Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

308

House il No.__*

Introduced by Representatives
GLORIA MACAPAGAL ARROYO and DIOSDADO MACAPAGAL ARROYO

AN ACT STRENGTHENING THE POLITICAL PARTY SYSTEM, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Political parties play a vital role in the country's quest for political and economic
development. The political party system in the country is basically confined to
personalities rather than issues and political platform. There have been many attempts
to reform the orientation of our political parties in the past so as to veer away from the
concept of traditional politics, but unfortunately they have not been successful because
of lack of legal institutional framework to govern system of political parties.

Our history tells us that political parties in the Philippines are normally used only
as political vehicles to win an election. Hence, most political aspirants change political
parties for convenience, rather than because of conviction. This only shows the lack of
ideological commitment to the members of party because they choose parties based on
the rise and fall of the tide of opportunity. “Turncoatism” should never be encouraged
nor tolerated since it only distorts the concept of word of honor and dignity of a leader.

It is in this light that the Political Party Act should be enacted. It is imperative that
political party system should be strengthened if we want to develop, achieve genuine
political development and democratization. We have to enact laws to prevent the
‘system of ward politics and political chameleons that we have today.

A Party Development Fund shall be created to provide subsidy to political parties
of national character for their operational expenses and party building activities not only
for electoral campaign but also for their, development programs. These funds shall be
appropriated in the national budget.

A political party may qualify to receive a portion from the Party Development
Fund if its national candidates garnered at least 15% of the popular yote in the most
Tecent general elections.

For their part, political parties should institute internal control mechanisms within
political parties to promote accountability and transparency.

The bill also encourages the political parties to raise its funds through Party
Foundation to finance their activities so that they will develop their self-sufficiency and
lessen their dependence on contributions from illegal sources.


The bill envisions changing the norm of having political butterflies during and
after the election period. It aims to give importance to party ideals and policy agenda
rather than the political pragmatism and survival. The bill proposes that any member of
the party wanting to change the party affiliation after being elected on that party's ticket,
should first resign from his elective position and must seek a fresh mandate from the
electorate. Likewise, defecting persons cannot be appointed nor hold any position in
nay public office, till after the expiration of the term within which they were elected.

In general, the proposed bill hopes to transform the Philippine political parties
from personality-oriented to issue-oriented political organizations. Thus, we can provide
our constituents with better brand of party politics.

In view of the urgent need to address the irregularities in the political party
system, the passage of this bill is urgently sought.

ache MACAPAGAL ARROYO DIOSDADO MACAPAGAL ARROYO
2nd District, Pampanga 2” District, Camarines Sur


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 30 8

Introduced by Representatives
GLORIA MACAPAGAL ARROYO and DIOSDADO MACAPAGAL ARROYO

AN ACT STRENGTHENING 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 |
DECLARATION OF POLICY, PURPOSES AND COVERAGE

Section 1. Title. — This Act shall be known as “The Political Party Development
Act of 2013”.

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
sysiem. 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. A part of the State’s thrust to strengthen the political party system, it
shall uphold partly 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 party development

c) Promote party loyalty and discipline;

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 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


b)

°)
d)

e)

2

h)

for this purpose by the Commission on Elections based on a set of criteria
provided under this Act

"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.

“Commission” refers to the Commission on Elections.

“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
Tesults 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
yoluntarily 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 yalue of the use of
which shall be assessed based on the market rates prevailing in a particular
area,

“COA" refers to Commission on Audit.

“Disclosure requirement” refers to the duty of all candidates and political
parties, aggrupation 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.

“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 who money,
property or any other form of contribution is made.

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

“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:


4) Abolition, merger or coalition of political parties where a candidate is

registered member thereof; and

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 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 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, aggrupation or coalitions thereof from persons, natural or
juridical, allowed under existing laws.

2

CHAPTER II
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 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
endeavour to act in accordance with the defined party platform and pursue programs to
fulfil 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 tules governing
the merit system on the nomination and selection of candidates not later than one
hundred eight (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 selectian of candidates. Every national nolitical narty 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 yoted 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
aggrupation or coalitions thereof. Nominations made in violation hereof shall be denied
die 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 of 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 hundred thousand pesos (P100,000. 00) from a natural person; and
b) Up to One million pesos (P1,000,000.00) 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

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 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;


c) 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 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 Ill
STATE SUBSISDY 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;

c) Education and training of members

d) Institution building and constituent outreach programs; and

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

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;


c) Information dissemination and advocacy campaigns of the political party;

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

e) 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, yice governors, twenty-four (24)
city/municipal mayors and vice mayors;

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.

b)

ic]

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 purposed and the conduct of information
dissemination campaigns and voters’ education;

Forty-five percent (45%) of the fund shall be proportionately and rateably
distributed to accredited national political parties represented in the Senate
based on the number of seats obtained in the most recent general elections;
and

Fifty percent (50%) of the fund shall be proportionately and rateably
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.

b)

°)

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
taised an amount equal to its share in the fund 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. 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. 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
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;

A full report of expenditures and receipts incurred during the campaign,
including those which were drawn from the State Subsidy Fund, if any;
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

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.

b)

°)

d

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.

Sec. 30. Performance Monitoring and Reporting System. The Commission and
the COA shall jointly design and implement, in consultation with the political parties,
aggrupation 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 deyelopment 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
feceived 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;

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;

b)

c)


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 Fifty thousand
pesos (P50,000.00) 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 less than One hundred thousand pesos
(P100,000.00) but not more than One million pesos (P1,000,000.00).

(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 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
Appropriations 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. 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. |f 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,