HOUSE oF RE

SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES.) REGEINER 16
First Regular Session ) BATE
HOUSE OF REPRESENTATIVES we Daven

H. No. 2595 BY

Introduced by Representative Vilma Santos-ReBLS 4X0 NPE X SERVICE

6th District of Batangas

AN ACT
MODERNIZING PUBLIC HEALTH INFRASTRUCTURE, PROVIDING FUNDS FROM.
THE PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR)
INCOME, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1869, AS
AMENDED BY REPUBLIC ACT NO. 9487

Explanatory Note

‘An overview of the Philippine Health Sector Reform in the Philippines described the
country’s health sector as one that exists in the context of persistent poverty and financial
challenges! As the population continues to grow, public health spending becomes inadequate.
Most of our public hospitals have deteriorated in terms of available medical equipment and
facilities as compared to their private counterparts, Such condition affects the quality of
healthcare and services that they provide to the Filipino people particularly the poor.

On the other side of the spectrum, there is quite a number of Government Owned and
Controlled Corporations (GOCCs), including the Philippine Amusement and Gaming
Corporation (PAGCOR) that has been in the spotlight in the recent past due to controversies
involving the alleged misuse of their funds.

Findings of the previous PAGCOR management indicted the Corporation’s former
officials for transgressions in the use of its income in the past few years. Other anomalous
transactions were noted including the use of revenues for partisan activities and failure to
allocate and remit the mandatory contributions to beneficiaries. Likewise, some of the mandated
contributions out of PAGCOR’s income have now become obsolete because the Corporation’s
Charter has not been amended since the year 2007.

This bill proposes to amend the PAGCOR charter by allocating the 50% share of the
national government in the aggregate gross earnings of the Corporation to fund the
modernization of public health infrastructure, specifically of all district, provincial and regional
hospitals in the country. This allocation is meant to improve the quality of healthcare that the
public hospitals deliver by modernizing their medical equipment and facilities, supporting their
possible increase in bed capacity and providing additional funding for the procurement of
necessary medicines.

The necessary requirements for personal services in line with the said modernization of
public health infrastructure shall be included in the General Appropriations Act under the
Department of Health.

With PAGCOR funds used to finance the modernization of public health infrastructure,
the financial challenges in public health sector and the issues on ncy_and effective
utilization of the Corporation’s income shall be addressed. —_ =

Esty 50

In view of the foregoing, the approval of the bill is ear

‘VILMA SANT‘

+ Soe Herrera etal, "Overview of Health Sector Reforms in the Philippines and Possible Opportunites for Public-Private Partnerships”, Asian
Institute of Management, Accessed at ils://C:/Users/acer/Downloads/health¢20sectoe20refoem pdf pdf on June 27,2016,


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SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )

First Regular Session

HOUSE OF REPRESENTATIVES
2599
H.No.

)

Introduced by Representative Vilma Santos-Recto
6th District of Batangas

AN ACT

MODERNIZING PUBLIC HEALTH INFRASTRUCTURE, PROVIDING FUNDS FROM

THE PHILIPPINE AMUSEMENT AND GAMIN‘

CORPORATION (PAGCOR)

INCOME, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1869, AS
AMENDED BY REPUBLIC ACT NO. 9487

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

SECTION 1. Section 1 of Presidential Decree No. 1869, as amended by Republic Act No.

9487 is hereby further amended to read as follows:

"Section 1. Declaration of Policy. — It is hereby declared to be the policy of the
State to centralize and integrate all games of chance not heretofore authorized by existing
franchises or permitted by law in order to attain the following objectives:
(a) To centralize and integrate the right and authority to operate and conduct games of
chance into one corporate entity to be controlled, administered and supervised by the
Government;
(b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools (basketball, football, lotteries, etc.) and such other forms of

amusement and recreation including games of chance, which may be allowed by law

within the territorial jurisdiction of the Philippines and which will (:(1)] generate sources
of additional revenue FOR THE MODERNIZATION OF PUBLIC HEALTHCARE
AND HEALTH INFRASTRUCTURE; [to infrastructure and socio-civie projects, such

as flood control programs, beautification, sewerage and sewage projects, Tulungan ng
Bayan Centers, Nutritional Programs, Population Control and such other essential public
services]

(© [2] TO create recreation and integrated facilities which will expand and improve the
country’s existing tourist attractions; AND

(@) [G)] TO [minimize, if not totally] eradicate [,] the evils, malpractices and corruptions

that are normally prevalent in the conduct and operation of gambling clubs and casinos
without direct government involvement.”

SEC. 2. Section 7 of Presidential Decree No. 1869, as amended by Republic Act No. 9487 is

hereby further amended to read as follows:

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"Section 7. Powers, Functions and Duties of the Board of Directors. — The Board
shall have the following powers, functions and duties;

a) To allocate and distribute[, with the approval of the Office of the President of the
Philippines,] the earnings of the Corporation AS PROVIDED FOR BY LAW [earmarked
to finance infrastructure and socio-civic projects};

b) To designate the commercial bank that shall act as the depository bank of the Corporation
and/or trustee of the funds of the Corporation;

©) To prepare and approve at the beginning of each calendar year the budget that may be
necessary under any franchise granted to it, to insure the smooth operation of the
Corporation; and to evaluate and approve budgets submitted to it by other corporations or
entities with which it might have any existing contractual arrangement; AND

[d) To submit to the Office of the President of the Philippines before the end of February of
each year a list of all the infrastructure and/or socio-civie projects that might have been
financed from the Corporation's earnings, and to submit such periodic or other reports as
may be required of it from time to time; and]

(@) [(@)] To perform such other powers, functions and duties as may be directed and authorized
by the President of the Philippines or as may be necessary or proper for the
accomplishment of its purposes and objectives.”

SEC. 3. Section 12 of Presidential Decree No. 1869, as amended by Republic Act No. 9487 is

hereby further amended to read as follows:

"Section 12. Special Condition of Franchise. — After deducting five (5%)
percent as Franchise Tax, the Fifty (50%) percent share of the Government in the
aggregate gross eamings of the Corporation from this Franchise shall be immediately set
aside and allocated to fund the MODERNIZATION OF PUBLIC HEALTH
INFRASTRUCTURE THROUGH THE following: [infrastructure and socio-civil
projects within the Metropolitan Manila Area:

(@) Flood Control

(b) Sewerage and Sewage

(©) Natritional Control

(d) Population Control

(©) Tulungan ng Bayan Centers

(© Beautification

(g) Kilusang Kabuhayan at Kaunlaran (KKK) projects; provided, that should the aggregate
‘gross earning be less than P150,000,000.00, the amount to be allocated to fund the above-
mentioned project shall be equivalent to sixty (60%) percent of the aggregate gross
‘earning.

In addition to the priority infrastructure and socio-civie projects with the Metropolitan
Manila specifically enumerated above, the share of the Government in the aggregate gross
earings derived by the Corporate from this Franchise may also be appropriated and
allocated to fund and finance infrastructure and/or socio-civic projects throughout the

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Philippines as may be directed and authorized by the Office of the President of the
Philippines.)

(A) ACQUISITION AND/OR UPGRADE OF MEDICAL EQUIPMENT AND
FACILITIES OF ALL DISTRICT, PROVINCIAL AND REGIONAL HOSPITALS
IN THE COUNTRY;

(B) REQUIREMENTS FOR THE INCREASE OF BED CAPACITY OF ALL
DISTRICT, PROVINCIAL AND REGIONAL HOSPITALS IN THE COUNTRY;
AND

(©) PROCUREMENT OF MEDICINE IN ALL DISTRICT, PROVINCIAL AND
REGIONAL HOSPITALS AS LISTED IN THE REGISTRY OF DOH;

PROVIDED, THAT THE SUBJECT FUNDS SHALL NOT BE UTILIZED FOR
THE PAYMENT OF PERSONAL SERVICES EXPENDITURES SUCH AS
SALARIES, ALLOWANCES AND OTHER PERSONNEL COMPENSATION:
PROVIDED, FURTHER, THAT THE EQUIVALENT AMOUNT NEEDED FOR
PERSONAL SERVICES SHALL BE INCLUDED IN THE GENERAL
APPROPRIATIONS ACT (GAA) UNDER THE BUDGET OF DOH OR LOCAL
GOVERNMENT FUNDS.

SEC. 4, Implementing Rules and Regulations. ~ Within sixty (60) days upon effectivity of
this Act, the PAGCOR, the DOH and the Department of Budget and Management (DBM) shall
provide the necessary rules and regulations for the proper disposition of the said funds and the
effective implementation of this Act.

SEC. 5. Separability Clause. ~ If any provision of this Act is subsequently declared
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect.

SEC. 6. Repealing Clause, ~ All laws, decrees, executive orders, rules and regulations and
other issuances or parts thereof which are inconsistent with this Act are hereby repealed or modified
accordingly.

SEC. 7. ffectivity. - This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any two (2) newspapers of general circulation,

Approved,

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