FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez. and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 43
EXPLANATORY NOTE

This bill was originally introduced as House Bill No. 2128 by the undersigned
Rufus B. Rodriguez during the Fourteenth Congress. It was approved by the
Committee on Suffrage and Electoral Reforms as substitute House Bill No. 3655
under Committee Report No. 308 dated February 26, 2008. It was recalled for 2"
reading on September 1, 2008.

This bill seeks to institutionalize and strengthen political parties in the country
by introducing reforms in campaign financing and provide financial subsidies to
political parties to augment their expenditures for campaign.

A political party is defined under Section 60 of the Omnibus Election Code as
an organized group of persons pursuing the same ideology, political ideas or
platforms of government and includes its branches and divisions. The Philippines has
a multi-party system as provided for under Section 6, letter c, Article IX of the 1987
Philippine Constitution which states that a free and open party system shall be
allowed to evolve according to the free choice of the people.

As of April 2001, the Commission on Elections has listed eighty-two (82)
registered and accredited political parties. In the 2007 national and local elections,
there were eighteen (18) political parties who participated in the national elections
while ninety-three (93) participated in the party-list elections.

‘A major argument against a multi-party system is the tendency of members of
political parties to change their affiliations. While this is not prohibited under our
laws, this promotes divisiveness among the leaders in the community.

This bill seeks to remedy that by providing sanctions against any member of a
national political party who changes party affiliation after being nominated by the
Political party otherwise known as political tumcoats.

To further empower and professionalize political parties in the country, this
proposed measure exempts voluntary contributions from any person, subject to a
certain cap, from the payment of donor’s tax. Likewise, there is hereby created a State
Subsidy Fund to augment the operating funds of accredited national political parties.


To promote transparency and performance of mandate free from vested
interest, this bill punishes the giving of voluntary contributions beyond the allowable
limits set by law. This is not an unreasonable prohibition given its intent. Likewise,
the State Subsidy Fund may be used instead for campaign expenditures and party
development.

In view of the foregoing, immediate passage of this bill is earnestly requested.

MAXIMO B RODRIGUEZ, IR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —_)
First Regular Session )

HOUSE OF REPRESENTATIVES
House Bill No. 43

Introduced by Honorable Rufus B. Rodriguez and
Honorable Maximo B. Rodriguez, Jr.

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 2010.”

SEC. 2. Declaration of Policy. - It is hereby declared a policy of the
State to institutionalize and strengthen political parties as vital pillars of the
country’s democratic system. Towards this end, the State shall institute
reforms in campaign financing through effective and transparent mechanisms
designed to level the playing field among all candidates and political parties
during elections, and reduce opportunities for graft and corruption. As part of
the State's thrust to strengthen the political party system, it shall uphold party
loyalty and adherence to the party’s ideological principles, platforms and
programs. The State shall also institute measures to professionalize political
parties, and make them viable instruments of development and good
governance

SEC. 3. Purposes. - This Act aims to:

a) Institutionalize reforms in the financing of electoral campaigns, so as
to promote accountability and transparency;


b) Provide financial subsidies to political parties, to augment their
expenditures for campaign purposes and for party development;

¢) 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 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
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.

4) “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 be 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 thereof. For accredited national political parties, it
includes expenditures and destinations of party development and
campaign monies given to them as their share in the State Subsidy
Fund established under this act.

h) “Donor” refers to any person, natural or juridical, who contributes
money, property or any other form of material contribution to a
candidate, political party, aggrupation or coalition thereof.

i) “Donee” 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 made.

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

k) “National Political Party” refers to a political party or an organized
group of persons duly registered with the Commission, whose
constituency is effectively spread across the geographical territory of
all or a majority of the administrative regions of the Philippines,
pursuing or advocating platform, principles and policies for the
general conduct of government and which, as the most immediate
means of securing their adoption and implementation, regularly
nominates and supports its members as candidates for public office.

1) “Political 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
farther, that political turncoatism shall not apply in any of the
following instances:
i. Abolition, merger or coalition of political parties where a
candidate is a registered member thereof;
ii, Expulsion in writing, of the registered member from
his/her political party: Provided, that the cause for such
does not constitute Political Opportunism.


It includes political opportunism or any act of a party member
constituting disloyalty to the party, or regular non-adherence to the
party’s ideological principles, platforms, and programs, as determined
by the party in accordance with its constitution and by-laws.

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

n) “Voluntary Contributions” 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 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 (10) days after the party convention, for violation of the rules
governing the merit system on the nomination and selection of candidates.
Every National Political Party may hold conventions or meetings to nominate
their official candidates not earlier than fifteen (15) days before the start of
election period and shall submit to the Commission not later than the start of
the election period the names of the officials of the party authorized to
nominate their official candidates.

No political party shall nominate more candidates than the number of
persons required to be voted for in an elective position nor shall any
candidate be allowed to accept nominations from more than one registered
political party, except in cases of aggrupations or coalitions thereof.
Nominations made in violation hereof shall be denied due course by the
‘Commission and the candidates concerned shall be considered independent
candidates, The nominations of candidates of political parties shall be filed
not later than the last day for filing of the certificates of candidacy as
determined by the Commission.

SEC. 9. Contents Of Certificate Of Nomination. - The certificate of
nomination shall state that the person issuing the nomination is the duly
authorized representative of the political party as provided for in its
constitution and by-laws, that the person named therein is the official
candidate of the party for the elective position stated, and that he has
accepted said nomination. The certificate of nomination shall be subscribed
under oath by the duly authorized representative of the political party.

SEC. 10. Limits on Voluntary Contributions. - Voluntary contributions

to any National Political Party shall be limited to the following maximum
amounts:

a) Up to One Hundred Thousand Pesos (P 100, 000.00) from
a natural person; and

b) Up to One Million Pesos (P1, OOO, 000.00) 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.

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 changes 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;

©) 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;

) Prohibited from assuming any executive or administrative
position in his/her new political party; and

e) Directed to refund any and all amounts he/she received from
his/her political party, plus a twenty five percent (25%)
surcharge thereon;

SEC. 14. Petition for Disqualification. - Any citizen of voting age, or
any candidate, political party, aggrupation or coalition thereof, 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 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 park development activities
shall be allowed to be funded out of the State Subsidy Fund:

(@) Party administration, recruitment and civic education:

(b) Research and policy development;

(©) Education and training of members;

(d) Institution building and constituent outreach program;
and

(e) Other reasonable logistical and operational expenses that
are essential in strengthening the party.

SEC. 18, Allowable Campaign Expenditures. - The Accredited National
Political Parties are authorized to use the subsidy given to them only for the
following campaign activities:

a) Operating expenses of the party, which may include hiring of
personnel, professional secretariat, setting up of headquarters, and
other relevant electoral expenditures;

b) Traveling expenses of the candidates and support personnel in the
course of the campaign, and for personal expenses incident thereto;

c) Information dissemination and advocacy campaigns of the political

party;

4) Production and distribution of electoral paraphernalia and other
propaganda materials; and


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

SEC. 19. Accreditation. - A National Political Party eligible in
accordance with Section 20 hereof, and which desires to be entitled to the
rights and privileges as recipient of the subsidy provided for under this Act,
may apply for accreditation by the Commission, under such rules and
regulations as the Commission shall prescribe consistent with the provisions
of this Act.

SEC. 20. Criteria for Eligibility. - The Commission shall accredit
National Political Parties eligible to receive subsidy from the State Subsidy
Fund, based on the following general criteria:

a) Political representation, consisting of the incumbent
president, vice-president, members of congress, governors, vice-
governors, city / municipal mayors and vice-mayors;

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

©) Performance and track record of the party, which may
include the number of years of existence of the party as well as
the ability of the party to field a complete slate of candidates in
the immediately preceding national elections.

SEC. 21. Effects of Accreditation. - A duly accredited National Political
Party shall be entitled to the rights and privileges accorded under this Act.
Likewise, the accredited national political party shall be subject to the

regulations set forth in this Act and its implementing rules as prescribed by
the Commission.

SEC. 22. Distribution of the Fund. - The total amount of State Subsidy
Fund released annually shall be distributed as follows:

a) Five percent (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;

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;


©) Fifty percent (50%) of the fund shall be proportionately and
ratably distributed to accredited national political parties
represented in the House of Representatives based on the
number of seats obtained in the most recent general elections.
The share of each of the Accredited National Political Parties in the
State Subsidy Fund shall be released only upon proof that the concerned
party has raised an amount equal to its share in the Fund from voluntary
contributions: Provided, that the party concerned that fails to raise an amount
equal to its share in the fund shall only receive an amount from its share in
the fund equal to the amount raised from voluntary contributions: Provided
further, that the balance, if any, from the share in the Fund of the party
concerned shall be forfeited and reverted to the general funds of the
Government.

SEC. 23. Schedule of Releases from the Fund. - For purposes of this Act,
all releases from the State Subsidy Fund during a non-election year shall be
used exclusively for party development activities. Funds released during an
election year shall be divided as follows: seventy five percent (75%) shall be
used for campaign expenditures, and twenty five percent (25%) for party
development activities. The Commission shall inform the Accredited National
Political Parties of the schedule of releases as well as the amount of the
subsidy allocated at the start of every fiscal year.

SEC. 24. Management of the Subsidy. - The Accredited 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 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.

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 forfeiture of all the rights and privileges to which it
would have been entitled under this Act.


SEC. 30. Performance Monitoring and Reporting System. - The
Commission and the COA shall jointly design and implement, in consultation
with political parties, aggrupations or coalitions thereof, accredited citizens’
arms, the private sector and non-governmental organizations, and
government agencies, an integrated political party development and
campaign subsidy performance monitoring and reporting system. The
performance and monitoring system shall identify, define and operationalize
a system of performance indicators and measures for party development and
campaign subsidy deployment.

‘The Commission and the COA shall, based on the results of the system,
publish and disseminate annual reports on the development of political
parties that have received subsidies and on the distribution, use and results of
the campaign subsidies provided to political parties.

SEC. 31. Publication and Dissemination of the Political Party
Development and Campaign Subsidy 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;

¢) 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 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 (P50,000) 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 (P100,000)
but not more than one million pesos (P1,000,000);

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 Commission on Elections shall include
in its program the implementation of this Act, the funding of which shall be
included in the annual General Appropriations Act.

SEC. 35. Lead Agency. - The Commission is hereby mandated as the
independent regulatory agency charged with administering and enforcing the
provisions of the Act.

SEC. 36. Applicability. -The provisions of Batas Pambansa Blg. 881, as
amended, otherwise known as the “Omnibus Election Code 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. Separability Clause. - If any part of this Act is held invalid or
unconstitutional, the other parts or provisions thereof not affected thereby
shall remain valid and effective.

SEC. 40. Effectivity. - This Act shall take effect fifteen (15) days from its
publication in least two (2) national newspapers of general circulation.

Approved,