" 
SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHIILIPPINES ) 
First Regular Session 
) 
SENATE 
S. No.250 
Introduced by Seuator Ralph G. Recto 
Explanatory Note 
.ilml'!l'l? 
{$ff.;, •. 1 t~ •. ,~m.tnry 
'13 JUL-1 
The PCSO has previously been mired in controversies over the alleged misuse of its 
Charity Fund - a billion pesos fund utilized to undertake medical and other social welfare 
program and projects of the PCSO and implemented through the services of Non-Government 
Organizations (NGOs), the Church and other program partners as conduits of funds for charity 
projects to the people. 
Given the discretionary nature of the Charity Fund and the lack of clear accountability 
provided in the PCSO charter, the disbursement of Charity Fund has not been in accordance with 
specific standards and is only subject to the approval of the PCSO board. 
Furthermore, the public is left in the dark as to the magnitude and allocation of the PCSO 
Charity Fund. There is no transparency in the use of the fund because it does not go through the 
usual budget scrutiny as it is considered an off-budget item aud, therefore, not discussed in the 
congressional public hearings on the General Appropriations Bill. 
For as long as we leave the disbursement of the Charity Fund in the hands of the PCSO 
board, allegations of abuse in its utilization will continue to be a thorny problem for the 
institution. 
This bill intends to ameud the charter of the PCSO. The Charity Fund which constitutes 
30% of the net receipts of the PCSO, under the bill, shall be used for the following: Universal 
coverage of the National Health Insurance Program (NHIP) under the Philippine Health 
Insurance Corporation (Philhealth) and repair, maintenance and improvement of facilities aud 
upgrading of services of each of the 618 district hospitals and 16 regional hospitals nationwide. 
The equivalent amount shall be included in the General Appropriations Act (GAA) as a 
Special Purpose Fund to be directly released by the Department of Budget and Management 
(DBM) to Philhealth and each of the district and regional hospitals in the country. Thus, "What 
you see is what you get" as reflected in the GAA and no more "pork barrel" for the PC SO 
board. 
The provision of PCSO funds for the NHIP will help in meeting and sustaining the goal 
of universal healthcare coverage for every Filipino, especially the marginalized ones. This will 
provide all Filipinos, including the poorest of the poor, the access to needed healthcare services 
without out of the pocket spending on their end. In like manner, the provision of PCSO funds for 
the repair, maintenance and improvement of facilities and upgrading of services of all district 
and regional hospitals will enable all district and regional hospitals in the country to deliver 
better medical and health care services to the public. As such, people in the provinces will no 
longer need to travel to the cities for emergency and specialized medical procedures, thus, saving 
more lives and resources. 
In view of the foregoing, the approval of the bill is e~J}IJ~~sought. 


SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
S.No. 250 
Introduced by Senator Ralph G. Recto. 
AN ACT 
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'13 
JUL -1 
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MODERNIZING 
HEALTHCARE 
AND 
HEALTH 
INFRASTRUCTURE 
BY 
EARMARKING THE ENTIRE PHILIPPINE CHARITY SWEEPSTAKES OFFICE 
CHARITY FUND FOR SUCH PURPOSE, 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 Congress 
assembled: 
1 
SECTION 1. Section I of Republic Act No. 1169, as amended by Batas Pambansa Big. 
2 
42 is hereby further amended to read as follows: 
3 
"SECTION I. The Philippine Charily Sweepstakes qfJice (PCSO). -- The 
4 
Philippine Charity Sweepstakes Office, lhereinafter designated the Office,] shall [be 
5 
the principal govermnent agency for raising] RAISE and [providing] PROVIDE [for] 
6 
funds for THE UNIVERSAL COVERAGE OF THE NATIONAL HEALTH 
7 
INSURANCE PROGRAM (NHlP), AND THE REPAIR, MAINTENANCE AND 
8 
IMPROVEMENT OF FACILITIES AND UPGRADING OF SERVICES OF 
9 
EACH OF THE SIX HUNDRED EIGHTEEN (618) DISTRICT HOSPITALS 
10 
AND SIXTEEN (16) REGIONAL HOSPITALS NATIONWIDE, lhealth 
11 
programs, medical assistance and services] and charities of national character, and as 
12 
such shall have the general powers con Cerred in [section thirteen of Act Numbered 
13 
One thousand four hundred fifty-nine] SECTION 13 OF ACT NUMBERED 1469, 
14 
as amended, and shall have the authority:" 
15 
"A. To hold and conduct charity sweepstakes races, lotteries, and other similar 
16 
activities, in such frequency and mauner, as shall be determined, and subject to such 
17 
rules and regulations as shall be promulgated by the Board of Directors." 
18 
["B. SUbject to the approval 0 f the Minister of Human Settlements, to engage in health 
19 
and welfare-related investments, programs, projects and activities which may be 
20 
profit-oriented, by itself or in collaboration, association or joint venture with any 
21 
person, association, company or entity, whether domestic or foreign, except for the 


1 
activities mentioned in the preceding paragraph (A), for the pnrpose of providing for 
2 
permanent and continuing sources of funds for health programs, including the 
3 
expansion of existing ones, medical assistance and services, andlor charitable grants: 
4 
Provided, That such investments will not compete with the private sector in areas 
5 
where investments are adequate, as may be determined by the National Economic and 
6 
Development Authority.") 
7 
"[C]B. To undertake any other activity that will enhance its funds generation 
8 
operations and funds management capabilities[, subject to the sanle limitations 
9 
provided for in the preceding paragraph)." 
10 
"It shall have, a Board of Directors, hereinafter designated the Board, composed of 
11 
five members who shall be appointed, and whose compensation and term of office 
12 
shall be fixed, by the President [(Prime Minister)]." 
13 
Sec. 2. Section 6 of Republic Act No. 1169, as amended by Batas Pambansa BIg. 42 is 
14 
hereby further anlended to read as follows: 
15 
"Sec. 6 Allocation of Net Receipts. - From the gross receipts from the sale of 
16 
[sweepstakes) tickets, whether for sweepstakes races, lotteries, or other similar 
17 
activities, shall be deducted the printing cost of such tickets, which in no case shall 
18 
exceed two percent (2%) of such gross receipts to arrive at the net receipts. The net 
19 
receipts shall be allocated as follows:" 
20 
"A. Fifty-five percent (55%) shall be set aside as a prize fund for the payment of 
21 
prizes, including those for the owners, jockeys of running horses, and sellers of 
22 
winning tickets." 
23 
"Prizes not claimed by the public within one year from date of draw shall be 
24 
considered forfeited; and shall form part of the charity fund for disposition as stated 
25 
below." 
26 
"B. Thirty percent (30%), AS CHARITY FUND shall be set aside TO FUND THE 
27 
UNIVERSAL COVERAGE OF THE NATIONAL HEALTH INSURANCE 
28 
PROGRAM (NHlP) UNDER THE PHlLlPPINE HEALTH INSURANCE 
29 
CORPORATION (PHlLHEALTH), AND THE REPAIR, MAINTENANCE 
30 
AND IMPROVEMENT OF FACILlTIES AND UPGRADING OF SERVICES 
31 
OF THE SIX HUNl)RED EIGHTEEN (618) DISTRICT HOSPITALS AND 
32 
SIXTEEN (16) REGIONAL HOSPITALS NATIONWIDE: PROVIDED, THAT 
33 
THE EQUIVALENT AMOUNT SHALL BE INCLUDED IN THE GENERAL 


" 
1 
APPROPRIATIONS ACT (GAA) AS A SPECIAL PURPOSE FUND: 
2 
PROVIDED, FURTHER, THAT FUNDS FOR THE NHIP SHALL NOT BE 
3 
USED 
FOR 
PERSONNEL 
SERVICES, 
AS 
WELL 
AS 
TRAVEL, 
4 
TRANSPORTATION OR REPRESENTATION EXPENSES, OR PURCHASE 
5 
OF MOTOR VEHICLES: PROVIDED, EVEN FURTHER, THAT FUNDS 
6 
FOR 
THE 
REPAIR, 
MAINTENANCE 
AND 
IMPROVEMENT 
OF 
7 
FACILITIES AND UPGRADING OF SERVICES SHALL BE DIRECTLY 
8 
RELEASED BY THE DEPARTMENT OF BUDGET AND MANAGEMENT 
9 
(DBM) TO EACH OF THE DISTRICT AND REGIONAL HOSPITALS 
10 
NATIONWIDE [as contributions to the charity fund fi'om which the Board of 
11 
Directors, in consultation with the Ministry of Human Settlements on identified 
12 
priority programs, needs and requirements in specific communities and with the 
13 
approval of the Office of the President (Prime Minister), shall make payments or 
14 
grants for health programs, including the expansion of existing ones, medical 
15 
assistance and services and/or charities of national character, such as the Philippine 
16 
National Red Cross, under such policies and subject to such rules and regulations as 
17 
the Board may from time to time establish and promulgate. The Board may apply 
18 
part of the contributions to the charity fund to approved investments of the Office 
19 
pursuant to Section 1 (B) hereof, but in no case shall such application to investments 
20 
exceed ten percent (10%) of the net receipts fi'om the sale of sweepstakes tickets in 
21 
any given year]," 
22 
"Any property acquired by an institution or organization with funds given to it under 
23 
this Act shall not be sold or otherwise disposed of without the approval of the Office 
24 
of the President [(Prime Minister)], and that in the event of its dissolution all such 
25 
property shall be transferred to and shall automatically become the property of the 
26 
Philippine Government." 
27 
"c. Fifteen (15%) percent shall be set aside as contributions to the operating 
28 
expenses and capital expenditures of the Office. 
29 
"D, All balances of any funds in the Philippine Charity Sweepstakes Office shall 
30 
revert to and form part of the charity fund provided for in paragraph (B) HEREOF[, 
31 
and shall be subject to disposition as above stated]," 
32 
"The disbursements of the allocation herein authorized shall be subject to the usual 
33 
auditing rules and regulations, " 


1 
Sec. 3. Implementing Rules and Regulations. - Within sixty (60) days upon effectivity of 
2 
this Act, the peso, the Philhealth, the Department of Health (DOH) and the Department of 
3 
Budget and Management (DBM) shall provide the necessary rules and regulations for the proper 
4 
disposition of the said funds and the effective implementation of this Act. 
5 
Sec. 4. Separability Clause. - If any provision of this Act is subsequently declared 
6 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
7 
effect. 
8 
Sec. 5. Repealing Clause. - All laws, decrees, executive orders, rules and regulations and 
9 
other issuances or parts thereof which are inconsistent with this Act are hereby repealed or 
10 
modified accordingly. 
11 
Sec. 6. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the 
12 
Official Gazette or in any two (2) newspapers of general circulation. 
Approved,