7' JUN 30. Pd :j(j 
FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
This bill seeks to institutionalize and strengthen political parties in the country 
by introducing reforms in campaign financing and provide financial subsidies to 
political parties to augment their expenditures for campaign. 
A political party is defined under Section 60 of the Omnibus Election Code as an 
organized group of persons pursuing the same ideology, political ideas or plddorms of 
government and includes its branches and divisions. The Philippines has a multi-party 
system as provided for under Section 6, letter c, Article IX of the 1987 Philippine 
Constitution which states that a free and open party system shall be allowed to evolve 
according to the free choice of the people. 
As of April 2001, the Commission on Elections has listed eighty-two (82) 
registered and accredited political parties. In the 2007 national and local elections, there 
were eighteen (18) poIitical parties who participated in the national elections while 
ninety-three (93) participated in the party-list elections. 
A major argument against a multi-party system is the tendency of members of 
political parties to change their affiliations. While this is not prohibited under our laws, 
this promotes divisiveness among the leaders in the community. 
This bill seeks to remedy that by providing sanctions against any member of a 
national political party who changes party affiliation after being nominated by the 
political party otherwise known as political turncoats. 
To further empower and professionalize political parties in the country, this 
proposed measure exempts voluntary contributions from any person, subject to a 
certain cap, from the payment of donor's tax. Likewise, there is hereby created a State 
Subsidy Fund to augment the operating funds of accredited national political parties. 
To promote transparency and performance of mandate free from vested interest, 
this bill punishes the giving of voluntary contributions beyond the allowable limits set 
by law. This is not an unreasonable prohibition given its intent. Likewise, the State 
Subsidy Fund may be used instead for campaign expenditures and party development. 
In view of the foregoing, immediate passage of this bill is earnestly requested. 
Senator 


FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
S E N A T E  
S.B. No. 
Introduced by Senator Loren Legarda 
AN ACT 
STRENGTHENING THE POLITICAL PARTY SYSTEM, APPROPRIATING FUNDS 
THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
Chapter I 
Declaration of Policy, Purposes and Coverage 
SECTION 1. Title. - This Act shall be known as “The Political Party Development 
Act of 2007.” 
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 .:upport 
continuing voters’ education and civic literacy 
programs through the political parties. 


SEC. 4. Coverage. - This Act shall apply to National Political Parties duIy 
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 Polifical farfy" refers to a National Political Party 
qualified to receive subsidy for party development and campaign purposes, 
accredited for this purpose by the Commission 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 certizicate of candidacy with the Commission. 
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 ofa 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 campaigh. 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) "Donee'lrefers 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 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. 
1) "Political Turncodism" 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 turncoatism shall 
not apply in any of the following instances: 
i. Abolition, merger or coalition of political parties where a candidate 
is a registered member thereof; 
ii. Expulsion in writing, of the registered member from his/her 
political party; Provided, that the cause for such does not constitute 
Political Opportunism. 
It includes political opportunism or any act of a party member 
constituting disloyalty to the party, or regular non-adherence to the party's 
ideological principles, platforms, and programs, as determined by the party in 
accordance with its constitution and by-laws. 
m) "State Subsidy Fuizd" refers to the fund for party development and campaign 
activities of accredited national political parties under this Act. 
n) "Volunta y Contributi0n.s" refers to the contributions to candidates and/or 
political parties, aggrupations or coalitions thereof, from persons, natural or 
juridical, allowed under existing laws. 
Chapter 2 
Institutionalization of Poli fical 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 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 ten (IO) 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 Pwty 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. Tovsxds this end, every National Political Party is mandated to 
formulate a merit system on 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 nomination and selection of candidates not later 
than one hundred and 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 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 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 filing of the certificates of candidacy as determined by the Commission. 
SEC. 9. 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 said nomination. 
The certificate of nomination shall be subscribed under oath by the duly 
authorized representative of the political party. 
SEC. 10. Limits on .Voluntay Contributions. - Voluntary contributions to any 
National Political Party shall be limited to the following maximum amounts: 
a) Up to One Hundred Thousand Pesos (nOO,OOO.OO) from,a natural 
person; and 
b) Up to One Million Pesos (Pl,OOO,OOO.OO) from a juridical person 
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 Party; How Made. - Voluntary contribution 
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 Iater 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 AffAiation. - 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 Turncoalism. - Political Turncoats shall be: 
a) Deemed to have forfeited hislher office, if helshe 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; 
c) 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 
e) 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, nay 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 Pafitical Parties. - The amount that a 
National Political Party may spend for every election campaign shall be Eletzn 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 3 
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 Politicd 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 park development activities shall be allowed 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 program: and 
e) Other reasonable logistical and operational expenses that are essential in 
strengthening the party. 
SEC. 18. Allowable Campaign Expenditures. - The 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 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 campaign, and for personal expenses incident thereto; 
c) Information dissemination and advocacy campaigns of the political party; 
d) Production and distribution of electoral paraphernalia 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, 
city/municipal mayors and vice-mayors; 


b) Organizational strength and mobilization capability, which may 
include the number of political chapters, organizations natiorxide, and 
number of active and permanent members of the party; 
c) 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 (So/) 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; 
c) Fifty percent (SOYO) 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 
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 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 shall 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, - The Accredited Natioiial 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 PoIitical Party shall be allowed to use the 
subsidy for purposes other than those indicated in this Act. 
Chapter 4 
Disclosures and Peformance 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 fhat, 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. I 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 recei-xd; 
b) A full report of expenditures and receipts incurred during the campaign, 
including those which were drawn from the State Subsidy Fund, if any; 
c) 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 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 
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 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 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 Peformance 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 5 
Miscellaneous Provisions 
SEC. 32. Punishable Acts. - The following acts shall be punishable: 
a) Misuse of funds received by 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 pre-election as well as post-election disclosure 
statements to ihe Cornrnission; 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,OOO) to five hundred thousand pesos (P500,000), 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 (P200,OOO) but not more than 
one million pesos (PI ,000,000); 
b) Any National Poljtical 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. 
SEC. 34. Appropriations. - The amount of Three Hundred Fifty Million Pesos 
(P350,000,000.00) is hereby appropriated out of the funds of the National Treasury not 
otherwise appropriated, effective immediately upon the approval of this Act. Every 
year thereafter, and not later than January 15 of every year; there shall be appropriated 
the amount Three Hundred Fifty Million Pesos (P350,000,000.00). All such amounts 
appropriated pursuant to this Act shall go to the State Subsidy Fund, which shall be 
administered by the Commission. 
The Commission and the Department of Budget and Management (DBM) shall 
promulgate guidelines to facilitate the release of the funds to every accredited national 
political party. 
SEC. 35. Lead Agency. - The Commission is hereby mandated as the independent 
regulatory agency charged with administering and enforcing the provisions of the Act. 
SEC. 36. Applicability. -The provisions of Batas Pambansa Blg. 881, as amended, 
otherwise known as the "Omnibus Election Code ofthe 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 thereof not affected thereby shall remain 
valid and effective. 
SEC. 40. Effectivity. - This Act shall take effect fifteen (15) days from its 
publication in least two (2) national newspapers of general circulation. 
Approved,