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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Third Regular Session 
, 
SENATE BILL NO. 
1 
(In substitution of S. Nos. 1051 1329,1401~~~~a:rVli; 
Y L ~ ~ . ~ ,  
~)I. 
Taking into consideration S. Nos. 1818 aiid 2082 ) 
Prepared by the Committee on Constitutional Amendments, Revision of Codes and Laws; 
Committee on Ways and Means; and, Committee on Finance. with Senators Af~gara, Recto, 
Pangilinan, Ejercito, J, Gordon and members of the committees as authors 
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 
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promote accountability and transparency; 


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b) Provide financial subsidies to political parties, to augment their 
expenditures for campaign purposes and for party di-welopment; 
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 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 certificate 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 of a 
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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. 
9 “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 devefopment 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. 
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i) “Donee”refers to any candidate, political party, aggr upation or coalition 
thereof, or any representative acting in their behalf or interest, to whom 
money, property, or any other form of contribution k made. 
j) “Fund refers to the State Subsidy Fund established under this Act. 
k) “National Political Party” refers to a political p;:.,:.iy 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. 
“Political Turncoafism” refers to the change of political party affiliation 
by any candidate whether or not elected, from the time he was first 
nominated; Provided tl7af, 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) 
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 
hidher 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. 
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m) “State Subsidy Fund” refers to the fund for party development and 
campaign activities of accredited national political parties under this 
Act. 
n) “Voluntary Confribufi0n.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 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 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 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 
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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 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 
( I O )  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. 
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SEC. 9. Contents Of Certificate Of Nomination. - The certificate of 
nornination shall state that the person issuing the nomination is the duiy 
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 Voluntary Contributions. - Voluntary contributions to 
any National Political Party shall be limited to the following maximum amounts: 
a) Up to One Hundred Thousand Pesos (PlOO,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 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. 
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The Commission shall cause the publication of the account of all political 
parties in any newspaper of general circulation within a reasonable tirne as 
determined by the Commission. 
SEC. 12. 
Changing Political Party Aff/liation. - 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 hidher 
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. 
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SEC. 15. Authorized Expenses of National Pafitical 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 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 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 paky 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. 
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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, 
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city/municipal mayors and vice-mayors; 
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b) Organizational strength and mobilizafion capability, which may 
include the number of political chapters, orgariizations nationwide, and 
number of active and permanent members of the party; 
c) Performance and track record of the parfy, 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 
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raised an amount equal to its share in the Fund from voluntary contributions; 
Provjded thaf, 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 
revetted 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 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. 
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Chapter 4 
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. 
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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 
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; 
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 
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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 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 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; 
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d) Failure to submit pre-election as well as post-election disclosure 
statements to the Cornmission; 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 (P100,OOO) but not more than one 
million pesos (PI ,000,000); 
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 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. 
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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 Bafas Pambansa Slg. 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. SeparabiMy 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, 
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