Section 12 of R.A. No. 7941 provides for the procedure in allocating seats for
the party-list system:
SEC. 12. Procedure in Allocating Seats for Party-List Representatives. - The COMELEC shall tally all the votes for the parties, organizations, or
coalitions on a nationwide basis, rank them according to the number of votes
received and allocate party-list representatives proportionately according to
the percentage of votes obtained by each party, organization, or coalition as
against the total nationwide votes cast for the party-list system.

In BANAT v. COMELEC, the Supreme Court laid down the following
procedure in determining the allocation of seats for party-list
representatives under Section 11 of R.A. No. 7941:
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The parties, organizations, and coalitions shall be ranked from the
highest to the lowest based on the number of votes they garnered during
the elections.
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The parties, organizations, and coalitions receiving at least two percent
(2%) of the total votes cast for the party-list system shall be entitled
to one guaranteed seat each.
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Those garnering sufficient number of votes, according to the ranking in
paragraph 1, shall be entitled to additional seats in proportion to their
total number of votes until all the additional seats are allocated.
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Each party, organization, or coalition shall be entitled to not more than
three (3) seats.