Republic of the Philippines
HOUSE OF REPRESENTATIVE:

Quezon City Ss DATE: JUN 3.0 np:
NINETEENTH CONGRESS .. TIME:, LY

First Regular Session

House Bill No._488

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Introduced by Representative Gloria Macapagal Arroyo

AN ACT
STRENGTHENING THE POLITICAL PARTY SYSTEM AND
APPROPRIATING FUNDS THEREFOR

EXPLANATORY NOTE

Political parties play a vital role in the country’s quest for political and
economic development. The political party system in the country is basically confined
personalities rather than issues and political platform. There have been many attempts
to reform the orientation of our political parties in the past so as to veer away from the
concept pf traditional politics, but unfortunately, they have not been successful
because of lack of legal institutional framework to govern the system of political
parties.

Our history tells us that political parties in the Philippines are normally used
only as political vehicles to win an election. Hence, most political aspirants change
political parties for convenience, rather than because of conviction. This only shows
the lack of ideological commitment to the members of a party because they choose
parties based on the rise and fall of the tide of opportunity. "Turncoatism" should
never be encouraged nor tolerated since it only distorts the concept of word of honor
and dignity of a leader.

It is in this light that the Political Party Act should be enacted. It is imperative
that political party system should be strengthened if we want to develop, achieve
political development and democratization. We must enact laws to prevent the system
of ward politics and political chameleons that we have today.

A Party Development Fund shall be created to provide subsidy to political
parties of national character for their operational expenses and party building activities
not only for electoral campaign but also for their development programs. These funds
shall be appropriated in the national budget.

A political party may qualify to receive a portion from the Party Development Fund
if its national candidates garnered at east fifteen percent (15%) of the popular vote in the
most recent general elections.

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For their part, political parties should institute internal control mechanisms
with political par ties to promote accountability and transparency.

The bill also encourages the political parties to raise the funds through Party
Foundation to finance their activities so that they will develop their self-sufficiency
and lessen their dependence on contributions from illegal sources.

The bill envisions changing the norm of having political butterflies during and
after the election period. It aims to give importance to party ideals and policy agenda
rather than the political pragmatism and survival. The bill proposes that any member
of the party wanting to change the party affiliation after being elected on that party's
ticket, should first resign from his elective position and must seek a fresh mandate
from the electorate. Likewise, defecting persons calmot be appointed nor hold any
position in any public office, until after the expiration of the term within which
they were elected.

In general, the proposed bill hopes to transform the Philippine political
parties from personality-oriented to issue-oriented political organizations. Thus,
we can provide our constituents with better brand of party politics.

In view of the urgent need to address the irregularities in the political party
system, the passage of this bill is earnestly sought.

GLORIA MACAPAGAL-ARROYO
Representative,2 District Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES,

NINETEENTH CONGRESS
First Regular Session

House Bill No. 488

Introduced by Representative Gloria Macapagal-Arroyo

AN ACT
STRENGTHENING THE POLITICAL PARTY SYSTEM AND
APPROPRIATING FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in the

Congress assembled:

CHAPTER I
DECLARATION OF POLICY, PURPOSES AND COVERAGE

SECTION 1. Title - This Act shall be known as "The Political Party
Development Act of 2022".

SEC. 2. Declaration of Policy - \t is hereby declared a policy of the State to
institutionalize and strengthen political parties as vital pillars of the country's
democratic system. Towards this end, the State shall institute reforms in
campaign financing through effective and transparent mechanisms designed
to level the playing field among, all candidates and political parties during
elections and reduce opportunities for graft and corruption. As part of the
State's thrust to strengthen the political party system, it shall uphold party
loyalty and adherence to the party's ideological principles, platform and
programs. The State shall also institute measures to professionalize political
parties and make them viable instuments of development and good
governance.

SEC. 3. Purposes. -This Act aims to:

(a) Institutionalize reforms in the financing of electoral campaigns, so as to
promote accountability and transparency;

(b) Provide financial subsidies to political parties, to augment their
expenditures for campaign purposes and for party development;

(©) Promote party loyalty and discipline; and

(d) Encourage and support continuing voter's education and civic literacy


programs through the political parties.

SEC. 4 Coverage. - This Act shall apply to political parties duly registered with
and certified to as such by the Commission on Elections.

SEC. 5, Definition of Terms. - As used in this Act:

a. Accredited political party refers to a political party qualified to receive
subsidy for party development and campaign purposes, accredited forth
is purpose by the Commission on Elections based on a set of criteria

provided for under this Act;

b. Candidate refers to any person aspiring for or seeking an elective public

office, duly nominated by a political party, aggrupation or coal

ion thereof,

and who has filed a certificate of candidacy with the Commission on

Elections;

¢. Commission refers to the Commission on Elections;

d. Campaign contribution refers to any form of donation to any candidate,
political party, aggrupation or coalition thereof given before, during or after
the holding of elections. It includes any gift, donation, subscription, loan ,
advance or deposit of money or anything of value, or those arising from
a contract, pledge or agreement to contribute , made for the purpose of
influencing the results of the election s, but s hall not include services
rendered without compensation by individuals volunteering a portion or

ail of their time in behalf of a candidate or pol
the use of office space, facili

ical party. It also includes
ies, equipment, office supplies and other

materials and fixtures voluntarily donated by other persons or who allowed
their use for free; the monetary value of which shall be assessed based on

market rates prevailing in a particular area;

©. Campaign expenditure refers to any type of expense incurred, regardless of
source, amount and purpose, that relates directly or indirectly, to the con
duct of an electoral campaign. It includes all payments of money or
anything of value, or a contract, promise or agreement to spend, for the
purpose of influencing the results of the elections It includes the use of
office s pace and facilities personally owned by the candidate, the monetary
value of which shall be assessed based on the market rates prevailing, in a

particular area;

f. COA refers to the Commission on Audit;

8. Disclosure requirement refers to the duty of all candidates and political

parties, aggrupation or co:

ion s thereof to reveal the details of campaign

contributions received by them and the expenditures made on account
thereof. For accredited political parties, it includes expenditures and
destinations of party development and campaign monies given to them as

their share in the State Subsidy Fund established under this Act;


h. Donor refers to any person, natural or juridical, who contributes money,
Property or any other form of material contribution to a candidate, political
Party, aggrupation or coalition thereof;

i. Donee refers to any candidate, political party, or coalition thereof or any
representative acting on their behalf or interest, to whom money, property,
or any other form of contributions were made;

Fund refers to the State Subsidy Fund established under this Act;

k. Member of a party refers to a natural person of good standing in a political
party who complies with the requirements of party membership, including the
payment of membership dues;

|. National political party refers to a political party or any organized group
of persons duly registered with the Commission whose constituency is effectively
spread across the geographical territory of all or a majority of the administrative regions
of the Philippines, pursuing or advocating platform, principles and policies for the
general conduct of government and which, as the most immediate means of securing
their adoption and implementation, regularly nominates and supports its members as
candidates for public office;

m. Political opportunism refers to any act of a party member constituting disloyalty
to the party or regular non-adherence to the party's ideological principles, platform and
programs, as determined by the party in accordance with its constitution and by-laws;

n, Political party refers to a political party, party-list or an organized group of persons
duly registered with the Commission, pursuing or advocating platform, principles and
Policies for the general conduct of government and which nominates and supports its
members as candidates for public office;

0. Political turncoatism refers to the change of political party affiliation by a party
member a period of one year before or after any national elections. Any party member
may legitimately change party affiliation only on the second year of a three-year term.
Provided, that political turncoatism shall not apply in any of the following instances:

1. Abolition, merger or coalition of political parties where a candidate is a
registered member thereof; and

2. Expulsion of the elected official in writing from one's political party:
Provided, that the cause for such does not constitute political opportunism;

Pp. State Subsidy Fund refers to the fund for party development and campaign
activities of accredited political parties under this Act;

4. Voluntary contributions refer to the contributions to candidates of political
parties, aggrupation or coalitions thereof from persons, natural or juridical, allowed
under existing laws.


CHAPTER IL
INSTITUTIONALIZATION OF POLITICAL PARTIES

SEC. 6, Registration as a Political Party. - Any organized group of persons
seeking registration as a political party may file with the Commission a
verified petition attaching thereto its constitution and by-laws , platform ,
principles , policies and general program of government, a verified list of its
national officials, members of the executive board, or its equivalent, and the heads
of its regional, provincial and city chapters, and such other relevant information
as may be required by the Commission.

The Commission shall, after due notice and hearing, resolve the petition
within thirty (30) days from the date it is submitted for decision.

Political parties already registered as such with the Commission
prior to the effectivity of this Act are not required to register anew but are
required to submit their intent to continue participating in elections within
a period of six (6) months after the enactment of this law.

Once a political party is registered with the Commission it shall acquire
legal personality with powers essential and necessary to carry out its mandate
and obligation under this law and other related electoral laws. This power shall
include the power to enter into contracts, to acquire properties through
purchase, lease, and other modes of acquisitions, to open bank accounts under
its name, and to employ staff and personnel in relation to its campaign and
party development activities.

SEC. 7, Policy Agenda and Program of Governance. - Political parties are
mandated to craft a clear policy agenda and program of governance
consistent with party philosophy and ideals. The members of the political
party shall endeavor to act in accordance with the defined party platform
and pursue programs to fulfill party commitments.

SEC. 8, Membership in a Political Party. - A person becomes a member of a
political party upon application duly signed, filed and approved by the party,
and upon compliance with the basic membership requirements of the party,
including the regular payment of membership dues.

SEC. 9, Selection of Candidates. - The selection process for candidates of
political parties shall be democratized through the adoption of a process that
is fair, open and transparent.

Every political party is mandated to formulate a system on the
nomination and selection of candidates, in which all party members are
involved. Every political party shall submit to the Commission its rules
governing the system on the nomination and selection of candidates not later
than one hundred eighty (180) days before the election day following the
effectivity of this Act.


Any aggrieved member of an accredited political party may file a verified
complaint to its Grievance and Arbitration Committee not later than ten (10)
days after the party convention, for violation of the rules governing the system
‘on the nomination and selection of candidates. The aggrieved party has the
right to appeal to the Commission. Upon finding of a violation of the system,
the Commission shall revert the grievance to the concerned political party. If the
political party does not comply with the order of the Commission, the said
party shall be disqualified from participating in the elections.

Every political party must hold conventions to nominate their official
candidates not earlier than fifteen (15) days before the filing of candidacy and
shall submit to the Commission not later than the start of the election period of
the names of the officials of the party authorized to nominate their official
candidates.

No political party shall nominate more candidates than the number of
persons required to be voted for in an elective position nor shall any candidate
be allowed to accept nominations from more than one (I) registered political
party, except in cases of aggrupation or coalitions thereof. Nominations made
in violation hereof shall be denied due course by the Commission and the
candidates concerned shall be considered independent candidates. The
nominations of candidates of political parties shall be filed not later than the
last day for filing of the certificates of candidacy as determined by the
Commission.

SEC. 10. Contents of Certificate of Nomination. - The certificate of
nomination shall state that the person issuing the nomination is the duly
authorized representative of the political party as provided for in. its
Constitution and By-Laws; that the person named therein is the official
candidate of the party for the elective position stated; and that he has
accepted the said nomination. The certificate of nomination shall be
subscribed under oath by the duly authorized representative of the political
party.

SEC. 11. Limits on Voluntary Contributions. - Voluntary contributions to any
political party shall be limited to the following maximum amounts:

(@) Up to One Million Pesos (P1,000,000.00) from a natural person and
up to Ten Million Pesos (P10,000,000.00) from a juridical person can make
a voluntary contribution under existing laws; and

(b) Any contribution in cash or in kind to any political party fiom
campaign purposes,
duly reported to the Commission in accordance with Section 13 of Republic
Act No. 7166, otherwise known as "The Synchronized National and Local
Elections Act" shall be exempt from the donor's tax.

No foreign national or entity shall be allowed to give contributions to


any political party.

SEC. 12. Voluntary Contributions to Party. — Voluntary contributions to
a political party shall be deposited by the contributor to the account of the
party with any reputable bank by any reputable bank accredited by the
commission at any time but not later than fifteen (15) days before the day of
the election. The accredited banks shall issue a corresponding receipt to the
contributor on the amount deposited and shall submit to the Commissi
statement of account of every political party with deposits.

The Commission shall cause the publication of the account of all
political parties in any newspaper of general circulation within a reasonable
time ag it may determine.

SEC. 13. Penalties for Political Turncoatism. - Political turncoats shall be
deemed to have forfeited their elective office if they change their political party
affiliation one (1) year before and one (1) year after any national elections. The
following penalties shall thus be imposed on persons found to have committed
this violation:

(a) Disqualification from running for any elective position in the next
succeeding election immediately following the act of changing political
party affiliation;

(b) Disqualification from being appointed or from holding any position in
any public or government office for three (3) years after the expiration of the
current term/office;

(©)Disqualification from assuming any executive or administrative
position in the new political party; and

(@ Refund of any and all amounts received from one's former political party,
plus a twenty-five percent (25%) surcharge thereon.

Sec. 14. Petition for Disqualification. - Any citizen of voting age or any candidate,
political party, aggrupation or coalition thereof may file with the Commission,
upon the filing of the certificate of candidacy and before proclamation, a petition
to disqualify a candidate on the ground of political turncoatism as defined in this
Act.

SEC. 15. Authorized Expenses of Political Parties and Candidates. - The
amount that a political party and a candidate may spend for every election
campaign shall be Twenty Pesos (P20.00) for every voter currently registered
in the constituency or constituencies of candidacy. The Commission shall
adjust the authorized amount based on the consumer price index (CPI) every
three (3) years following the effectivity of this Act.


CHAPTER I
STATE SUBSIDY FUND

SEC. 16. Establishment of a State Subsidy Fund. - There is hereby
established a State Subsidy Fund which shall be used to augment the
operating funds of the accredited political parties. The fund shall be used
directly and exclusively for the following purposes:

a. Party development;

b. Campaign expenditures, and

c. Information dissemination and monitoring activities of the
Commission

SEC. 17. Allowable Party Development Activities. - Due to the vital role
played by the political parties in the country's political development and in
order to promote professionalism and accountability among members of the
parties, the following party development activities shall be allowed to be
funded out of the State Subsidy Fund:

Party administration, recruitment and civic education;
Research and policy development;

Education and training of members;

Institution building and constitution building and constituent
outreach program; and

€. Other reasonable logistical and operational expenses that are

essential in strengthening the party.

poop

SEC.18. Allowable Campaign Expenditures. - The accredited political
parties are authorized to use the subsidy given to them only for the following
campaign activities:
a. Operating expenses of the party which may include the hiring of
personnel, professional secretariat, setting up of headquarters and
other relevant electoral expenditures;

b. Traveling expenses of the candidates and support personnel in the
course of the campaigns and for personal expenses incident thereto;

¢. Information dissemination and advocacy campaigns of the political
party;

4. Production and distribution of electoral paraphernalia and other
propaganda materials; and

e. Other expenditures as allowed under Section 102 on Lawful
Expenditures of the Omnibus Election Code.

SEC. 19. Accreditation. - A political party eligible in accordance with


Section 20 hereof, and which desires to be entitled to the rights and privileges
as recipient of the subsidy provided for under this Act, may apply for
accreditation by the Commission, under such rules and regulations as the
Commission shall prescribe, consistent with the provisions of this Act.

SEC. 20. Criteria for Eli . - The Commission shall accredit political
parties eligible to receive subsidy from the State Subsidy Fund based on the
following general criteria:

(@) Political representation, consisting of the incumbent Pre-members of
Congress, Governors and City Mayors;

(b) Organizational strength and mobilization capability, which may include
the number of political chapters, organizations nationwide and number of
permanent members of the party paying their dues; and

(©) Performance and track record of the party, which may include its
performance in the past elections and its ability to field candida les in the coming
elections.

SEC. 21. Effects of Accreditation. - A duly accredited political party shall be
entitled to the rights and privileges accorded under this Act. Likewise, the
accredited political party shall be subject to the regulations set forth in this Act
and its implementing rules as prescribed by the Commission.

SEC. 22, Distribution of the Fund. - The total amount of the State Subsidy
Fund released annually shall be distributed as follows:

(a) Five percent (5%) of the fund shall accrue to the Commission, to be
used exclusively for monitoring purposes and the conduct of information
dissemination campaigns and voters’ education;

(b)Thirty percent (30%) of the fund shall be proportionately and_ratably
distributed to accredited political parties represented in the Senate based on
the number of seats obtained in the most recent general elections; and

(©) Sixty-five percent (65%) of the fund shall be proportionately and
ratably distributed to accredited political parties represented in the House
of representatives based on the number of seats obtained in the most
recent general elections.

The share of each of the accredited political parties in the State Subsidy
Fund shall be released only upon proof that the concerned party has raised an
amount equal to its share in the fund from membership dues and voluntary
contributions : Provided, That the party concerned that fails to raise an
amount equal to its share in the fund shall only receive an amount equal to
the amount raised from membership dues and voluntary contributions:
Provided, further, That the balance, if any, from the share in the fund of the
party concerned shall be forfeited and reverted to the Genera | Fund of the
government.



SEC. 23. Schedule of Releases from the Fund. ~ For purposes of this Act, all
releases from the State Subsidy Fund during a non -election year shall be used
exclusively for party development activities. Funds released during an election
year shall be divided as follows: seventy-five percent (75%) shall be used for
campaign expenditures, and twenty-five percent (25%) for party development
activities. The Commission shall inform the accredited political pa r ties of the
schedule of releases as well as the amount of the subsidy allocated at the start
ofevery fiscal year.

SEC. 24. Management of the Subsidy. The accredited political parties
availing of the subsidy shall maintain a separate financial account for the
funds used to finance campaign activities and party development,
respectively.

Every accredited political party shall submit to the Commission a
detailed program of activities as well as the breakdown of expenditures drawn
from the fund by the end of December of every fiscal year. No accredited
political party shall be allowed to use the subsidy for purposes other than those
indicated in this Act.

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CHAPTER IV
DISCLOSURES AND PERFORMANCE MONITORING

SEC. 25. Audit of the State Subsidy Fund. - The COA shall examine the
financial reports of the accredited political partieson their use of the State
Subsidy Fund Membership dues and voluntary contributions to any accredited
political party shall be accounted for separately under a different set of books
of accounts, which shall be open to inspection by the COA.

SEC. 26. Party Ethics. - Accredited political parties shall institute internal
control mechanisms to promote accountability and transparency.
Accredited political parties shall likewise develop and enforce an internal
code of conduct and ethical standards for its party members to uphold the
values and standards of public life, and to formulate and implement
disciplinary procedures for party members: Provided , That the said
program for internal controls, ethical standards and disciplinary
procedures shall be duly submitted to the Commission and made available
to the public. No political party shall select and nominate a candidate who
has been convicted by final judgment for any criminal offense.

SEC, 27. Full Disclosure. - The officials of every accredited political party
shall submit a sworn statement of their assets and liabilities to the Commission
which shall be made available to the public at least six (6) months before
elections. All accredited political parties and their candidates shall also be
required to submit to the Commission and make a public disclosure of all
contributions as well as expenditures incurred for the use of the State Subsidy


Fund thirty (30) days after the elections. All these disclosures shall be made
through the official website of the Commission and published in a newspaper
of general circulation.

SEC. 28. Other Reports. - The following shall be reported by the
accredited political parties and their candidates:

a. The amount of contributions for the elections, the date of receipt
by the bank or by the duly authorized representative of the party
and the full name and exact address of the person, whether natural
or juridical, from whom the contribution was received;

b. A full report of expenditures and receipts incurred during the
campaign, including those which were drawn from the State Subsidy
Fund, if any;

c. Post-election disclosure statements as required under existing
laws, which must be submitted to the Commission within thirty
(30) days after election day. Late submissions shall be penalized
with a fine in such amounts as may be determined by the
Commission; and

d. Detailed breakdown of expenditures for the party development
activities charged against the State Subsidy Fund. The financial
report covering the party development activities shall be
submitted annually, at the end of every fiscal year. The subsidy
for the succeeding year will not be released without the
submission of the said report covering the preceding year.

SEC. 29. Failure to Comply with Disclosure and Reporting Requirements.
Failure of the accredited political party to comply with the provisions of this
Act will result in its disqualification from receiving its share of the State
Subsidy Fund. The said unused funds shall revert to the General Fund of the
National Treasury, and all the rights and privileges to which the party would
have been entitled under this Act shall be forfeited.

SEC. 30. Performance Monitoring and Reporting System. - The
Commission and the COA shall jointly design and implement, in consultation
with political parties, aggrupations or coalitions thereof, accredited citizens’
arms, the private sector and nongovernmental organizations, and government
agencies, an integrated political party development and campaign subsidy
performance monitoring and reporting system. The performance and
monitoring system shall identify, define and operationalize a system of
performance indicators and measures for party development and campaign
subsidy deployment.

The Commission and the COA shall, based on the results of the
implementation of the system, publish and disseminate annual reports on the
development of political parties that have received subsidies and, on the
distribution, use and results of the campaign subsidies provided to political


parties.

SEC. 31. Publication and Dissemination of the Political Party Development
and Campaign Subsidy Performance Reports. — The political party
development and campaign subsidy reports shall be submitted to both the
Senate and the House of representatives of the Congress of the Philippines not
later than June 30 of every year, shall be made available to the public via the
internet and mass media as a guide for the citizenry in evaluating political parties
for the purpose of participating in their program of activities, and in supporting,
affiliating with, or joining them.

CHAPTER V
MISCELLANEOUS PROVISIONS

SEC. 32. Prohibited Acts. - The following acts shall be prohibited:

(a) Misuse of funds received by political parties, both from the State
Subsidy Fund and from voluntary contributions;

(b) Giving of voluntary contribution s that goes beyond the allowable limits
set under this Act and other existing laws;

(©) Inability to account for all incoming contributions from whatever

source;

(@ Failure to submit pre-election as well as post-election disclosure

statements to the Commission; and

(©) False reporting or any misrepresentation in the financial statement

reports.

SEC. 33. Penalties. - Any candidate or official of any political pa r ty who
violates any provision of this Act shall be punished with imprison me nto f not
less than six (6) years but not more than twelve (12) years or a fine ranging
from One Hundred Thousand Pesos (P 100, 000. 00) to Five Hundred
Thousand Pesos (P500, 000.00 ), or both. One shall likewise be disqualified to
hold public office. Any political party that violates any provision of this Act shall
pay a fine of not less than Five Hundred Thousand Pesos (P500,000.00) but not
more than FiveMillion Pesos (P5,000,000. 00).

Any political party that fails to comply with any of the documentary
requirements set forth in this Act shall be subject to administrative sanctions
by the Commission, which shall include temporary or permanent cancelation
of the party's registration as well as payment of fines consistent with existing
laws and regulations.

These penalties shall be applicable only to the punishable acts as stated
in Section 32 and not to political turncoatism.


SEC. 34. Lead Agency. - The Commission is hereby mandated to administer
and enforce the provisions of this Act.

For this purpose, there is hereby created, within the Commission, a
Political Party and Campaign Finance Department, which shall perform the
following functions:

1. Assist the Commission in the registration and accreditation of
political parties as provided in this Act and in other related laws;

2. Receive, compile and safekeep all records and documents
pertaining to political parties, including their organizational and
financial reports;

3. Conduct examination, investigation and audit activities to
determine compliance, with the requirements of applicable laws
and rules to recommend appropriate action/s to the Commission;

4. Perform such other functions as may be found necessary by the
Commission.

SEC. 35. Rules and Regulations. - With in thirty (30) days from its effectivity
, the Commission shall promulgate the necessary rules and regulations to
effectively implement the provision s of this Act , including those that shall
provide for the proper organization of the Commission, in view of the creation of
the Political Party and Campaign Finance Department.

SEC. 36. Appropriations. - The amount necessary for the implementation of
the provisions of this Act shall be included in the annual General Appropriation
s Act.

SEC. 37. Applicability of Batas Pambansa Blg. 881. - The provision s of Batas
Pambansa Big. 881, as amended, otherwise known as the "Omnibus Election
Code of the Philippines”, and other election laws not inconsistent with this Act
shall apply suppletorily.

SEC. 38. Separability Clause. - \f any part of this Act is held invalid or
unconstitutional, the other parts or provisions hereof which are not affected
thereby shall remain valid and effective.

SEC. 39. Repealing Clause. - All laws, orders, issuances, rules and
regulations or parts thereof inconsistent with the provisions of this Act are
hereby repealed, modified or amended accordingly.

SEC. 40. Effectivity Clause. - This Act shall take effect fifteen (15) days after
its publication in at least two (2) national newspapers of general circulation.

Approved,