.- 
.
.
 
.; ;,i 
THIRTEENTH CONGRESS OF THE RESPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
1 
<gyi 
... 
. ,  
<.; 
, . .  
, i  
~, 
. L:) 
j , :I .3 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The present lottery system of the Philippine Charity Sweepstakes Office (PCSO) 
has been plagued by allegations of graft and corruption, especially in connection with the 
authority of this agency to conduct lotteries and other similar activities, in collaboration, 
association, or joint venture with any person, association, company, or entity, whether 
domestic or foreign, including any arrangement that bears an identifiable resemblance to 
- 
.- - 
-. 
the subsisting Equipment Lease Agreement (ELA). 
Aside from the conduct of the lottery system, other reports of graft and corruption 
Failure to account for some EIGHT HUNDRED MILLION 
ESOS 
(PS00,000,000.00) reportedly earned under the STL, or small-to 
'lotto 
operation. 
Disregard by the Office of the President of the repeated confidential 
reports from former PCSO chairperson Tavera that the lottery bidding was 
rigged. 
i 
in the PCSO include the following: 
1. 
2. 
3. 
The lease contract in connection with the lottery is grossly 
disadvantageous to the government. 
The ELA is a fraudulent misrepresentation, because in actual practice, it is 
the Philippine Gaming Management Corporation (PGMC) and not the 
PCSO which controls and operates the main computer. 
4. 
Two lotto cases have been filed before the Supreme Court on the lease contract 
between the PCSO and the PGMC. In the first case, the Court ruled that the contract was 


in effect a joint venture agreement and was therefore invalid as the charter prohi its the 
PCSO from engaging in a joint venture. 
4 
In the second case, the Supreme Court held that the second lease contract, ELA, 
was a true lease contract and thus valid. It even went further and ruled that a joint 
venture agreement would be valid under the PCSO charter. 
The legislative branch has the power of reversing a Supreme Court decision, if in 
its judgment the interpretation given to a law by the court is not in harmony with the 
general policy of the State, by enactment of a new law or by an amendment of the old, 
giving it a non-disputed meaning and interpretation as to clearly wipe out the decision of 
the judicial department. “(Alejandrino vs. Quezon, 46 Phil. 83 (1942)). And since in the 
second lotto case, the judicial branch of government has deliberately ignored the intent of 
the legislative branch so clearly and explicitly recorder in the legislative journal, it is now 
necessarno pass a l& in order to-make it completely clear that the prohibition against a 
joint venture applies not only to investments, but also to programs, projects and activities, 
including so-called as exemplified by the ELA presented at the second case. 
Hence, there is a need to amend the PCSO Charter, or Republic Act No. 1169, to 
remove from the agency the authority to conduct lotteries or other similar activi ies, in 
collaboration, association, or joint venture with any person, association, comp y, or 
entity, whether domestic or foreign, including any arrangement that bears an iden 1, 
ifiable 
resemblance to the existing Equipment Lease Agreement, or ELA. The early passage of 
this bill is earnestly recommended. 


THIRTEENTH CONGRESS OF THE RESPUBLIC) 
. ,  
OF THE PHILIPPINES 
1 
First Regular Session 
1 
, -  
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
AMENDING SECTION ONE OF REPUBLIC ACT NUMBERED ELEVEN 
THE PHILIPPINE CHARITY SWEEPSTAKF,S OFFICE 
HUNDRED AND SIXTY-NINE, OTHERWISE KNOWN AS THE CHARTER OF 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 1 of the Republic Act Numbered Eleven Hundred and 
Sixty-Nine is hereby amended to read as follows: 
"Sec. 1. 
The Philippine Charity Sweepstakes Office. 
The 
Philippine Charity Sweepstakes Office, hereinafter designated the Office, 
shall be the principal government agency for raising and providing for 
funds for health programs, medical assistance and services and charities of 
national character, and as such shall have the general powers conferred in 
section thirteen of Act Numbered One thousand four hundred fifty-nine, as 
amended, and shall have the authority; 
X 
X 
X 
X 
"€3. 
The Philippine Charifv Sweepstakes Office shall have 
authoritv to enawe in health and welfare related investments, proarams, 
projects and activities which mav be profit-oriented bv itself or in 
collaboration, association, or joint venture with any person, association, 
companv or entitv, whether domestic or foreian, except charifv 
sweepstakes, races, lotteries. and other similar activities. 


- - 
-- 
SECTION 2. Repealing Clause. - All laws, decrees, orders, proclamations, rules 
and regulations or parts thereof, inconsistent with the provisions of this Act are hereby 
amended or modified accordingly. 
SECTION 3. Effectivity Clause. - This Act shall take effect after fiftee days 
1 
from its publication in at least two (2) papers of general circulation. 
Approved. 
FN: 282 
.. .