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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

ae

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 802

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN III

EXPLANATORY NOTE

An issue paper released by the Friedrich Ebert Stifftung aptly enumerates the inherent flaws of the
country’s political party system, to wit: the lack of accountability and transparency in party financing
and expenditures; political turncoatism; and patronage culture of political parties based on financial
contributions, In furtherance of said observations, a separate study by the same Institute warns that
“{I]f the political party system (mal-jfunctions in such a way. apathy, mistrust or even frustration
among citizens may spread, thus endangering the gains of a democratization process. It is clear that
this is a serious danger to a democratic system ~ making it one of the major challenges of Philippine
politics today."

Cognizant of the aforesaid political situation, this measure seeks to enhance the quality of our
democratic system by reforming our current political party system.

‘This bill seeks to:

‘*  Institutionalize and strengthen political parties in the country by introducing reforms in
campaign financing and providing financial subsidies (o political parties to augment their
expenditures for campaign;

* Provide sanctions against any member of a national political party who changes party
affiliation after being nominated by the political party otherwise known us political turncoats,

© Exempt voluntary contributions from any person, subject to a certain cap, from the payment
of donor’s tax, and punish the giving of voluntary contributions beyond the allowable limits
set by law

© Cres

tate Subsi

y Fund to augment the operating funds of accredited national parties

{1 is hoped that the enactment of this measure shall institutionalize and strengthen political parties as
vital pillars of the country's democratic system

In view of the foregoing, passage of this measure is earnestly sought.



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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

il No, _802

House

introduced by MAGDALO Party:
HON. MANUEL DG. CABOCHAN IL

AN ACT.
STRENGHTENING THE POLITICAL PARTY SYS!
FUNDS THEREFOR AND FOR OTHER PURPOSES

EM, APPROPRIATING

Be It enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled.

CHAPTER 1
DECLARATION OF POLICY, PURPOSES AND COVERAGE

SECTION 1. Title. - This Act shall be known as “The Political Party Development

Act of 2019".

SEC. 2. Declaration of Policy. — 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, platform and programs. ‘The State shall
also institute measures to professionalize political parties and make them viable instruments

of development and good governance.


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SEC. 3. Purposes. — This Act aims to:

(a)

(b)

(c)
(d)

Institutionalize reforms in the finan

12 of electoral campaigns, so as. to
promote accountability and transparency;

Provide financial subsidies to political parties, to augment their expenditures
for campaign purposes and for part development,

Promote party loyalty and discipline; and

Encourage and support continuing voter’s education and civic literacy

programs through the political parties.

SEC. 4. Coverage. ~ This Act shall apply to political parties duly registered with and

certified to as such by the Commissions on Elections (COMELEC),

SEC. 5. Definition of terms. ~ The following terms as used in this Act shall be

defined as follows:

{a)

(b)

(c)

(dy

“Accredited political party” refers to a political party qualified to receive
subsidy for party development and campaign purposes and aceredited for this
purpose by the COMELEC based on a set of criteria provided for under this
Act.

“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 COMELEC.

“Commission” refers to the COM!

[a
“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,


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(e)

()

(@)

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

fluencing the results of the elections, but shall not include services rendered
without compensation by individuals volunteering a portion or all of their time
in behalf of a candidate or political party. It also includes the use of office
space, facilities, equipment, office supplies and other materials and fixtures
voluntarily donated by other persons or who allowed their use for free, the
monetary value of which shall be assessed based on market rates prevailing. in
a particular area. F
“Campaign expenditure” refers to any type of expense incurred, regardless of
source, amount and purpose, that relates, directly or indirectly, to the conduct
of an electoral campaign. It includes all payments of money or anything of
value, or a contract, promise or agreement to spend, for the purpose of

influencing the results of the elections. It includes the use of office space and

facilities personally owned by the candidate, the monetary value of which

shall be as

essed based on market rates prevailing in a particular area
“COA” refers to the Commission on Audit

“Disclosure requirement” refer

s to the duty of all candidates and political
parties, aggrupations or coalitions thereof to reveal the details of campaign
contributions received by them and the expenditures made on account thereof,
For accredited political parties, it includes expenditures and disposition of
party development and campaign monies given to them as their share in the

State Subsidy fund established under this Act.


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(hy

(i)

wo

(k)

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(m)

“Donor” refers to any candidate, political party, aggrupation or coalition

thereof or any representative acting on their behalf or interest, to. whom
money, property or any other form of contributions were made.

“Donee''refers to any candidate, political party, aggrupation or coalition
thereof or any representative acting on their behalf or interest, to whom
money, property ot any other form of contributions were made.

“Fund” refers to the State Subsidy Fund established under this Act.

‘Member of a party" refers to a natural person of good standing in a political
party who complied with the requirements of party membership, including the
payment of membership dues,

“Political party” refers to a political party, party-list or an organized group of
persons duly registered with the Commission, pursuing or advocating
platform, principles and policies for the general conduct of government and
which nominates and supports its members as candidates for public office
“Political turncoatism” refers to the change of political party affiliation by an
elected official during one’s term, except within six (6) months prior to the
end of the term: Provided, hat political tumcoatism shall not apply in any of
the following instances:

(1) Abolition, merger or coalition of political parties where a candidate is @

registered member thereof; and

(2) Expulsion of the elec

ed official in writing from one’s political part
Provided, That the cause for such does not constitute political
opportunism. Political opportunism includes any act of a party member

constituts

we disloyalty to the party or regular non-adherence to the


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party’s ideological principles, platform and programs, as determined
by the party in accordance with its constitution and bylaws.

“State Subsidy Fund” refers to the fund for party development and campaign
activities of accredited political parties under this Act.

(n) “Voluntary contributions” refer to the contributions to candidates or political
parties, aggrupation or coalitions thereof from persons, natural or juridical, allowed under
existing laws.

CHAPTER I
INSTITUTIONALIZATION OF POLITICAL PARTIES,

SEC. 6. Registration as a Political Party. - Any organized group of persons seeking
registration as a political party may file with the Commission a verified petition attaching
thereto its constitution and bylaws, 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
(10) days from the date it is submitted for decision.

Political parties already registered as such with the Commission prior to the
effectivity of this Act are not required to register anew but are required to submit their intent
to continue participating in elections within a period of six (6) months after the enactment of

this law.

SEC. 7. Policy Agenda and Program of Governance. Political parties are mandated

to craft a clear policy agenda and program of governance consistent with their party


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philosophy and ideals. The members of the political party shall endeavor to act in accordance

with the defined party platform and pursue programs to fulfill party commitments.

SEC. 8. Membership in a Political Party. — A person becomes a member of a
political party upon application duly signed, filed and accepted by the party, and upon
compliance with the basic membership requirements of the party, including the regular

payment of membership dues.

SEC. 9. Selection of Candidates. ~ The selection process for candidates of political
parties shall be democratized through the adoption of a process that is fair, open and
transparent.

Every political party is mandated to formulate a system on the nomination and
selection of candidates, in which all party members are involved. Every political party shall
submit to the Commission its rules in governing the system on the nomination and selection
of candidates not later that one hundred eighty (180) days before the election day following
the effectivity of this Act.

Any aggrieved member of an accredited political party may file a verified complaint
before its Grievance and Arbitration Committee not later than ten (10) days after the party
convention, for violation of the rules governing the system on the nomination and selection of
candidates. The aggrieved party has the right to appeal to the Commission. Upon finding
violation of the system, the Commission shall revert the grievance to the concerned political
party. If the political party does not comply with the order of the Commission, the said party
shall be disqualified from participating in the elections.

Every political party shall hold conventions to nominate their official candidates not

earlier than sixty (60) days before the start of the campaign period and shall not submit to the


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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

nomination

from more than one (1) registered politician party, except in cases of
aggrupations or coalitions thereof, Nominations made in violations 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 candidaey as determined by the Commission

SEC, 10. Contents of Certificate of Nomination. ~ The certificate of nomination
shall state that the person issuing the nomination is the duly authorized representative of the
political party as provided for in its constitution or bylaws; that the person named therein is
the official candidate of the party for the elective position stated; and that he has accepted the

said nomination. The certificate of nomination shall be subscrit

ed under oath by the duly

authorized representative of the political party.

SEC. 11. Limits on Voluntary Contributions. Voluntary contributions to any
political party shall be limited to the following maximum amounts:

(a) Up to One million pesos (P1.000,000.00)from a natural person and up to T

million pesos (P10,000,000.00) from a juridical person who/which allowed to make a
voluntary contribution under existing laws: and

(b) Any contribution in cash or in kind to any political party for campaign

purposes, duly reported to the Commission in accordance with Section 13 of Republic Act

No. 7166, shall be exempt from the donor’s tax.


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No foreign national or entity shall be allowed to give contributions to any political

party,

C. 12, Voluntary Contributions to Party; How Made, ~ Voluntary contributions to
4 political party shall be deposited by the contributor to the account of the party with any
reputable bank accredited by the Commission at any time but not later than fifteen (15) days
before the day of election. The accredited banks shall issue a corresponding receipt to the
contributor on the amount deposited, and shall submit to the Commission a statement of
account of all political parties in any newspaper of general circulation within five (5) days

before the elections.

SEC. 13, Political Turncoatism. — Any elected official of a political party who
changes party affiliation, after being nominated by the party, shall be deemed to have

committed political turncoatism except within six months prior to clections.

SEC. 14, Penalties for Political Turncoatism. ~ Political turncoats shall be

(a) Deemed to have forfeited their elective office, if they change their political
party affiliation, except within six (6) months prior to elections;

(b) Disqualified from running for any elective position in the 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 the current term/office;

(d) Prohibited from assuming any executive or administrative position in the new
political party; and

(c) Directed to refund any and all amounts received from his former political

party, plus a twenty-five (25%) surcharge thereon.


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SEC. 15. Petition for Disqualification. ~ Any citizen of voting age, or any candidate,
political party, aggrupation or coalition thereof. may file with the Commission, within fifteen
(15) days from 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. 16. Authorized Expenses of National Political Parties and Candidates.-The
amount that a political party and a candidate may spend for every election campaign shall be
‘Twenty pesos (P20.00) for every voter currently registered in the constituency ot
constituencies of candidacy. The Commission shall adjust the authorized amount based on

the consumer price index (CP1) every three (3) years following the effectivity of this Act.

CHAPTER IIT
STATE SUBSIDY FUND
SEC. 17. 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. 18. Allowable Party Development Activities. — Due to the vital role played by
the political parties in the country’s political development and in order to promote
professionalism and accountability among members of the parties, the following party
development activities shall be allowed to be funded out of the State Subsidy Fund:

(a) Party administration, recruitment and civic education;


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(b) Research and policy development:

(c) Education and training of members;

(@) Institution building and constituent outreach program; and

(e) Other reasonable logistical and operational expenses that are essential in

strengthening the party.

SEC. 19, Allowable Campaign Expenditures. — The accredited authorized 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, setting up of headquarters and other relevant electoral expenditures:

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

(©) _ Information dissemination and advocacy campaigns of the political party:

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

(e) Other expenditures as allowed under Section 102 on Lawful Expenditures of
the Omnibus Election Code.

SEC. 20. Accreditation. ~ A political party eligible in accordance with Section

2ihereof, and which desires to be entitled to the rights and privileges as recipients 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.

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SEC. 21. Criteria for Eligibility. - The Commission shall accredit political parties
eligible to receive subsidy from the State Subsidy Fund based on the following general
criteria:

(a) Political representation, consisting of the incumbent Pr

-sident, Vice President,

Members of Congress, Governors and City Mayors;

(b) Organizational strength and mobilization capability, which may include the
number of political chapters, organizations nationwide and number of permanent members of
the party paying their dues; and

(c) Performance and track record of the party, which may include its performance

in the past elections and its ability to field candidates in the coming elections.

SEC. 22. Effects of Accreditation. — duly accredited political party shall be entitled
fo 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. 23. Distribution of the Fund, — The total amount of the State Subsidy Fund
released annually shall be distributed as follows:

(a) Five percent (5%) of the fund shall accrue to the Commission, to be used
exclusively for monitoring purposes and the conduct of information dissemination campaigns
and voter's education;

(b) Thirty percent (30%) of the fund shall be proportionately and ratably
distributed to accredited political parties represented in the Senate based on the number of

seats obtained in the most recent general elections; and

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(c) Sixty-five (65%) percent of the fund shall be proportionately and ratably
distributed to accredited political parties represented in the House of Representatives based
on the number of seats obtained in the most recent general elections.

The share of each of the accredited political parties in the State Subsidy Fund shall be
released only upon proof that the concerned party has raised an amount equal to its share in
the fund from membership dues and voluntary contributions: Provided, That the party

cone

\ed that fails to raise an amount equal to its share in the fund shall only receive an
amount equal to the amount raised from membership dues and voluntary contributions
Provide further, That the balance, if any, from the share in the fund of the party concerned

shall be forfeited and reverted to the general fund of the government.

SEC. 24. Schedule of Releases from the Fund. For purposes of this Act, all releases:
from the State Subsidy Fund during a nonelection year shall be used exclusively for party
development activities. Funds released during an election year shall be divided as follows
seventy-five percent(75%) shall be used for campaign expenditures, and twenty-five percent
(25%) for party development activities, The Commission shall inform the accredited political
parties of the schedule of releases as well as the amount of the subsidy allocated at the start of

every fiscal year.

SEC. 25. Management of the Subsidy. ~ The accredited political parties availing of

the subsidy shall maintain a separate financial account for the funds used to finance campaign
activities and party development, respectively.
Every accredited political party shall submit to the Commission a detailed program of

activities as well as the breakdown of expenditures drawn from the fund by the end of

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December of every fiscal year, No accredited political party shall be allowed to use the

subsidy for purposes other than those indicated in this Act

CHAPTER IV

DISCLOSURE AND PERFORMANC|

MONITORING
Sl

1.26. Audit of the State Subsidy Fund. — The COA shall examine the financial
reports of the accredited political parties on their use of the State Subsidy Fund. Membership
dues and voluntary contributions to any accredited political party shall be accounted for
separately under a different set of books of accounts, which shall be open ti inspection by the

COA,

SEC. 27. Party Ethics. ~ Accredited political parties shall institute internal control

mechanisms to promote accountabili

y and transparency. Accredited political parties shall

likewise develop and enforce an internal code of conduct and ethical standards of its party
members to uphold the values and standards of public life, and to formulate and implement
disciplinary procedures for party members: Provided, That the said program for internal
controls, ethical standards and disciplinary procedures shall be duly submitted to the
Commission and made available to the public. No political party shall select and nominate a

candidate who has been convicted by final judgment for any criminal offense

SEC, 28, Full Disclosure. ~ The officials of every accredited political party shall
submit a sworn statement of their assets and liabilities to the Commission which shall be
made available to the public at least six (6) months before elections, All accredited political
parties and their candidates shall also be required to submit with the Commission and make @

public disclosure of all contributions as well as expenditures incurred for the use of State

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Subsidy fund thirty (30) days after the elections. All these disclosures shall be made through

the official website of the Commission and published in a newspaper of general circulation

SEC. 29. Other Reports, ~The following shall be reported by the accredited political
parties and their candidates:

(j) The amount of contributions for the elections, the date o'

ceipt by the bank
or by the duly authorized representative of the party and the full name and exact address of
the person, whether natural or juridical, from whom the contribution was received:

(b) A full report of expenditures and receipts incurred during the campaign,
including those which were drawn from the State Subsidy Fund, if any:

(©) Postelection disclosure statements as required under existing laws, which
must be submitted to the Commission within thirty (30) days after election day. Late
submission shall be penalized with a fine in such amounts as may be determined by the
Commission; and

(d) Detailed breakdown of expenditures for 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

ear.

SEC. 30. Failure to Comply with Disclosure and Reporting Requirements. - Failure

of the accredit

.d political patty to comply with the provisions of this Act will result in its
disqualification from receiving its share in the State Subsidy Fund. The said unused funds

shall revert to the General Fund of the National Treasury

ind all the rights and privileges to

which the party would have been entitled under this Act shall be forfeited.

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SEC. 31. 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

nongovernmental organizations, and other government agencies, an inte!

rated political party
development and campaign subsidy performance monitoring and reporting system, The
performance and monitoring system shall identify, define and operationalize @ 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. 32. 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 the Senate and the House of
Representatives of the Congress of the Philippines not later than June 30 of every year, and
shall be made available to the public via the internet and mass media as a guide for the
citizenry in evaluating political parties for the purpose of participating in their program of

activities, and in. supporting, affiliating with, or joining them,
CHAPTER V

MISCELLANEOUS PROVISIONS

SEC. 33. Punishable Acts. - The following acts shall be punishable:

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(a) Misuse of funds received by political parties, both from the State Subsidy

Fund and from voluntary contributions;

(b) Giving of voluntary contributions that 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 the

Commission; and

(e) False reporting or any misrepresentation in the finan

statement reports.

SEC. 34. Penalties.

(a) Any candidate or official of any political party who violates any provision of
this Act shall be punished with imprisonment of not less than six (6) years but not more than
twelve (12) years or a fine ranging from One hundred thousand pesos (P100,000.00) to Five
hundred thousand pesos (P500,000.00), or both, at the discretion of the court, He shall

likewise be disqualified to hold public office. Any political party that violates any provision

of this Act shall pay a fine of not less than Five hundred thousand pesos (P500, 000,00) but

not more than Five million pesos (P5, 000,000.00).
(b) Any political party that fails to comply with any of the documentary
requirements set forth in this Act shall be subject to administrative sanctions by the

Commission, which shall include temporary or permanent cancellation of the party's

registration as well as payment of fines consistent with existing laws and regulations.

SEC. 35. Appropriations. - The amount necessary for the implementation of the

provisions of this Act shall be included in the annual General Appropriations Act.

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SEC. 36, Lead Ageni

- The Commission is hereby mandated as the independent

regulatory agency charged with administering and enforcing the provisions of this Act

SEC. 37. Applicability - The provisions of Batas Pambansa Blg. 881, as amended,
otherwise known as the "Omnibus Election Code of the Philippines", and other election laws

not 27 inconsistent with this Act shall apply suppletorily:

SEC. 38. Rules and Regulations. - The Commission shall promulgate the necessary

rules and regulations to effectively implement the provisions of this Act.

SEC. 39. Separability Clause. - If any part of this Act is held invalid or
unconstitutional, the other parts or provisions hereof which are not affected thereby shall
remain valid and effective.

SEC. 40. Repeating Clause. -- All laws, orders, issuances, tules and regulations or
parts thereof inconsistent with the provisions of this Act are hereby repealed, modified or

amended accordingly.

SEC. 41. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

publication in at least two (2) national newspapers of general circulation

Approved,

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