Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSEBILLNO._ 2985 _

Introduced by Representative Giorgidi B. Aggabao

EXPLANATORY NOTE

Many will agree that solicitation letters abound on practically every imaginable
occasion in the Philippines : Christmas, New Year, Valentine, to name a few. But it is
not only during the happy times that public solicitation is rampant. The times of
disaster and calamities are not even spared, Sadly, many unscrupulous people take
advantage of the opportunity to gain not only at the expense of legitimate organizations
who selflessly devote their time and resources to help, but more importantly, the
victims of these disasters and calamities who are being used as alleged beneficiaries
and the unsuspecting public as well.

It is time to protect the public from these nefarious solicitation activities by
instituting mechanisms and modes regulating public solicitation, strengthening the
monitoring of such and engaging the concerned government agencies and law
enforcement in the implementation of the same.

This bill is a cumulative product of the consultation conducted by the

Department of Social Welfare and Development (DSWD) with the stakeholders.
Approval of this bill is earnestly sought.

GIORGIDIB- BAO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO, 2 98 5

Introduced by Representative Giorgidi B. Aggabao

AN ACT TO REGULATE PUBLIC SOLICITATION
PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES

SECTION 1. Short Title. - This Act shall be known as the “The Public Solicitation Act
of 2013.”

SECTION 2. Purpose. - It shall be the purpose of this Act to regulate public solicitation
undertaken by organizations and agencies, groups and individuals in order to protect
the general public from unscrupulous solicitation, It also aims to establish standards
and guidelines and strengthen the system of granting permits or authorization
primarily to solicit funds or donations from the public for charitable, social and public
welfare purposes to ensure that funds are properly “utilized for the intended purpose
and beneficiaries.

SECTION 3. Coverage, - This Act shall apply to. all National Government Agencies
(NGAs), Government Owned and Controlled Corporations (GOCCs), State
Colleges/ Universities, Local Government Units (LGUs) and other government
agencies; Non-Government Organizations (NGOs) including faith-based, people’s
organization and civil society organizations, associations, branch offices and similar
organizations, chapters and affiliates of similar international organizations operating in
the Philippines which are partly or fully financed with funds solicited from or
contributed by the public or private sectors for charitable or public welfare purpose/s.

SECTION 4. Exemption from the Coverage. - Organizations and agencies created by
laws that specifically confer authority on these organizations and agencies to solicit or
conduct fund campaign for charitable or public welfare purposes shall continue to be
covered by its charter. Provided, the DSWD, PSWDO and C/MSWDO shall have the


authority to monitor their activities and to require these organizations and agencies to
submit but not limited to the following documents:
a. Audited fund utilization report of its collections, income and expenditures and
other financial documents;
, Lists of donors and their corresponding addresses and contact numbers;
¢c. List of beneficiaries with their corresponding signatures, addresses and contact
numbers and amount or types of assistance extended;
d, List of projects completed, location and cost with complete documentation on
the project, e.g. pictures, videos and testimonies of beneficiaries; and
e. Other documents which the DSWD may require in order to make assessment of
performance of the organization and agency.
Caroling during Christmas season as a form of solicitation and the solicitation within
the church/ mosque or building for religious purposes or Christian/Muslim worship is
also. exempted from the application of solicitation permit. However, approval of the
concerned PSWDO or C/MSWDO that has jurisdiction over the areas, must first be
obtained prior to the solicitation activities for religious purposes that are to be
conducted outside the peripheral of the Christian/Muslim worship.

SECTION 5, Definition of Terms, - For purposes of this Act, the following terms shall

be defined as:
a. Administrative Cost - refers to the costs incurred in the management and
operation of the conduct of the solicitation activity such as mails, print of letter of
appeal and other paraphernalia, etc,
b. Beneficiaries - refer to the poor, vulnerable, marginalized and
disadvantaged sectors or entities who will be benefiting from the proceeds of the
public solicitation conducted. These include, but are not limited to: (1) neglected,
abandoned, orphaned, exploited children or children under difficult
circumstances; (2) children in conflict with the law, out of school youth and other’
youth with special needs; (3) persons. with disabilities; (4) senior citizens; (5)
Victims of natural or man-made calamities; (6) disadvantaged women and
women in especially difficult circumstances; (7) indigenous peoples and
communities; (8) rebel returnees and families who are victims of armed conflict
situation, and (9) poor or dysfunctional families and depressed communities
among others.
c. Charitable purpose - refers to the intent to provide services or conduct of
activities for the beneficiaries indicated in sub-section ( b) of this Section.
d. Donor/s - refers to a person, organization or agency who/that donates
something for charitable or public welfare purposes.
e. Memorandum of Agreement - refers to a notarized contract executed
between parties stating among others, the amount or percentage from the
proceeds to be given to the beneficiaries or the project to be undertaken, the date
and place where the activity shall be undertaken and date of awarding of

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proceeds or turn-over of project. It should clearly state the date and duration of
the awarding of proceeds.
f, Organization or agency ~ refers to all National Government Agencies
(NGAs), Government Owned and Controlled Corporations (GOCCS), State
Colleges/ Universities, Local Government Units (LGUs) and other government
agencies, Non-Government Organizations (NGOs) including religious and civil
society organizations, people's organizations, associations, branch offices and
similar organizations, chapters and affiliates of similar international
organizations operating in the Philippines desiring to solicit or receive
contributions from the public for charitable or public welfare purpose/s.
g. Program Cost - refers to all expenses incurred in the direct or indirect
provision of services or goods to the beneficiary including expenses of the donee
person or agency in its operation and the implementation of relevant programs
and services,
h. Public Solicitation - refers to any activity or project intended to generate
funds, goods, or other assistance from the public sectors for charitable and/or
public welfare purposes. Categories of public solicitation:
h.l. Local Public Solicitation - refers to a solicitation activity conducted
within the city or municipality
h.2. Provincial Public Solicitation - refers to a solicitation activity
conducted within two or more cities or municipalities in a province
3. Regional Public Solicitation - refers to a solicitation activity
conducted within two or more provinces in a region
hd. National Public Solicitation - refers to a solicitation activity
conducted in two or more regions in the country
i, Public Welfare Purpose/s - refers to any activity or project relative to health,
education, peace, social welfare and protection, environmental safety, rights,
security and safety of citizens and similar circumstances or conditions.

SECTION 6. Authority to Issue Permit. - The following are the authorized officials of
government agencies who will grant permits to eligible organization or agency that will
conduct solicitation activities for public welfare and charitable purposes:

a. Department of Social Welfare and Development (DSWD)
Secretary/Undersecretary or Regional Director for national or regional public
solicitation respectively.

b. Provincial Governor through the Provincial Social Welfare and Development
Office (PSWDO) Chief or his/her representative/s for provincial public
solicitation.

c. City/Municipal Mayor through the City/Municipal Social Welfare and
Development Office (C/MSWDO) Chief or his/her representative/s for local
public solicitation.

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SECTION 7. Requirements. - Prior the issuance of the permit to conduct public
solicitation, the organization or agency shall comply with the requirements that may be
set by the DSWD, PSWDO or C/MSWDO respectively including but not limited to the
following:

a. Duly accomplished application form, prescribed by the DSWD, PSWDO or
C/MSWDO, signed by the organization or agency head or his/her authorized
representative;

b. Project proposal on the intended public solicitation activity including the
work and financial plan of the activity to.be undertaken;

c. Certified true copy of Certificate of Registration and Articles of Incorporation
and by-laws with the Securities and Exchanges Commission (SEC) or other
regulatory government agency which has jurisdiction to regulate the applying,
organization or agency, if non-government organization or private agency;

d. Certification of status of operation and updated certification from SEC or
other regulatory government agency, which has jurisdiction to regulate the
applying organization or agency on the validity of its registration, if non-
government organization or private agency;

e. Notarized Memorandum of Agreement or other written document signifying
the intended beneficiary concurrence as recipient of the solicitation activity. It
shall entail (i) Statement of the purpose for which the solicitation is being
conducted; (ii) Statement of the amount or percentage from the proceeds to be
given to the beneficiaries or the project to be undertaken; and (iii) the date,
duration and place where the activity shall be undertaken and the date of
awarding of proceeds or turn-over of project; and

f. Notarized Board Resolution on their planned solicitation activity and ensure
the strict compliance to the standard ratio on fund utilization.

SECTION 8. Validity of Permit, - All permits for the purpose of undertaking public
solicitation shall be issued by the DSWD, PSWDO or C/MSWDO for a stated period of
time. The solicitation permit shall be valid only on the approved date of coverage
which in no case shalll exceed one (1) year within the specified city /municipality, region
or areas of the Philippine territory. Its validity does not extend to other countries
regardless of whether or not the target beneficiaries and donors are Filipinos. In such
cases, the organization or agency should comply with the rules and regulations of the
concerned countries.

SECTION 9. Fees and Charges. - For national and regional coverage, the DSWD shall
charge and collect corresponding fees to be determined by the Department for the
effective implementation of this Act. The fees shall be remitted to the National
Treasury, recorded as a Special Account in the General Fund and shalll be available to
the DSWD through a Special Budget pursuant to Section 35, Chapter 5, Book VI of
Executive Order No. 292. Likewise, the provincial governor and city /municipal mayors

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shall impose corresponding fees for the provincial and local public solicitation
respectively, consistent with the Local Government Code and its amendments,
SECTION 10. Methods of Public Solicitation. - Public solicitation may be done
using any of the following , but not limited to:
a. Written request such as letter of appeal, envelopes, and cards, and other
similar forms.
b. Mass media campaign through television, cinema, radio, magazine,
newspapers, and billboards, and other similar forms.
¢.Distribution, circulation, publication or posting of written advertisement or
other similar forms.
d. Sale of goods such as souvenir items, printing, rummage sales, among others.
e.Benefit shows, i.e. concert, fashion show and other forms of entertainment.
Jf. Donation box, coin banks and other similar forms.
g-Other methodologies that may be allowed by the DSWD, PSWDO. and/or
‘C/MSWDO.
However, the ceiling amount for the cost of every paraphernalia for public solicitation
shall be set in the Implementing Rules and Regulations, e.g. cost of tickets for benefit
shows, amount for request of letter of appeal , among others.

SECTION 11, Tax Deduction or Exemption of Donations and Contributions. - The
donor by virtue of the foregoing provisions shall be entitled to allowable deduction in
his/her income tax return the equivalent amount of donations he/she would give to
public solicitation subject to such conditions as provided under the National Internal
Revenue Code, as amended.

SECTION 12. Allocation of Proceeds. - Not more than fifteen percent (15%) of the total
proceeds for the fund raising activity of any organization or agency shall be expended
for the administrative cost. ‘The remaining eighty-five percent (85%) shall be utilized
entirely for projects/programs for the targeted beneficiaries. Unless compliance with
this section is satisfactorily established on the basis of the report as required in Section
13 hereof, no organization or agency shall be issued any subsequent permit, Funds
collected during the conduct of fund campaign activities shall be deposited in a banking
institution regulated by the Bangko Sentral ng Pilipinas in the name of the organization
or agency to which the permit was issued. Book of accounts shall also be required in
the monitoring / validation of report.

The date, duration and place where the consolidation and accounting of proceeds shall
be undertaken and the date of the awarding or turn-over of the proceeds to the
beneficiaries, shall be witnessed by the authorized representatives from the DSWD,
PSWDO or C/MSWDO for national/ regional, provincial or city/municipal fund
campaign respectively.

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SECTION 13. Monitoring of Public Solicitation Activity. - The concerned
organization or agency to which the permit was issued shall submit to the concerned
DSWD office, PSWDO or C/MSWDO within sixty (60) days after the expiration of the
issued permit, a report signed and sworn to. by at least two. authorized officers of the
organization or agency, indicating whether such permit was used or not.
a. Ifused, additional documents to be submitted are the following:

a.1.Audited fund utilization report of its income and expenditures and other

documents;

a.2. _ List.of donors with their corresponding addresses. and contact numbers,

and the amount of donations;

a.3. List of beneficiaries, their corresponding addresses and contact numbers

and amount or types of assistance extended;

a4. List of projects completed, location and cost; and

a5. Expired original permit authorizing the conduct of national or local fund

campaign.

If the issued permit is unutilized, the concerned organization or agency shall

submit the following records to the respective DSWD, PSWDO or CPMSWDO:

b.1 Justification for not conducting or continuing the solicitation activity within

the validity period; and

b.2.Expired original permit authorizing the conduct of local/national fund

campaign.
The DSWD, PSWDO or C/MSWDO may in the exercise of their regulatory powers,
verify the authenticity of the report submitted by conducting on-the-spot investigations
or reviewing the books of account of the concerned organization or agency. Further, the
organization or agency shall for each solicitation activity maintain and preserve an
accurate and detailed books of accounts for not less than three (3) years after the
completion of such public solicitation activity, which shall be available for inspection, at
all times, upon demand by the DSWD, PSWDO, or C/MSWDO. Likewise, the latter
should keep. the submitted report of the organization or agency. including audited fund
utilization report, list of beneficiaries and their corresponding addresses and contact
numbers and amount and type of assistance extended and list of project completed, its
costs and location.

SECTION 14, Filing of Complaints - The DSWD, PSWDO or C/MSWDO shall on its
initiative or upon the complaint of any individual initiate an investigation and the filing
of complaints in the local police or prosecutor's office, if warranted, against the
organization or agency which undertake fund campaigns without the necessary permit
or which secures such permits through fraudulent representation. Provided, however,
that any concerned person, may in his/her own file a complaint before the local police
or prosecutor's office against any person who shall commit any of the acts punishable
under Section 16 of this Act. Any law enforcement agency can also file a complaint
against any organization, agency or individual engaging in prohibited acts whom they
have apprehended in accordance with the Rules of Court.

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SECTION 15. Handling of Complaint - There shall be a Review Committee at the
concerned DSWD office, PSWDO or C/MSWDO which will handle the complaint
against the organization or agency. The law enforcement agencies e.g. Philippine
National Police (PNP), National Bureau Investigation (NBI), Department of Interior and
Local Government (DILG), and Ombudsman among others shall assist in the
enforcement of this Act. Said Committee shall be organized within sixty (60) days upon
the effectivity of this Act. The Committee shall be composed of minimum of seven (7)
members which consist of three (3) representatives from concerned government
agencies, two (2) from Non-Government Organizations and two. (2) from DSWD and
PSWDO or C/MSWDO. The specific roles and functions of the Committee as well as
the procedures in handling of complaints shall form part of the Implementing Rules
and Regulations of this Act.

SECTION 16, Prohibited Acts. This Act prohibits any organization or agency to do any
of the following acts:

a, Soliciting without securing solicitation permit from DSWD, PSWDO or
C/MSWDO.

b. Soliciting beyond the allowed area of coverage or violating the mode of
solicitation as indicated in the approved solicitation permit.

c. Using falsified or tampered solicitation permit.

d. Soliciting with expired solicitation permit.

e, Using of solicited funds other than the intended purposes.

ff Using the clients or beneficiaries in conducting the solicitation activities.

4 Use of lottery and other game of chances where the source of prizes shall be taken
from the proceeds of the solicitation activity and all other means contrary to law,
public policy and morals.

h, Solicitation paraphernalia which portray a dehumanizing picture, information or
situation of the intended beneficiary.

Further, all solicited funds from the prohibited acts shall be turned over to concerned
DSWD, PSWDO or C/MSWDO for the implementation of its social welfare and
development programs and services after the court disposition. The specific procedures
in the management of turn-over of solicited funds from the prohibited acts shall be
provided in the Implementing Rules and Regulations of this Act.

SECTION 17. Penalties - Violations of this law shall be subject to the following
penalties:
a, Any person who violates the provision of this Act shall be punished with
imprisonment of not less than one (1) year but not more than three (3) years or a
fine of not less than One Hundred Thousand Pesos (P100,000.00) but not more
than Five Hundred Thousand Pesos (P500,000.00) or both at the discretion of the
court.

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b. Additionally, for the first offense, the solicitation permit of the concerned
organization or agency shall be revoked and no permit shall be issued to them
for a period of two (2) years from the date of violation.

c. For the second offense, the concerned organization or agency shall be
permanently banned from conducting any solicitation activity. Further, its
registration or license to operate as an organization or agency issued by any of
the concerned government regulatory agency shall be cancelled and revoked
permanently.

d. When the offender is a foreigner, he/she shall be immediately deported and
be barred permanently from entering the country after having served his/her
sentence.

e. In case of a violation of this Act by an organization or association, the
incumbent officers thereof who have knowingly participated in the violation of
this Act shall be held liable.

SECTION 18. Information Dissemination, - The DSWD, PSWDO or C/MSWDO shall
disseminate information on the organizations or agencies issued with public solicitation
permits to include the permit number, duration period, methodology to be used and the
area/s covered. Likewise the DSWD, PSWDO. or C/MSWDO shall also inform the
public on the list of organizations or agencies which permits have been cancelled or
revoked.

SECTION 19. Implementing Rules and Regulations. - The officers or authorized
representatives of the DSWD, Association of PSWDO and. Associations of C/MSWDO
in coordination with the Bureau of Internal Revenue (BIR), Department of Finance
(DOF), Department of the Interior and Local Government (DILG), Department of Trade
and Industry (DTI), Department of Transportation and Communication (DOTC), Local
Government Unit (LGU), Philippine National Police (PNP), National Bureau
Investigation (NBN), Securities and Exchange Commission (SEC) and other concerned
government agencies and three (3) representatives selected by DSWD from the
academe, NGOs, media organizations and peoples organizations shall promulgate the
necessary implementing rules and regulations within ninety (90) working days from the
effectivity of this Act.

SECTION 20. Appropriations. - The amount necessary to carry out the provisions of
this Act is hereby authorized to be appropriated in the budget of the DSWD in the
General Appropriations Act for the year following its enactment into law and
thereafter.

SECTION 21. Repealing Clause. - Presidential Decree No. 1564, Local Government
Code of 1991 Book Ill Title II Ch. 3 Art 1 Sec 444 (b) (3) V) and Sec 455 (b) (3) (v) and all
other laws, decrees, executive orders and proclamations, rules and regulations or parts
thereof, inconsistent with this Act are hereby repealed or modified accordingly.

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SECTION 22. Separability Clause, - In the event that any provision of this Act is held
invalid or unconstitutional, the other provisions not affected thereby shall remain valid
and subsisting:

SECTION 23. Effectivity Clause, - This Act shall take effect fifteen (15) days after its
publication in any two (2) newspapers or general circulation.

Approved.

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