March 27, 2019

Campaign Donations of Domestic Corporations to Political Parties and Candidates

 

Philippine companies can now make campaign contributions to political parties and individual candidates.

The Rule Before the Enactment of the Revised Corporation Code

The old Corporation Code prohibited all companies, both foreign and local, from making political contributions to political parties and candidates for purposes of partisan political activity (i.e., election to public office). This prohibition was further reinforced by the Omnibus Election Code which expressly forbade companies engaged in certain activities (such as public utilities) from making campaign contributions.

The New Rule Under the Revised Corporation Code

The Revised Corporation Code does not prohibit domestic companies from making campaign contributions to political parties or candidates. The prohibition is now limited to foreign companies1. However, the enumeration of companies that cannot donate to partisan political activities remains in the Omnibus Election Code2.

Under the Revised Corporation Code domestic companies can donate to political parties and candidates as long as these companies are not among those prohibited by the Omnibus Election Code. Since the blanket prohibition on domestic corporations has been removed, only those that are enumerated under the Omnibus Election Code are prohibited from making such donations.

Further, it seems that any Philippine company, even one that is listed in the Omnibus Election Code, can make a donation to a political candidate as long as the donation is made before the start of the campaign period. The Supreme Court ruled in Penera v. Comelec3 that “[a]ny person who files his certificate of candidacy within [the period for filing] shall only be considered as a candidate at the start of the campaign period for which he filed his certificate of candidacy.” This only means that unlawful acts or omissions applicable to a candidate shall only take effect only upon the start of the campaign period. However, such cannot be said to a political party as their status remains as such even before the start of the campaign period.

Summary Table on the Rule on Corporate Campaign Donations

Before Campaign Period Before Campaign Period
Domestic corporation NOT falling under Sec. 95 of OEC Can donate to both political party and candidate Can donate to both political party and candidate
Domestic corporation under Sec. 95 of OEC Can donate to a candidate but NOT to a political party CANNOT donate to both political party and candidate

 

It shall be unlawful for any person to solicit or receive any contribution from any of the persons or entities enumerated herein.

 


1 Sec. 35. Corporate Powers and Capacity. – Every corporation incorporated under this Code has the power and capacity:

(i) To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, that no foreign corporation shall give donations in aid of any political party or candidate or for purposes of partisan political activity;

2 Sec. 95. Prohibited contributions. – No contribution for purposes of partisan political activity shall be made directly or indirectly by any of the following:

(a) Public or private financial institutions: Provided, however, That nothing herein shall prevent the making of any loan to a candidate or political party by any such public or private financial institutions legally in the business of lending money, and that the loan is made in accordance with laws and regulations and in the ordinary course of business;

(b) Natural and juridical persons operating a public utility or in possession of or exploiting any natural resources of the nation;

(c) Natural and juridical persons who hold contracts or sub-contracts to supply the government or any of its divisions, subdivisions or instrumentalities, with goods or services or to perform construction or other works;

(d) Natural and juridical persons who have been granted franchises, incentives, exemptions, allocations or similar privileges or concessions by the government or any of its divisions, subdivisions or instrumentalities, including government-owned or controlled corporations;

(e) Natural and juridical persons who, within one year prior to the date of the election, have been granted loans or other accommodations in excess of P100,000 by the government or any of its divisions, subdivisions or instrumentalities including government-owned or controlled corporations;

(f) Educational institutions which have received grants of public funds amounting to no less than P100,000.00;

(g) Officials or employees in the Civil Service, or members of the Armed Forces of the Philippines; and

(h) Foreigners and foreign corporations.

3 G.R. No. 181613, November 25, 2009.

  Philippine companies can now make campaign contributions to political [...]

Read more >>

  The Revised Corporation Code Of The Philippines (Republic Act [...]

Read more >>

The Department of Labor and Employment (DOLE) issued Department Order [...]

Read more >>