Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Regular Session

4923

HOUSE BILL NO.

Introduced by Representative 153). 2. 222 pag

EXPLANATORY NOTES

Presidential Decree No. 1564 entitled Amending Act No. 4075 otherwise known as
The Public Solicitation Law was issued on June 41, 1978 to regulate the solicitation of
donations and voluntary contributions from the public sector in order to obviate the illegal

fund drives.

The said law has been in existence and impiemented for the past thirty (30) years.
However, as a result of changes in national and globat environment, some of its provisions
are no longer attuned to the present conditions and development in the regulation of public
solicitations. Among the issues identified in the implementation of the law include: (1) the
need to intensify the monitoring of individuals/organizations/associations who were issued
authority 10 conduet solicitation; (2) the need to religiously monitor the proceeds of the
solicited funds to ensure that these are delivered to the intended beneficiaries or are all
used for projects for which these are intended for and to protect the general public as weil
‘as the beneficiaries from being exploited; (3) the presence of several organizations

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conducting fund raising activities without the required solicitation permit and (4) the need to
increase the penalties or sanctions for violators andor soliciting fund outside the country.

The Bill “An Act to Reguiate Public Solicitation Providing Funds Therefore and for
Other Purposes” seeks to regulate public solicitation undertaken in order to protect the
general public from unscrupulous solicitation. The Bill, once passed will enable the
government to effectively and efficiently monitor public solicitations. Thus, will provide the
public with an open and ready access to information regarding the financial operation.
projects and activities of the public solicitors.

The Bill shall apply to all National Goverment Agencies (NGAs), Government
Owned and Controlled Corporations (GOCCs), State Colleges/Universities, Non-
Govemment Organizations (NGOs), religious and civic organizations, branch offices and
similar organizations, individuals, chapters and affiliates of similar intemational
organizations operating in the Phifippines which are partly or fully financed with funds
solicited from or contributed by the public or private sectors for charitable or public welfare
purpose/s.

The Bill also aims to further enhance mechanisms and the modes in conducting
public solicitation, increase the share of the proceeds allocated for the intended programs
and projects and protect the beneficiaries. Likewise, increase the penalties and tighten

sanctions for violations.

Further, the Bill also seeks to strengthen the partnership and involvement of the
government regulating and law enforcement agencies in the implementation of the law

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In view hereof, approval of this bill is eamestly sought.


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Regular Session

ge
HOUSE BILL NO. 4923

Introduced by Representative

AN ACT TO REGULATE PUBLIC SOLICITATION
PROVIDING FUNDS THEREFORE AND FOR OTHER PURPOSES

SECTION 14. Short Title - This Act shall be known as the “The Public Solicitation Act of
2010"

SECTION 2. Purpose - It shall be the purpose of this Act to regulate public sokcitation
undertaken by organizations, agencies, groups and individuals in order to protect the
general public from unscrupulous solicitation. It also aims to establish standards and
guidelines and strengthen the system of granting permits or authorization primarily to
solicit funds or donations from the public for charitable, social and/or public welfare

purposes

SECTION 3.Coverage - This Act shall apply to all National Government Agencies
(NGAs), Govemment Owned and Controlied Corporations (GOCCs), State

Colleges/Universities and other government agencies, Non-Government Organizations
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(NGOs) including faith based and civic organizations, associations, branch offices and
similar organizations, individuals, chapters and affiliates of similar international
organizations operating in the Philippines which are partly or fully financed with funds
solicited from or contributed by the public or private sectors for charitable or public welfare
purpose/s.

SECTION 4. Exemption on the Coverage: Organizations and agencies created by laws
that specifically confer authority on these organization and agencies to solicit and/or
conduct fund campaign for charitable and/or public welfare purposes shail continue to be
covered by its charter. Provided, the DSWD shall have the authority to monitor their
activities and to require these organizations and agencies to submit the following as well
as other documents that the DSWD may require to make an assessment of the

performance of these organizations and agencies:

a. Audited fund utilization report of its collections, income and expenditures and
other financial documents;

b. Lists of donors and their corresponding addresses and contact numbers;

c. List of beneficiaries, their corresponding addresses and contact numbers and
amount or types of assistance extended; and

d. _ List of projects completed, location and cost

SECTION 5. Definition of Terms — For purposes of this Act, the following terms shall be
defined as:

a. Administrative Cost - refers to the costs incurred in the managemenVoperation
of the conduct of the solicitation activity and/or of the soliciting organization.

b. Beneficiaries — refer to the poor, the vulnerable and the disadvantaged sectors or
entities who will be benefiting from the proceeds of the public solicitation
conducted, These include but are not limited to: (1) neglected, abandoned,

orphaned, exploited children or children under difficult circumstances; (2) children
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in conflict with the law, out of school youth and other youth with special needs; (3)
persons with disabilities; (4) senior citizens; (5) victims of natural or man-made
disasters/calamities; (6) disadvantaged women and women in especially difficult
circumstances; (7) indigenous peoples and communities; (8) rebel retumees and

(9) poor or dysfunctional families and depressed communities.

Charitable purpose/s - refers to the intent to provide services or conduct of
activities for the beneficiaries indicated on letter b of this Section.

Memorandum of Agreement — refers to a contract executed between parties
stating among others, the amount or percentage from the proceeds to be given to
the beneficiaries or the project to be undertaken, the date and place where the
activity shall be undertaken and date of awarding of proceeds or tum-over of
project. It should clearly state the date and duration of the awarding of proceeds.

Organization, agency or individual — refers to all National Goverment
Agencies (NGAs), Goverment Owned and Controlled Corporations (GOCCs),
State Colleges/Universities and other government agencies, Non-Government
Organizations (NGOs) including religious and civic organizations, associations,
branch offices and similar organizations, individuals, chapters and affitiates of
similar international organizations operating in the Philippines desiring to solicit or
receive contributions from the public for charitable or public welfare purpase/s

Program Cost — refers to all expenses incurred in the direct or indirect provision
of services or goods to the beneficiary including expenses of the donee person or
agency in its operation and the implementation of relevant programs and services.

Public Solicitation - refers to any activity or project intended to generate funds,

money, materials or other assistance from the public sectors for charitable and/or

public welfare purposes. Categories of public solicitation:

* Local Public Solicitation - refers to a solicitation activity conducted within the
city/municipatity

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* Provincial Public Solicitation — refers to a solicitation activity conducted
within two or more cities/municipalities in a province.

* Regional Public Solicitation - refers to a solicitation activity conducted within
two or more provinces in a region

+ National Public Solicitation - refers to a solicitation activity conducted in two
or more regions in the country

Public Welfare Purpose/s - refers to any activity or project relative to health,
education, peace, social welfare and protection, environmental safety, rights,
security and safety of citizens and similar circumstances or conditions.

SECTION 6. Authority to Issue Permit — The following are authorized to grant permits to
conduct public solicitation.

Department of Social Welfare and Development (DSWD) Secretary or the
Undersecretary or Regional Director for national or regional public solicitation

respectively.

Provincial Govemer through the Provincial Social Welfare and Development
Office (PSWDO) Chief or his/her representative/s for provincial public ‘solicitation

City/Municipal Mayor through the City/Municipal Social Welfare and Development
Office (CAMSWODO) Chief or his/her representative/s for local public solicitation

Provided, that the organization, agency or individual applying for such permit complies with
the requirements that may be set by the DSWD, PSWDO or C/MSWDO respectively
including but not limited to the following:

Duly accomplished application form signed by the agency head or authorized
representative. The form shall be prescribed by the DSWD, PSWDO or
C/MSWDO which shall indicate the intended purpose of the solicitation

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b. Project proposal on the intended public solicitation activity including the work and
financial plan on the activity to be undertaken

c. Certified true copy of Certificate of Registration and Articles of Incorporation and
by-laws with the Securities and Exchanges Commission (SEC) or other regulatory
goverment agencies, which have jurisdiction to regulate the applying
organization, agency or individual and information. (for non-government).

d. Certification of status of operation and updated certification from SEC or other
regulatory govemment agencies, which have jurisdiction to regulate the applying
organization, agency or individual on the validity of registration (for non-

government }

e. Notarized Memorandum of Agreement or other written document signifying the

intended beneficiarylies concurrence as recipient of the solicitation activities

SECTION 7. Validity of Permit — All permits for the purpose of undertaking public
solicitation shall be issued by the DSWD, PSWDO or C/MSWDO for a stated period of
time. No organization, agency or individual shail solicit contributions or have contributions
solicited on its behalf before issuance of its permit by the DSWD, PSWDO or C/MSWDO.
The solicitation permit shalt be valid only on the approved date of coverage which in no
case shall exceed one year within the specified region/s or area/s of the Philippine
territory. Its validity does not extend to other countries regardless of whether or not the
target beneficiaries and donors are Filipinos. In such cases, the organization, agency or
individual should comply with the rules and regulations of the concemed countries

SECTION 8, Fees and Charges — For national and regional coverage, the DSWD shall
charge and collect corresponding fees to be determined by the Department for the
effective implementation of this Act. The fees shall be remitted to the National Treasury,
recorded as a Special Account in the General Fund and shall be available to the DSWD
through a Special Budget pursuant to Section 35, Chapter 5, Book VI of Executive Order
No. 292. Likewise, the provincial govemor and city/municipal mayors shall impose

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corresponding fees for the provincial and local public solicitation respectively, consistent
with the Local Goverment Code and its amendments

SECTION 9. Methods of Public Solicitation - Public solicitation may be done using but
not limited to the following:

a. Oral or written request,

b. Announcement to the press, over the radio or television or by telephone or the

internet,

¢. Distribution, circulation, publication or posting of written advertisement or other
publication;

d. Sale of goods i.e souvenir items, printing, rummage sales, among others;
e. Benefit shows i.e. concert, fashion show and other forms of entertainment, and

f. Other methodologies that may be allowed by the DSWD, PSWDO and/or
CiMSWDO

On the other hand, caroling during Christmas season as a form of solicitation and the
solicitation within the church/mosque or building for public Christian/Muslim worship are
exempted from the application of solicitation permit from DSWD, PSWDO andior
C/MSWDO.

SECTION 10. Tax Deduction or Exemption of Donations and Contributions. - The
donor by virtue of foregoing provisions shall be entitied to allowable deduction in his/her
income tax retum the equivalent amount of donations he/she would give to public
solicitation subject to such conditions as provided under the National internal Revenue

Code, as amended.

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SECTION 11. Beneficiaries of Fund Campaigns — The applying organization, agency or
individual for solicitation permit shall be required to submit a duly notarized Memorandum
of Agreement executed between the parties, which shail contain the following:

a. _ Statement of the purpose for which the solicitation is being conducted;

b. Statement of the amount or percentage from the proceeds to be given to the
beneficiaries or the project to be undertaken; and

c The date, duration and place where the activity shall be undertaken and the date
of awarding of proceeds of turn-over of project.

‘The benefiting organization, agency or individual, has the right not to allow its name to be
used, advertised or publicized as the beneficiary of any public solicitation project.

SECTION 12. Allocation of Proceeds - Not more than fifteen percent (15%) of the total
proceeds for the fund raising activity of any organization, agency or individual shall be
expended for the administrative cost of the said fund-raising activity or other operations of
the agency. The remaining eighty-five percent (85%) shall be utilized entirely for
projects/programs for the targeted beneficiaries. Unless compliance with this section is
satisfactorily established on the basis of the report as required in Section 13 hereof, no
organization, agency or individual shall be issued any subsequent permit. Funds collected
during the conduct of fund campaign activities shall be deposited in a banking institution
regulated by the Bangko Sentral ng Pilipinas in the name of the organization, agency or
individual to whom the permit was issued. Book of accounts shall also be required in the
monitoring/validation of report.

SECTION 13. Monitoring of Public Solicitation Activity — The concerned organization,
ageney or individual to whom the permit was issued shall submit to the concemed oswD
offices, PSWDO or C/MSWDO within sixty (60) days after the expiration of the issued

permit, a report signed and swom to by the individual or af least two authorized officers of

the organization/agency, indicating whether such permit was used or not. IF used,

additional documents to be submitted are the following:
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a. Audited fund utilization report of its income and expenditures and other

documents;

b. List of donors and the amount of donations, their corresponding addresses and
contact numbers;

°c. List of beneficiaries, their corresponding addresses and contact numbers and

amount or types of assistance extended:
d. List of projects completed, location and cost; and
e. Expired permit authorizing the conduct of local/national fund campaign

The DSWD, PSWDO or C/MSWDO may in the exercise of their regulatory powers, verify
the authenticity of the report submitted by conducting spot investigations or reviewing the
book of accounts of the concemed organization, agency or individual, among others.
Further, the organization, agency or individual shall for each solicitation activity maintain
and preserve an accurate and detailed book of accounts for not less than three (3) years
after the completion of such public solicitation activity, which shall be availabie for
inspection, at al times, upon demand by the DSWD, PSWDO, C/MSWDO.

SECTION 14, Filing of Complaints - The DSWD, PSWDO or C/MSWDO shall on its
initiative or upon the complaint of any individual initiate an investigation and the fling of
complaints in the appropriate court, if warranted, against the organization, agency or
individual which undertake fund campaigns without the necessary permit or which secures
such permits through fraudulent representation. Provided, however, thal any concerned
person, may in his/her own file a complaint before the Regional Trial Court against any
person who shall commit any of the acts punishable under Section 16 of this Act. Any law
enforcement agency can also file a complaint against any organization/agencylindividual
engaging in prohibited acts whom they have apprehended in accordance with the Rules of
Coun.

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SECTION 15. Handling of Complaint - There shall be a Review Committee at the
concemed DSWD, PSWDO or C/MSWDO who will handle the complaint against the
organization, agency or individual. The law enforcement agency/ies e.g. Philippine
National Police (PNP), National Bureau Investigation (NBI), Local Goverment Unit (LGU)
and Department of interior and Local Government {DILG) among others shail assist in the
enforcement of this Act. Said Committee shall be organized within sixty (60) days upon
effectivity of this Act. Their specific roles and functions as well as the procedures in
handling of complaints shall form part of the Implementing Rules and Regulations of this
Act.

SECTION 16. Prohibited Acts. This Act prohibits any organization, agency or individual
to do any of the following acts:

a. Soliciting without securing solicitation permit from DSWD, PSWDO or CIMSWDO

b. Soliciting beyond the allowed area of coverage and/or violating the mode of
solicitation as indicated in the approved solicitation permit

c. Using falsified or tampered solicitation permit
da. Soliciting with expired solicitation permit
a Using of solicited funds for purpose/s other than the purpose/s in which funds

were intended

Further, all solicited funds from the prohibited acts shall be tured over to DSWD,
PSWDOs or C/MSWDOs for the implementation of its social welfare and development

programs and services

SECTION 17. Penalties — Violations of this law shall be subject to the foliowing penalties:

a. Any person who violates the provision of this Act shall be punished with
imprisonment of not less than one (1) year but not more than three (3) years or a
fine of not less than One Hundred Thousand Pesos (P100,000.00) but not more

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than Five Hundred Thousand Pesos {P500,000.00) or both at the discretion of the
court

b. Additionally, for the first offense, the solicitation permit of the concemed
organization, agency or individual shall be revoked and no permit shall be issued
to them for a period of two (2) years from the date of violation

c. _ For the second offense, the concemed organization, agency or individual shail be
permanently banned from conducting any solicitation activity. Further, its
registration and/or license to operate as an organization, agency. or individual

shall be cancelled and revoked permanently.

d. When the offender is a foreigner, he/she shall be immediately deported and be
bared permanently from entering the country after having served his/her

sentence.

SECTION 18. Information Dissemination — The DSWD, PSWDO or C/MSWDO shalt
disseminate information on the organizations, agencies and individuals issued with public
solicitation permits to include the pertinent data such as permit number, duration period,
methodology to be used and the areals covered. Likewise the DSWD, PSWDO or
CIMSWDO shall also inform the public on the list of organizations, agencies and
individuals whose permits have been cancelled or revoked.

SECTION 19, Implementing Rules and Regulations — The DSWD, Association of
PSWDO and Associations of C/MSWDO jn coordination with the Bureau of internal
Revenue (BIR), Department of Finance (DOF), Department of the Interior and Local
Government (DILG), Deparment of Trade and Industry (DTI), Department of
Transportation and Communication (DOTC), Local Government Unit (LGU), Philippine
National Police (PNP), National Bureau Investigation (NBI), Securities and Exchange
Commission (SEG) and other concemed goverment agencies and three (3)
representatives selected by DSWD from the academe, NGOs, media organizations and

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peoples organizations shall promulgate the necessary implementing rules and regulations
within ninaty (90) working days from the effectivity of this Act

SECTION 20. Appropriations — The amount necessary to carry out the provisions of this
‘Act is hereby authorized to be appropriated in the concemed DSWD and Local
Government Units General Appropriations Act for the year following its enactment into law
and thereafter.

SECTION 21. Repealing Clause - Presidential Decree No. 1564, Local Government
Code of 1991 Book III Title !1 Ch 3 Art 1 Sec 444 (b) (3) V) and Sec 455 (b) (3) (v) and all
other laws, decrees, executive orders and proclamations, rules and regulations or parts
thereof, inconsistent with this Act are hereby repealed or modified accordingly.

SECTION 22, Separability Clause - In the event that any provision of this Act is held
invalid or unconstitutional, the other provisions not affected thereby shall remain valid and

subsisting

SECTION 23. Effectivity Clause - This Act shall take effect fifteen (15) days after its

publication in any two (2) newspapers or genera! circulation.

Approved.

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