Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

Ht Wo, __408

Introduced by HONORABLE JUAN EDGARDO “SONNY” M. ANGARA

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 to 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 way from the concept of traditional
politics, but unfortunately they have not been successful because of lack of legal institutional
framework to govern 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 of the members of 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.

Itis 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 genuine political
development and democratization. We have to 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, developmental 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 gamered at least 15% of the popular vote in the most recent general
elections.


For their part, Political parties should institute internal control mechanisms within political
parties to promote accountability and transparency.

The bill also encourages the political parties to raise its funds through Party Foundation
to finance their activities so thai they will develop their self-sufficiency and lessen their
dependence on contributions from illegal sources

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 cannot be appointed nor hold any position in any public office, till 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 political party system, the
passage of this bill is urgently sought.

ae ae
JUAN EDGARDO “SONNY” M. ANGARA.
Represenfative

Lone District, Province of Aurora


FIFTEENTH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES —_)
First Regular Session )
a 403
H.B.No.__

Introduced by Honorable JUAN EDGARDO “SONNY” M. ANGARA

AN ACT
STRENGTHENING THE POLITICAL PARTY SYSTEM, APPROPRIATING FUNDS
THEREFOR AND FOR OTHER PURPOSES

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 2010”.

SEC. 2. Declaration of Policy. It 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, platforms 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 voters’ education and civic literacy programs
through the political parties.

SEC. 4. Coverage. This Act shall apply to national political parties duly registered with
and certified to as such by the Commission on Elections.


SEC, 5. Definition of Terms. The following terms, as used in this Act, shall mean

(a) “Accredited national political party” refers to a national political party qualified to
receive subsidy for party development and campaign purposes, accredited for this purpose by
the Commission on Elections based on a set of criteria provided 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

(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 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 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 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 election. It includes the use of office
space and facilities personally owned by the candidate, the monetary value of the use 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,
aggrupations or coalitions thereof to reveal the details of campaign contributions received by
them, and the expenditures made on account thereof. For accredited national 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) “Done” refers to any candidate, political party, aggrupation or coalition thereof, or any
representative acting in their behalf or interest, to whom money, property or any other form of
contribution is made.

(j) "Fund" refers to the State Subsidy Fund established under this Act

(k) “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.

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()) "Political turncoatism” refers to the change of political party affiliation by any candidate,
whether or not elected, from the time he was first nominated: Provided, That the term shall not
include any such change in party affiliation before the effectivity of this Act: Provided, further,
That political turcoatism 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, in writing, of the registered member from his/her political party; Provided,
That the cause for such does not constitute political opportunism.
't includes political opportunism or any act of a party member constituting disloyalty to
the party, or regular nonadherence to the party's ideological principles, platforms and
programs, as determined by the party in accordance with its constitution and bylaws.
(m) “State Subsidy Fund” refers to the fund for party development and campaign activities
of accredited national political parties under this Act.
(n) “Voluntary contributions” refers to the contributions to candidates and/or 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 National Political Party. Any organized group of persons
seeking registration as a national political party may file with the Commission a verified petition
attaching thereto its constitution and bylaws, platforms, principles, policies and general
programs 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 ten (10)

days from the date it is submitted for decision.

National political parties already registered as such with the Commission prior to the
effectivity of this Act are not required to register anew.

SEC. 7. Policy Agenda and Program of Governance. National political parties are
mandated to craft a clear policy agenda and program of governance consistent with their party
philosophy and ideals. The members of the national political party shall endeavor to act in
accordance with the defined party platform and pursue programs to fulfill party commitments.

SEC. 8. Selection of Candidates. The selection process for candidates of national
political parties shall be democratized through the adoption of a process that is fair, open and
transparent, and which promotes participation of choice from the members of the party.
Towards this end, every national political party is mandated to formulate a merit system on the
nomination and selection of candidates who must be members of the party.


Every national political party shall submit to the Commission its rules governing the merit
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 national 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 merit system on the nomination and selection
of candidates. Every national political party may hold conventions or meetings to nominate their
official candidates not earlier than fifteen (15) days before the start of the election period 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 for fling of the certificates
of candidacy as determined by the Commission.

SEC. 9. Contents of the 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 bylaws, that the person named therein is the official
candidate of the party for the elective position stated and that he has accepted said nomination.
The certificate of nomination shall be subscribed under oath by the duly authorized
representative of the political party

SEC. 10, Limits on Voluntary Contributions. Voluntary contributions to any national
political party shall be limited to the following maximum amounts:

(a) Up to One hundred thousand pesos (P100,000.00) from a natural person; and

(b) Up to One million pesos (PI,000,000.00) from a juridical person is allowed to make a
voluntary contribution under existing laws.

‘Any contribution in cash or in kind to any candidate or political party for campaign
purposes, duly reported to the Commission, shall be exempt from donor's tax.

SEC. 11. Voluntary Contributions to a Political Party; How Ma 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 within six (6) months prior to the
campaign period 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 determined by the Commission.


SEC. 12. Changing Political Party Affiliation. Any member of a national political party
who changes party affiliation after being nominated by the party shall be deemed to have
committed political turncoatism.

SEC. 13. Penalties for Political Turncoatism. Political turncoats shall be:

a) deemed to have forfeited his/her office, if he/she is an elected official who changes
political party affiliation during his/her term of office;

b) disqualified from running for any elective position in the next succeeding election
immediately following the act of changing political party affiliation;

©) _ prohibited from being appointed or from holding any position in any public or
government office for three (3) years after the expiration of his/her current term;

d) prohibited from assuming any executive or administrative position in his/her new
political party; and

€) directed to refund any and all amounts he/she received from his/her 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 National Political Parties. The amount that a
national political party may spend for every election campaign shall be Eleven pesos (P11.00)
for every voter currently registered in the constituency or constituencies where it has official
candidate. The Commission shall adjust the authorized amount based on the Consumer Price
Index every three (3) years following the effectivity of this Act.

CHAPTER Ill
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 national
political parties. The fund shall be used directly and exclusively for the following purposes’

(a) Party development; and

(b) Campaign expenditures.

SEC. 17. Allowable Party Development Activities. Due to the vital role played by the
national 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 allo-ed to be funded out of the State Subsidy Fund:

(a) Party administration, recruitment and civic education;

(b) Research and policy development;


(c) Education and training of members;

(d) Institution building and constituent outreach programs; and

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

SEC. 18. Allowable Campaign Expenditures. Accredited national 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, the setting-up of headquarters and other relevant electoral
expenditures;

(b) Traveling expenses of the candidates and support personnel in the course of the
campaign, and for personal expenses incident thereto;

(c) Information dissemination and advocacy campaigns of the political party;

(d) Production and distribution of electoral paraphemalia and other propaganda materials;
and

(e) Other expenditures under Section 102 of the Omnibus Election Code.

SEC. 19. Accreditation. A national 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 national 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, vice governors, twenty-four (24) city/municipal mayors and
vice mayors;

(6) Organizational strength and mobilization capability, which may include the number of
political chapters and organizations nationwide, and the number of active and- permanent
members of the party; and

(©) Performance and track record of the party, which may include the number of years of
existence of the party as well as the ability of the party to field a complete slate of candidates in
the immediately preceding national elections.

SEC. 21. Effects of Accreditation. A duly accredited national political party shall be
entitled to the rights and privileges accorded under this Act. Likewise, the accredited national
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 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) Forty-five percent (45%) of the fund shall be proportionately and ratably distributed to.
accredited national political parties represented in the Senate based on the number of seats
obtained in the most recent general elections; and

(c) Fifty percent (50%) of the fund shall be proportionately and ratably distributed to
accredited national 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 national pol

| 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 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 from its share in the
fund equal to the amount raised from voluntary contributions: Provided, further, That the
balance, if any, from the share in the fund of the party concerned shalll be forfeited and reverted
to the general funds 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 national
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. Accredited national 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 national 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 national 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 Fund. The COA shall examine the financial reports of the
accredited national political parties on their use of the State Subsidy Fund. Voluntary
contributions to any accredited national 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 national political parties shall institute internal control
mechanisms to promote accountability and transparency. Accredited national 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 said program for internal controls,
ethical standards and disciplinary procedures shall all be duly submitted to the Commission and
made available to the public.

No political party shall select and nominate a candidate who has been convicted for any
criminal offense.

SEC. 27. Full Disclosure. The officials of every accredited national political party shall
submit a sworn statement of their assets and liabilities to the Commission which shall be made
available to the public. All accredited national political parties and their candidates shall also be
required to make a public.disclosure of all contributions as well as expenditures incurred for the
use of the State Subsidy Fund. All these disclosures shall be made through the official website
of the Commission and in a newspaper of general circulation.

SEC. 28. Other Reports. The following shall be reported by the accredited national
political parties and their candidates:

(a) The amount of contribution, the date of receipt by the bank and the full name and
exact address of the person 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;

(0) 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
subject to 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 succeeding 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. Failure of
the accredited national political party to comply with the provisions of this Act will result in its
disqualification from receiving its share in the State Subsidy Fund, which shall revert to the
general funds of the government and the forfeiture of all the rights and privileges to which it
would have been entitled under this Act.

SEC. 30. Performance Monitoring and Reporting System. The Commission and the
COA shall jointly design and implement, in consultation with the 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

8


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 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 performance reports shall be submitted to both Houses 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. Punishable Acts. The following acts shall be punishable:
(a) Misuse of funds received by the national political parties, both from the State Subsidy
Fund and from voluntary contributions;
(b)_ The giving of voluntary contributions which go beyond the allowable limits set under
this Act and other existing laws;
(c)_ Inability to account for all incoming contributions from whatever source;
(d) Failure to submit preelection 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 national 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 Fifty thousand pesos
(P50,000.00) to Five hundred thousand pesos (P500,000.00), or both. He shall likewise be
disqualified to hold public office. Any national political party that violates any provision of this
‘Act shall pay a fine of not less than One hundred thousand pesos (P100,000.00) but not more
than One million pesos (P1,000,000.00).

(b) Any national 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 the payment of fines consistent with existing laws and regulations.

SEC. 34. Appropriations. The Commission shall include in its program the
implementation of this Act, the funding of which shall be included in the annual General
Appropriations Act


SEC. 35. Lead Agency. The Commission is hereby mandated as the independent
regulatory agency charged with administering and enforcing the provisions of this Act.

SEC. 36. Applicability. The provisions of Batas Pambansa Bilang 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. 37. Rules and Regulations. The Commission shall promulgate the necessary rules

and regulations to effectively implement the provisions of this Act.
SEC. 38. 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. 39. Separability Clause. If any part of this Act is held invalid or unconstitutional,
the other parts or provisions hereof not affected thereby shall remain valid and effective.

SEC. 40. Effectivity. This Act shall take effect fifteen (15) days from its publication in at
least two (2) national newspapers of general circulation.

Approved,

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