Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

THIRTEENTH CONGRESS
1* Regular Session

House Bill No,

Introduced by RODRIGUEZ D. DADIVAS

Note
In the fong political history of our country, many political parties have come and
gone. On the other hand, new parties usually surface during election time and the
winning political parties whether local or national usually remain intact after the
elections.

Losing parties suddenly have gone or just remained sidelined until new opportunity
knocks or depending on the rise and fail of the tide of opportunity. This is so because
most if not all politicians use it for political convenience and narrow superficial
considerations rather than of sacrifice, honor, dignity, and conviction. Political
turncoatism is but normal and the general public has no choice but to accept this
‘situation hook, line and sinker while the country's Progress is etemaily in question.

On the other hand, the cost of running in any national or local election is too costly
and the moneyed politicians especially the incumbents certainly have the edge over
the new set of aspiting politicians.

It is in this light that the Political Party System Act should be enacted. Indeed, the
‘need to stave off political tumcoatism and prevent the proliferation of chameleons is
imperative if we are to achieve genuine political development and democracy.

This bill seeks also the establishment of a State Subsidy Fund to be used solely for
campaign expenditures and the program operations and party development of the
accredited national political parties. This would level the playing and the need for the
candidates especially the poor ones to seek alliance with big business and lobbyist
groups, or even syndicates to ask for logistic support would be prevented. Hence,
massive political corruption is nipped in the bud before it could create a malady.

By and large, the proposed bill hopes to transform the Philippine political parties from
Personality-oriented to issue oriented political organizations to provide our
Constituepte-wittr better brand of party politics.

e ppproval of this bill is eamestly sought. This bill was also
filed in both houses of Coigress during the last congress.

1® District, Capiz fbi parysystam


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

THIRTEENTH CONGRESS
4 Regular Session

House Bill No.

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

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

Chapter 1
Dectaration of Policy, Purposes and Coverage

Section 1. Title. - This Act shall be known as “The Political Party
Development Act of 2004.”

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 system. Towards this end, the State shall institute reforms in campaign
financing through effective and transparent mechanisms designed to level the
playing fied among all candidates and political parties during elections, and reduce
Opportunities for graft and corruption. As part of the State's thrust to strengthen the
political party system, it shall uphold party 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 govemance.

Sec. 3. Purposes, — This Act aims to

@) institutionalize reforms in the financing of electoral campaigns, so as to
promote accountability and transparency;

b) Provide financia! subsidies to political parties, to augment their
expenditures for campaign purposes and for party development;

©) Promote party loyalty and discipline; and

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 with, 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 poltical party of national
character qualified to receive subsidy for campaign purposes and party
development, accredited for the purpose by the Commission based on a
set of criteria provided under this Act.

b) “Candidate” refers to any person aspiring for, or seeking an elective
Public office, duly nominated by a political party, aggrupation, or coalition
of patties, and who has filed a certificate of candidacy with the
Commission

©) “Commission” refers to the Commission on Elections.

@) “Campaign Contributions” shall mean all forms of donations to any
candidate, political party, aggrupation or coalition, regardless of the
source, given before, during and after the holding of elections. It shall also
include 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, whether or not legally enforceable, made for the purpose of
influencing the results of the elections, but shall not include services
rendered without compensation by individuals volunteering @ portion or all
of their time in behalf of a candidate or political party. it shall also include
the use of office, space, facilities, equipment, office supplies and other
materials and fixtures voluntarily 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

e) “Campaign Expenditures” shail include all types of expenses incurred,
regardless of source, amount and purpose that relates, directly or
indirectly, to the conduct of an electoral campaign. It involves all payments
of money or anything of value, or a contract, promise of agreement to
spend, for the purpose of influencing the results of the election. it shall
include the use of space and facilities personally owned by the candidate
the monetary value of the use of which shall be assessed based on the
market rates prevailing in a particular are.

f) “COA” refers to the Commission on Audit.

g) “Disclosure Requirements” refers to the duty of all candidates and
political parties, aggrupations or coalition to reveal the details of campaign
contributions received by them, and the expenditures made on account
thereof, For the accredited national parties, “disclosure requirements* shail
include expenditures and destinations of campaign and party development
monies given to them as their share in the State Subsidy Fund established
under this Act.

h) “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

“Donee” refers to any candidate, political party, aggrupation or coalition,

or any representative acting in their behalf or interest, to whom money,

property or any other form of contribution is made

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

k) “National Political Party” refers to a political party 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.


|) “Political Party” refers to an organized group of persons duly registered
with the Commission, pursuing or advocating a platform, principles and
polities 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.

m) “Political Turncoatism" refers to the change of political party affiliation by
any elective public official under which he was elected from the time of the
election up to the last six (6) months before the succeeding election;
Provided, That political tumcoatism shail apply in any of the following
instances:

i Merger or coalition of political parties where a candidate is a
registered member thereof;

ii Abolition of political parties where a candidate is a registered
member thereof,

ii,  Exputsion in writing, of the registered member from his/her
political party; and

iv. Resignation of any elective public official from a political party;
Provided, That the elective public official remains independent
during his term of office up to six (6) months before the
succeeding election; Provided, further, That the basis of
determining his/her party membership is the party of his/her
choice appearing in the certificate of nomination from his/her
party filed with the Commission.

n) “State Subsidy Fund” refers to the fund for party development and
campaign activities of accredited national political parties established
under this Act.

©) “Voluntary Contributions” refers to the contributions to candidates
and/or polttical parties, aggrupations or coalitions, from persons, natural or
juridical, allowed under existing laws,

Chapter 2
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 by-laws platform,
Principles, policies and general program of government, a verified list of its national
officials, members of the executive board, or its equivalent, and the head of its
regional, provincial and city branches and such other relevant information as may be
fequired by the Commission. The Commission shall, after due notice and hearing,
resolve the petition with twenty (20) days from the date it is submitted for decision.

Those who are already registered as a national poltical party may not register
anew.

Sec. 7. Definition of policy agenda and program of governance. -
National political parties are mandated to adopt a clear policy agenda and program
of govemance consistent with their party philosophy and ideals. The members of the
national political party shall endeavor to act in accordance with the defined party
platform and pursue programs to fulfill party commitments.


‘Sec. 8. Selection of Candidates. — The selection process of candidates of
national political parties shall be democratized through the adoption of a process that
is fair, open and transparent, and which promote the widest possible participation of
the members of the party.

Sec. 9. Limits on Voluntary Contributions. — Voluntary contributions to any
national polttical party shall be limited to the following amounts:

a) A contribution from any individual shall not exceed the amount of One
Hundred Thousand Pesos (P100,000.00); and

b) A juridical entity can contribute up to a maximum amount of One Million
Pesos (P1,000,000.00)

Sec, 10. Changing Political Party Affiliation. - Any member of a national
party who changes party affiliation after being elected on the ticket of that party shall
be deemed to have committed political tumcoatism.

Sec. 11. Penalties for Political Turncoatism. — The elected public officials
who have committed political tumcoatism shail be:

) Prohibited from running for any elective position in the next succeeding
election immediately following the act of changing political party affiliation;

») 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;

©) Prohibited from assuming any executive or administrative position in
his/her new political party; and

d) Directed to refund any and all amounts he/she received from his/her
political party, plus a twenty-five (25%) surcharge thereon.

Sec. 12. Petition for Disqualification. - Any citizen of voting age, or any
candidate, political party, aggrupation or coalition, 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 tumcoatism as defined in this Act.

Sec. 13. 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 candidates. The Commission shall adjust the
authorized expenditure as well as the authorized contributions under Section 9
based on the Consumer Price Index every three (3) years following the effectivity of
this Act.

Chapter 3
State Subsidy Fund

Sec. 14. Establishment of a State Subsidy Fund. - There is hereby
established a State Subsidy Fund, which shall be exclusive used to augment the


operating funds of the accredited national political parties. The Fund shall be used
equally for two major purposes, as follows:

a) Campaign expenditures; and
b) Program operations and party development.

Sec. 15. Application for Subsidy. - A registered national political party,
which desires to be entitled to the rights and privileges as recipient of the subsidy
provided for under this Act, may apply for the subsidy with the Commission, under
such rules and regulations as the Commission shall prescribe consistent with the
eligibility criteria laid down under this Act

Sec. 16. Criteria for Eligibility. - The Commission shall approve the
application for subsidy of a registered national political party based on the following
criteria:

@) Political representation, which may include the number of seats gained in
the national legislature in the most recent national elections;

b) Organizational strength and mobilization capability, which may include the
number of political chapters, organizations nationwide, and number of
active and permanent members of the party;

c) 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 past three (3) national elections; and

Capability to implement developmental programs for their constituency,

which may include the number of projects and programs of the national

political parties related to voters’ education, information campaigns on
rational issues, trainings and other constituency-building activities.

9d)

Sec. 17. Effects of Approval of Acceptance of State Subsidy. - A
registered national political party whose application for subsidy has been approved
shall be entitled to the rights and privileges accorded under this Act. Likewise, said
national political party shall be subject to the regulations set forth in this Act and its
implementing rules as prescribed by the Commission.

Sec. 18. Distribution of the Fund. — The total amount of subsidy released
annually shall be distributed as follows:

a) Up to 20% of the fund shall be distributed equally between the accredited
dominant majority and the accredited dominant minority party: Provided,
That the share of said party shall only be released upon actual showing
that said party has raised from voluntary contributions and amount equal
to its share of the subsidy;

b) Up to 10% of the fund may be used by the Commission exclusively for

information campaign, voters education and comprehensive monitoring of

this Act; and

The balance of 70% shall be equitably and proportionately apportioned

among the registered national political parties in accordance with the

eligibility criteria under Section 16 and in compliance with the party ethical
and disciplinary code under Section 24 hereof.

°)



Sec. 19. Schedule of Releases from the Fund. ~ For the purposes of this
Act, all releases from the Fund during a non-election year shall be used exclusively
for party development activities. The funds for campaign subsidy shall be released
only during an election year.

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. 20, Accounting of the Subsidy. - The accredited national political
parties availing of the subsidy shall maintain a separate financial accounts 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
the purposes other than those indicated in this Act.

Sec. 21. 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,
only the following party development activities shall be allowed to be funded out of
the subsidy:

a) Party administrative staff, recruitment and training of personnel, and
headquarters operations;

b) Research and policy development, including hiring of experts;

¢) Education and training of party members;

d) Constituency outreach program, workshop and seminar, and

e) Other reasonable logistical expenses essential to the necessary operation
of the party.

Sect 22. Allowable Campaign Expenditures. — The 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 hiring of campaign
personnel, setting up of headquarters, and other relevant electoral
expenditures;

b) Traveling and accommodation expenses of the candidates and support
personnel in the course of the campaign;

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

d) Production and distribution of electoral paraphemalia and other campaign
materials; and

e) Other expenditures stipulated under Section 102 of the Omnibus Election
Code.


Chapter 4
Disclosures and Performance Monitoring

Sec. 23. Audit of the Fund. — The COA shall examine the financial reports of
the accredited national political parties on their utilization of the 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. 24, Party Ethics. - Accredited national political parties shall institute
interna! contro! mechanisms to promote accountability and transparency,

Accredited national political parties shall likewise develop and enforce an
internal code of conduct and ethical standard 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 intemal controls,
ethical standards and disciplinary procedures shall all be duly filed with the
Commission and made available to the public.

In addition, no accredited national political party shall sponsor and select a
candidate who has been convicted of any criminal offense involving moral turpitude,
electoral fraud or violence against persons.

‘Sec. 26. Full Disclosure. — The national officials of every registered national
political party shall submit a sworn statement of their assets and liabilities to the
Commission. Said documents shall be open to public inspection.

All accredited national political parties shall also be required to make a similar
public disclosure of all contributions as well as expenditures from the subsidy out of
the fund.

All these disclosures shall be made through the official website of the
Commission and in a newspaper of general circulation.

Sec. 26, Other Reports. - The following shall be reported by the national
political parties:

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

b) Detailed breakdown of expenditures of the party development activities
charged against the 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.

‘Sec. 27. Publication and Dissemination of Annual Reports. - The COA
shall, based on the audit of the various disclosure reports, publish and disseminate
annual reports on the development of political parties which shall receive subsidies


and on the distribution, use and results of the campaign subsidies provided to
political parties.

Sec, 28. Publication and Dissemination of the Polltical Party
Development and Campaign Subsidy Performance Reports. - The COA shall
submit to Congress said performance report not jater 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 &
Miscellaneous Provisions

Sec. 29. Punishable Acts. — The following acts shall be considered election
offenses and be punishable:

a) Misuse of funds received by the national political parties both from the
State Subsidy Fund and from voluntary contributions;

b) The giving of voluntary contributions which go beyond the allowable limits
set under this Act and other existing laws;

¢) Inability without justifiable reason to account for all incoming contributions
from whatever source;

d) Failure to submit disclosure statements to the Commission; and

e) False reporting or any misrepresentation in the financial statement reports

‘Sec. 30. Penalties. — 2) Any candidate or official of any national political party
who commits any of the acts mentioned in Section 29 hereof shalll be liable for an
election offense, and shall be imposed the corresponding penatty prescribed under
the Omnibus Election Code, without prejudice to the imposition of other penalties
under other existing laws;

b) Any national political party which 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 payment of fines consistent with
existing laws and regulations,

Sec. 31. Appropriations. - The amount of Three Hundred Fifty Million Pesos
(P350,000,000.00) is hereby appropriated out of the funds of the National Treasury
not other appropriated for every fiscal year when national elections will be held and
the amount of Two Hundred Fifty Million Pesos (P250,000,000.00) for every year
when no national elections will be conducted. All such amounts appropriated
pursuant to this Act shall go to the State Subsidy Fund, which shall be administered
by the Commission.

‘Sec, 32. Lead Agency. ~ The Commission on Elections is hereby mandated
as the independent regulatory agency charged with administering and enforcing the
provisions of the Act



Sec. 33. Applicabllity. - The provisions of Batas Pambansa Big. 881, as
amended, otherwise known as the “Omnibus Election Code of the Philippines,” and
‘other election laws not inconsistent with this Act shall apply suppietorily.

Sec. 34. Rules and Regulations. - The Commission, in consultation with the
registered national poltical parties within one hundred twenty (120) days from
approval shall promulgate the necessary rules and regulations to effectively
implement the provisions of this Act.

Sec. 36. 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. 36. Separability Clause. — If any part of this Act is heid invalid or

unconstitutional, the other parts or provisions thereof not affected thereby shall
temain valid and effective.

Sec. 37. Effectivity. This Act shall take effect fifteen (15) days from its
publication in at least two (2) national newspapers of general circulation

Approved,