Republic of the Philippines
HOUSE OF REPRESENTATI

‘>’ RECEIVED

i s
Quezon City 2 spo AUS 0's 2018

EIGHTEENTH CONGRESS
First Regular Session

House Bill No.3428

Introduced by Representative Juan Miguel 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 of
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.

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 illegalsources.


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 calmotbe 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 pol
system, the passage of this bill is earnestly sought.

MIGUEL ARROYO
Representative, 2" District


Republic of the Philippines
HOUSE OF REPRESENTATIVES

EIGHTEENTH CONGRESS
First Regular Session

House Bill No.3 428

Introduced by Representative Juan Miguel 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:

CHAPTERI
DECLARATION OF POLICY, PURPOSES AND COVERAGE

SECTION 1. Title - This Act shall be known as "The Political Party
Development Act of 2019".

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 instruments 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;

(c) 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 coalition 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 all
of their time in behalf of a candidate or political party. It also includes the use
of office space, facilities, 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;

e. 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;

g. Disclosure requirement refers to the duty of all candidates and_ political
parties, aggrupation or coalition 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;

j. 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;

p. 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 (1) 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.



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

(a) 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 fromcampaign
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; How Made. — 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 Commission a
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 as 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/offic

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

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

See. 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 UL
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 acti
Commission

s of the

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

e. Other reasonable logistical and operational expenses that are essential
in strengthening the party.

eese

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;

d. 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 Eligibility. - The Commission shall accredit political parties
eligible to receive subsidy from the State Subsidy Fund based on the following
general criteria:

(a) 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

(c) 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

(c) 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 concemed 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, ifany, 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
al . 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 of
every fiscal year.



C. 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.

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 con
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
poli | 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

ceeding 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.
ilure 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:

use 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; ae
(c) Inability to account for all incoming contributions from whatever
source;
(a) 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 nt 0 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 Ac t 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 provision s 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

ining 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 effectivi
the Commission shall promulgate the necessary rules and regulations to
effectively implement the provision s of this Act , including those that shall provide
forthe 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.