E ore)
E-Filed

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Congress of the Philippines
Quezon City

NINETEENTH CONGRESS
Third Regular Session

House Bill No, 10944

L Introduced by Rep. Mary Mitzi Cajayon-Uy ]

EXPLANATORY NOTE

‘The term Artificial Intelligence (Al) was first coined in 1956 by computer scientist John
McCarthy. Artificial intelligence (Al) is the development of computer systems that
replicate human intelligence and perform certain human tacks.

‘The Philippines recognizes the vast growth of AI in both the private and public
sectors. Al is integrated in sectors such as education, medicine, business, engineering,
and the arts.!

While the rapid advancement of AI has various beneficial application, it also presents
significant risks when misused, particularly in replicating human voices and likeness.
‘The 2023 AI Index Report indicates that incidents of “ethical misuse of AT has increased
26 times since 2012?

‘The Philippines strongly adheres to utilize the advantages of AI. Moreover, this bill
aims to establish the Philippine Artificial Intelligence Board (PAIB)- whose function,
among many others, is to protect the fundamental rights of every Filipino vis-a-vis the
growing impact of Alin our country. The PAIB shall also be established to ensure that
the development, research, application, and use of Al are grounded on value-based
principles and ethical considerations.

In view of the foregoing, passage of this bill is earnestly sought.

REP. MARY MITZI C; Ke a

24 District, Caloocan City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Congress of the Philippines
Quezon City

NINETEENTH CONGRESS
Third Regular Session

House Bill No, 10944

L Introduced by Rep. Mary Mitzi Cajayon-Uy

AN ACT
ESTABLISHING A REGULATORY FRAMEWORK FOR A RELIABLE AND SECURE
DEVELOPMENT, RESEARCH, APPLICATION, AND USE OF ARTIFICIAL
INTELLIGENCE (Al) SYSTEMS, CREATING THE PHILIPPINE ARTIFICIAL
INTELLIGENCE BOARD, DELINEATING THE ROLES OF VARIOUS
GOVERNMENT AGENCIFS, DEFINING AND PENALIZING CERTAIN
PROHIBITED ACTS

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

Section 1. Short Titl

~ This Act shall be known as “ Artificial Intelligence Act."

Section 2. Declaration of Policy. - The State recognizes that technology is essential for
national development and progress. It shall support thetr application to the country's
productive systems and regulate the transfer and promote the adaptation of
technology from all sources for national benefit. To this end, the State shall promote
the development of artificial intelligence (Al), including digitization and
infrastructure, workforce development, research and development, and regulation
with the end view of harnessing Al's potentials to uplift the lives of Filipinos, local
industries, and the national economy.

Section 3. Definition of Terms. -For purposes of this Act, the following terms shalll be
defined as stated below:

(a) Algorithm refers to a process or set of rules to be followed in calculations or other
problem-solving operations, especially by a computer;

(b) Algorithm decisions refer to the analysis of large amounts of personal data to infer
correlations or, more generally, to derive information deemed useful to make
decisions;


(c) Artificial Intelligence refers to the simulation of human intelligence in machines
that are programmed to think like humans and mimic their actions.;

(d) Artificial Intelligence Fco-System refers to a group of Al systems which are
coupled together to some extent to achieve a common goal. The most common goal of
establishing an Al ecosystem is automation via applied machine learning. This is
generally achieved by putting Al systems in both real-time as well as historical
scenarios and generating intelligence out of it;

(e) Artificial Intelligence System refers to a computer system or software application
that utilizes Al technologies and techniques to perform a task or make a decision such
as machine learning, deep learning, natural language processing, and robotics;

(9) Augmentation refers to the process of allowing human collaboration with machines
to perform a task;

(g) Automated Decision refers to the process of making a decision by automated
means without any human involvement;

(h) Automation refers to the creation and application of technologies to produce and
deliver goods and services with minimal human intervention;

(i) Innovation refers to the creation of new ideas that results in the development of
new of improved policies, products, processes, or services which are then spread or
transferred across the market;

() Lethal Autonomous Weapons Systems (LAWS) refer to weapons that use artificial
intelligence to identify, select, and kill human targets without human intervention;

(k) Regulatory Sandbox refers to a regulatory approach, typically summarized in
writing and published, that allows live, time-bound testing of innovations under a
regulator's oversight;

() Social Scoring refers to the act of rating a person's level of influence based on
evaluating one's followers, friends, and postings on social networks such as Twitter
and Facebook;

(m) Identity theft through the use of AI refers to incidents when actors craft fake
identities and create convincing phishing content to steal information and commit
fraud to impersonate another person;

(n) Deepfakes refer to technology that analyze massive amounts of audio or video of
© specific person and then use that information to generate deeply convincing content
that can mimic facial expressions, voices and mannerisms;

(0) Phishing refers to a type of cybercrime wherein the attacker impersonates another
person through the use of email, text message, phone calls, and other electronic
communication methods;


(p) A- powered phishing refers to the act of using AI to make the phishing messages
more convincing and personalized;

(q) Al misuse refers to unauthorized replication of a person's voice or likeness using
Alas a form of identity theft; and

(r) Consent Requirement refers to any use of Al to replicate a person's voice or likeness
shall require explicit consent from the subject individual provided through verifiable
means.

(s) Bill of Rights refers to the fundamental rights of every Filipino in the development,
research, application, and use of AI systems:

(i) Right to Protection from Unsafe and Ineffective Al Systems - The right of
every person to be protected from harmful Al systems shall be inviolable. Al systems,
tools, and technologies shall be developed with consultation from diverse
communities, stakeholders, and domain experts to identify concerns, risks, and
potential impacts of the system. Systems shall undergo pre-deployment testing, risk
identification and mitigation, and ongoing monitoring that demonstrate they are safe
and effective based on their intended use, mitigation of unsafe outcomes including
those beyond the intended use, and adherence to domain-specific standards.

(ii) Right Against Algorithmic Discrimination - No person shall be
discriminated by algorithms and Al systems on the basis of ethnicity, sex, related
medical conditions, gender identity, religion, age, national origin, disability, genetic
information, or any other classification protected by law. Designers, developers, and
Geployers of Al systems shall take proactive and continuous measures to protect
individuals and communities from algorithmic discrimination and shall use and
design systems in an equitable manner. To protect equal rights, proactive equi
assessments as part of the system design, use of representative data and protection
against proxies for demographic features, ensuring accessibility for people with
disabilities in design and development, pre-deploymentand ongoing disparity testing
and mitigation, and clear organizational oversight shall be instituted. Independent
evaluation and plain language reporting in the form of an algorithmic impact
assessment, including disparity testing results and mitigation information shall be
performed and made public whenever possible to confirm these protections.

(ii) Right to Privacy - Every person shall be protected from violations of
privacy through design choices that ensure such protections are included by default.
Data collection that conforms to reasonable expectations and that only data strictly
necessary for the specific context is collected shall be ensured. Designers, developers,
and deployers of Al systems shall seek permission and respect the decisions of every
person regarding collection, use, access, transfer, and deletion data in appropriate
ways and to the greatest extent possible. Alternative privacy by design safeguards
shall be used whenever applicable. Systems shall not employ user experience and
design decisions that obfuscate user choice or burden users with defaults that are


privacy invasive. Consent shall only be used to justify collection of data in cases where
it can be appropriately and meaningfully given.

(iv) Right to Information - Designers, developers, and deployers of Al systems
shall provide generally accessible plain language documentation including clear
descriptions of the overall system functioning and the role automation plays including,
notice that such systems are in use, the individual or organization responsible for the
system, and explanations of outcomes that are clear, timely, and accessible. Such
notice shall be kept up-to-date and people impacted by the system shall be notified of
significant use case or key functionality changes.

(v) Right to Redress -Every people shall be given an opportunity to opt out
from Al systems in favor of a human alternative, where appropriate. They shall have
access to timely human consideration and remedy through a fallback and escalation
process if an automated system fails or produces an error. The right to appeal or
contest Al's impacts on every person shall not be denied. Human consideration and
fallback shall at all times be accessible, equitable, effective, maintained and shall not
impose an unreasonable burden to the public.

(s) Consent Requirement refers to any use of Al to replicate a person's voice or likeness
shall require explicit consent from the subject individual provided through verifiable
means

Section 4, Creation of the Philippine Artificial Intelligence Board.- To carry out the
provisions of this Act, an agency shall be created to be called the Philippine Artificial
Intelligence Board (PAIB) and shall be composed of the Secretary of Science and
‘Technology (DOST) as Chairman, the Secretary of the Department of Information and
Communications Technology (DICT), the Secretary of the Department of Trade and
Industry (DTI), the Director General of the Intellectual Property Office of the
Philippines (IpopHIL), and the Commissioner of the National Privacy Commission
(NPC), as members. The PAIB shall act unanimously in the discharge of its functions
as defined hereunder:

(a) to exercise regulatory and supervisory authority over the development, research,
application, and use of Al systems;

(b) to investigate motu proprio or upon report of any person, impose and collect fines
and penalties, initiate and resolve the necessary administrative action, or initiate the
necessary criminal case against the responsible persons for any violation of this Act;

(c) to issue subpoena and subpoena duces tecum in relation to its investigation
provided that the subpoena shall state the nature and purpose of the investigation,
shall be directed to the person whose attendance is required, and in the case of a
subpoena duces tecum, it shall contain a reasonable description of books, documents,
or things demanded which must be relevant to the investigation;


(d) to exercise visitorial powers by itself or in coordination with other competent
agencies of the government to ensure the effective implementation of this Act, which
shall include the power to scrutinize the records of Al companies and laboratories,
except trade secrets and proprietary information, and to inspect their premises.
Provided, That trade secrets and proprietary information shall be defined in this Act's
implementing rules and regulations;

(e) to appoint automation auditors with the power to probe and review the behavior
of the algorithm;

(8 to require AI companies and laboratories to submit written or electronic forms or
reports as it may deem necessary and reasonable;

(g) to create, maintain, and regularly update a central database of AI companies and
laboratories;

(h) to conduct a nationwide information campaign with the Philippine Information

Agency (PIA) that shall inform and educate the public on the responsible
development, application, and use of Al systems to enhance awareness among end-
consumers;

(i) to enlist the assistance of any branch, department, bureau, office, agency or
instrumentality of the government, including government-owned and -controlled
corporations, in undertaking any and all operations, which may include the use of its
personnel, facilities and resources for the more resolute prevention, detection and
investigation of offenses and prosecution of offenders; and

(j) to implement such measures as may be necessary and justified under this Act.

Section 5. Creation of a Secretariat, -The PAIB is hereby authorized to establish a
secretariat to be headed by an Executive Director who shall be appointed by the Board
for a term of four (4) years. He or she must be a member of the Philippine Bar, at least
thirty-five (85) years of age and of good moral character, unquestionable integrity and
known probity. All members of the Secretariat must have served for at least three (3)
years in any of the member agencies and shall hold full-time permanent positions
within the said agencies.

Section 6. Whole of Government Approach. -In order to effectively regulate and/or
mitigate the risks and harness the potentials of Al across all areas of government
policy-spanning health, infrastructure, education, training, energy, communication,
industry, science and technology, defense, among others - a "whole of government
approach" shall be adopted. This approach shall facilitate engagement with business,
the research development and extension (RD&E) sector, and the broader community
towards ensuring the full and effective implementation of this Act. All government
agencies concerned, including the following, shall be responsible for implementing
the country's policies on Al and, as such, shall observe the "whole of government
approach" provided herein:


(a) Department of Science and Technology (DOST);

(b) Department of Information and Communications Technology (DICT);
(c) Department of Trade and Industry (DTI);

(4) Department of Agriculture (DA);

(c) Department of Environment and Natural Resources (DENR);

(8) Department of Health (DOH);

(g) Department of Energy (DOE);

(fa) Department of Transportation (DOT);

(i) Department of National Defense (DND); 0) Department of the Interior and Local
Government (DILG);

(k) Department of Education (DepEd);

(1) Commission on Higher Education (CHED);

(m) Technical Education and Skills Development Authority (TESDA);
(a) Department of Labor and Employment (DOLE); and

(0) Commission on Human Rights (CHR).

Government agencies shall make available for public access, a joint web portal, that
will bear information pertinent to Al regulations. Government agencies shall submit
periodic reports to the Board on their respective implementation of this Act. Reporting
guidelines shall be prepared by the Board for this purpose. The enumeration of
agencies provided herein is without prejudice to other agencies that the Board may
mandate.

Section 7. Reports and Disclosure to the PAIB. -In requiring Al companies and
laboratories to submit written or electronic forms or reports pursuant to Section 6, the
PAIB shall be prohibited from sharing, disclosing, or making available to the public
and other Al entity any information, document, plan, and report constituting trade
secrets, proprietary data, and other legitimate commercial information which are
confidential or privileged in nature,

Section 8. Central Database of Al Industry. -The central database, which shall be
open to the public, created by the PAIB, shall be updated on a monthly basis. It shall
include the following information:

(a) Corporate, business, or trade name of the Al industry participant;
(b) Registered trademark or trade name or logo of Al company or laboratory;

(0) Violations committed and incidents relating to such violations; and


() Other relevant information as may be determined by the Board: Provided, That it
shall not include trade secrets and other proprietary information as may be
determined in this Act's implementing rules and regulations. For this purpose, the
PAIB shalll coordinate with the Intellectual Property Office of the Philippines (IpopHL)
for the accurate reporting of trademarks and tradenames of AI companies or
laboratories.

Section 9. Prohibited Use of A Systems, -It shall be unlawlul for any person to use
any Al system that shall cause unnecessary, unjustifiable and indiscriminate moral or
pecuniary damage to individuals. The use of lethal autonomous weapon systems
(LAWS), creation and proliferation of “deep fake” videos, as well as any misue of AI
systems, are hereby prohibited. The development, research, application, and use of Al
to manipulate, exploit or control any person beyond his or her consciousness to
materially distort his or her behavior in a manner that is likely to cause him or her or
another person physical or psychological harm is prohibited, Al based social scoring
of natural persons and practices that undermine privacy rights shall also be
prohibited.

Section 10. Penalties. -Any person who willfully or knowingly does or who shall aid,
permit, or cause to be done any of the acts declared to be unlawful in the preceding
section, or aids, permits, or causes such violation shall, upon conviction thereof, be
punished by imprisonment for not less than six months or more than six years and
with the accessory penalty of perpetual absolute disqualification from public office if
the offender be a public official at the time of the commission of the offense, and, if the
offender is an alien he shall be subject to deportation proceedings.

Section 11, Violations by Juridical Entities. -If the violation is committed by a
corporation, partnership, association, or other juridical entity, the penalty of
imprisonment shall be imposed on the responsible directors or officers thereof, and
the lack of corporate personality cannot be raised as a defense in case the juridical
entity is unregistered.

Section 12. Appropriations. -The amounts necessary for the implementation of this
Act shall be included in the annual General Appropriations Act.

Section 13, Implementing Rules and Regulations. - The DOST, shall, in consultation
with the concerned government agencies and stakeholders, promulgate the
implementing rules and regulations of this Act within ninety (90) days from its
effectivity. All guidelines, regulations, and other issuances mandated to be
promulgated in this Act shall be issued within sixty (60) days from the promulgation
of this Act's implementing rules and regulations.

Section 14, Separability Clause - If, for any reason, any chapter, section, or provision
of this Act shall be declared unconstitutional, illegal, or invalid, such parts not affected
thereby shall remain in full force and effect.


Section 15. Repealing Clause. - All laws, decrees, executive orders, proclamations,
and administrative regulations, or parts thercof inconsistent herewith are hereby
repealed or modified accordingly.

Section 16, Effectivity. - This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in any newspaper of general circulation.

Approved,