SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHIILIPPINES 
) 
First Regular Session 
) 
SENATE 
S,No. 620 
Introduced by Senator Ralph G. Recto 
Explanatory Note 
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The PCSO has previously been mired in controversies over the alleged misuse of its 
Charity Fund - a billion pesos fund utilized to undertake medical and other social welfare 
program and projects of the PC SO and implemented through the services of Non-Government 
Organizations (NGOs), the Church and other program partners as conduits of funds for charity 
projects to the people. 
Given the discretionary nature of the Charity Fund and the lack of clear (lccountability 
provided in the peso charter, the disbursement of Charity Fund has not been in accordance with 
specific standards and is only subject to the approval of the PCSO board. 
Furthermore, the public is left in the dark as to the magnitude and allocation of the PCSO 
Charity Fund. There is no transparency in the use of the fund because it does not go through the 
usual budget scrutiny as it is considered an off-budget item and, therefore, not discussed in the 
congressional public hearings on the General Appropriations Bill. 
For as long as we leave the disbursement of the Charity Fund in the hands ·of the PCSO 
board, allegations of abuse in its utilization will continue to be a thorny problem for the 
institution. 
This bill intends to amend the charter of the PCSO. The Charity Fund which constitutes 
30% of the net receipts of the PCSO, under the bill, shall be used for the National Health 
Insurance Program administered by the PhilHealth. The existing revenue share of the local 
government units and other govermnent agencies in the PCSO charity fund shall be respected 
nevertheless. 
The equivalent amount shall be included in the General Appropriations Act (GAA) as a 
Special Purpose Fund for the counterpart shares of the national and local government in the 
National Health Insurance Program under the PhiIHealth. Thus, "What you see is what you get" 
as reflected in the GAA and no more "pork barrel" for the PCSO board. 
Hence, instead of the PCSO funneling the funds to its various government hospital 
beneficiaries, PCSO's Charity Fund would now be directly infused to PhilHealth that will allow 
indigents to seek treatment in government and private hospitals as well. 
Given such set-up, indigents no longer need to suffer the long queues of patients in the 
PCSO for financial assistance before they can line up in the hospitals for the medical services. 
Instead, they can go directly to any hospital accredited by the PhiIHealth to avail the needed 
hospital services. 
The provision of funds for PhiIHealth will hasten the achievement of universal health 
care coverage and will mean health insurance coverage for the poorest of the poor who are the 
usual players of the PCSO's Lotto and Sweepstakes. 
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This is also in line with the Aquino Administration Health Agenda which seeks to attain 
Universal Health Care by giving all Filipinos especially the poor and marginalized access to 
needed health care services without having to use personal money by enrolling them in 
PhilHealth and enhancing the benefit package that it offers. 
With PCSO funds used to finance the National Health Insurance Program, there will be 
easing of pressure to raise new taxes to cover increasing requirements of the program. And, 
instead of PhiIHealth members having to pay increased contributions to pay for enhanced 
benefits, the PhilHealth with additional funding from PCSO will now finance the additional cost 
of improved health services. 
The full implementation of universal coverage will increase health expenditures of the 
PhiIHealth and will reduce out-of-pocket expenditures which have dire implications to the people 
particularly the poor. This will result in freeing scarce household funds that can now be used for 
other basic expenses like education and food. The availability of insurance can also shield the 
people from distress having to face unexpected hospital expenses. 
In view of the foregoing, the approval of the bill is earnestly sought. 
rnkslJc 


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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
,211llilf 
II~Um tif t~. »".t.,U 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
JUL -8 P 2 :50 
SENATE 
S.No. 620 
Introduced by Senator Ralph G. Recto 
AN ACT 
AUGMENTING THE PHILHEALTH FUND FOR UNIVERSAL HEALTH CARE 
COVERAGE BY EARMARKING THE PHILIPPINE CHARITY SWEEPSTAKES 
OFFICE CHARITY FUND FOR SUCH PURPOSE, THEREBY AMENDING REPUBLIC 
ACT NO. 1169, AS AMENDED BY BAT AS P AMBANSA BLG. 42 
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Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Section I of Republic Act No. 1169, as amended by Batas Pambansa Big. 
42 is hereby further amended to read as follows: 
"SECTION 1. The Philippine Charity Sweepstakes Office (peSO). - The 
Philippine Charity Sweepstakes Office, [hereinafter designated the Office,] shall [be 
the principal government agency for raising] RAISE and [providing] PROVIDE [for] 
funds for THE NATIONAL HEALTH INSURANCE PROGRAM (NHIP) [health 
programs, medical assistance and services] and charities of national character, and as 
such shall have the general powers conferred in [section thirteen of Act Numbered 
One thousand four hundred fifty-nine] SECTION 13 OF ACT NUMBERED 1469, 
as amended, and shall have the authority:" 
"A. To hold and conduct charity sweepstakes races, lotteries, and other similar 
activities, in such frequency and manner, as shall be determined, and subject to such 
rules and regulations as shall be promulgated by the Board of Directors. 
["B. Subject to the approval of the Minister of Human Settlements, to engage in health 
and welfare-related investments, programs, proj ects and activities- which may be 
profit-oriented, by itself or in collaboration, association or joint venture with any 
person, association, company or entity, whether domestic or foreign, except for the 
activities mentioned in the preceding paragraph (A), for the purpose of providing for 
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permanent and contmumg sources of funds for health programs, incl~ding the 
expansion of existing ones, medical assistance and services, and/or charitable grants: 


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Provided, That such investments will not compete with the private sector in areas 
where investments are adequate, as may be determined by the National Economic and 
Development Authority. ") 
"[ClB. To undertake any other activity that will enhance its funds generation 
operations and funds management capabilities[, subject to the same limitations 
provided for in the preceding paragraph)." 
"It shall have, a Board of Directors, hereinafter designated the Board, composed of 
five members who shall be appointed, and whose compensation and term of office 
shall be fixed, by the President [(Prime Minister))." 
Sec. 2. Section 6 of Republic Act No. 1169, as amended by Batas Pambansa BIg. 42 is 
hereby further amended to read as follows: 
"SEC. 6 Allocation olNet Receipts. - From the gross receipts from the sale of 
[sweepstakes) tickets, whether for sweepstakes races, lotteries, or other similar 
activities, shall be deducted the printing cost of such tickets, which in no case shall 
exceed two percent (2%) of such gross receipts to arrive at the net receipts. The net 
receipts shall be allocated as follows:" 
"A. Fifty-five percent (55%) shall be set aside as a prize fund for the payment of 
prizes, including those for the owners, jockeys of running horses, and sellers of 
winning tickets:" 
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"Prizes not .claimed by the public within one year from date of draw shall be 
considered forfeited, and shall form part of the charity fund for disposition as stated 
below." 
"B. Thirty percent (30%), AS CHARITY FUND, WHICH shall be set aside as 
contributions to the NHIP, CREATED UNDER REPUBLIC ACT NO. 7875, AS 
AMENDED, AND ADMINISTERED BY THE PHILIPPINE HEALTH 
INSURANCE CORPORATION (PHILHEALTH) FOR THE EXCLUSIVE 
PURPOSE OF UNIVERSAL HEALTH CARE COVERAGE: PROVIDED, 
THAT THE EQUIVALENT AMOUNT SHALL BE INCLUDED IN THE 
GENERAL APPROPRIATIONS ACT (GAA) AS A SPECIAL PURPOSE 
FUND FOR THE COUNTERPART SHARES OF THE NATIONAL AND 
LOCAL GOVERNMENT IN THE NHIP UNDER THE PHILHEALTH: 
PROVIDED, FURTHER, THAT THE EXISTING REVENUE SHARE OF 


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LOCAL 
GOVERNMENT 
UNITS 
AND 
OTHER 
GOVERNMENT 
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AGENCIES, AS PROVIDED FOR BY EXISTING LAWS, SHALL BE 
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RETAINED [charity fund from which the Board of Directors, in consultation with 
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the Ministry of Human Settlements on identified priority programs, needs and 
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requirements in specific communities and with the approval of the Office of the 
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President (Prime Minister), shall make payments or grants for health p~ograms, 
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including the expansion of existing ones, medical assistance and servicds andlor 
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charities of national character, such as the Philippine National Red Cross, under such 
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policies and subject to such rules and regulations as the Board may from time to time 
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establish and promulgate. The Board may apply part of the contributions to the 
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charity fund to approved investments of the Office pursuant to Section 1 (B) hereof, 
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but in no case shall such application to investments exceed ten percent (l 0%) of the 
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net receipts from the sale of sweepstakes tickets in any given year]." 
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"Any property acquired by an institution or organization with funds given to it under 
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this Act shall not be sold or otherwise disposed of without the approval of the Office 
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of the President [(Prime Minister)], and that in the event of its dissolution all such 
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property shall be transferred to and shall automatically become the property of the 
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Philippine Government." 
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"C. Fifteen (15%) percent shall be set aside as contributions to the operating 
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expenses and capital expenditures of the Office. 
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"D. All balances of any funds in the Philippine Charity Sweepstakes Office shall 
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revert to and form part of the charity fund provided for in paragraph (B) HEREOF[, 
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and shall be subject to disposition as above stated]." 
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"The disbursements of the allocation herein authorized shall be subject to the usual 
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auditing rules and regulations." 
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Sec. 3. Implementing Rules and Regulations. - Within sixty (60) days upon effectivity of 
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this Act, the PCSO, the PhiIHealth and the Department of Budget and Management (DBM) shall 
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provide the necessary rules and regulations for the proper disposition of the said ifunds and the 
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effective implementation of this Act. 
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Sec. 4. Separability Clause. - If any provision of this Act is subsequently declared 
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unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
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effect. 


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Sec. 5. Repealing Clause. ~ All laws, decrees, executive orders, rules and regulations and 
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other issuances or parts thereof which are inconsistent with this Act are hereby repealed or 
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modified accordingly. 
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Sec. 6. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in the 
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Official Gazette or in any two (2) newspapers of general circulation. 
Approved, 
IlIksbc