FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
'11 
JUL 21 
P 1 :34 
SEN~1:E 
S. No. 
ti98 
HECEIV;:!, I'Y:~ 
-------------------------------------------
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
In the 2009 Annual Audit Report of the Commission on Audit, the Philippine Charity 
Sweepstakes Office (PCSO) had a dismal showing in terms of its implementation of the previous 
year's recommendations. Of the 50 audit recommendations presented in the 2008 report, only six 
were implemented, six were partially implemented, and 38 were not implemented at all. This 
only highlights the existing culture of illicit practices in the PCSO which this bill seeks to 
address. 
Under existing law, PCSO generates revenues from the sale of sweepstakes and lotto 
tickets. The resulting revenues are allocated as follows: 
• 
55% to the Prize Fund 
• 
30% to the Charity Fund 
• 
15% to the Operating Fund 
The Charity Fund and the Operating Fund - or in other words, 45% of the revenues - are 
allocated by the PCSO Board with the approval of the President. This fund has served as a black 
budget, meaning a budget insulated from public scrutiny, confined to the dark and insulated from 
sunshine, sneaked through the back door instead of undergoing the open process of congressional 
budgetary authorization. The present situation is feudal and contrary to best international 
practice. The best practice is the one-fund concept, under which all government revenues are 
remitted to the Treasury, and disbursed only as authorized by Congress. There should be no 
President's Social Fund, because the entire government budget is already his budget. This is why 
we call it the President's Budget. 
The entire revenues of the PCSO for the year should be remitted to the national treasury. 
Only the President and Congress will prioritize and allocate the fund, except that 5% of the lotto 
earnings shall be given to local government units, and only 10% shall be allocated for 
administrative expenses. 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
SENATE 
S.No. 
2B98 
Introduced by Senator Miriam Defensor Santiago 
1 
AN ACT 
'11 
JUL 21 
P 1 :34 
2 
AMENDING SECTIONS 6 AND 11 OF REPUBLIC ACT NO. 1169, AS AMENDED, 
3 
ALSO KNOWN AS "AN ACT PROVIDING FOR CHARITY SWEEPSTAKES, HORSE 
4 
RACES, AND LOTTERIES" 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
5 
SECTION I. Section 6, paragraphs (B), (C) and (D) of Republic Act No. 1169, as 
6 
amended, also known as "An Act Providing for Charity Sweepstakes, Horse Races, and 
7 
Lotteries", is hereby amended to read as follows: 
8 
B. [Thirty percent (30%)] THIRTY FIVE PERCENT (35%) shall be set 
9 
aside TO BE REMITTED TO THE NATIONAL TREASURY, [as 
10 
contributions to the charity fund from which the Board of Directors, in 
11 
consultation with the Ministry of Human Settlement on identified priority 
12 
programs, needs, and requirements in specific communities and with approval of 
13 
the Office of the President (Prime Minister), shall make payments or grants for 
14 
health programs, including the expansion of existing ones, medical assistance and 
15 
services and/or charities of national character, such as the Philippine National Red 
16 
Cross, under such policies and subject to such rules and regulations as the Board 
17 
may from time establish and promulgate. The Board may apply part of the 
18 
contributions to the charity fund to approved investments of the Office pursuant to 
19 
Section 1 (B) hereof, but in no case shall such application to investments exceed 
20 
ten percent (10%) of the net receipts from the sale of sweepstakes tickets in any 
21 
given year.] 


,. 
1 
[Any property acquired by an institution or organization with funds given 
2 
to it under this Act shall not be sold or otherwise disposed of without the approval 
3 
of the Office of the President (Prime Minister), and that in the event of its 
4 
dissolution all such property shall be transferred to and shall automatically 
5 
become the property of the Philippine Government.] 
6 
C. [Fifteen (15%)] TEN (10%) percent shall be set aside as contributions 
7 
to the operating expenses and capital expenditures of the Office. 
8 
D. LOCAL GOVERNMENT UNITS SHALL RECEIVE A FIVE 
9 
(5%) PERCENT SHARE OF THE PROCEEDS FROM THE TOTAL 
10 
SALES OF ON-LINE LOTTERY (LOTTO) OUTLETS OPERATING 
11 
WITHIN THEIR JURISDICTION, INCLUDING A DOCUMENTARY 
12 
STAMP TAX FROM THE SAID DONATION. [All balances of any funds in 
13 
the Philippine Charity Sweepstakes Office shall revert to and form part of the 
14 
charity fund provided for in paragraph (B), and shall be subject to disposition as 
15 
above stated. 
16 
The disbursements of the allocation herein authorized shall be subject to 
17 
the usual auditing rules and regulations.] 
18 
SECTION 2. Section 11 of the same law is hereby amended to read as follows: 
19 
SECTION 11. Laws affected. -
Act No. 430, as amended by 
20 
Commonwealth Act Nos. 301 and 546 and by Republic Acts Nos. 72 and 574, 
21 
and all other Acts or parts thereof, except Commonwealth Act No. 595 and 
22 
Republic Act No. 620, inconsistent with the provisions of this Act, are hereby 
23 
repealed. 
24 
THE PROVISIONS OF REPUBLIC ACT NOS. 6847, 7722, 7660, 
25 
7835,8042,8175,8313,8371,8492 AND 9165 AND EXECUTIVE ORDER 
26 
NOS. 201, 218 AND 280 INCONSISTENT WITH THE PROVISONS OF 
27 
THIS ACT ARE HEIlEBY REPEALED, 
2 


• 
SECTION 3. Separability Clause. - If any provision of this Act shall be declared 
2 
unconstitutional, any other provision not affected thereby shall remain in full force and effect. 
3 
SECTION 4. Repealing Clause. - Any law, presidential decree or issuance, executive 
4 
order, letter of instruction, administrative order, rule or regulation contrary to or inconsistent 
5 
with, the provisions of this Act is hereby repealed, modified, or amended accordingly. 
6 
SECTION 5. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
7 
publication in at least two (2) newspapers of general circulation. 
Approved, 
3