9.2 Prohibited Acts, Gifts, Conflict of Interest, Divestment, and SALN Compliance

Private interests, gifts, and sworn disclosure

This supplemental lesson distinguishes four related obligations in Republic Act No. 6713: avoiding prohibited transactions, refusing improper benefits, removing conflicts of interest, and disclosing assets and interests. They are not interchangeable. Filing a SALN does not authorize a prohibited transaction, and refusing a gift does not remove a conflicting ownership interest. The CSC qualifying-test scope does not explicitly name this statute as a separate tested topic.

Financial interest and outside activities

Section 7(a) prohibits a direct or indirect financial or material interest in a transaction requiring the approval of the official's office. An officer whose office approves a procurement cannot treat a shareholding in the supplier as harmless merely because a colleague signs the final approval. Identify the office's role, the financial interest, and the transaction before deciding whether the prohibition applies.

Section 7(b) prohibits specified ownership, control, management, or employment in a private enterprise regulated, supervised, or licensed by the official's office, unless expressly allowed by law. Private professional practice requires constitutional or legal authorization and must not conflict or tend to conflict with official functions. The statute also bars recommending a person for a position in a private enterprise with a regular or pending official transaction with the office. An internal permission slip cannot by itself override a statutory prohibition.

The Section 7(b) restrictions continue for one year after resignation, retirement, or separation, with an exception for private professional practice: the former official may practice generally, but may not practice in connection with a matter before the former office during that year. This is narrower than an invented ban on representing every client whose business was ever approved during the official's tenure. Other laws or professional rules may impose additional restrictions.

Section 7(c) prohibits using or divulging confidential or classified information officially known by reason of office and not publicly available, to advance private interests, give an undue advantage, or prejudice the public interest. A former official should not assume that separation makes confidential files available for sale or publication. First identify the information's status and the applicable disclosure authority.

Gifts: relationship to official duties matters

Section 7(d) prohibits soliciting or accepting gifts, favors, entertainment, loans, or things of monetary value in the course of official duties or in connection with regulated operations or transactions affected by the office. The definition of a gift excludes an unsolicited item of nominal or insignificant value that is not given in anticipation of, or in exchange for, a favor. “Small” alone is not enough: a nominal benefit offered to influence an approval still presents the prohibited connection.

For foreign-government gifts and grants, the statute records congressional consent to three categories: nominal souvenirs or courtesy gifts; scholarships, fellowships, or medical treatment; and appropriate travel grants for travel entirely outside the Philippines, permitted by the head of the relevant office, branch, or agency. Do not replace these categories with a blanket rule that every foreign gift requires personal presidential approval, or that diplomatic embarrassment automatically authorizes keeping an expensive item.

In a fictional scenario, a vendor offers an officer a hotel stay while its contract awaits approval. Ask who supplies the benefit, what official transaction is pending, and whether an exception actually applies. Decline and report through the applicable procedure; do not assume that labeling the benefit “hospitality” changes its substance. Agency rules can set more stringent standards than the statutory minimum.

Conflict of interest and actual divestment

Section 9 requires avoiding conflicts at all times. When a conflict arises, it provides for resignation from the relevant private-business position within 30 days from assumption of office and/or divestment of shareholdings or interests within 60 days from assumption. It does not require every public servant to sell every investment without a conflict. Its divestment exception covers service in an honorary capacity, laborers, and casual or temporary workers.

Divestment means completely and actually disposing of the interest to someone other than the official's spouse or relatives as defined in the Act, including relatives within the fourth civil degree of consanguinity or affinity. Moving shares into a spouse's name does not satisfy this standard. Distinguish legal title, actual beneficial interest, resignation from a management role, and disclosure; taking one step may not satisfy the others.

SALN coverage and deadlines

Section 8 requires sworn asset, liability, net-worth, and business-interest disclosure, including the interests of the spouse and unmarried children under 18 living in the household. The stated filing exceptions are those serving in an honorary capacity, laborers, and casual or temporary workers. Do not invent an additional “non-plantilla” condition for those statutory exceptions.

If both spouses are public officials or employees, they may file jointly or separately. Either option does not erase required household disclosures. Follow the current form instructions for values, reporting dates, and the agency submission procedure. CSC's updated 2025 SALN framework, effective 29 September 2025, and the form updated in February 2026 should be consulted rather than using an obsolete downloaded form.

Section 8 allows inspection at reasonable hours and copying after ten working days from filing. That is not a ten-day deadline measured from a request. Statements remain available for ten years after receipt and may then be destroyed unless needed for an ongoing investigation. The Act prohibits uses contrary to morals or public policy and commercial use other than dissemination by news and communications media.

Penalties and careful scenario analysis

Section 11 provides administrative penalties of a fine not exceeding six months' salary, suspension not exceeding one year, or removal depending on gravity, after due notice and hearing. Violations of Sections 7, 8, or 9 may bring imprisonment not exceeding five years, a fine not exceeding PHP 5,000, or both; disqualification is within the competent court's discretion. Do not call these consequences automatic upon an allegation.

For a practice scenario, identify the act, the relevant subsection, any exception, and the stated procedural safeguard. Keep the salary-based administrative fine separate from the criminal fine. This method produces a better answer than assuming every ethics breach has the same penalty.

Sources: RA 6713, Sections 3 and 7–11 and CSC current SALN guidance.