaving SWDAs in a period of uncertainty regarding specific compliance requirements.
While awaiting the issuance of the IRR and before full implementation, it is imperative for the DSWD to invest in institutional capacity-building. This includes hiring additional accreditation staff, improving the reliability of the digitized application and monitoring process, and establishing clear, time-bound processing standards. Equally important is the adoption of a more participatory accreditation framework that incorporates civil society reviewers or an independent technical panel, preserving the spirit of peer accountability long embodied by PCNC, while promoting transparency and maintaining the confidence among SWDAs and their donors.
For its part, the PCNC can view EO No. 117 not as an endpoint, but as an opportunity to redefine its role. Beyond SWDAs, there remains a broader ecosystem of NGOs that can benefit from its expertise. Indeed, the PCNC has already begun repositioning itself as a capacity-building and standards-setting body within the NGO sector. Its nearly three decades of experience in organizational assessment, financial accountability training, and peer evaluation remain invaluable. Moving forward, the PCNC can pivot toward providing technical assistance, pre-accreditation coaching, and sector-level research — functions that complement and support SWDAs, rather than duplicate, the government accreditation process.
Meanwhile, SWDAs should take a proactive approach to the transition. This includes reviewing the validity of their current accreditations and preparing for the eventual compliance under the new framework. Organizations may also continue to seek PCNC certification on a voluntary basis as it serves as a recognized “Seal of Good Housekeeping.” The certification process itself provides added value by encouraging NGOs to strengthen internal controls, align documentation, and enhance their financial and program reporting.
On the other side, donors, including corporations, foundations, and high-net worth individuals must be more prudent in conducting their due diligence, particularly in evaluating the governance and financial practices of the donee organizations. Ensuring that donations are properly substantiated and made to duly accredited institutions remains crucial to managing compliance and reputational risk, particularly when deductions are subject to scrutiny.
EO No. 117 clearly represents an effort to reduce bureaucratic friction for social welfare organizations delivering essential services. The intent is sound. However, as with any reform, the true measure of success lies in its implementation. Streamlining must not come at the expense of accountability.
Ultimately, the success of EO No. 117 will be measured not only by faster processing times, but how it sustains donor confidence, upholds accountability standards, and avoids an increase in compliance issues. As such, while we welcome such reform, stakeholders have the right to demand that the systems put in place are robust, transparent, and firmly grounded in the public interest — ensuring that they truly serve the communities at the heart of this work, and not just as a political move or gain.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
Edwin Padillo is a registered social worker and a Markets senior manager at Isla Lipana & Co., the Philippine member firm of PricewaterhouseCoopers global network. He also works at Isla Lipana & Co. Foundation, Inc.
