Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

.
HOUSE BILL NO. __ 8242

Introduced by Honorable Giorgidi B. Aggabao

EXPLANATORY NOTE

The political party system plays a crucial role in the political and economic
stability of our country. We all agree that a sound and strong political party system
must be anchored on party ideologies, ideals and principles, issues and platform, all for
the country’s development. Sadly, however, our current political system is dominated
more by personalities whose interest is rooted on what would be financially and
politically convenient and rewarding to them. Because of this misorientation or
misconception, political butterflies have become a common sight and turncoatism seem
to have become the norm.

This bill aims to strengthen and reform our political party system , hopefully in
time for the next national elections. It also establishes a State Subsidy Fund to provide
subsidy to national political parties for their operational and party building expenses,
including expenses for campaign purposes.

This bill has been introduced many times during the past Congress and has in
fact been approved and passed on Third Reading by the House of Representatives
during the fifteenth Congress. With the upcoming national elections in 2016, approval
of this bill would be very relevant and timely.

Hence, approval of this bill is earnestly sought.

Sane BAO.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

3242

HOUSE BILL NO.

Introduced by Honorable Giorgidi B. Aggabao

AN ACT
STRENGHTENING 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 I
DECLARATION OF POLICY, PURPOSES AND COVERAGE

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

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;
Provide financial subsidies to political parties to augment their expenditures
for campaign purposes and for party development;
Promote party loyalty and discipline; and

s

a)


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 assessed based on market rates prevailing in a
particular area.

(¢) “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

Page 2 of II


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.
(b) “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.
“Donee” 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.
“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 turncoatism
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.
It includes political opportunities 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 the party development and
campaign activities of accredited national political parties under this Act.
(n) “Voluntary contributions” refer to the contributions to candidates and/or political
parties, aggrupations or coalitions thereof from persons, natural or juridical, allowed
under existing laws.

6

@

Page 3of 11


CHAPTER II
INTITUTIONALIZATION 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 coalition s 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

Page 4 of 11


political parties shalll be filed not later than the last day for filing 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 million pesos (P1,000,000.00) from a natural person; and

(b) Up to ten million pesos (P10,000,000.00) 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.

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

SEC, 11. Voluntary Contributions to a Political Party; How Made. 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 charges 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;

Page Sof 1


©) 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 (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 Twenty
pesos (20.00) 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 Ul
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 allowed to be funded out of the State
Subsidy Fund:

(a) Party administration, recruitment and civic education;

(b) Research and policy development;

(©) Education and training of members;

(a) Institution building and constituent outreach programs; and

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

strengthening the party.

Page 6 of IL


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) Travelling expenses of the candidates and support personnel in the course of
the campaign, 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

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

SEC. 19. Accreditation. A national political party eligible in accordance with Sec. 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 of Elij ity. 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;

(b) 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 accord 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;

Page 7 of It


(b) Thirty percent (30%) 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

(©) Sixty -five percent (65%) 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 membership dues and 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 membership dues and 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 purpose of this Act, all releases
from the State Subsidy Fund during a non-election year shall be used exclusively for
the party development activities. Funds released during 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.
Membership dues and voluntary contributions to any accredited national political

Page 8 of I


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 od 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;

(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 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.

Page 9 of II


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 coalition 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 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 contribution 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 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 One
Hundred thousand pesos (P100,000.00) 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
Jess than Five hundred thousand pesos (P500,000.00) but not more than Five million
‘pesos (P5,000,000.00). (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

Page 10 of 11


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 Appropriation 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. Alll 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.

Page Il of I