False Claims Act

Senate Dificp of the societarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 26 FEB 10 P3:46 SENATE RECEIVED BY: S. No. 1829 Introduced by Senator Rodante D. Marcoleta AN ACT TO FURTHER COMBAT FINANCIAL FRAUD PERPETRATED AGAINST PUBLIC FUNDS, ALLOWING PRIVATE INDIVIDUALS TO INSTITUTE ACTIONS FOR FALSE CLAIMS ON BEHALF OF THE GOVERNMENT EXPLANATORY NOTE The recent flood control scandal has once again brought to fore the one affliction of our country that has proven to be more calamitous than any typhoon or natural disaster: the systemic corruption in the government. The figures are almost unimaginable. The Independent Commission for Infrastructure (ICI), for example, has confirmed at least 416 "ghost" flood control projects.1 The Anti-Money Laundering Council (AMLC) has since frozen nearly P25 billion worth of assets linked to the flood control scandal, including 379 bank accounts, 4 e-wallet accounts, 55 real properties, and other securities and investment accounts.? And the Department of Finance has estimated that economic loss from the flood control corruption has cost the country at least P118.5 billion annually from 2023 to 2025.3 But even with these mounting data, justice remains elusive to the indignant and disgruntled Filipino people. As a means to enhance the participation of our kababayans in reclaiming justice and rehabilitating our system, this bill adopts a modified version of the US False Claims Act (FCA). First introduced by Sen. Miriam Defensor Santiago in the 13th Congress, 1 Mary Joy Salcedo, ICI Cuts 'Ghost' Flood Control Projects List to 416 After Review, Inquirer.net, January 30, 2026, available at: https://newsinfo.inquirer.net/2175314/ici-cuts-ghost-flood-control-projects-list-to-416-after-review (last accessed on February 01, 2026). 2 Ian Nicolas P. Cigaral, AMLC Freezes P25-B Assets in Flood Projects, Philippine Daily Inquirer, February 01, 2026, available at: https://newsinfo.inquirer.net/2175723/amlc-freezes-p25-b-assets-in-flood-projects (last accessed on February 01, 2026). 3 Marco Luis Beech, P118.5 Billion a Year Lost to Flood Control Corruption - DOF, The Philippine Star, September 03, 2025, available at https://www.philstar.com/headlines/2025/09/03/2470047/p1185-billion-year-lost-flood-control-corruption-dof (last accessed on 05 November 2025).

this revised version of the FCA contains qui tam provisions-short of "qui tam pro domino rege quam pro se ipso in hac parte sequitur" - which translates to "he who brings an action for the king as well as for himself", qui tam statutes allow private citizens to institute an action on the Government's behalf against entities that have defrauded the Government. The private citizen in turn receives part the recovered amount. It essentially encourages and incentivizes whistleblowers to shed light to these anomalies and to report fraud accordingly. Throughout the years, the US FCA has gained significant foothold in terms of recovered amounts for the Government. From 1987 to 2019, for example, the US Government was able to recover approximately $62 billion USD from cases and settlement involving fake claims.* While in 2020 alone, the US Justice Department recovered over $2.2 billion USD from FCA cases.5 This bill aims to replicate the same success so that brave whistleblowers and citizens may end the culture of impunity once and for all. It is our hope that this new mechanism for public participation ushers in a new age of accountability and reparation-one in which public office truly becomes an embodiment of public trust, and justice becomes a shared reality, not just a distant dream for the nation. In view of the foregoing, the passage of this bill is urgently sought. weal RODANTE D. MARCOLETA 4 US Department of Justice, Justice Department Recovers Over $3 Billion from False Claims Act Cases in Fiscal Year 2019, January 09, 2020, accessed on November 05, 2025). available at https://www.justice.gov/archives/opa/pr/justice-department-recovers-over-3-billion-false-claims-act-cases-fiscal-year-2019 (last available at: https://www.justice.gov/archives/opa/pr/justice-department-recovers-over-22-billion-false-claims-act-cases-fiscal-year-2020 (last 5 US Department of Justice, Justice Department Recovers Over $2.2 Billion From False Claims Act Cases in Fiscal Year 2020, January 14, 2021, accessed on November 05, 2025).

Senate Office of the Zenerary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 26 FEB 10 P3:46 First Regular Session SENATE RECEIVED BY S. No. 1829 Introduced by Senator Rodante D. Marcoleta AN ACT TO FURTHER COMBAT FINANCIAL FRAUD PERPETRATED AGAINST PUBLIC FUNDS, ALLOWING PRIVATE INDIVIDUALS TO INSTITUTE ACTIONS FOR FALSE CLAIMS ON BEHALF OF THE GOVERNMENT Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the "False Claims Act".

Sec. 2. Declaration of Policy. - Consistent with Article II, Section 27 of the 1987

3 Constitution which states that "the State shall maintain honesty and integrity in the public service and take positive and effective measures against graft and corruption", as well as the fundamental principle that Government funds or property shall be spent 6 or used solely for public purposes, it is hereby declared the policy of the State to give priority to the enactment and enforcement of stronger measures to combat financial 8 fraud perpetrated against the wealth of the nation and taxpayers' money by public 9 officers and private individuals alike. This includes adopting

Sec. 3. Definition of Terms. - As used in this Act:

(a) "Claim" means any request or demand, whether under a contract or otherwise, for money or property that (1) is presented to an officer, employee, or agent of the Government; or (2) is made to a contractor, grantee, or other recipients if the money or property is to be spent or used on the Government's behalf or to advance a Government program or interest, and if the Government provides or has provided any portion of the money or property requested or demanded, or will reimburse such contractor, grantee, or other recipient for any portion of the

money or property which is requested or demanded. It does not include requests or demands for money or property that the Government has paid to an individual as compensation or as subsidy. (b) "Material" means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.

Sec. 4. Prohibited Acts. - Any person who performs any of the following shall

be liable under this Act: (a) knowingly presents, or cause to be presented, a false or fraudulent claim for payment or approval; (b) knowingly makes, uses, or cause to be made or used, a false record or statement material to a false or fraudulent claim; (c) has possession, custody, or control of money or property used or to be used by the Government, and knowingly delivers or causes to be delivered less than all of that money or property; (d) is authorized to make or deliver a document certifying receipt of property used or to be used by the Government, and makes or delivers the said document with knowledge that the information on it is false; (e) knowingly buys or receives public property from a government officer or employee who lawfully may not sell or pledge the said property; (t) knowingly makes, uses, or cause to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the government, or knowingly conceals, avoids, or decreases an obligation to pay or transmit money or property to the Government; or (g) conspires to commit a violation of sub-paragraphs (a) to (f) of this Section. As used under this Section, "knowing" and "knowingly" shall refer to a person who: i. has actual knowledge of the information pertaining to the relevant prohibited acts under Section 4 of this Act; ii. acts in deliberate ignorance of the truth or falsity of the information; or iii. acts in reckless disregard of the truth or falsity of the information.

Sec. 5. Civil Action for False Claims by the Solicitor General. - The Solicitor

General shall investigate any violation of the listed acts under Section 4. If there is a

1 finding of violation, the Solicitor General may thereafter file the corresponding civil 2 action without prejudice to other criminal, civil, or administrative charges.

Sec. 6. Civil Action for False Claims by a Private Person. -

(a) A private person may bring a civil action under this Act for the person and for the Government. The action shall be brought in the name of the Government. (b) A copy of the complaint and written disclosure of substantially all relevant evidence and information the person possesses shall be served to the Government pursuant to the pertinent provisions of the Rules of Court. The complaint shall remain under seal for at least sixty (60) days and shall not be served on the defendant until the court so orders. The Government may elect to intervene and proceed with the action within sixty (60) days after it receives both the complaint and the relevant evidence and information. (c) The Government may, for good cause shown, move the court for extension of time during which the complaint remains under seal. Any such motions may be supported by affidavits. The defendant shall not be required to respond to any complaint filed under this section until twenty (20) days after the complaint is unsealed and served upon the defendant. (d) Before the expiration of the sixty (60) day period or any extension obtained therein, the Government shall: (ii) proceed with the action, in which case the action shall be conducted by the Government; or iii) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action. (e) When a person brings an action under this section, no person other than the Government may intervene or bring a related action on the facts underlying the pending action.

Sec. 7. Rights of the Parties to Qui Tam Actions -

(a) If the Government proceeds with the action, it shall have the primary responsibility for pursuing the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to the limitations set forth in paragraphs (b) to (e) of this Section.

(b) The Government may move to dismiss the action, notwithstanding the objections of the person initiating the action. The person must be notified by the Government of the filing of the motion and be furnished of a copy thereof. The court must likewise provide the person with an opportunity for a hearing on the motion. (c) The Government may settle the action with the defendant, notwithstanding the objections of the person initiating the action, if the court determines, after the appropriate hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. (d) Upon showing by the Government that unrestricted participation during the course of the litigation by the person initiating the action would unduly interfere with or delay the Government's prosecution of the case, the court may, in its discretion, impose limitations on the person's participation, such as by limiting the number of witnesses the person may call, the length of the testimony of such witnesses, or the person's cross-examination of the witnesses. (e) Upon showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation of the said person in the litigation similar to paragraph (d) of this Section. (f) If the Government does not elect to proceed with the action, the person who initiated the action shall have the right to conduct the action. If the Government so requests, it shall be served with copies of all pleadings filed in the action and shall be supplied with copies of all deposition transcripts at the Government's expense. When a person proceeds with the action, the court, without limiting the status and rights of the person initiating the action, may nevertheless permit the Government to intervene at a later date upon showing of good cause. (g) Whether or not the Government proceeds with the action, upon a showing by the Government that certain actions of discovery by the person initiating the action would interfere with the Government's investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay such discovery for a period of not more than sixty (60) days. The court may extend the 60-day period upon further showing that the Government has pursued the criminal or civil

investigation or proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceeding.

Sec. 8. Alternative Proceeding by the Government. - Notwithstanding the

previous sections, the Government may elect to pursue its claim through any alternate remedies available, including through administrative proceedings.

Sec. 9. Award to Qui Tam Plaintiff. -

(a) If the Government proceeds with an action brought by a person under Section 6 of this Act, such person shall receive no less than fifteen percent (15%) but not more than twenty-five percent (25%) of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed during the course of the action. Where the action is one which the court finds to be based primarily on disclosures of specific information other than the information provided by the person bringing the action, such as those found in separate criminal, civil, or administrative proceedings, congressional hearings or reports, press conferences, audit reports, publications, or from the news media, the court may award such sums as it considers appropriate, but in no case more than ten percent (10%) of the proceeds, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation. Any payment to a person under the first or second sentence or this paragraph shall be made from the proceeds. Any such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorney's fees and costs. All such expenses, fees, and costs shall be awarded against the defendant. (b) If the Government does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than twenty-five percent (25%) and not more than thirty percent (30%) of the proceeds of the action or settlement and shall be paid out of such proceeds. Such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorney's

fees and costs. All such expenses, fees, and costs shall be awarded against the defendant. (c) Whether or not the Government proceeds with the action, if the person bringing the action is convicted of criminal conduct arising from his or her role in the prohibited acts under Section 4, that person shall be dismissed from the civil action and shall not receive any share or the proceeds of the action. Such dismissal shall not prejudice the right of the Government to continue the action, represented by the Solicitor General. (d) If the Government does not proceed with the action and the person bringing the action conducts the action, the court may award to the defendant reasonable attorney's fees and expenses if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.

Sec. 10. Restrictions on Qui Tam Actions. -

(a) In no event may a person bring an action under Section 6 based upon allegations or transactions that are already the subject of a criminal, civil, or administrative proceeding in which the government is already a party. (b) Unless the action is brought by the Solicitor General or the person bringing the action is an original source of the information, the Court shall dismiss an action or claim under this Act, unless opposed by the Government, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed: i. in a criminal, civil, or administrative hearing in which the Government is a party; ii. in a congressional or other agency report, hearing, audit, or investigation; or iii. from the news media. For purposes of this paragraph, "original source" means an individual who: (i) prior to the public disclosure under this Section, has voluntarily disclosed to the Government the information on which the allegations or transactions are based; or (ii) who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the Government before filing an action under this section.

Sec. 11. Government Not Liable for Expenses. - The government is not liable

for expenses which a person incurs in bringing an action under this Act.

Sec. 12. Relief From Workplace Harassment or Retaliatory Actions - Any

person, whether employed in the public or private sector, who is discharged, demoted, 5 suspended, threatened, harassed, or in any manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee in furtherance of an action under this Act, shall be entitled to all appurtenant relief, including but not limited to reinstatement with the same seniority status, back pay, and compensation for any damages sustained as a result of the discrimination, including litigation costs and reasonable attorney's fees.

Sec. 13. Penalty. - Any person who violates Section 4 of this Act shall be liable

for imprisonment for not less than six (6) years and one (1) month to not more than fifteen (15) years, and a fine of not less than Five Hundred Thousand Pesos (P500,000.00) but not more than Two Million Pesos (P2,000,000.00). If the offender is a government official or employee, the penalty of perpetual absolute disqualification to hold appointive or elective public office shall likewise be imposed.

Sec. 14. Exclusion. - This Act does not apply to claims, records, or statements

made under the National Internal Revenue Code, as amended.

Sec. 15. Separability Clause. - If any provision or part of this Act is declared

21 invalid or unconstitutional, the remaining parts not affected shall remain in full force 22 and effect.

Sec. 16. Repealing Clause. - All laws, presidential decrees, executive orders,

letters of instructions, administrative orders, proclamations, or administrative regulations that are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

Sec. 17. Effectivity. - This Act shall take effect fifteen (15) days following its

complete publication in the Official Gazette or in a newspaper of general circulation. Approved,