FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHilLIP PINES 
Second Regular Session 
SENATE 
S.B.No. 2890 
) 
) 
111 
JUL 18 [\10 :38 
INTRODUCED BY HONORABLE RALPH G. RECTO 
EXPLANATORY NOTE 
The PCSO has recently been mired in controversies over the alleged misuse of its 
Charity Fund. 
Billions of pesos are held as discretionary funds in the PC SO and 
disbursed by its board without specific standards on its use and without clear 
accountability provided in the PCSO charter. 
For as long as we leave the disbursement of the Charity Funds in the hands of the 
PCSO board, allegations of abuse in its utilization will continue to be a thorny problem 
for the institution. 
The public is left in the dark as to the magnitude and allocation of the PCSO 
Charity Fund. There is no transparency in the use of the fund because it does not go 
through the usual budget scrutiny as it is considered an off-budget item and, therefore, 
not included in the congressional public hearings on the General Appropriations Bill. 
The PCSO, at present, undertakes medical and other social welfare projects which 
are better implemented by mandated government agencies that have more capability to 
undertake social programs and projects. Hence, the PCSO has to tap the services of Non 
Government Organizations (NGOs), the Church and other program partners as conduits 
offunds for charity projects to the people. 
This bill intends to amend the charter of the peso. The Charity Fund which 
constitutes 30 % of the net receipts of the PCSO, under the bill shall be used for the 
National Health Insurance Program administered by the PhilHealth. This is intended to 
hasten the achievement of universal health care coverage. The existing revenue share of 
the local government units and other government agencies in the PCSO charity fund shall 
be respected nevertheless. 
The equivalent amount shall be included in the General Appropriations Act 
(GAA) as a Special Purpose Fund for the counterpart shares of the national and local 
government in the National Health Insurance Program under the PhilHealth. Thus, "What 
you see is what you get" as reflected in the GAA and no more "pork barrel" for the 
PCSO board. 
Hence, instead of the PCSO funneling the funds to its various government 
hospital beneficiaries, PCSO's Charity Fund would now be directly infused to PhilHealth 
that will allow indigents to seek treatment in government and private hospitals as well. 
Indigents will no longer suffer having to join the long queues of indigent patients 
in the PCSO for financial assistance and then again line up in the government hospitals 


[or the medical services. The poor can go directly to any hospital accredited by the 
PhilHealth and avail of needed hospital services. 
The provision of funds for PhilHealth will mean health insurance coverage for the 
poorest of the poor and will benefit those who are the usual players of the PCSO's Lotto 
and Sweepstakes. 
The Aquino Health Agenda seeks to attain Universal Health Care by giving all 
Filipinos especially the poor and marginalized access to needed health care services 
without having to use personal money for these services. The target is to enroll all 
Filipinos and to enhance the benefit package of the PhilHealth. 
With peso funds used to finance the National Health Insurance Program, there 
will be easing of pressure to raise new taxes to cover increasing requirements of the 
program. And, instead of PhilHealth members having to pay increased contributions to 
pay for enhanced benefits, the PhilHealth with additional funding from peso will now 
finance the additional cost of improved health services. 
The full implementation of universal coverage will increase health expenditures 
of the PhilHealth and will reduce Out-of-Pocket expenditures which have dire 
implications to the people particularly the poor. 
This will result in freeing scarce 
household funds that can now be used for other basic expenses like education and food. 
The availability of insurance can also shield the people from distress having to face 
unexpected hospital expenses. 
In view of the foregoing, the approval of the bill is earnestly sought. 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
) 
) 
) 
'11 
JUL 18 mo :38 
SENATE 
S. B. No. 2890 
Introduced by Senator Ralph G. Recto 
AN ACT 
AUGMENTING THE PHILHEALTH FUND FOR UNIVERSAL HEALTH CARE 
COVERAGE THROUGH THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE 
CHARITY FUND AND FOR OTHER PURPOSES, THEREBY AMENDING REPUBLIC 
ACT NO. 1169, AS AMENDED BY BATAS PAMBANSA BLG. 42 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. Section 1 of Republic Act No. 1169, as amended by Batas Pambansa BIg. 
2 
42 is hereby further amended to read as follows: 
3 
"SECTION 1. The Philippine Charity Sweepstakes OfJice (PCSO). - The 
4 
Philippine Charity Sweepstakes Office, [hereinafter designated the Office,] shall [be 
5 
the principal government agency for raising] RAISE and [providing] PROVIDE [for] 
6 
funds for THE NATIONAL HEALTH INSURANCE PROGRAM (NHIP) Ihealth 
7 
programs, medical assistance and services] and charities of national character, and as 
8 
such shall have the general powers conferred in [section thilteen of Act Numbered 
9 
One thousand four hundred fifty-nine] SECTION 13 OF ACT NUMBERED 1469, 
10 
as amended, and shall have the authority:" 
11 
"A. To hold and conduct charity sweepstakes races, lotteries, and other similar 
12 
activities, in such frequency and manner, as shall be determined, and subject to such 
13 
rules and regulations as shall be promulgated by the Board of Directors. 
14 
["B. Subject to the approval of the Minister of Human Settlements, to engage in health 
15 
and welfare-related investments, programs, projects and activities which may be 
16 
profit-oriented, by itself or in collaboration, association or joint venture with any 
17 
person, association, company or entity, whether domestic or foreign, except for the 
18 
activities mentioned in the preceding paragraph (A), for the purpose of providing for 
19 
permanent and continuing sources of funds for health programs, including the 
20 
expansion of existing ones, medical assistance and services, and/or charitable grants: 
21 
Provided, That such investments will not compete with the private sector in areas 
Page 1 of 3 


1 
where investments arc adequate, as may be determined by the National Economic and 
2 
Development Authority. "] 
3 
"[ClB. To undertake any other activity that will enhance its funds generation 
4 
operations and funds management capabilitics[, subject to the same limitations 
5 
provided for in the preceding paragraph]." 
6 
"It shall have. a Board of Directors, hereinafter designated the Board, composed of 
7 
live members who shall be appointed, and whose compensation and term of office 
8 
shall be fixed, by the President [(Prime Minister)]." 
9 
SEC. 2. Section 6 of Republic Act No. 1169, as amended by Batas Pambansa Big. 42 is 
10 
hereby further amended to read as follows: 
11 
"SEC. 6 Allocation of Net Receipts. - From the gross receipts from the sale of 
12 
[sweepstakes I tickets, whether for sweepstakes races, lotteries, or other similar 
13 
activities, shall be deducted the printing cost of such tickets, which in no case shall 
14 
exceed two percent (2°;;.) of such gross receipts to arrive at the net receipts. The net 
15 
receipts shall be allocated as follows:" 
16 
"A. Fifty-five percent (55%) shall be set aside as a prize fund for the payment of 
17 
prizes, including those for the owners, jockeys of rurming horses, and sellers of 
18 
winning tickets." 
19 
"Prizes not claimed by the public within one year from date of draw shall be 
20 
considered forfeited, and shall form part of the charity fund for disposition as stated 
21 
below." 
22 
"B. Thirty percent (30%), AS CHARITY FUND, WHICH shall be set aside as 
23 
contributions to the NHIP, CREATED UNDER REPUBLIC ACT NO. 7875, AS 
24 
AMENDED, AND ADMINISTERED BY THE PHILIPPINE HEALTH 
25 
INSURANCE CORI)ORATION (PHILHEALTH) FOR THE EXCLUSIVE 
26 
PURPOSE OF UNIVERSAL HEALTH CARE COVERAGE: PROVIDED, 
27 
THAT THE EQUIVALENT AMOUNT SHALL BE INCLUDED IN THE 
28 
GENERAL APPROPRIATIONS ACT (GAA) AS A SPECIAL PURPOSE 
29 
FUND FOR THE COUNTERPART SHARES OF THE NATIONAL AND 
30 
LOCAL GOVERNMENT IN THE NHIP UNDER THE PHILHEALTH: 
31 
PROVIDED, FURTHER, THAT THE EXISTING REVENUE SHARE OF 
32 
LOCAL 
GOVERNMENT 
UNITS 
ANI) 
OTHER 
GOVERNMENT 
33 
AGENCIES, AS PROVIDED FOR BY EXISTING LAWS, SHALL BE 
Page 2 of 4 


1 
RETAINED [charity fund from which the Board of Directors, in consultation with 
2 
the Ministry of I-Iuman Settlements on identified priority programs, needs and 
3 
requirements in specific communities and with the approval of the Office of the 
4 
President (Prime M inistcr), shall make payments or grants for health programs, 
5 
including the expansion of existing ones, medical assistmlce ffi1d services and/or 
6 
charities of national character, such as the Philippine National Red Cross, under such 
7 
policies and subject to such Jules and regulations as the Board may th1l11 time to time 
8 
establish and promulgate. The Board may apply part of the contributions to the 
9 
charity fund to approved investments of the Office purSUffi1t to Section 1 (B) hereof, 
10 
but in no case shall such application to investments exceed ten percent (10%) of the 
11 
net receipts from the sale ofswecpstakcs tickets in any given year1." 
12 
"Any property acquired by an institution or organization with funds given to it under 
13 
this Act shall not be sold or otherwise disposed of without the approval of the OtTice 
14 
of the President [(Prime Minister)], and that in thc event of its dissolution all such 
15 
property shall be transferred to and shall automatically become the property of the 
16 
Philippine Government." 
17 
"c. Fifteen (15%) percent shall be set aside as contributions to the operating 
18 
expenses ffild capital expenditures of the Office. 
19 
"D. All balances of any flmds in the Philippine Charity Sweepstakes Office shall 
20 
revert to and form part of the charity fund provided for in paragraph (B) HEREOF!, 
21 
and shall be subject to disposition as above stated]." 
22 
"The disbursements of the allocation herein authorized shall be subject to the usual 
23 
auditing rules and regulations." 
24 
SEC. 3. Separability Clause. - If ffi1y provision of this Act is subsequently declared 
25 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
26 
effect. 
27 
SEC. 4. Repealing Clause. -
All laws, decrees, executive orders, rules and regulations 
28 
and other issuances or parts thereof which are inconsistent with this Act are hereby repealed or 
29 
modified accordingly. 
30 
SEC. 5. Implementing Rules and Regulations. - Within sixty (60) days upon effectivity 
31 
of this Act, the PCSO, the PhilHealth and the Department of Budget and Management (DBM) 
32 
shall provide the necessary rules and regulations for the proper disposition of the said funds ffi1d 
33 
the effective implementation of this Act. 
Page 3 of 4 


1 
SEC. 6. Effectivity. - This Act shall take effect fifteen (15) days after its publication in 
2 
any two (2) newspapers of general circulation. 
Approved, 
Page 4 of 4