However, a 2013 Supreme Court decision clarified that the party-list is a system of proportional representation open to various kinds of groups and parties, and not an exercise exclusive to marginalized sectors.
For three consecutive terms after the ratification of the constitution, one-half of the seats allocated to party-list representatives were filled "by selection or election.
The five political parties with the highest number of members at the start of the 10th Congress of the Philippines were banned from participating.
[4] Ateneo de Manila University mathematics professor Felix Muga II said that "Any seat allocation formula that imposes a seat-capping mechanism on the party-list proportional representation voting system contradicts the social justice provision of the 1987 Constitution.
[6] The court maintained the four inviolable parameters: First, the twenty percent allocation – the combined number of all party-list congressmen shall not exceed twenty percent of the total membership of the House of Representatives, including those elected under the party list.
However, since R.A. 7941 limits the maximum number of seats for each party to three, of the existence of a 2% quota, and that 20% of the seats can be filled up, the court instead devised the formula above to ensure that the 20% allocation for sectoral representatives would not be exceeded, the 2% threshold will be upheld, the three-seat limit enforced and the proportional representation be respected.
The use of this formula by the COMELEC had been labeled by certain groups as to "annihilate independent voices in the House," according to Akbayan representative Etta Rosales.
[8] The court upheld this in subsequent cases, such as the Partido ng Manggagawa vs. COMELEC and Citizens' Battle Against Corruption vs.
The court ruled on April 21, 2009, that the 2% election threshold unconstitutional, and stipulated that for every four legislative districts created, one seat for sectoral representatives should be created; this thereby increased the sectoral seats in the 14th Congress from 22 to 55; the Supreme Court, however, upheld the 3-seat cap.
A much simpler understanding of the formula is as follows: While the party-list system has been used by some sectors that have not been able to participate in government in order to have a voice in Congress, allegations from left-leaning party-list organizations state that several parties were used as fronts by then-President Gloria Macapagal Arroyo's ruling administration to further its interests.
Parties such as 1-UTAK, purportedly representing transport groups, and PACYAW, which claims to advocate athletes and sports personnel, have government officials for nominees.
[13] The first nominee of Ang Galing Pinoy, for instance, a group claiming to represent security guards and tricycle drivers, was former Pampanga 2nd district representative Mikey Arroyo, the son of the former president; Arroyo won a seat through Ang Galing Pinoy in the 2010 election.
[18] In 2002, the Supreme Court ruled in Ang Bagong Bayani-OFW Labor Party vs. COMELEC that nominees "must be Filipino citizens belonging to marginalized and unrepresented sectors, organizations and parties, as the constitution intended to give genuine power to the people, not only by giving more law to those who have less in life, but more so by enabling them to become veritable lawmakers themselves.
"[19] In the same BANAT vs. COMELEC case stated above, while the ponencia thereof pointed out that neither the 1987 Constitution nor R.A. 7941 prohibits major political parties from participating in the party-list election, it was emphasized that they must do so by establishing or forming coalitions with sectoral organizations for electoral or political purposes.
In fact, Associate Justice Antonio Carpio noted that "it is not necessary that the party-list organization's nominee 'wallow in poverty, destitution and infirmity' as there is no financial status required by the law.
However, by a vote of 8–7, the Supreme Court still decided to continue disallowing major political parties from participating in the party-list elections, directly or indirectly.
The Supreme Court then laid down the basic on which organizations can join:[21] Methods of determining winners in party-list proportional representation: