7 ,Jj. 
1 fl 
j. 1 ‘ L  ‘i 
FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The present lottery system of the Philippine Charity Offices (PCSO) has been plagued by 
allegations of graft and corruption, especially in connection with the authority of this agency to 
conduct lotteries and other similar activities, in collaboration, association, or joint venture with 
any person, association, company. Or entity, whether domestics, or foreign, including any 
arrangements that bears an identifiable resemblance to the subsisting Equipment Lease 
Agreement (ELA). 
Aside from conduct lottery system, other reports of graft and corruption in the PCSO 
include the following, 
1. 
Failure to account for some Eight Hundred Million Pesos (PS00,000,000.00) 
reportedly earned under the STL. Or small-town lotto operation. 
Disregard by the Office of the President of repeated confidential reports from 
former PCSO chairperson Tavera that the lottery bidding was rigged. 
The lease contract in connection with the lottery is grossly disadvantageous 
the government. 
The ELA is fraudulent misrepresentation, because in actual practice, it is the 
Philippine Gaming Management Corporation (PGMC) and not the PCSO which 
controls and operate the main computer. 
2. 
3. 
to 
4. 
Two lotto cases have been filed before the Supreme Court on the lease contract between 
the PCSO and PGMC. In case, the Court ruled that the contract was in effect a joint venture 
agreement and was therefore invalid as the chapter prohibits the PCSO from engaging in a joint 
venture. 
In the second case, the Supreme Court held that the lease contract, ELA, was true lease 
contract and thus valid. It even went further and ruled that a joint venture agreement would be 
valid under the PCSO charter. 


The legislative branch has the power of reversing a Supreme Court decision, if in its 
judgment the interpretation given to a law by the court is not in harmony with the general policy 
of the State, by enactment of a new law or by an amendment of the old, giving it a non-disputed 
meaning and interpretation as to clearly wipe out the decision of the judicial department. 
[Alejandro v. Quezon, 46 Phil. 83 (1942)l. And since in the second lotto case, the judicial branch 
of government has deliberately ignored the intent of the legislative branch so clearly and 
explicitly recorder in the legislative journal, it is now necessary to pass a law in order to make it 
completely clear that the prohibition against a joint venture applies not only to investment, but 
also to programs, projects and activities, including so-called as exemplified by the ELA 
presented at the second case. 
Hence, there is need to amend the PCSO Charter, or Republic Act No. 1169, to remove 
from the agency the authority to conduct lotteries or other similar activities, in collaboration, 
association, or joint venture with any person, association, company, or entity, whether domestic 
or ibreign, including any arrangement that bears an identifiable resemblance to the existing 
Equipment Lease Agreement, or ELA. This bill seeks to make such an amendment.* 
* This bill was originally filed during the Thirteenth Congress, First Regular Session. 


5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
FOURTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
7 ,li,l 
.,. .. ‘i8 i ’ ;  :..t 
First Regular Session 
) 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
AMENDING SECTION ONE OF REPUBLIC ACT NUMBERED ELEVEN HUNDRED AND 
SWEEPSTAKES OFFICE 
SIXTY-NINE, OTHERWISE KNOWN AS THE CHARTER OF THE PHILIPPINE CHARITY 
Be it enacted by the Senate and the House of the representative of the Philippines in 
congress Assembled 
SECTION 1. Section 1 of the Republic Act Numbered Eleven Hundred and Sixty-Nine is 
hereby amended to read as follows: 
“Sec. 1. The Philippine Charity Sweepstake Office. 
The Philippine Charity 
Sweepstake Office, hereinafter designated the Office, shall be the principal 
government agency for raising and providing for funds for 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, as amended, and shall have the authority; 
X 
X 
X 
X 
“B. THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE SHALL 
HAVE AUTHORITY TO ENGAGE IN HEALTHY AND WELFARE 
RELATED INVESTMENT, PROGRAMS, PROJECTS AND ACTIVITIES 
WHICH 
MAY 
BE 
PROFIT-ORIENTED 
BY 
ITSELF 
OR 
IN 
COLLABORATION, ASSOCIATION, OR JOINT VENTURE WITH PERSON, 
ASSOCIATION, COMPANY OR ENTITY, WHETHER DOMESTICS OR 
FOREIGN, EXCEPT CHARITY SWEEPSTAICE, RACES, LOTTERIES, AND 
OTHER SIMILAR ACTIVITIES. 
1 


1 
2 
3 
modified accordingly. 
SECTION 2. Repealing Clause. - All laws, decrees, orders, proclamation, rules and 
regulations or parts thereof, inconsistent with the provision of this Act are hereby amended or 
4 
5 
SECTION 3. Effectivity Clause. - This Act shall take effect fifteen days (15) days after 
its publication in at least two (2) newspapers of general circulation. 
6 
Approved, 
2