Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSEBILLNO. 72

Introduced by REP. ANTHONY G. DEL ROSARIO

EXPLANATORY NOTE

The Philippine Charity Sweepstakes Office (PCSO) was created by virtue of Act
No. 4130 in 1936 to institutionalize sweepstakes as a venture to raise funds for public
health and general welfare. In 1954, Republic Act No. 1169 was enacted providing for
PCSO Charter thereby strengthening its mandate.

The PCSO Charter was amended by Batas Blg. 42 which raised the fund
allocation for the agency's Charity Fund from the previous 25% of net sales to 30%,
while 55% now went to prizes and the remaining 15% for operations. All unclaimed
prizes also go to Charity Fund. Further, Presidential Decree No. 1157 increases the tax
rates on winnings in jai-alai and horse-racing and the share of the Government from the
sweepstakes total Prize Fund.

The Charity Fund has been subject of recent controversies due to its alleged
misuse by the PCSO board of directors who have discretionary powers on the
disbursement of said fund. The PCSO Charter does not provide clear institutionalize
criteria in the disposition of fund thus making it prone to abuse and promotion of
patronage politics.

This bill warrants a just and equitable distribution of this Government's money
grounded on the needs of people. It is proposed that the Charity Fund be earmarked for
the National Health Insurance Program administered by PhilHealth to ensure the
achievement of universal health insurance coverage in line with the Aquino Health
Agenda. It is putting the money into where it is most needed and useful.

Under the bill, the Charity Fund shall no longer be channelled through hospital
beneficiaries. Instead it shall be used as contributions to PhilHealth forming part of
special purpose fund for the counterpart shares of the National Government and Local
Government, to be included in the General Appropriations Act.

While making health care more accessible to the indigents through PhilHealth,
the bill also ensures transparency in the ufilization of the monetary resources and
provides necessary safeguards against corruption specifically in the PCSO.

In view of the foregoing, approval of the bill is semeatly sought

SK
au DEL ROSARIO



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILLNO.” 72

Introduced by REP. ANTHONY G. DEL ROSARIO

AN ACT
EARMARKING THE ENTIRE PHILIPPINE CHARITY SWEEPSTAKES OFFICE
(PCSO) CHARITY FUND FOR UNIVERSAL HEALTH CARE COVERAGE 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 the
Congress assembled:

SECTION 1. Section 1 of Republic Act No. 1169, as amended by Batas
Pambansa Big. 42 is hereby further amended to read as follows:

“SECTION 1. The Philippine Charity Sweepstakes Office (PCSO). - The
Philippine Charity Sweepstakes Office, (hereinafter designated the Office] shall
[be the principal government agency for raising] RAISE and [providing] PROVIDE
[for] funds for THE NATIONAL HEALTH INSURANCE PROGRAM (NHIP) [health
programs, medical assistance and services] and charities of national character,
and as such shall have the general powers conferred in [section thirteen of Act
Numbered One thousand four hundred fifty-nine] SECTION 13 OF ACT
NUMBERED 1469, as amended, and shall have the authority:”

“A. To hold and conduct charity sweepstakes races, lotteries, and other similar
activities, in such frequency and manner, as shall be determined, and subject to
such rules and regulations as shall be promulgated by the Board of Directors.

[B. Subject to the approval of the Minister of Human Settlements, to engage in
health and welfare-related investments, programs, projects and activities which
may be profit-oriented, by itself or in a collaboration, association or joint venture
with any person, association, company or entity, whether domestic or foreign,
except for the activities mentioned in the preceding paragraph (A), for the
purpose of providing for permanent and continuing sources of funds for health
program, including the expansion of existing ones, medical assistance and
services, and/or charitable grants: Provided, That such investments will not
compete with the private sector in areas where investments are adequate, as
may be determined by the National Economic Development Authority.”]

*[C] B. To undertake any other activity that will enhance its funds generation
operations and funds management capabilities [,subject to the same limitations
provided for in the preceding paragraph].”

“it shall have, a Board of Directors, hereinafter designated the Board, composed
of five members who shall be appointed and whose compensation and term of
office shall be fixed, by the President [(Prime Minister)].

SEC. 2. Section 6 of Republic Act No. 1169, as amended by Batas Pambansa
Big. 42 is hereby further amended to read as follows:


“SEC. 6. Allocation of Net Receipts. - From the gross receipts from the
sale of [sweepstakes] tickets, whether for sweepstakes races, lotteries, or other
similar activities, shall be deducted the printing cost of such tickets, which in no
case shall exceed two percent (2%) of such gross receipts to arrive at the net
receipts. The net receipts shall be allocated as follows:”

“A. Fifty-five percent (55%) shalll be set aside as a prize fund for the payment of
prizes, including those for the owners, jockeys of running horses, and sellers of
winning tickets.”

“Prizes not claimed by the public within one year from date of draw shall be
considered forfeited, and shall form part of the charity fund for disposition as
stated below.”

“B. Thirty percent (30%), AS CHARITY FUND, WHICH shall be set aside as
contributions to the NHIP, CREATED UNDER REPUBLIC ACT NO. 7875, AS
AMENDED, AND ADMINISTERED BY THE PHILIPPINE HEALTH INSURANCE
CORPORATION (PHILHEALTH) FOR THE EXCLUSIVE PURPOSE OF
UNIVERSAL HEALTH CARE COVERAGE: PROVIDED, THAT 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 NHIP UNDER THE
PHILHEALTH [charity fund from which the Board of Directors, in consultation
with the Ministry of Human Settlements on identified priority programs, needs
and requirements in specific communities and with the approval of the Office of
the President (Prime Minister), shall make payments or grants for health
programs, including the expansion of existing ones, medical assistance and
services and/or charities of national character, such as the Philippine National
Red Cross, under such policies and subject to such rules and regulations as the
Board may from time to time establish and promulgate. The Board may apply
part of the contributions to the charity fund to approved investments of the Office
pursuant to Section 1 (B) hereof, but in no case shall such application to
investments exceed ten percent (10%) of the net receipts from the sale of
sweepstakes tickets in any given year].

“Any property acquired by an institution or organization with funds given to it
under this Act shall not be sold or otherwise disposed of without the approval of
the Office of the President [(Prime Minister)], and that in the event of its
dissolution all such property shall be transferred to and shall automatically
become the property of the Philippine Government.”

“C. Fifteen (15%) percent shall be set aside as contributions to the operating
expenses and capital expenditures of the Office.

“D. All balances of any funds in the Philippine Charity Sweepstakes Office shall
revert to and form part of the charity fund provided for in paragraph (B) HEREOF
[, and shall be subjected to disposition as above stated].”

“The disbursements of the allocation herein authorized shall be subject to the
usual auditing rules and regulations.”

SEC. 3. Separability Clause. — If any provision of this Act is subsequently
declared unconstitutional, the validity of the remaining provisions hereof shall remain in
full force and effect.

SEC. 4. Repealing Clause. — All laws, decrees, executive orders, rules and
regulations and other issuances or parts thereof which are inconsistent with this Act are
hereby repealed or modified accordingly.


SEC. 5. Implementing Rules and Regulations. — Within sixty (60) days upon
effectivity of this Act, the PCSO, the PhilHealth and the Department of Budget and
Management (DBM) shall provide the necessary rules and regulations for the proper
disposition of the said funds and the effective implementation of this Act.

SEC. 6. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in any two (2) newspapers or general circulation.

Approved,