Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

1383

House Bill No.

Introduced by Representative Fredenil H.Castro

ANACT
STRENGTHENING THE POLITICAL PARTY SYSTEM AND APPROPRIATING FUNDS
THEREFOR

EXPLANATORY NOTE

Political parties are supposedly among the pillars of nation building —- the potent
instruments in strengthening the country’s democracy, economy and governance,
Unfortunately, in the Philippines, political parties were scaled down to mete political vehicles
utilized solely for campaign convenience and election success. As such, “party loyalty” has
become nothing but a rhetorical concept devoid of any meaning and purpose. Consequently,
political butterflies flourished. Many, if not all, politicians — candidates and elected alike
change parties to pursue self-interests rather than for principles and for the common good.

It is upon the foregoing circumstances that this Political Party Development Act is
introduced and sought to be enacted. This bill aims to strengthen political parties by
instituting concrete reforms in the campaign financing through effective and transparent
mechanisms designed to level the playing field among all candidates and political parties
during elections. In every respect, a strong political party system will foster party loyalty and
adherence to the party’s ideological principles, platform and programs. Further, this bill shall
institute measures to professionalize political parties and make them viable instruments of
development and good governance.

Accordingly, the passage of this bill is imperative.

FREDENIL Ht. CASKRO
Representative, 2"! Dist. Capi



EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

HOUSE BILL NO. 1383

Introduced by Honorable Fredenil H. Castro

ANACT
STRENGTHENING THE POLITICAL PARTY SYSTEM AND APPROPRIATING FUNDS
THEREFOR

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

CHAPTER |
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—tt 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


(4) 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 this Commission on Elections.

SEC. 5. Definition of Terms.--As used in this Act:

(a) Accredited political party refers to a political party qualified to received subsidy for party
development and campaign purposes, accredited for this 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:

(c) Commission refers to the Commission on Elections;

(4) 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 election. 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
value, or those arising from a contract, pledge or agreement to contribute, made for the
purpose of influencing the results of the elections, but shall 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;

(©) Campaign expenditure refers to any type of expense incurred, regardless of source,
amount and purpose, that relates directly or indirectly, to the conduct 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 space 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;

() COA refers to the Commission on Audit;

(g) Disclosure requirement refers to the duty of all candidates and political parties,
aggrupations or coalitions 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, aggrupation or coalition thereof or any
representative acting on their behalf or interest, to whom money, property or any other form
of contributions were made;

(i) 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 apolitical party who
complies with the requirements of party membership, including the payment of membership
dues;

() National political party refers to a political party or an 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 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 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 were 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;

(q) Voluntary contributions refer to the contributions to candidates of political parties,

aggrupations or coalitions thereof from persons, natural or juridical, allowed under existing
laws.

CHAPTER II
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
contract, 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.

An aggrieved member of an accredited political party may file a verified complaint to
its Grievance and Arbitration Committee not later than ten (10) days afier 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 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 aggrupations
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 of 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.

SEC. 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 is allowed to make a voluntary
contribution under existing laws; and

(b) Any contribution in cash or in kind to any political party for campaign 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 accredited by the Commission at any time but not later than fifteen (15) days
before the day of 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 if they exchange 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
of government office for three (3) years after the expiration of the current term office;

(©) 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.

SEC. 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 II
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
(©) Information dissemination and monitoring activities of the Chairman

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:

(a) Party administration, recruitment and civie education;

(b) Research and policy development;

(c) Education and training of members;

(@) Institution building and constituent outreah program; and

(©) Other reasonable logistical and operational expenses that are essential in
strengthening the party.

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 expense 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;

(4) Production and distribution of electora paraphernalia and other propaganda
materials; and

(©) 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 President, Vice President,
Members of Congress, Governors, and City Mayors;

(>) 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

(©) Performance and track record of the party, which may include its performance in
the past elections and its ability to field candidates in the coming elections.

SEC. 21. Effects of Accreditation.--A duly accredited political party shall be entitled to the
rights and rpvileges 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

(©) 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 n the most recent general elections.

The share of each of teh accredited political parties in the State Subsidy Fund shall be


released only upon proof that the concerned 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, if any, from the share in the fund of the party concemed
shall be forfeited and reverted to the General 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 activities. The Commission shall inform the accredited political
parties of the schedule of releases as well as the amount of the subsidy allocated at the start of
every fiscal year.

SEC. 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 MONITORI

SEC. 25. Audit of the State Subsidy Fund.—The COA shall examine the financial reports of
the accredited political parties on their use of the State Subsidy Fund. Membership dues and
voluntary contribution 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 shalll select and nominate a
candidate who has been convicted by final judgment for any criminal offense,

SEC. 27. Full Disclosure.—The offici f 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 political parties
and their candidates:

(a) The amount of contributions for the elections, the date of receipt of 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;

(©) 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

(A) 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 succeeding year
will not be released without the submission of the sair report covering the preceding year.

SEC. 29. Failure to Comply with Disclosure and Reporting Requirements.—Failure 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 non governmental
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
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 Fund and
‘Campaign Subsidy Performance Reports. —The political party development and campaign
subsidy performance 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, and
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 shall be prohibited:


(a) Misuse of funds received by political parties, both from the State Subsidy Fund
and from Voluntary Contributions;

(b) Giving of voluntary contributions that goes beyond the allowable limits sent
under this Act and other existing laws;

(©) Inability to account for all incoming contributions from whatever source;

(d) Failure to submit pre-election as well as post-election disclosure Statements to the
Commission; and

(e) False reporting or any misrepresentation in the financial statement reports.

SEC. 33. Penalties.-

(a) Any candidate or official of any political party who violates any provision of this Act shall
be punished with imprisonment of not less than six (6) years but not more than twelve (12)
years or a fine ranging from One Hundred Thousand Pesos (P100,000.00) 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 Act shall pay a fine of not less
than Five Hundred Thousand Pesos (P300,000.00) but not more than Five Million Pesos
(P5,000,000.00).

(b) 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 cancellation‘ 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
provisions 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 pertaining 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 and 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. - Within thirty (30) days from its effectivity, the
Commission shall promulgate the necessary rules and regulations to effectively implement
the provisions of this Act, including those that shall provide for the 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 implement
of this Act shall be included in the annual General Appropriations Act.

ion of the provisions

SEC. 37. Applicability of Batas Pambansa Blg. 881. - The provisions of Batas Pambansa
Blg. 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. If 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.