‘SIXTEENTH CONGRESS. )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION

WED
£ T2018

Introduced by Representative Rufus B. Rod ng
Representative Maximo B. Rodriguez, Jw!

House Bill No. 389
EXPLANATORY NOTE

This bill was originally introduced as House Bill No. 2128 by the undersigned Rufus
B. Rodriguez during the Fourteenth Congress and as House Bill No. 49 during the
Fifteenth Congress. It was approved by the Committee on Suffrage and Electoral Reforms
as substitute House Bill No. 3655 under Committee Report No. 308 dated February 26,
2008 and was recalled for 2" reading on September 1, 2008 during the Fourteenth
Congress. For the Fifteenth Congress, it was approved by the House of Representatives
on 3 Reading and was transmitted to the Senate on October 11, 2012 where it was not
acted upon.

This bill seeks to institutionalize and strengthen political parties in the country by
introducing reforms in campaign financing and provide financial subsidies to political
parties to augment their expenditures for campaign.

A political party is defined under Section 60 of the Omnibus Election Code as an
organized group of persons pursuing the same ideology, political ideas or platforms of
government and includes its branches and divisions. The Philippines has a multi-party
system as provided for under Section 6, letter c, Article IX of the 1987 Philippine
Constitution which states that a free and open party system shall be allowed to evolve
according to the free choice of the people

As of April 2001, the Commission on Elections has listed eighty-two (82) registered
and accredited political parties. In the 2007 national and local elections, there were
eighteen (18) political parties who participated in the national elections while ninety-three
(93) participated in the party-list elections.

A major argument against a multi-party system is the tendency of members of
political parties to change their affiliations. While this is not prohibited under our laws, this
promotes divisiveness among the leaders in the community

This bill seeks to remedy that by providing sanctions against any member of a
national political party who changes party affiliation after being nominated by the political
party otherwise known as political turncoats.

To further empower and professionalize political parties in the country, this
proposed measure exempts voluntary contributions from any person, subject to a certain


cap, from the payment of donor's tax. Likewise, there is hereby created a State Subsidy
Fund to augment the operating funds of accredited national political parties.

To promote transparency and performance of mandate free from vested interest,
this bill punishes the giving of voluntary contributions beyond the allowable limits set by
law. This is not an unreasonable prohibition given its intent. Likewise, the State Subsidy
Fund may be used instead for campaign expenditures and party development.

In view of the foregoing, immediate passage of this bill is earnestly requested.

lth.

MAXIMO ROGRIGUEZ, JR.


SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B, Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No.. 389

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
DECLARATION OF POLICY, PURPOSES AND COVERAGE

SECTION 1. Title — This Act shall be known as “The Political Party Development Act
of 2013"

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 field 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, platform and programs. The State
shall also institute measures to professionalize political parties and make them viable
instruments of development and good governance.

SEC.3. — Purposes. - This Act aims to:

(a) Institutionalize reforms in the financing of electoral campaigns, so as to promote
accountability and transparency;

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

(c) Promote party loyalty and discipline; and

(4) Encourage and support continuing voter's education and civic literacy programs
through the political parties.

SEC. 4. Coverage. - This Act shall apply to political parties duly registered with and
certified to as such by the Commission on Elections (COMELEC)

SEC. 5. — Definition of Terms. — The following terms as used in this Act shall be defined
as follows:


(a) Accredited political party refers to a political party qualified to receive subsidy for
party development and campaign purposes, accredited for this purpose by the COMELEC
based on a set of criteria provided for 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 thereof, and who has filed a
certificate of candidacy with the COMELEC.

(c) Commission refers to the COMELEC.

(4) Campaign contribution refers to any form of donation to any candidate, political
party, aggrupation or coalition thereof given before, during or after the holding of elections.
It includes 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, made for the
Purpose of influencing the results of the elections, but shall not include services rendered
without compensation by individuals volunteering a portion or all of their time in behalf of a
candidate or political party. It also includes the use of office space, facilities, equipment,
office supplies and other materials and fixtures voluntarily donated by other persons or
who allowed their use for free, the monetary value of which shall be assessed based on
market rates prevailing in a particular area

(e) Campaign expenditure refers to any type of expense incurred, regardless of
source, amount and purpose, that relates, directly or indirectly, to the conduct of an
electoral campaign. It includes all payments of money or anything of value, or a contract,
promise or agreement to spend, for the purpose of influencing the results of the elections.
It includes the use of office space and facilities personally owned by the candidate, the
monetary value of which shall be assessed based on the market rates prevailing in a
particular area

(f) COA refers to the Commission on Audit

(g) Disclosure requirement refers to the duty of all candidates and political parties,
aggrupations or coalitions thereof to reveal the details of campaign contributions received
by them and the expenditures made on account thereof. For accredited political parties, it
includes expenditures and destinations of party development and campaign 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 thereof.

(i) Donee refers to any candidate, political party, aggrupation or coalition thereof or
any representative acting on their behalf or interest, to whom money, property or any other
form of contributions were made.

(i) Fund refers to the State Subsidy Fund established under this Act.

(k) Member of a party is a natural person of good standing in a political party who
complied with the requirements of party membership, including the payment of
membership dues.

(|) Political party refers to a political party, party-list or an organized group of persons
duly registered with the Commission, pursuing or advocating platform, principles and
policies for the general conduct of government and which nominates and supports its
members as candidates for public office.

(m) Political turncoatism refers to the change of political party affiliation by an elected
official during one’s term, except within six (6) months prior to the end of the term:
Provided, That political turncoatism shall not apply in any of the following instances:

(1) Abolition, merger or coalition of political parties where a candidate is a
registered member thereof; and


(2) Expulsion of the elected official in writing from one's political party: Provided,
That the cause for such does not constitute political opportunism. Political opportunism
includes any act of a party member constituting disloyalty to the party or regular
nonadherence to the party's ideological principles, platform and programs, as determined
by the party in accordance with its constitution and bylaws.

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

(0) Voluntary contributions refer to the contributions to candidates or political parties,
aggrupations or coalitions thereof from persons, natural or juridical, allowed under existing
laws.

CHAPTER Il
INSTITUTIONALIZATION OF POLITICAL PARTIES

SEC. 6. Registration as a Political Party. — Any organized group of persons seeking
registration as a political party may file with the Commission a verified petition attaching
thereto its constitution and bylaws, 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 heads of its regional, provincial and city chapters, and such other
relevant information as may be required by the Commission.

The Commission shall, after due notice and hearing, resolve the petition within ten
(10) days from the date it is submitted for decision.

Political parties already registered as such with the Commission prior to the effectivity
of this Act are not required to register anew but are required to submit their intent to
continue participating in elections within a period of six (6) months after the enactment of
this law.

SEC.7. Policy Agenda and Program of Governance. — Political parties are mandated
to craft a clear policy agenda and program of governance consistent with their party
philosophy and ideals. The members of the political party shall endeavor to act in
accordance with the defined party platform and pursue programs to fulfil party
commitments

SEC. 8. Membership in a Political Party. — A person becomes a member of a political
party upon application duly signed, filed and accepted by the party, and upon compliance
with the basic membership requirements of the party, including the regular payment of
membership dues.

SEC.9. Selection of Candidates. — The selection process for candidates of political
parties shall be democratized through the adoption of a process that is fair, open and
transparent.

Every political party is mandated to formulate a system on the nomination and
selection of candidates, in which all party members are involved. Every political party shall
submit to the Commission its rules governing the system on the nomination and selection
of candidates not later than one hundred eighty (180) days before the election day
following the effectivity of this Act.

Any aggrieved member of an accredited political party may file a verified complaint to
its Grievance and Arbitration Committee not later than ten (10) days after the party
convention, for violation of the rules governing the system on the nomination and selection
of candidates. The aggrieved party has the right to appeal to the Commission. Upon
finding violation of the system, the Commission shall revert the grievance to the


concerned political party. If the political party does not comply with the order of the
Commission, the said party shall be disqualified from participating in the elections.

Every political party must hold conventions to nominate their official candidates not
earlier than sixty (60) days before the start of the campaign period and shall submit to the
Commission not later than the start of the election period the names of the officials of the
party authorized to nominate their official candidates.

No political party shall nominate more candidates than the number of persons
required to be voted for in an elective position nor shall any candidate be allowed to
accept nominations from more than one (1) registered political party, except in cases of
aggrupations or coalitions thereof. Nominations made in violation hereof shall be denied
due course by the Commission and the candidates concerned shall be considered
independent candidates. The nominations of candidates of political parties shall be filed
not later than the last day for filing of the certificates of candidacy as determined by the
Commission

SEC. 10. Contents of Certificate of Nomination. — The certificate of nomination shall
state that the person issuing the nomination is the duly authorized representative of the
political party as provided for in its constitution and bylaws; that the person named therein
is the official candidate of the party for the elective position stated; and that he has
accepted the said nomination. The certificate of nomination shall be subscribed under
cath by the duly authorized representative of the political party.

SEC. 11. Limits on Voluntary Contributions. - Voluntary contributions to any political
party shall be limited to the following maximum amounts:

(a) Up to One million pesos (P1,000,000.00) from a natural person and up to Ten
million pesos (P10,000,000.00) from a juridical person is allowed to make a voluntary
contribution under existing laws; and

(b) Any contribution in cash or in kind to any political party for campaign purposes,
duly reported to the Commission in accordance with Section 13 of Republic Act No. 7166,
shall be exempt from the donor's tax.

No foreign national or entity shall be allowed to give contributions to any political
party.

SEC. 12. Voluntary Contributions to Party; How Made. - Voluntary contributions to a
political party shall be deposited by the contributor to the account of the party with any
reputable bank accredited by the Commission at any time but not later than fifteen (15)
days before the day of election. The accredited banks shall issue a corresponding receipt
to the contributor on the amount deposited, and shall submit to the Commission a
statement of account of every political party with deposits. The Commission shall cause
the publication of the account of all political parties in any newspaper of general circulation
within five (5) days before the elections.

SEC. 13. Political Turncoatism. — Any elected official of a political party who changes
party affiliation, after being nominated by the party, shall be deemed to have committed
Political turncoatism, except within six (6) months prior to elections.

SEC. 14. Penalties for Political Turncoatism. — Political tuncoats shall be:
(a) Deemed to have forfeited their elective office, if they change their political party
affiliation, except within six (6) months prior to elections;


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

(c) Prohibited from being appointed or from holding any position in any public or
government office for three (3) years after the expiration of the current term/office;

(d) Prohibited from assuming any executive or administrative position in the new
political party; and

(e) Directed to refund any and all amounts received from one's former political party,
plus a twenty-five percent (25%) surcharge thereon

SEC. 15. Petition for Disqualification. — Any citizen of voting age, or any candidate,
political party, aggrupation or coalition thereof, may file with the Commission, within fifteen
(15) days from the filing of the certificate of candidacy and before proclamation, a petition
to disqualify a candidate on the ground of political turncoatism as defined in this Act

SEC. 16. Authorized Expenses of National Political Parties and Candidates. - The
amount that a political party and a candidate may spend for every election campaign shall
be Twenty pesos (P20.00) for every voter currently registered in the constituency or
constituencies of candidacy. The Commission shall adjust the authorized amount
based on the consumer price index (CPI) every three (3) years following the effectivity of
this Act.

CHAPTER III
STATE SUBSIDY FUND

SEC.17. Establishment of a State Subsidy Fund. — There is hereby established a
State Subsidy Fund which shall be used to augment the operating funds of the accredited
national political parties. The fund shall be used directly and exclusively for the following
purposes

(a) Party development; and

(b) Campaign expenditures.

SEC. 18. Allowable Party Development Activities. - Due to the vital role played by the
political parties in the country's political development and in order to promote
professionalism and accountability among members of the parties, the following party
development activities shall be allowed to be funded out of the State Subsidy Fund:

(a) Party administration, recruitment and civic education;

(b) Research and policy development;

(c) Education and training of members;

(d) Institution building and constituent outreach program; and

(e) Other reasonable logistical and operational expenses that are essential in
strengthening the party.

SEC. 19. Allowable Campaign Expenditures. - The accredited 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 the hiring of personnel,
professional secretariat, setting up of headquarters and other relevant. electoral
expenditures;

(b) Traveling expenses of the candidates and support personnel in the course of the
campaigns, and for personal expenses incident thereto;

(c) Information dissemination and advocacy campaigns of the political party;


(d) Production and distribution of electoral paraphernalia and other propaganda
materials; and

(e) Other expenditures as allowed under Section 102 on Lawful Expenditures of the
Omnibus Election Code.

SEC. 20. Accreditation. - A political party eligible in accordance with Section 21
hereof, and which desires to be entitled to the rights and privileges as recipient of the
subsidy provided for under this Act, may apply for accreditation by the Commission, under
such rules and regulations as the Commission shall prescribe consistent with the
provisions of this Act.

SEC. 21. Criteria for Eligibility. —- The Commission shall accredit political parties
eligible to receive subsidy from the State Subsidy Fund based on the following general
criteria:

(a) Political representation, consisting of the incumbent President, Vice President,
Members of Congress, Governors and City Mayors;

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

(c) Performance and track record of the party, which may include its performance in
the past elections and its ability to field candidates in the coming elections.

SEC. 22. _ Effects of Accreditation. - A duly accredited political party shall be entitled to
the rights and privileges accorded under this Act. Likewise, the accredited national political
party shall be subject to the regulations set forth in this Act and its implementing rules as
prescribed by the Commission

SEC. 23. Distribution of the Fund. — The total amount of the State Subsidy Fund
released annually shall be distributed as follows:

(a) Five percent (5%) of the fund shall accrue to the Commission, to be used
exclusively for monitoring purposes and the conduct of information dissemination
‘campaigns and voters’ education;

(b) Thirty percent (30%) of the fund shall be proportionately and ratably distributed to
accredited political parties represented in the Senate based on the number of seats
obtained in the most recent general elections; and

(c) Sixty-five percent (65%) of the fund shall be proportionately and ratably
distributed to accredited political parties represented in the House of Representatives
based on the number of seats obtained in the most recent general elections.

The share of each of the accredited political parties in the State Subsidy Fund shall
be released only upon proof that the concerned party has raised an amount equal to its
share in the fund from membership dues and voluntary contributions: Provided, That the
party concerned that fails to raise an amount equal to its share in the fund shall only
receive an amount raised from its share in the fund equal to the amount raised from
membership dues and voluntary contributions: Provided, further, That the balance, if any,
from the share in the fund of the party concerned shall be forfeited and reverted to the
general fund of the government.

SEC. 24. Schedule of Releases from the Fund. — For purposes of this Act, all releases
from the State Subsidy Fund during a nonelection year shall be used exclusively for party
development activities. Funds released during an election year shall be divided as follows:


seventy-five percent (75%) shall be used for campaign expenditures, and twenty-five
percent (25%) for party development activities. The Commission shall inform the
accredited political parties of the schedule of releases as well as the amount of the
subsidy allocated at the start of every fiscal year.

SEC. 25. | Management of the Subsidy. - The accredited political parties availing of the
subsidy shall maintain a separate financial account for the funds used to finance
campaign activities and party development, respectively.

Every accredited 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 political party shall be allowed to use the
subsidy for purposes other than those indicated in this Act.

CHAPTER IV
DISCLOSURES AND PERFORMANCE MONITORING

SEC. 26. Audit of the State Subsidy Fund. - The COA shall examine the financial
reports of the accredited political parties on their use of the State Subsidy Fund.
Membership dues and voluntary contributions to any accredited 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. 27. Party Ethics. — Accredited political parties shall institute internal control
mechanisms to promote accountability and transparency. Accredited political parties shall
likewise develop and enforce an internal code of conduct and ethical standards 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 the said program
for internal controls, ethical standards and disciplinary procedures shall be duly submitted
to the Commission and made available to the public. No political party shall select and
nominate a candidate who has been convicted by final judgment for any criminal offense.

SEC. 28. Full Disclosure. — The officials of every accredited political party shall submit
a sworn statement of their assets and liabilities to the Commission which shall be made
available to the public at least six (6) months before elections. All accredited political
parties and their candidates shall also be required to submit with the Commission and
make a public disclosure of all contributions as well as expenditures incurred for the use of
the State Subsidy Fund thirty (30) days after the elections. All these disclosures shall be
made through the official website of the Commission and published in a newspaper of
general circulation

SEC. 29. Other Reports. — The following shall be reported by the accredited political
parties and their candidates:

(a) The amount of contributions for the elections, the date of receipt by the bank or by
the duly authorized representative of the party and the full name and exact address of the
person, whether natural or juridical, from whom the contribution was received;

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

(c) Post-election disclosure statements as required under existing laws, which must
be submitted to the Commission within thirty (30) days after election day. Late


submissions shall be penalized with a fine in such amounts as may be determined by the
Commission; and

(d) Detailed breakdown of expenditures for the party development activities charged
against the State Subsidy 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. 30. Failure to Comply with Disclosure and Reporting Requirements. — Failure of
the accredited political party to comply with the provisions of this Act will result in its
disqualification from receiving its share in the State Subsidy Fund. The said unused funds
shall revert to the General Fund of the National Treasury, and all the rights and privileges
to which the party would have been entitled under this Act shall be forfeited

SEC. 31. Performance Monitoring and Reporting System. - The Commission and the
COA shall jointly design and implement, in consultation with political parties, aggrupations
or coalitions thereof, accredited citizens’ arms, the private sector and nongovernmental
organizations, and government agencies, an integrated political party development and
campaign subsidy performance monitoring and reporting system. The performance and
monitoring system shall identify, define and operationalize a system of performance
indicators and measures for party development and campaign subsidy deployment.

The Commission and the COA shall, based on the results of the system, publish and
disseminate annual reports on the development of political parties that have received
subsidies and on the distribution, use and results of the campaign subsidies provided to
political parties.

SEC. 32. Publication and Dissemination of the Political Party Development and
Campaign Subsidy Performance Reports. - The political party development and campaign
subsidy performance reports shall be submitted to both the Senate and the House of
Representatives of the Congress of the Philippines not later 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 V
MISCELLANEOUS PROVISIONS

SEC. 33.  Punishable Acts. — The following acts shall be punishable:

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

(b) Giving of voluntary contributions that goes beyond the allowable limits set under
this Act and other existing laws;

(c) Inability to account for all incoming contributions from whatever source;

(d) Failure to submit preelection as well as post-election disclosure statements to the
Commission; and

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

SEC. 34. Penalties. - (a) Any candidate or official of any political party who violates
any provision of this Act shall be punished with imprisonment of not less than six (6) years
but not more than twelve (12) years or a fine ranging from One hundred thousand pesos


(P 100,000.00) to Five hundred thousand pesos (P500,000.00), or both. He shall likewise
be disqualified to hold public office. Any political party that violates any provision of this
‘Act shall pay a fine of not less than Five hundred thousand pesos (P500,000.00) but not
more than Five million pesos (P5,000,000.00).

(b) Any political party that 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. 35. Appropriations. - The amount necessary for the implementation of the
provisions of this Act shall be included in the annual General Appropriations Act

SEC. 36. Lead Agency. - The Commission is hereby mandated as the independent
regulatory agency charged with administering and enforcing the provisions of this Act.

SEC. 37. Applicability. - 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 suppletorily.

SEC. 38. Rules and Regulations. - The Commission shall promulgate the
necessary rules and regulations to effectively implement the provisions of this Act.

SEC.39.  Separability Clause. - If any part of this Act is held invalid or
unconstitutional, the other parts or provisions hereof which are not affected thereby shall
remain valid and effective.

SEC. 40. 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. 41, Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) national newspapers of general circulation.