SEVENTEENTH CONGRESS OF THE REPUBLIC } 
OF THE PHILIPPINES 
}
First Regular Session 
}
SENATE 1
Senate Bill No. J- 4 7 0
iP ffirp  of t!)r i r r i r r t . v p
Introduced by SENATOR LACSON
AN ACT
CREATING THE PHILIPPINE CHARITY OFFICE
EXPLANATORY NOTE
The Philippine Charity Sweepstakes Office (PCSO) Charter was in force 
and effect since the enactment of Republic Act No. 1169 in 1954. The Charter was 
amended in 1979 through Batas Pambansa Big. 42, which raised the charity fund 
from 25% of the net receipts to 30%. Since then, no further amendment has been 
passed by Congress.
For almost four decades since the Charter’s last amendment, several new 
programs have been instituted by the PCSO, which were then incomprehensible at 
the time of the enactment of R.A. No. 1169 and B.P. Big. 42. The seeming 
limitation of the Charter to regulate these programs in effect makes it almost 
obsolete.
Throughout the same period, the PCSO had also been mired in 
irregularities, possibly conducted by unscrupulous individuals who took advantage 
of the loopholes of the present Charter.
The provisions in this Bill allow the PCSO Charter to adapt to the changing 
system of and emerging variations of lotteries and similar activities. The Bill also 
seeks to strengthen the Charter by one, making the PCSO more accountable to the 
public, and two, limiting its discretion in the distribution of its funds.
sought.
It is for the abovestated purposes that the approval of this bill is earnestly
PANE
'LACSON 
nator


V I
SEVENTEENTH CONGRESS OF THE REPUBLIC } 
OF THE PHILIPPINES 
}
First Regular Session 
}
SENATE 
Senate Bill No. 1470
'17 MAY 24 P2 :00
RilCEIVLO BV;
Introduced by SENATOR LACSON
AN ACT
CREATING THE PHILIPPINE CHARITY OFFICE
Be it enacted by the Senate and House of Representatives in Congress 
assembled:
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SECTION 1. Short Title. -  This Act shall be known and cited as the
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“Philippine Charity Office Act of 2017.”
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SECTION 2. Purpose. -  Consistent with the mandate of the State to
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provide for the welfare of its people, the government shall operate lotteries,
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sweepstakes and other similar activities to maximize revenue for the purpose of
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raising and providing funds for health programs, medical assistance and services,
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and related charities.
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SECTION 3. Philippine Charity Office. -  There is hereby created a body
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corporate to be known as the Philippine Charity Office, hereafter referred to as the
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Office, with a primary mandate of raising revenues to fund for health programs,
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medical assistance and services, and related charities of the government.
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Unless specified in this Act, the Office shall be the sole entity authorized to
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promote, organize, operate, hold and conduct lotteries, sweepstakes and other
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similar activities in the country.
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SECTION 4, Powers and Functions of the Office. -  The Office shall have 
the following powers and functions, subject to applicable laws, rules, and 
regulations, and in connection with its operations authorized by the provisions of 
this Act, or as are essential to the proper conduct of such operations;
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1. Sue and be sued;


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2. Adopt and use a seal;
3. Lease or own real and personal property, and sell or otherwise dispose 
of the same;
4. Acquire and hold such assets and incur such liabilities, whether 
domestic or foreign, on such terms and conditions as it may deem 
appropriate for the accomplishment of its purposes;
5. Enter into contracts.
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SECTION 5. Power and limitations to engage in investments, programs,
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projects and activites. -  The Office may engage in health and welfare-related
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investments, programs, projects and activities which may be profit-oriented, by
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itself or in collaboration, association or joint venture with any person, association,
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company or entity, whether domestic or foreign, except operate, hold and conduct
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lotteries, sweepstakes and other similar activities, for the purpose of providing for
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permanent and continuing sources of funds for health programs, including the
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expansion of existing ones, medical assistance and services, and/or charitable
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grants: Provided, That such investments will not compete with the private sector in
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areas where investments are adequate, as may be determined by the National
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Eeonomic and Development Authority.
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The Office may undertake any other activity that will enhance its funds
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generation operations and funds management capabilities, subject to the same
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limitations provided for in the preceding paragraph.
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SECTION 6. Board of Directors. -  The Office shall have a Board of
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Directors to be composed of five (5) members, all of whom shall be citizens and
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residents of the Philippines, without political affiliation, who shall be appointed,
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and whose term of office shall be fixed, by the President. The members shall elect
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from among themselves the Chairman of the Board.
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The members of the Board shall be entitled to per diem for their actual
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attendance in board meetings and reimbursement for aetual and reasonable
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expenses and incentives as authorized by the Governance Commission for
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Government-Owned or -Controlled Corporations (GCG) pursuant to Republic Act
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No. 10149.


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The Board shall meet at such times as may be necessary or expedient for
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the transaction of its business and the meetings shall be held at such place and
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time and on such days as the Board determines.
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SECTION 7. Disqualification and Liability of the Directors of the Board.
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-  No person convicted of any crime involving moral turpitude, or a violation of
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this Act, shall qualify as a director of the Board.
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Directors who willfully and knowingly vote for or assent to patently illegal
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or unlawful acts of the Office, or who are guilty of gross negligence or bad faith in
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directing the affairs of the Office, or acquire any personal or pecuniary interest in
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conflict with their duty as such directors shall be disqualified for the position, and
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shall be liable jointly and severally for all damages resulting therefrom suffered by
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the Office, and other persons.
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SECTION 8. Powers and Functions of the Board. -  The Board shall have
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the following powers and functions:
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1. Adopt policies and implement programs to promote the charitable 
activities of the government.
2. Control and supervision over the operations of all lotteries, sweepstakes 
and similar activities throughout the country.
3. Establish rules and regulations governing the establishment, operation 
and conduct of all lotteries, sweepstakes and similar activities 
throughout the country.
4. Adopt programs, measures and schemes for the elimination of illegal 
numbers game.
5. Issue licensing to agents and determine the amount and manner of 
compensation.
6. Apportion its revenues in accordance with the provisions of this Act.
7. Make a continuous study and investigation of the lottery in country.
8. Hear and decide on appeal any approval or denial by the General 
Manager of the licensing or suspension, or of any renewal or revocation 
or refusal to renew the license of a lottery agent or Authorized Agent 
Corporation (AAC).


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9. Consistent with the purposes of this Act, to determine and approve the 
most effective organizational framework and its staffing pattern; to fix 
the salaries and determine the reasonable allowances, bonuses, and other 
incentives of its officers and employees as may be recommended by the 
General Manager; and to prescribe the manner of hiring and 
compensating on a contractual basis such sales and other personnel as 
may be required for its operations, subject to pertinent civil service and 
compensation laws.
10. Promulgate and implement such rules and regulations necessary to 
implement this Act.
11. Do and perform any and all things that may be necessary or proper to 
carry out the purposes of this Act.
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SECTION 9. General Manager. -  The General Manager shall be
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appointed by the Board of Directors and he/she can be removed or suspended only
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for cause as provided by law. He/She shall have the direction and control in all
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matters which are not specifically reserved for action by the Board. Subject to the
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approval of the Board of Directors, he/she shall also appoint the personnel, except
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the Auditor and the personnel of the Office of the Auditor who shall be appointed
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by the Chairman of the Commission on Audit.
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SECTION 10. National Lotteries. -  No person or entity may operate, hold
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and conduct national lotteries, sweepstakes and other similar activities except for
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the Office. National lotteries, sweepstakes and other similar activities are to be
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operated nationwide and/or regionwide and on such type, frequency, price of
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tickets and prizes determined by the Board. If feasible, the Office may conduct
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sweepstakes and similar activities in provinces, cities or municipalities.
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SECTION 11. Online Lotteries. -  The Office may promote, operate, hold 
and conduct online lotteries through internet or any form of remote technological 
communication that hereafter may be discovered. For this purpose, the Office shall 
operate and maintain a secured central computer system to operate the online 
lotteries.
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The Board shall issue rules and regulations for the operation of online
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lotteries subject to the provisions of Republic Act No. 8484 (Access Devices


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Regulation Act of 1998), Republic Act No. 8792 {Electronic Commerce Act of
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2000), Republic Act No. 10173 {Data Privacy Act of 2012), Republic Act No.
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10175 {Cybercrime Prevention Act of 2012), and other pertinent laws.
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SECTION 12. Local Lotteries. -  The Board may establish lotteries which
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shall only be operated, held and conducted locally, within a municipality, city and
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province. The Board may grant licenses to agents, to be called the AACs, for the
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operation and conduct of local lotteries; Provided, That, The license herein granted
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is merely an extension of the authority to operate lotteries granted solely to the
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Office by this Act; Provided, Further, That the Board shall retain control and
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supervision in the operation, holding and conduct of all local lotteries, including
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its AACs.
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The Local Government Units (LGUs) having jurisdiction over the area shall
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be consulted before local lotteries may be operated within their locality. The
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LGUs shall be entitled to 7% of the Gross Sales/Receipts obtained from their
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locality, of which, 2% shall go to the Barangay, 4% to the municipality or city and
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2% to the province. The amount received by the LGUs shall only be used to fund
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their healthcare or medical programs and services; Provided, That the municipality
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or city shall appropriate 20% of their share for the programs, activities and
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projects of their respective Peace and Order Councils.
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Without dispensing with the authority of the Commission on Audit (COA),
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the Office may conduct an audit as to the proper use of funds received by the
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LGUs. The release of shares of LGUs shall automatically be suspended if there is
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a finding of any irregularity in the use of funds based on a COA Report or audit of
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the Office.
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The Board shall issue the necessary rules and regulations for the operation,
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holding and conduct of local lotteries.
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SECTION 13. Licensed Authorized Agent Corporations. — AACs shall be 
corporations, wholly owned by Filipinos, and duly registered with the Securities 
and Exchange Commission (SEC) or with the Cooperative Development Authority 
(CDA). A non-relundable license fee and cash bond shall be required fi'om all 
AACs before they may be granted a license. The Board may provide additional


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qualifications of and requirements from AACs and impose conditions on their
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license. License granted shall be exclusive to the licensee AAC and cannot be
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transferred nor assigned. No license shall be granted to an AAC covering more
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than one locality. An AAC can only operate within the locality specified under its
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license.
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Licensed AACs shall be directly and solely liable for any complaint or
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liability that may arise from their transactions with the public.
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SECTION 14. Lottery Agents. -  The Board shall authorize agents to sell
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tickets, including online lottery tickets. Only natural persons, not politically
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affdiated, may be authorized as lottery agents. No person convicted of crimes
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involving moral turpitude shall be licensed. Licensed agent shall be of legal age
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and shall not employ any person below 18 years old to sell or vend tickets. License
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granted shall be exclusive to the licensee agent and is not transferable or 
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assignable.
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An agent shall only operate on the location stated in its license and no
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license shall be extended for more than one location.
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Before a license may be issued, all agents shall give a bond, fee, guarantee,
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or other security instrument in the amount and in such form as the Board may
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from time to time determine. The Board may likewise impose certain
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qualifications, requirements and obligations to agents.
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Lottery agents shall be entitled to a commission to be determined and set by
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the Board provided, it should not be less than 5% of the cost of the ticket.
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Likewise, the agent shall be entitled to a share of .5% on the winning ticket.
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Licensed agents shall be directly and solely liable for any complaint or
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liability that may arise from their transactions with the public.
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SECTION 15. Suspension and Revocation of License. — The Office shall
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suspend, revoke or refuse to renew the license of AACs or Lottery Agents on the
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following grounds:


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a) Failure to maintain the qualifications, requirements and conditions 
imposed by this Act and the Rules and Regulations and issuances issued 
by the Office.
b) Failure to file the required bond, pay the necessary fees and or charges 
within the period prescribed by the Office.
c) Failure to account the tickets received and the proceeds of the sale or to 
file a return, report or keep records as required by the Office.
d) Any act of fraud, deceit, misrepresentation or any conduct prejudicial to 
public confidence.
e) Conviction of any offense involving moral turpitude.
f) Violation of any provision of this Act or the terms of the license.
g) Other grounds that the Office established under its Rules and 
regulations and issuances.
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The General Manager shall temporarily suspend a lottery agent or AACs
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pending an investigation or hearing.
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SECTION 16. Prohibited Acts. -
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a) No ticket shall be sold or prize be paid to a minor, any member of the 
Board, officer or employee of the Office, lottery agents and their 
employees, shareholder, officer or employee of the AACs, or to any 
person, employee or officer of any entity that is providing services or 
goods directly related in the operation, conduct, holding of lotteries, 
sweepstakes and other similar activities.
b) No lottery agents and AACs, including all their officers and employees, 
shall extend credit or lend money to a person for the purchase of tickets.
c) No name of any government official or employee shall appear on the 
ticket or play slip of any lottery game or on any prize or on any instrument 
used for the payment of prizes.
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Commission of the above-mentioned prohibited acts shall be penalized by 
not less than one (1) year but not more than three (3) years imprisonment and a 
fine of not less than Five Hundred Thousand Pesos but not more than One Million 
Pesos.


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Any person, in case of Corporation its officers, who operate, hold, conduct
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any lottery, sweepstakes or similar activities without being a licensed agent or an
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AAC, shall be penalized by imprisonment of not less than six (6) years but not
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exceeding twelve (12) years and a fine of not less than Five Million Pesos but not
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more than Ten Million Pesos. All proceeds capable of monetary value received
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from such prohibited activities shall be forfeited in favor of the Office and to form
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part of its Charity Fund.
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SECTION 17. Audit of Accounts and Transactions— An annual audit shall
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be conducted by the Office on all its all lottery agents and AACs; Provided, that,
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the Office may conduct an audit anytime at its discretion and shall have visitorial
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power over the premises of the lottery agents and AACs.
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The COA may at its discretion conduct an audit on all acounts and
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transactions of the Office and its lottery agents and AACs. The COA, in the
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conduct of its function, shall have free and unhampered access to the premises,
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documents, papers and effects of the Office and its lottery agents and AACs.
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The presence of a COA representative shall be required during the drawings
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or selections of winning tickets, otherwise the drawings or selections shall be void.
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SECTION 18. Taxes - A tax equivalent to 10% shall be imposed on the
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prize of winning tickets to be withheld by the Office. No other tax, charges, lien or
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deductions shall be imposed except as provided under this Act..
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SECTION 19. Allocation of Revenues. — The printing cost of tickets for
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lotteries, sweepstakes and other similar activities shall not exceed two 2% of the
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sales receipts of such tickets. The sales receipts deducted by the printing cost shall
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constitute the net receipts, which in addition to other income of the Office, shall be
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allocated as follows:
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55% shall constitute the prize fund, which shall be used for the
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payment of prizes, commission of AAC and lottery agents, and taxes on prizes.
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Prizes not claimed by the public within one year from date of draw shall be
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considered forfeited, and shall form part of the charity fund.


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30% shall constitute the charity fund, which shall be used for health
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care or medical programs and services, and related charities of national character.
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15% shall constitute the operating fund, which shall be used for the
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payment of operating expenses and capital expenditures of the Office, and of other
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taxes and duties.
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All balances of any funds shall revert and form part of the charity fund.
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SECTION 20. Charity Fund. -  The balance of the charity fund, after
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deducting the mandatory contributions provided by law, shall be distributed as
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follows:
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75% shall be deposited to the Philippine Health Insurance
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Corporation (PhilHealth) to be used for medical assistance to indigents and low-
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income individuals, in addition to and separate from the individual’s benefits
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under the National Health Insurance Program.
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15% shall be deposited to public hospitals, rural health care units,
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and other public healthcare facilities to be used for medical and healthcare-related
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purposes, including purchase of ambulances.
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3. 
8% shall be deposited to the Department of Health to be used for
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free distribution of medicine, and medical equipment such as wheelchairs, and for
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similar purpose.
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1% shall be deposited to the Department of Social Welfare and
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Development who shall grant social welfare assistance to accredited orphanages,
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nursing homes, and other similar institutions.
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1% shall be deposited to the Philippine Council for Health Research
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and Development.
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SECTION 21. Separability Clause. -  If any provision of this Act shall be
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declared invalid or unconstitutional, the remaining part or provisions not otherwise
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affected shall remain in force.
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SECTION 22. Repealing Clause. -  Republic Act No. 1169, as amended by 
Batas Pambansa Big. 42, is hereby repealed. Any law, decree, ordinance, 
administrative circulars not consistent with any provision of this Act is hereby 
amended, repealed or modified accordingly.


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SECTION 23. Transfer of Powers. -  All powers, duties and functions
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vested by law in the Philippine Charity Sweepstakes Office not inconsistent with
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the provisions of this Act shall be deemed transferred to the Philippine Charity
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Office. All references to the Philippine Charity Sweepstakes Office in any law or
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special charters shall be deemed to refer to the Philippine Charity Office.
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SECTION 24, Effectivity Clause. -  This Act shall take effect fifteen (15)
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days after its complete publication in the Official Gazette or in at least two (2)
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newspapers of general circulation.
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Approved,
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