‘Republic of the Phikippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
‘Second Regular Session

House‘Hite No._5362

Introduced by REP. ANTHONY G. DEL ROSARIO

EXPLANATORY NOTE

The Philippine Charity Sweepstakes Office (PCSO) was created by virtue of Act
No. 4130 in 1935 to institutionalize sweepstakes as a venture to raise funds for public
health and general welfare. In 1954, Republic Act No. 1169 was enacted providing for
PCSO Charter thereby strengthening its mandate.

The PCSO Charter was amended by Batas Big. 42 which raised the fund
allocation for the agency's Charity Fund from the previous 25% of net sales to 30%.
while 55% now went to prizes and the remaining 15% for operations. All unclaimed
prizes also go to Charity Fund. Further, Presidential Decree No. 1157 increases the tax
rates on winnings in jai-atai and horse-racing and the share of the Govemment from the
sweepstakes total Prize Fund.

The Charity Fund has been subject of recent controversies due to its alleged
misuse by the PCSO board of directors who have discretionary powers on the
disbursement of said fund. The PCSO Charter does not provide clear institutionalize
criteria in the disposition of fund thus making it prone to abuse and promotion of
patronage politics.

This bill warrants a just and equitable distribution of this Govermment's money
grounded on the needs of people. It is proposed that the Charity Fund be earmarked for
the National Health Insurance Program administered by PhilHealth to ensure the
achievement of universal health insurance coverage in fine with the Aquino Health
Agenda. It is putting the money into where it is most needed and useful.

Under the bill, the Charity Fund shall no tonger be channelled through hospita!
beneficiaries. Instead it shall be used as contributions to PhilHealth forming part of
special purpose fund for the counterpart shares of the National Goverment and Local
Government, to be included in the General Appropriations Act.

While making health care more accessible to the indigents through PhilHeaith.
the bill also ensures transparency in the utilization of the monetary resources and
provides necessary safeguards against corruption specifically in the PCSO.


In view of the foregoing, approval of the bill is earnestly sought.

Al |. DEL ROSARIO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO._ 5362

Introduced by REP. ANTHONY G. DEL ROSARIO

AN ACT
EARMARKING THE ENTIRE PHILIPPINE CHARITY SWEEPSTAKES OFFICE
(PCSO) CHARITY FUND FOR UNIVERSAL HEALTH CARE COVERAGE AND FOR
OTHER PURPOSES, THEREBY AMENDING REPUBLIC ACT NO. 1169, AS
AMENDED BY BATAS PAMBANSA BLG. 42

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

SECTION 1. Section 1 of Republic Act No. 1169, as amended by Batas
Pambansa Blg. 42 is hereby further amended to read as follows:

“SECTION 1. The Philippine Charity Sweepstakes Office (PCSO). - The
Philippine Charity Sweepstakes Office, [hereinafter designated the Office]
shall [be the principal government agency for raising} RAISE and
{providing] PROVIDE [for] funds for THE NATIONAL HEALTH INSURANCE
PROGRAM (NHIP) {health programs, medical assistance and services] and
charities of national character, and as such shail have the general powers
conferred in [section thirteen of Act Numbered One thousand four hundred
fifty-nine} SECTION 13 OF ACT NUMBERED 1469, as amended, and shall
have the authority:”

"A. To hold and conduct charity sweepstakes races, lotteries, and other
similar activities, in such frequency and manner, as shail be determined,
and subject to such rules and regulations as shall be promulgated by the
Board of Directors.

[B. Subject to the approval of the Minister of Human Settlements, to engage
in health and welfare-related investments, programs, projects and activities
which may be profit-oriented, by itself or in a collaboration, association or
joint venture with any person, association, company or entity, whether
domestic or foreign, except for the activities mentioned in the preceding
paragraph (A), for the purpose of providing for permanent and continuing
sources of funds for health program, including the expansion of existing
ones, medical assistance and services, and/or charitable grants: Provided,
That such investments will not compete with the private sector in areas
where investments are adequate, as may be determined by the National
Economic Development Authority."]

“{C] B. To undertake any other activity that will enhance its funds
generation operations and funds management capabilities [,subject to the
same limitations provided for in the preceding paragraph}.”


“It shall have, a Board of Directors, hereinafter designated the Board,
composed of five members who shall be appointed and whose
compensation and term of office shall be fixed, by the President [(Prime
Minister)].

SEC. 2. Section 6 of Republic Act No. 1169, as amended by Batas
Pambansa Big. 42 is hereby further amended to read as follows:

“SEC. 6. Allocation of Net Receipts. — From the gross receipts from the
sale of [sweepstakes] tickets, whether for sweepstakes races, lotteries, or
other similar activities, shall be deducted the printing cost of such tickets,
which in no case shall exceed two percent (2%) of such gross receipts to
arrive at the net receipts. The net receipts shall be allocated as follows:”

“A. Fifty-five percent (55%) shall be set aside as a prize fund for the
payment of prizes, including those for the owners, jockeys of running
horses, and sellers of winning tickets.”

“Prizes not claimed by the public within one year from date of draw shall be
considered forfeited, and shall form part of the charity fund for disposition
as stated below.”

“B. Thirty percent (30%), AS CHARITY FUND, WHICH shall be set aside as
contributions to the NHIP, CREATED UNDER REPUBLIC ACT NO. 7875, AS
AMENDED, AND ADMINISTERED BY THE PHILIPPINE HEALTH
INSURANCE CORPORATION (PHILHEALTH) FOR THE EXCLUSIVE
PURPOSE OF UNIVERSAL HEALTH CARE COVERAGE: PROVIDED, THAT
EQUIVALENT AMOUNT SHALL BE INCLUDED IN THE GENERAL
APPROPRIATIONS ACT (GAA) AS A SPECIAL PURPOSE FUND FOR THE
COUNTERPART SHARES OF THE NATIONAL AND LOCAL GOVERNMENT
IN THE NHIP UNDER THE PHILHEALTH [charity fund from which the Board
of Directors, in consultation with the Ministry of Human Settlements on
identified priority programs, needs and requirements in specific
communities and with the approval of the Office of the President (Prime
Minister), shall make payments or grants for health programs, including the
expansion of existing ones, medical assistance and services and/or
charities of national character, such as the Philippine National Red Cross,
under such policies and subject to such rules and regulations as the Board
may from time to time establish and promulgate. The Board may apply part
of the contributions to the charity fund to approved investments of the
Office pursuant to Section 1 (B) hereof, but in no case shall such
application to investments exceed ten percent (10%) of the net receipts
from the sale of sweepstakes tickets in any given year]

“Any property acquired by an institution or organization with funds given to
it under this Act shall not be sold or otherwise disposed of without the
approval of the Office of the President [(Prime Minister)], and that in the
event of its dissolution all such property shall be transferred to and shall
automatically become the property of the Philippine Government.”

“C. Fifteen (15%) percent shall be set aside as contributions to the
operating expenses and capital expenditures of the Office

“D. All balances of any funds in the Philippine Charity Sweepstakes Office
shall revert to and form part of the charity fund provided for in paragraph
(8) HEREOF [, and shall be subjected to disposition as above stated].”

“The disbursements of the allocation herein authorized shall be subject to
the usual auditing rules and regulations.”


SEC. 3. Separability Clause. — If any provision of this Act is subsequently
declared unconstitutional, the validity of the remaining provisions hereof shall
remain in full force and effect.

SEC. 4, Repealing Clause. — All laws, decrees, executive orders, rules and
regulations and other issuances or parts thereof which are inconsistent with this
Act are hereby repealed or modified accordingly.

SEC. 5. implementing Rules end Regulations. — Within sixty (60) days upon
effectivity of this Act, the PCSO, the PhilHealth and the Department of Budget and
Management (OBM) shall provide the necessary rules and regulations for the
proper disposition of the said funds and the effective implementation of this Act.

SEC. 6. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in any two (2) newspapers or general circulation.

Approved,