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SIXTEENTH CONGRESS OF THE REPUBLIC 
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OF THI' PHILWPINES 
) 
First Regular Session 
) 
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11U6 27 P 1 :33 
SENATE 
S.B. No. 1356 
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Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
Explanatory Note 
At a time when public funding is under intense scrutiny, when the Filipino people are 
crying out for full transparency and accountability, and when government is being called on to 
implement massive reforms, how can we ensure that it is the PEOPLE of the Philippines who 
ultimately have a say on where public funds are being spent? 
The People's Fund seeks to revolutionize public budgeting and funding by giving the 
taxpayers of the Philippines the choice on where a portion of their hard-earned money should 
go. 
It allows an individual taxpayer to allocate five percent (5%) of his or her income tax to 
be allocated for any ofthe following: 
,:. 
1. . An accredited charity or civil society organization; 
2. 
A priority national or local government project; 
3. 
A legitimate political party. 
Under this bill, the Bureau of Internal Revenue (BIR) shall establish the mechanism that 
would enable individual taxpayers to select beneficiaries upon filing of their annual income tax 
returns. 
Meanwhile, an inter-agency committee led by the Department of Budget and 
Management (DBM) shall determine the eligibility of respective organizations, and shall 
likewise set the conditions, guidelines, and reporting requirements for the receipt and use of 
the funds by the benefitting organizations. 
This gives the Filipino public greater control over how their monies are spent, ultimately 
empowering Filipinos to support institutions and initiatives that they deem worthy. 
In view of the foregoing, the approval of this bill is earnestly sought. 
s'"."'(?~o " .. m" 
. Aquino IV 
\ . 
"' 


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2 
SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S.B. No. 1356 
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(effo .. "f til' '\'>w.t •• ¥ 
'13 
AUG 27 P 1 :33 
RECEIVED BY:_Y-r\: 
Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
AN ACT PROVIDING FOR PEOPLE'S DIRECT PARTICIPATION IN FUNDING CHARITABLE 
INSTITUTIONS AND OTHER DEVELOPMENT-ORIENTED INITIATIVES THROUGH A PERCENTAGE 
OF THEIR PERSONAL INCOME TAX 
8e it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. - This Act shall be known as the "People's Fund of 2013". 
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SECTION 2. Declaration of Policies. - It is the policy of the State to guarantee the right 
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of the people and their organizations tp. effective and reasonable participation at all levels of 
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social, political, and economic decision-making. It is moreover the policy of the State to 
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promote a just and dynamic social order through the strengthening of a broad range of 
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organizations, programs and initiatives that facilitate social welfare, people's participation and 
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national development. In furtherance of these policies, the State shall provide a mechanism 
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that empowers its citizens to directly contribute public funds towards priority development 
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programs and the strengthening of real political parties and a vibrant civil society sector in the 
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Philippines. 
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SECTION 3. Definition of Terms. -
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a. Individual Tax Payer refers to any individual citizen subject to tax on income as 
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provided by the Tax Reform act (Republic Act No. 8424); 
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b. Charity or Civil Society Organizations refer to charitable institutions and other non-
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government organizations,' including foundations, civic organizations, people's 
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organizations, sectoral formations, cooperatives, microfinance institutions and social 
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enterprises, duly registered with the Securities and Exchange Commission (SEC), the 
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Cooperative Development Authority (CDA), or formal accrediting bodies approved 
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for the purposes of this law; 
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c. Priority Government Projects refer to the identified priority development projects 
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and programs of (1) Local Government Units (LGUs) as identified in their Local 
f",· , 
~, . 
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Poverty Reduction Action Plans (LPRAP) or (2) National Government Agencies 
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(NGAs) as identified in the Philippine Development Plan; 
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d. Political parties refer to national, regional, or sectoral parties, organizations or 
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coalitions duly registered with the Commission on Elections (COMELEC) as provided 
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by the Omnibus Election Code (Batasang Pambansa Big. 881) and the Party-List 
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System Act (Republic Act No. 7941). 
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SECTION 4. Allocation of Funds from Income Tax. -
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a. Individual Tax Payers shall have the option to allocate five percent (5%) of their 
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annual income tax to support a Charity or Civil Society Organization, Priority 
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Government Project or Political Party that the Tax Payer shall select from an official 
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list of eligible organizations and projects. An inter-agency committee to be led by 
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the Department of Budget and Management (DBM) shall provide this list. 
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b. The Bureau of Internal Revenue (BIR) shall establish the mechanism for an Individual 
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Tax Payer to allocate five percent (5%) of income tax yearly to the selected 
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beneficiary as part of the annual process offiling income tax returns. 
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c. 
Should an Individual Tax Payer decide not to allocate for any of the listed 
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beneficiaries or projects, the whole amount of the individual's annual income tax 
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goes to the government's general fund. 
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d. Funds received by the benefitting organizations or priority government programs as 
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provided by this Act shall be exempted from Donor's tax or any other taxes. 
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SECTION 5. Eligibility Requirements and Conditions. - An inter-agency committee to be 
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led by DBM shall be established to determine the qualifications and requirements for a Charity 
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or Civil Society Organization, Priority Government Project or Political Party to be eligible for the 
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five percent (5%) allocation; and to finalize the list of eligible organizations and projects to be 
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submitted to BIR each year. The inter-agency committee shall also set the conditions, 
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guidelines, processes and reporting requirements for the receipt and use of funds in 
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accordance with the government's de\l~lopment priorities and to ensure full transparency and 
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accountability. 
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SECTION 6. Implementing Rules and Regulations. -
The Department of Budget and 
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Management (DBM) and the Bureau of Internal Revenue (BIR) shall promulgate not later than 
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thirty (30) days upon the effectivity of this Act, the necessary rules and regulations for its 
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effective implementation. 
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SECTION 7. Separability Clause. -
If any provision of this Act is subsequently declared 
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invalid or unconstitutional, other provisions hereof which are not affected thereby shall remain 
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in full force and effect. 
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SECTION 8. Repealing Clause. -
All laws, acts, presidential decrees, executive orders, 
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issuances, presidential proclamations, rules and regulations or parts thereof which are contrary 
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to and inconsistent with any provision of this Act are hereby repealed, amended or modified 
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accordingly. 
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SECTION 9. Effectivity. -
This Act shall take effect fifteen (15) days after its complete 
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publication either in the Official Gazette or in at least two (2) newspapers of general circulation. 
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Approved,