COMMONWEALTH ACT No. 146 THE PUBLIC SERVICE LAW (As amended, and as modified particularly by PD No.

1, Integrated Reorganization Plan and EO 546) CHAPTER I ORGANIZATION Section 1. This Act shall be known as the "Public Service Act." Section 2. There is created under the Department of Justice a commission which shall be designated and known as the Public Service Commission, composed of one Public Service Commissioner and five Associate Commissioners, and which shall be vested with the powers and duties hereafter specified. Whenever the word "Commission" is used in this Act, it shall be held to mean the Public Service Commission, and whenever the word "Commissioner" is used in this Act it shall be held to mean the Public Service Commissioner or anyone of the Associate Commissioners. The Public Service Commissioner and the Associate Public Service Commissioners shall be natural born citizens and residents of the Philippines, not under thirty years of age; members of the Bar of the Philippines, with at least five years of law practice or five years of employment in the government service requiring a lawyer's diploma; and shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments of the Congress of the Philippines: Provided, however, That the present Commissioner and the personnel of the Commission shall continue in office without the necessity of re-appointment. The Commissioners shall have the rank and privilege of retirement of Judges of the Courts of First Instance. (As amended by Republic Act Nos. 178 and 2677) Section 3. The Commissioner and Associate Commissioners shall hold office until they reach the age of seventy years, or until removed in accordance with the procedures prescribed in section one hundred and seventy-three of Act Numbered Twenty-seven hundred and eleven, known as the Revised Administrative Code: Provided, however, That upon retirement any Commissioner of Associate Commissioner shall be entitled to all retirement benefits and privileges for Judges of the Courts of First Instance or under the retirement law to which he may be entitled on the date

of his retirement. In case of the absence, for any reason, of the Public Service Commissioner, the Associate Commissioner with seniority of appointment shall act as Commissioner. If on account of absence, illness, or incapacity of any of three Commissioners, or whenever by reason of temporary disability of any Commissioner or of a vacancy occurring therein, the requisite number of Commissioners necessary to render a decision or issue an order in any case is not present, or in the event of a tie vote among the Commissioners, the Secretary of Justice may designate such number of Judges of the Courts of First Instance, or such number of attorneys of the legal division of the Commission, as may be necessary to sit temporarily as Commissioners in the Public Service Commission. The Public Service Commission shall sit individually or as a body en banc or in two divisions of three Commissioners each. The Public Service Commissioner shall preside when the Commission sits en banc and in one division. In the other division, the Associate Commissioner with seniority of appointment in that division shall preside. Five Commissioners shall constitute a quorum for sessions en banc and two Commissioners shall constitute a quorum for the sessions of a division. In the absence of a quorum, the session shall be adjourned until the requisite number is present. All the powers herein vested upon the Commission shall be considered vested upon any of the Commissioners, acting either individually or jointly as hereinafter provided. The Commissioners shall equitably divide among themselves all pending cases and those that may hereafter be submitted to the Commissioner, in such manner and form as they may determine, and shall proceed to hear and determine the case assigned to each or to their respective divisions, or to the Commission en banc as follows: uncontested cases, except those pertaining to the fixing of rates, shall be decided by one Commissioner; contested cases and all cases involving the fixing of rates shall be decided by the Commission in division and the concurrence of at least two Commissioners in the division shall be necessary for the promulgation of a decision or non-interlocutory order in these cases: Provided, however, That any motion for reconsideration of a decision or noninterlocutory order of any Commissioner or division shall be heard directly by the Commission en banc and the concurrence of at least four Commissioners shall be necessary for the promulgation of a final decision or order resolving such motion for reconsideration. (As amended by Republic Act Nos. 723 and 2677) Section 4. The Public Service Commissioner shall receive an annual compensation of thirteen thousand pesos; and each of the Associate

Commissioners an annual compensation of twelve thousand pesos. The Commissioners shall be assisted by one chief attorney, one finance and rate regulation officer, one chief utilities regulation engineer, one chief accountant, one transportation regulation chief, one secretary of the Public Service Commission, and three public utilities advisers who shall receive an annual compensation of not less than ten thousand eight hundred pesos each; five assistant chiefs of division who shall receive an annual compensation of not less than nine thousand six hundred pesos each; twelve attorneys who shall receive an annual compensation of not less than nine thousand pesos each; and a technical and confidential staff to be composed of two certified public accounts, two electrical engineers, two mechanical or communication engineers, and two special assistants who shall receive an annual compensation of not less than seven thousand two hundred pesos each. (As amended by Republic Act Nos. 723, 2677 and 3792) Section 5. The Public Service Commissioner, the Associate Public Service Commissioners, and all other officers and employees of the Public Service Commission shall enjoy the same privileges and rights as the officer and employees of the classified civil service of the Government of the Philippines. They shall also be entitled to receive from the Government of the Philippines their necessary travelling expenses while travelling on the business of the Commission, which shall be paid on proper voucher therefor, approved by the Secretary of Justice, out of funds appropriated for the contingent expenses of the Commission. When the exigency of the service so requires and with the approval of the Secretary of Justice, and subject to the provisions of Commonwealth Act Numbered Two hundred forty-six, as amended, funds may be set aside from the appropriations provided for the Commission and/or from the fees collected under Section forty of this Act to defray the expenses to be incurred by the Public Service Commissioner or any of the Associate Commissioners, officers or employees of the Commission to be designated by the Commissioner, with the approval of the Secretary of Justice, in the study of modern trends in supervision and regulation of public services. (As amended by Republic Act No. 3792) Section 6. The Secretary of Justice, upon recommendation of the Public Service Commissioner, shall appoint all subordinate officers and employees of the Commission as may be provided in the Appropriation Act. The Public Service Commissioner shall have general executive control, direction, and supervision over the work of the Commission and of its members, body and

personnel, and over all administrative business. (As amended by Republic Act Nos. 178 and 3792) Section 7. The Secretary of the Commission, under the direction of the Commissioner, shall have charge of the administrative business of the Commission and shall perform such other duties as may be required of him. He shall be the recorder and official reporter of the proceedings of the Commission and shall have authority to administer oaths in all matters coming under the jurisdiction of the Commission. He shall be the custodian of the records, maps, profiles, tariffs, itineraries, reports, and any other documents and papers filed with the Commission or entrusted to his care and shall be responsible therefor to the Commission. He shall have authority to designate from time to time any of his delegates to perform the duties of Deputy Secretary with any of the Commissioners. Section 8. The Commission shall furnish the Secretary such of its findings and decisions as in its judgment may be of general public interest; the Secretary shall compile the same for the purpose of publication in a series of volumes to be designated "Reports of the Public Service Commission of the Philippines," which shall be published in such form and manner as may be best adapted for public information and use, and such authorized publications shall be competent evidence of the reports and decisions of the Commission therein contained without any further proof or authentication thereof. Section 9. No member or employee of the Commission shall have any official or professional relation with any public service as herein defined, or hold any office of profit or trust with the Government of the Philippines. Section 10. The Commission shall have its office in the City of Manila or at such other place as may be designated, and may hold hearings on any proceedings at such times and places, within the Philippines, as it may provide by order in writing: Provided, That during the months of April and May of each year, at least three Commissioners shall be on vacation in such manner that once every two years at least three of them shall be on duty during April and May: Provided, however, That in the interest of public service, the Secretary of Justice may require any or all the Commissioners not on duty to render services and perform their duties during the vacation months. (As amended by Republic Act Nos. 176 and 3792)

Section 11. The Commission shall have the power to make needful rules for its Government and other proceedings not inconsistent with this Act and shall adopt a common seal, and judicial notice shall be taken for such seal. True copies of said rules and other amendments shall be promptly furnished to the Bureau of Printing and shall be forthwith published in the Official Gazette. CHAPTER II JURISDICTION, POWERS AND DUTIES OF THE COMMISSION Section 13. (a) The Commission shall have jurisdiction, supervision, and control over all public services and their franchises, equipment, and other properties, and in the exercise of its authority, it shall have the necessary powers and the aid of the public force: Provided, That public services owned or operated by government entities or government-owned or controlled corporations shall be regulated by the Commission in the same way as privately-owned public services, but certificates of public convenience or certificates of public convenience and necessity shall not be required of such entities or corporations: And provided, further, That it shall have no authority to require steamboats, motor ships and steamship lines, whether privatelyowned, or owned or operated by any Government controlled corporation or instrumentality to obtain certificate of public convenience or to prescribe their definite routes or lines of service. (b) The term "public service" includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether may be its classification, freight or carrier service of any class, express service, steamboat or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, That a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is

offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act. (c) The word "person" includes every individual, co-partnership, jointstock company or corporation, whether domestic or foreign, their lessees, trustees, or receivers, as well as any municipality, province, city, government-owned or controlled corporation, or agency of the Government of the Philippines, and whatever other persons or entities that may own or possess or operate public services. (As amended by Com. Act 454 and RA No. 2677) Section 14. The following are exempted from the provisions of the preceding section: (a) Warehouses; (b) Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and lighters; (c) Airships within the Philippines except as regards the fixing of their maximum rates on freight and passengers; (d) Radio companies except with respect to the fixing of rates; (e) Public services owned or operated by any instrumentality of the National Government or by any government-owned or controlled corporation, except with respect to the fixing of rates. (As amended by Com. Act 454, RA No. 2031, and RA No. 2677 ) Section 15. With the exception of those enumerated in the preceding section, no public service shall operate in the Philippines without possessing a valid and subsisting certificate from the Public Service Commission known as "certificate of public convenience," or "certificate of public convenience and necessity," as the case may be, to the effect that the operation of said service and the authorization to do business will promote the public interests in a proper and suitable manner.

The Commission may prescribe as a condition for the issuance of the certificate provided in the preceding paragraph that the service can be acquired by the Republic of the Philippines or any instrumentality thereof upon payment of the cost price of its useful equipment, less reasonable depreciation; and likewise, that the certificate shall be valid only for a definite period of time; and that the violation of any of these conditions shall produce the immediate cancellation of the certificate without the necessity of any express action on the part of the Commission. In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model, or other circumstances affecting its value in the market shall be taken into consideration. The foregoing is likewise applicable to any extension or amendment of certificates actually in force and to those which may hereafter be issued, to permit to modify itineraries and time schedules of public services, and to authorizations to renew and increase equipment and properties. Section 16. Proceedings of the Commission, upon notice and hearing. - The Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary : (a) To issue certificates which shall be known as certificates of public convenience, authorizing the operation of public service within the Philippines whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. Provided, That thereafter, certificates of public convenience and certificates of public convenience and necessity will be granted only to citizens of the Philippines or of the United States or to corporations, co-partnerships, associations or joint-stock companies constituted and organized under the laws of the Philippines; Provided, That sixty per centum of the stock or paid-up capital of any such corporations, co-partnership, association or joint-stock company must belong entirely to citizens of the Philippines or of the United States: Provided, further, That no such certificates shall be issued for a period of more than fifty years. (b) To approve, subject to constitutional limitations any franchise or privilege granted under the provisions of Act No. Six Hundred and

Sixty-seven, as amended by Act No. One Thousand and twenty-two, by any political subdivision of the Philippines when, in the judgment of the Commission, such franchise or privilege will properly conserve the public interests, and the Commission shall in so approving impose such conditions as to construction, equipment, maintenance, service, or operation as the public interests and convenience may reasonably require, and to issue certificates of public convenience and necessity when such is required or provided by any law or franchise. (c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as commutation, mileage, kilometrage, and other special rates which shall be imposed observed and followed thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by public services provisionally and without necessity of any hearing; but it shall call a hearing thereon within thirty days, thereafter, upon publication and notice to the concerns operating in the territory affected: Provided, further, That in case the public service equipment of an operator is used principally or secondarily for the promotion of a private business, the net profits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates. (d) To fix just and reasonable standards, classifications, regulations, practices, measurement, or service to be furnished, imposed, observed, and followed thereafter by any public service. (e) To ascertain and fix adequate and serviceable standards for the measurement of quantity, quality, pressure, initial voltage, or other condition pertaining to the supply of the product or service rendered by any public service, and to prescribe reasonable regulations for the examination and test of such product or service and for the measurement thereof. (f) To establish reasonable rules, regulations, instructions, specifications, and standards, to secure the accuracy of all meters and appliances for measurements.

(g) To compel any public service to furnish safe, adequate, and proper service as regards the manner of furnishing the same as well as the maintenance of the necessary material and equipment. (h) To require any public service to establish, construct, maintain, and operate any reasonable extension of its existing facilities, where in the judgment of said Commission, such extension is reasonable and practicable and will furnish sufficient business to justify the construction and maintenance of the same and when the financial condition of the said public service reasonably warrants the original expenditure required in making and operating such extension. (i) To direct any railroad, street railway or traction company to establish and maintain at any junction or point of connection or intersection with any other line of said road or track, or with any other line of any other railroad, street railway or traction to promote, such just and reasonable connection as shall be necessary to promote the convenience of shippers of property, or of passengers, and in like manner direct any railroad, street railway, or traction company engaged in carrying merchandise, to construct, maintain and operate, upon reasonable terms, a switch connection with any private sidetrack which may be constructed by any shipper to connect with the railroad, street railway or traction company line where, in the judgment of the Commission, such connection is reasonable and practicable and can be out in with safety and will furnish sufficient business to justify the construction and maintenance of the same. (j) To authorize, in its discretion, any railroad, street railway or traction company to lay its tracks across the tracks of any other railroad, street railway or traction company or across any public highway. (k) To direct any railroad or street railway company to install such safety devices or about such other reasonable measures as may in the judgment of the Commission be necessary for the protection of the public are passing grade crossing of (1) public highways and railroads, (2) public highways and streets railway, or (3) railways and street railways.

(l) To fix and determine proper and adequate rates of depreciation of the property of any public service which will be observed in a proper and adequate depreciation account to be carried for the protection of stockholders, bondholders or creditors in accordance with such rules, regulations, and form of account as the Commission may prescribe. Said rates shall be sufficient to provide the amounts required over and above the expense of maintenance to keep such property in a state of efficiency corresponding to the progress of the industry. Each public service shall conform its depreciation accounts to the rates so determined and fixed, and shall set aside the moneys so provided for out of its earnings and carry the same in a depreciation fund. The income from investments of money in such fund shall likewise be carried in such fund. This fund shall not be expended otherwise than for depreciation, improvements, new construction, extensions or conditions to the properly of such public service. (m) To amend, modify or revoke at any time certificate issued under the provisions of this Act, whenever the facts and circumstances on the strength of which said certificate was issued have been misrepresented or materially changed. (n) To suspend or revoke any certificate issued under the provisions of this Act whenever the holder thereof has violated or willfully and contumaciously refused to comply with any order rule or regulation of the Commission or any provision of this Act: Provided, That the Commission, for good cause, may prior to the hearing suspend for a period not to exceed thirty days any certificate or the exercise of any right or authority issued or granted under this Act by order of the Commission, whenever such step shall in the judgment of the Commission be necessary to avoid serious and irreparable damage or inconvenience to the public or to private interests. (o) To fix, determine, and regulate, as the convenience of the state may require, a special type for auto-busses, trucks, and motor trucks to be hereafter constructed, purchased, and operated by operators after the approval of this Act; to fix and determine a special registration fee for auto-buses, trucks, and motor trucks so constructed, purchased and operated: Provided, That said fees shall be smaller than more those charged for auto-busses, trucks, and motor trucks of types not made regulation under the subsection.

Section 17. Proceedings of Commission without previous hearing. - The Commission shall have power without previous hearing, subject to established limitations and exception and saving provisions to the contrary: (a) To investigate, upon its own initiative, or upon complaint in writing, any matter concerning any public service as regards matters under its jurisdiction; to require any public service to furnish safe, adequate, and proper service as the public interest may require and warrant; to enforce compliance with any standard, rule, regulation, order or other requirement of this Act or of the Commission, and to prohibit or prevent any public service as herein defined from operating without having first secured a certificate of public convenience or public necessity and convenience, as the case may be and require existing public services to pay the fees provided for in this Act for the issuance of the proper certificate of public convenience or certificate of public necessity and convenience, as the case may be, under the penalty, in the discretion by the Commission, of the revocation and cancellation of any acquired rights. (b) To require any public service to pay the actual expenses incurred by the Commission in any investigation if it shall be found in the same that any rate, tool, charge, schedule, regulation, practice, act or service thereof is in violation of any provision of this Act or any certificate, order, rule, regulation or requirement issued or established by the Commission. The Commission may also assess against any public service costs not to exceed twenty-five pesos with reference to such investigation. (c) From time to time appraise and value the property of any public service, whenever in the judgment of the Commission it shall be necessary so to do, for the purpose of carrying out any of the provisions of this Act, and in making such valuation the Commission may have access to and use any books, documents, or records in the possession of any department, bureau, office, or board of the government of the Philippines or any political subdivision thereof. (d) To provide, on motion by or at the request of any consumer or user of a public service, for the examination and test of any appliance used for the measuring of any product or service of a public service, and for that purpose, by its agents, experts, or examiners to enter upon any premises where said appliances may

be, and other premises of the public service, for the purpose of setting up and using on said premises any apparatus necessary therefor. and to fix the fees to be paid by any consumer or user who may apply to the Commission for such examination or test to be made, and if the appliance be found defective or incorrect to the disadvantage of the consumer or user to require the fees paid to be refunded to the consumer or user by the public service concerned. (e) To permit any street railway or traction company to change its existing gauge to standard steam railroad gauge, upon such terms and conditions as the Commission shall prescribe. (f) To grant to any public service special permits to make extra or special trips within the territory covered by its certificates of public convenience, and to make special excursion trips outside of its own territory if the public interest or special circumstances required it: Provided, however, that in case a public service cannot render such extra service on its own line or in its own territory, a special permit for such extra service may be granted to any other public service. (g) To require any public service to keep its books, records, and accounts so as to afford an intelligent understanding of the conduct of its business and to that end to require every such public service of the same class to adopt a uniform system of accounting. Such system conform to any system approved and confirmed by the Auditor General. (h) To require any public service to furnish annual reports of finances and operations. Such reports shall set forth in detail the capital stock issued, the amounts of said capital stock paid up and the form of payment thereof; the dividends paid, the surplus, if any and the number of stockholders, the consolidated and pending obligations and the interest paid thereon; the cost and value of the property of the operator; concessions or franchises and equipment; the number of employees and salaries paid to each class; the accidents to passengers, employees, and other person, and the causes thereof; the annual expenditures on improvements; the manner of their investment and nature of such improvements; the receipts and profits in each of the branches of the business and of whatever source; the operating and other expenses; the balance of profits and losses; and a complete statement of the annual financial operations of the operator, including an annual balance sheet. Such reports

shall also contain any information which the Commission may require concerning freight and passenger rates, or agreements, compromises or contracts affecting the same. Said reports shall cover a period of twelve months, ending on December thirty-first of each year, and shall be sworn to by the officer or functionary of the public service authorized therefor. The Commission shall also have power to require from time to time special reports containing such information as above provided for or on other matters as the Commission may deem necessary or advisable. (i) To require every public service to file with the Commission a statement in writing, verified by the oaths of the owner or the president and the secretary thereof, if a corporation, setting forth the name, title of office or portion, and post-office address, and the authority, power and duties of every officer, member of the board of directors, trustees executive committee, superintendent, chief or head of construction and operation thereof, in such form as to disclose the source and origin of each administrative act, rule, decision, order or other action of the operator of such public service; and, within ten days after any change is made in the title of, or authority, powers or duties appertaining to any such office or position, or the person holding the same, filed with the Commission a like statement, verified in like manner, setting forth such change. (j) To require any public service to comply with the laws of the Philippines and with any provincial resolution or municipal ordinance relating thereto and to conform to the duties imposed upon it thereby or by the provisions of its own character, whether obtained under any general or special law of the Philippines. (k) To investigate any or all accidents that may occur on the property of any public service or directly or indirectly arising from or connected with its maintenance or operation in the Philippines; to require any public service to give the Commission immediate and effective notice of all any such accidents, and to make such order or recommendation with respect thereto as the public interest may warrant or require. (l) To require every public service s herein defined to file within complete schedules of every classification employed and of every individual or joint rate, toll fare or charge made, charged or exacted by it for any product supplied or service rendered within the

Philippines and, in the case of public carriers, to file with it a statement showing the itineraries or routes served as specified in such requirement. CHAPTER III OPERATORS OF PUBLIC SERVICES REGULATIONS AND PROHIBITIONS Section 18. It shall be unlawful for any individual, co-partnership, association, corporation or joint-stock company, their lessees, trustees or receivers appointed by any court whatsoever, or any municipality, province, or other department of the Government of the Philippines to engage in any public service business without having first secured from the Commission a certificate of public convenience or certificate of public convenience and necessity as provided for in this Act, except grantees of legislative franchises expressly exempting such grantees from the requirement of securing a certificate from this Commission as well as concerns at present existing expressly exempted from the jurisdiction of the Commission, either totally or in part, by the provisions of section thirteen of this Act. Section 19. Unlawful Acts. - It shall be unlawful for any public service: (a) To provide or maintain any service that is unsafe, improper, or inadequate or withhold or refuse any service which can reasonably be demanded and furnished, as found and determined by the Commission in a final order which shall be conclusive and shall take effect in accordance with this Act, upon appeal of otherwise. (b) To make or give, directly or indirectly, by itself or through its agents, attorneys or brokers, or any of them, discounts or rebates on authorized rates, or grant credit for the payment of freight charges, or any undue or unreasonable preference or advantage to any person of corporation or to any locality or to any particular description of traffic or service, or subject any particular person or corporation or locality or any particular description of traffic to any prejudice or disadvantage in any respect whatsoever; to adopt, maintain, or enforce any regulation, practice or measurement which shall be found or determined by the Commission to be unjust, unreasonable, unduly preferential or unjustly discriminatory in a final order which shall be conclusive and shall take effect in accordance with the provisions of this Act, upon repeal or otherwise.

(c) To refuse or neglect, when requested by the Director of Posts or his authorized representative, to carry public mail on the regular trips of any public land transportation service maintained or operated by any such public service; upon such terms and conditions and for a consideration in such amount as may be agreed upon between the Director of Posts and the public service carrier of fixed by the Commission in the absence of an agreement between the Director of Posts and the carrier. In case the Director of Posts and public service carrier are unable to agree on the amount of the compensation to be paid for the carriage of the mail, the Director of Posts shall forthwith request the Commission to fix a just and reasonable compensation for such carriage and the same shall be promptly fixed by the Commission in accordance with Section sixteen of this Act. Section 20. Acts requiring the approval of the Commission. - Subject to established limitations and exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had (a) To adopt, establish, fix, impose, maintain, collect or carry into effect any individual or joint rates, commutation, mileage or other special rate, toll, fare, charge, classification or itinerary. The Commission shall approve only those that are just and reasonable and not any that are unjustly discriminatory or unduly preferential, only upon reasonable notice to the public services and other parties concerned, giving them a reasonable opportunity to be heard and the burden of the proof to show that the proposed rates or regulations are just and reasonable shall be upon the public service proposing the same. (b) To establish, construct, maintain, or operate new units or extend existing facilities or make any other addition to or general extension of the service. (c) To abandon any railroad station or stop the sale of passenger tickets, or cease to maintain an agent to receive and discharge freight at any station now or hereafter established at which passenger tickets are now or may hereafter be regularly sold, or at which such agent is now or may hereafter be maintained, or make any permanent change in its time tables or itineraries on any railroad or in its service.

(d) To lay any railroad or street railway track across any highway, so as to make a new crossing at grade, or cross the tracks of any other railroad or street railway, provided, that this subsection shall not apply to replacements of lawfully existing tracks. (e) Hereafter to issue any stock or stock certificates representing an increase of capital; or issue any share of stock without par value; or issue any bonds or other evidence of indebtedness payable in more than one year from the issuance thereof, provided that it shall be the duty of the Commission, after hearing, to approve any such issue maturing in more than one year from the date thereof, when satisfied that the same is to be made in accordance with law, and the purpose of such issue be approved by the Commission. (f) To capitalize any franchise in excess of the amount, inclusive of any tax or annual charge, actually paid to the Government of the Philippines or any political subdivision thereof as the consideration of said franchise; capitalize any contract for consolidation, merger or lease, or issue any bonds or other evidence of indebtedness against or as a lien upon any contract for consolidation, merger, or lease: Provided, however, that the provisions of this section shall not prevent the issuance of stock, bonds, or other evidence of indebtedness subject to the approval of the Commission by any lawfully merged or consolidated public services not in contravention of the provisions of this section. (g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights or any part thereof; or merge or consolidate its property, franchises privileges or rights, or any part thereof, with those of any other public service. The approval herein required shall be given, after notice to the public and hearing the persons interested at a public hearing, if it be shown that there are just and reasonable grounds for making the mortgaged or encumbrance, for liabilities of more than one year maturity, or the sale, alienation, lease, merger, or consolidation to be approved, and that the same are not detrimental to the public interest, and in case of a sale, the date on which the same is to be consummated shall be fixed in the order of approval: Provided, however, that nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale, alienation, or lease by any public service of any of its property in the ordinary course of its business.

(h) To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that sale in itself or in connection with another previous sale, shall be to vest in the transferee more than forty per centum of the subscribed capital of said public service. Any transfer made in violation of this provision shall be void and of no effect and shall not be registered in the books of the public service corporation. Nothing herein contained shall be construed to prevent the holding of shares lawfully acquired. (As amended by Com. Act No. 454.) (i) To sell, alienate or in any manner transfer shares of its capital stock to any alien if the result of that sale, alienation, or transfer in itself or in connection with another previous sale shall be the reduction to less than sixty per centum of the capital stock belonging to Philippine citizens. Such sale, alienation or transfer shall be void and of no effect and shall be sufficient cause for ordering the cancellation of the certificate. (j) To issue, give or tender, directly or indirectly, any free ticket free pass or free or reduced rate of transportation for passengers, except to the following persons: (1) officers, agents, employees, attorneys, physicians and surgeons of said public service, and members of their families; (2) inmates of hospitals or charity institutions, and persons engaged in charitable work; (3) indigent, destitute, and homeless persons when transported by charitable societies or hospitals, and the necessary agents employed in such transportation; (4) the necessary caretakers, going and returning, of livestock, poultry, fruit, and other freight under uniform and nondiscriminatory regulation; (5) employees of sleeping car corporations, express corporations and telegraph and telephone corporations, railway and marine mail service employees, when traveling in the course of their official duly; (6) post-office inspectors, customs officers and inspectors, and immigration inspectors when engaged in inspection; (7) witnesses attending any legal investigation in which the public service is an interested party; (8) persons injured in accidents or wrecks, and physicians and nurses attending such persons; (9) peace officers and men of regularly constituted fire departments. (As amended by Com. Act No. 454.) (k) Adopt, maintain, or apply practices or measures, rules or regulations to which the public shall be subject in its relations with the public service.

CHAPTER IV PENALTIES FOR VIOLATIONS Section 21. Every public service violating or failing to comply with the terms and conditions of any certificate or any orders, decisions or regulations of the Commission shall be subject to a fine of not exceeding two hundred pesos per day for every day during which such default or violation continues; and the Commission is hereby authorized and empowered to impose such fine, after due notice and hearing. The fines so imposed shall be paid to the Government of the Philippines through the Commission, and failure to pay the fine in any case within the same specified in the order or decision of the Commission shall be deemed good and sufficient reason for the suspension of the certificate of said public service until payment shall be made. Payment may also be enforced by appropriate action brought in a court of competent jurisdiction. The remedy provided in this section shall not be a bar to, or affect any other remedy provided in this Act but shall be cumulative and additional to such remedy or remedies. Section 22. Observance of the orders, decisions, and regulations of the Commission and of the terms and conditions of any certificate may also be enforced by mandamus or injunction in appropriate cases, or by action to compel the specific performance of the orders, decisions, and regulations so made, or of the duties imposed by law upon such public service: Provided, that the Commission may compromise any case that arise under this Act in such manner and for such amount as it may deem just and reasonable. Section 23. Any public service corporation that shall perform, commit, or do any act or thing forbidden or prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be done or performed, shall be punished by a fine not exceeding twenty-five thousand pesos, or by imprisonment not exceeding five years, or both, in the discretion of the court. Section 24. Any person who shall knowingly and willfully perform, commit, or do, or participate in performing, committing, or doing, or who shall knowingly and willfully cause, participate, or join with others in causing any public service corporation or company to do, perform or commit, or who shall advice, solicit, persuade, or knowingly and willfully instruct, direct, or order any officer, agent, or employee of any public service corporation or company to perform, commit, or do any act or thing forbidden or prohibited by this Act,

shall be punished by a fine not exceeding two thousand pesos, or imprisonment not exceeding two years, or both, in the discretion of the court: Provided, however, that for operating a private passenger automobile as a public service without having a certificate of public convenience for the same the offender shall be subject to the penalties provided for in section sixtyseven (j) of Act numbered thirty-nine hundred an ninety-two. Section 25. Any person who shall knowingly and willfully neglect, fail, or omit to do or perform, or who shall knowingly and willfully cause or join or participate with others in causing any public service corporation or company to neglect, fail or omit to do or perform, or who shall advise, solicit, or persuade, or knowingly and willfully instruct, direct, or order any officer, agent, or employee of any public service corporation or company to neglect, fail, or omit to do any act or thing required to be done by this Act, shall be published by a fine not exceeding two thousand pesos or by imprisonment not exceeding two years, or both, in the discretion of the court. Section 26. Any person who shall destroy, injure, or interfere with any apparatus or appliance owned or operated by to in charge of the Commission or its agents, shall be deemed guilty of a misdemeanor and upon conviction shall be published by a fine not exceeding one thousand pesos or imprisonment not exceeding six months, or both in the discretion of the court. Any public service permitting the destruction, injury to, or interference with, any such apparatus or appliances shall forfeit a sum not exceeding four thousand pesos for each offense. Section 27. This Act shall not have the effect to release or waive any right of action by the Commission or by any person for any right, penalty, or forfeiture which may have arisen or which may arise, under any of the laws of the Philippines, and any penalty or forfeiture enforceable under this Act shall not be a bar to or affect a recovery for a right, or affect or bar any criminal proceedings against any public service or person or persons operating such public services, its officers, directors, agents, or employees. Section 28. Violations of the orders, decisions, and regulations of the Commission and of the terms and conditions of any certificate issued by the Commission shall prescribe after sixty days, and violations of the provisions of this Act shall prescribe after one hundred and eighty days.

CHAPTER V PROCEDURE AND REVIEW Section 29. All hearings and investigations before the Commission shall be governed by rules adopted by the Commission, and in the conduct thereof the Commission shall not be bound by the technical rules of legal evidence: Provided, That the Public Service Commissioner or associate commissioners may summarily punish for contempt by a fine not exceeding two hundred pesos or by imprisonment not exceeding ten days, or both, any person guilty of misconduct in the presence of the Commissioner or associate commissioners or so near the same as to interrupt the hearing or session or any proceeding before them, including cases in which a person present at a hearing, session, or investigation held by either of the commissioners refuses to be sworn as a witness or to answer as such when lawfully required to do so. To enforce the provisions of this section, the Commission may, if necessary, request the assistance of the municipal police for the execution of any order made for said purpose. (1) While the Commission is authorized to make rules for the conduct of their business, it could not set at naught the fundamental rule of all proceedings that only parties having a real interest will be heard. (2) A party not affected or prejudiced cannot file an opposition. (3) One public service corporation cannot assume the name and be substituted in the place of another public service corporation. (4) A legal representative of the estate of a deceased applicant may be substituted for the latter. If the right consists in the prosecution of unfinished proceedings upon an application for a certificate of public convenience of the deceased before the Public service Commission, it is but logical that the legal representative be empowered and entitled in behalf of the estate to make the right effective in that proceeding. (5) One who has been granted a legislative franchise to operate an ice plant, although not yet an operator of such public utility, has sufficient interest or personality either to oppose an established operator's application for an increase in the capacity of his existing plant, or to ask for a joint hearing of said application and the

grantee's own application for the issuance of a certificate of public convenience in order to operate under such franchise. (6) The fact that a party is the lessee of a line does not bar him from applying for a certificate of its own in the same line. Even in cases where the owner of a certificate has sold it subject to the condition that he would not apply for a similar service on the same line sold by him, it has been held that such an argument does not bar the seller from applying and that the Public Service Commission, if it finds that there is public need for the new service applied for, may properly grant the certificate requested. In other words the primary consideration is a finding by the Commission that public interest and convenience require a given service and that parties may not by agreement deprive the Commission of its power. (7) A case involving the grant of a Certificate of Public Convenience to the respondent becomes moot and academic where the respondent ceases to be a bus operator, and it should be dismissed. Section 30. (a) The Commission may issue subpoenas and subpoenas duces tecum, for witnesses in any matter or inquiry pending before the Commission and require the production of all books, papers, tariffs, contracts, agreements, and all other documents, which the Commission may deem necessary in any proceeding. such process shall be issued under the seal of the Commission, signed by one of the Commissioners or by the secretary, and may be served by any person of full age, or by registered mail. In case of disobedience to such subpoena, the Commission may invoke the said of the Supreme Court or of any Court of First Instance of the Philippines in requiring the attendance and testimony of witness and the production of books, papers, and documents under the provisions of this chapter, and the Supreme Court, or any Court of First Instance of the Philippines within the jurisdiction of which such inquiry is carried on, may in case of contumacy of refusal to obey a subpoena, issue to any public service subject to the provisions of this Act, or to any person, an order requiring such public service or other person to appear before the Commission and produce and papers if so ordered and give evidence touching the matter; and any failure to obey such order of the court may be punished by such court as a contempt thereof. (b) Any person who shall neglect or refuse to answer any lawful inquiry or produce the Commission books, paper, tariffs, contracts, agreements, and documents or other things called for by said

Commission, if in his power to do so, in obedience to the subpoena or lawful inquiry of the Commission, upon conviction thereof by a court of competent jurisdiction, shall be punished by a fine not exceeding five thousand pesos or by imprisonment not exceeding one year, or both, in the discretion of the court. (c) The Commissioner and associate commissioners, the chiefs of divisions, the attorneys of the Commission, and the deputy secretaries shall have the power to administer oaths in all matters under the jurisdiction of the Commission. (d) Any person who shall testify falsely or make any false affidavit or oath before the Commission or before any of its members shall be guilty of perjury, and upon conviction thereof in a court of competent jurisdiction, shall be punished as provided by law. (e) Witnesses appearing before the Commission in obedience to subpoena or subpoena duces tecum, shall be entitled to receive the same fees and mileage allowance as witnesses attending Courts of First Instance in civil cases. (f) Any person who shall obstruct the Commission or either of the Commissioners while engaged in the discharge of Official duties, or who shall conduct himself in a rude, disrespectful or disorderly manner before the Commission or either of the Commissioners, while engaged in the discharge of official duties, or shall orally or in writing be disrespectful to, offend or insult either of the Commissioners on occasion or by reason of the performance of official duties, upon conviction thereof by a court of competent jurisdiction, shall be punished for each offense by a fine not exceeding one thousand pesos, or by imprisonment not exceeding six months, or both, in the discretion of the court. Section 31. No person shall be excused from testifying or from producing any book, document, or paper in any investigation or inquiry by or upon the hearing before the Commission, when ordered so to do by said Commission, except when the testimony or evidence required of him may tend to incriminate him. Without the consent of the interested party no member or employee of the Commission shall be compelled or permitted to give testimony in any civil suit to which the Commission is not a party, with regard to secrets obtained by him in the discharge of his official duty.

Section 32. The Commission may, in any investigation or hearing, by its order in writing cause the deposition of witnesses residing within or without the Philippines to be taken in the manner prescribed by the Rules of Court. Where witnesses reside in places distant from Manila and it would be inconvenient and expensive for them to appear personally before the Commission, the Commission may, by proper order, commission any clerk of the Court of First Instance, municipal judge or justice of the peace of the Philippines to take the deposition of witnesses in any case pending before the Commission. It shall be the duty of the official so commissioned, to designated promptly a date or dates for the taking of such deposition, giving timely notice to the parties, and on said date to proceed to take the deposition, reducing it to writing. After the depositions have been taken, the official so commissioned shall certify to the depositions taken and forward them as soon as possible to the Commission. It shall be the duty of the respective parties to furnish stenographers for taking and transcribing the testimony taken. in case the are no stenographers available, the testimony shall be taken in long hand by such person as the clerk of court, the municipal judge or justice of the peace may designate. The Commission may also commission a notary public to take the depositions in the same manner herein provided. The Commission may also, by proper order, authorize any of the attorneys of the legal division or division chiefs of the Commission, if they be lawyers, to hear and investigate any case filed, with the Commission and in connection therewith to receive such evidence as may be material thereto. At the conclusion of the hearing or investigation, the attorney or division chief so authorized shall submit the evidence received by him to the Commission to enable the latter to render its decision. (As amended by Rep. Act No. 723.) Section 33. Every order made by the Commission shall be served upon the person or public service affected thereby, within ten days from the time said order is filed by personal delivery or by ordinary mail, upon the attorney of record, or in case there be no attorney of record, upon the party interested; and in case such certified copy is sent by registered mail, the registry mail receipt shall be prima facie evidence of the receipt of such order by the public service in due course of mail. All orders of the Commission to continue an existing service or prescribing rates to be charged shall be immediately operative; all other orders shall become effective upon the dates specified thereon: Provided, however, that orders, resolutions or decisions in converted matters and not referring to the continuance of an existing service or prescribing rates to be charged shall not be effective

unless otherwise provided by the Commission, and shall take effect thirty days after notice to the parties. Section 34. Any interested party may request the reconsideration of any order, ruling, or decision of the Commission by means of a petition filed not later than fifteen days after the date of the notice of the order, ruling, or decision in question. The grounds on which the request for reconsideration is based shall be clearly and specifically stated in the petition. Copies of said petition shall be served on all parties interested in the matter. It shall be the duty of the Commission to call a hearing to decide the same promptly, either denying the petition or revoking or modifying the order, ruling or decision under consideration. Section 35. The Supreme Court is hereby given jurisdiction to review any order, ruling, or decision of the Commission and to modify or set aside such order, ruling, or decision when it clearly appears that there was no evidence before the Commission to support reasonably such order, ruling, or decision, or that the same is contrary to law, or that it was without the jurisdiction of the Commission. The evidence presented to the Commission, together with the record of the proceedings before the Commission, shall be certified by the secretary of the Commission to the Supreme Court. Any order, ruling, or decision of the Commission may likewise be reviewed by the Supreme Court upon a writ of certiorari in proper cases. The procedure for review, except as herein provided, shall be prescribed by rules of the Supreme Court. Section 36. Any other, ruling, or decision of the may be reviewed on the application of any person or public service affected thereby, by certiorari in appropriate cases, or by petition, to be known as petition for review, which shall be filed within thirty days from the notification of such order, ruling or decision, or in case of a petition is filed in accordance with the preceding section for the reconsideration of such order, ruling or decision and the same is denied it shall be filed within fifteen days after notice of the order denying reconsideration. Said petition shall be placed on file in the office of the Clerk of the Supreme Court who shall furnish copies thereof to the Secretary of the Commission and other parties interested. Section 37. The institution of a writ of certiorari or other special remedies in the Supreme Court shall in no case supersede or stay any order, ruling or decision of the Commission, unless the Supreme Court shall so direct, and the appellant may be required by the Supreme Court to give bond in such form and of such amount as may be deemed proper.

Section 38. The chief of the legal division or any other attorneys of the Commission shall represent the same in all judicial proceedings. It shall be the duty of the Solicitor General to represent the Commission in any judicial proceedings if, for special reason, the Commissioner shall request his intervention. There is hereby created under the administrative supervision of the Secretary of Justice an office to be known as the Office of the People's Counsel in the Public Service Commission. The people's Counsel shall have two assistants and such number of employees as may be necessary to perform the functions hereinafter specified. The People's Counsel and his assistants shall be appointed by the President of the Philippines with the consent of the commission on appointments of the Congress of the Philippines. The employees of the office of the People's Counsel shall be appointed by the Secretary of Justice upon recommendation of the People's Counsel. The People's Counsel and his assistants shall posses the qualifications of a provincial fiscal. The People's Counsel shall receive compensation at the rate of seven thousand two hundred pesos per annum, and the first and second assistant's People's Counsel, at the rate of six thousand pesos per annum each. The People's Counsel, his assistants, and the employees of the Office of the People's Counsel shall not, during their continuance in office, intervene directly or indirectly in the management or control of, or be financially interested directly or indirectly in any public service as defined in this Act. It shall be the duty of the People's Counsel (1) to institute proceedings before the Commission, in behalf of the public, for the purpose of fixing just and reasonable rates or charges to be followed and observed by public services as herein defined, whenever he has reason to believe that the existing rates or charges of such public services are unjust and unreasonable or unjustly discriminatory; (2) to represent and appear for the public before the Commission or any court of the Philippines in every case involving the interest of users of the products of, or service furnished by any public service under the jurisdiction of the Commission; (3) to represent and appear for petitioners appearing before the Commission for the purpose of complaining in matters of the rates and services; (4) to investigate the service given by the rates charged by, and the valuation of the properties of the public services under the jurisdiction of the Commission, and such other matters relating to said public services as affect the interests of users of the

products or service thereof, and to take all the steps necessary for the protection of the interests of the person or persons or of the public affected thereby. In connection with such investigation he is hereby empowered to issue subpoena or subpoena duces tecum. The People's Counsel is authorized to call upon and obtain such assistance as he may deem necessary in the performance of his duties from any officer or employee of any department, bureau, office, agency, or instrumentality of the government including corporations owned, controlled or operated by the government. (As amended by Rep. Act No. 178.) Section 39. Any preceding in any court of the Philippines directly affecting an order of the Commission or to which the Commission is a party, shall have preference over all other civil proceedings pending in such court, except election cases. CHAPTER VI FEES Section 40. The Commission is authorized and ordered to charge and collect from any public service or applicant, as the case may be, the following fees as reimbursement of its expenses in the authorization, supervision and/or regulation of public services: (a) The charge of fifty pesos for the registration of: (1) Applications under the provisions of Section sixteen (a), (b), (c), and (d), and twenty (a), (b) (c), (e), (f), and (h): Provided however, That in case of transportation services an additional filing fee of five pesos shall be charged for each additional unit or vehicle in excess of five units or vehicles applied for: And provided, finally, That no filing fee shall be collected for the reduction of rates if the same does not alter or modify in any way the basic rates of the schedule. (2) Applications for the approval or modification of maximum rates under Section fourteen. (b) Thirty pesos shall be collected from any operator of land transportation for the registration of:

(1) Applications under Section seventeen (f). (2) Applications for the extension of time covering a period of thirty days for the registration of motor vehicles previously authorized by the Commission. (c) The charge of thirty pesos for the filing of other applications by any public service operator not specifically provided for in the preceding paragraphs of this section other than motions of a temporary or incidental character: Provided, however, That fifteen pesos only shall be collected for each certificate of public convenience or certificate of public convenience and necessity in diploma form issued to a public service operator. (d) For annual reimbursement of the expenses incurred by the Commission for the supervision and regulation of the operations of motor vehicle services: (1) For each automobile, ten pesos. (2) For each motor vehicle, truck, or trailer of less than two tons gross transportation capacity, ten pesos. (3) For each motor vehicle, truck, or trailer of two tons or more, but less than three tons gross transportation capacity, twenty pesos. (4) For each motor vehicle, truck, or trailer of three tons or more but less than four tons gross transportation capacity, thirty pesos. (5) Motor vehicles, trucks, trailers or buses of four tons or more gross capacity shall pay at the rate of ten pesos per ton gross. The fees provided in paragraphs (d) and (e) hereof shall be paid on or before September thirtieth of each year with a penalty of fifty per centum in case of delinquency: Provided, further, That if the fees or any balance thereof are not paid within sixty days from the said date, the penalty shall be increased by one per centum for every month thereafter of delinquency: Provided, however, That motor vehicles registered in the Motor Vehicles Office after

September thirtieth shall be exempt from payment for said year. (e) For annual reimbursement of the expenses incurred by the Commission in the supervision of other public services and/or in the regulation or fixing of their rates, twenty centavos for each one hundred pesos or fraction thereof, of the capital stock subscribed or paid, or if no shares have been issued, of the capital invested, or of the property and equipment, whichever is higher. (f) For the issue or increase of capital stock, twenty centavos for each one hundred pesos or fraction thereof, of the increased capital. (g) For each permit authorizing the increase of equipment, the installation of new units or authorizing the increase of capacity. or the extension of means or general extension in the services, twenty centavos for each one hundred pesos or fraction of the additional capital necessary to carry out the permit. (h) For the inspection or certification made in the meter laboratory of the Commission or each apparatus or meter used by any public service, four pesos, and for examination made outside the meter laboratory of the Commission, the additional expenses as may be incurred in making the examination shall also be paid. (i) For certification of copies of official documents in the files of the Commission, fifty centavos plus fifty centavos for each page or folio so certified. This section shall not be applicable to the Republic of the Philippines, nor to its instrumentalities. Aside from the appropriations for the Commission under the annual General Appropriation Act, any unexpended balance of the fees collected by the Commission under this section shall be constituted receipts automatically appropriated each year, and together with any surplus in the standardizing meter laboratory revolving fund under Commonwealth Act Numbered Three hundred forty-nine, shall be disbursed by the Public Service Commissioner in accordance with special budgets to be approved by the Department of Justice, the Budget Commission and the Office of the President of the Philippines for additional needed personal services, maintenance and

operating expenses, acquisition of urgently needed vehicles, furniture and equipment, maintenance of an adequate reference library, acquisition of a lot and building for the Commission, and other expenses necessary for efficient administration and effective supervision and regulation of public services. (As amended by Com. Act No. 454 and RA No. 3792, approved June 22, 1963.) CHAPTER VII GENERAL AND TRANSITORY PROVISIONS Section 41. A substantial compliance with the requirements of this Act shall be sufficient to give effect to all the rules, orders, acts and regulations of the Commission and they shall not be declared inoperative, illegal, or void for any omission of a technical nature in respect thereto. Section 42. Copies of all official documents and orders filled or deposited in the office of the Commission, certified by either of the commissioners, or by the secretary to be true copy of the original, under the seal of the Commission shall be evidence in like manner as the originals in all courts of the Philippines. Section 43. The Commission created under this Act shall succeed the Commission created under Act numbered thirty-one hundred and eight in the dispatch, hearing, and determination of all pending matters before the latter; and shall take charge of its archives, books, furniture, equipment, and other properties of whatsoever nature. Section 44. In addition to the sum appropriated for the former commission under Act numbered forty-one hundred and thirty-two, the General Appropriation Act for nineteen hundred and thirty-six, the sum of six thousand seven hundred and sixty-eight pesos and thirty-four centavos is hereby appropriated out of any funds in the Philippines Treasury not otherwise; and in addition to the sum appropriated under Act numbered thirty-eight, the General Appropriation Act for nineteen hundred and thirtyseven, the sum of twenty-three thousand six hundred and ten pesos, or so much thereof as may be necessary, is hereby appropriated, out of any funds in the Philippines Treasury not otherwise appropriated, for carrying out the purposes of this Act.

Section 45. If, any reason, any section, subsection, sentence, clauses or terms of this Act is held to the unconstitutional such decision shall not affect the validity of the other provisions of this Act. Section 46. Act numbered thirty-two hundred and forty-seven and Act numbered thirty-five hundred and eighteen shall continue in force and effect; but all provisions of Act numbered thirty-one hundred and eight and amendments thereof, and all other acts or parts or acts inconsistent with the provisions of this Act are hereby repealed. Section 47. This Act shall take effect upon its approval. Approved: November 7, 1936

Republic of the Philippines Congress of the Philippines Metro Manila Fourteenth Congress First Regular Session

(b) "Aerodrome" refers to an airport, a defined area on land or water (including any building, installation and equipment) intended to be used either wholly or in part for the arrival, departure and surface movement of aircraft. (c) "Aeronautics or aviation" refers to the science and art of flight. (d) "Aeronautical telecommunication" refers to and includes any telegraph or telephone communication signs, signals, writings, images and sounds of any nature, by wire, radio or other systems or processes of signaling, used in the aeronautical service. (e) "Aeronautical telecommunication station" refers to any station operated to provide telecommunications for aeronautical purposes. (f) "Air carrier or operator" refers to a person who undertakes, whether directly or indirectly, or by a lease or any other arrangements, to engage in air transportation services or air commerce. The term may likewise refer to either a "Philippine air carrier" or a "foreign air carrier" as indicated by the context. (g) "Air commerce or commercial air transport operation" refers to and includes scheduled or non-scheduled air transport services for pay or hire, the navigation of aircraft in furtherance of a business, the navigation of aircraft from one place to another for operation in the conduct of a business, or an aircraft operation involving the transport of passengers, cargo or mail for remuneration or hire. (h) "Aircraft" refers to any machine that can derive support in the atmosphere from the reactions of the air other than the reactions of the air against the earth's surface. The term "aircraft", when used in this Act or in regulations issued under this Act, shall refer to civil aircraft only, and will not include State or public aircraft.

Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand seven. Republic Act No. 9497 March 04, 2008

AN ACT CREATING THE CIVIL AVIATION AUTHORITY OF THE PHILIPPINES, AUTHORIZING THE APPROPRIATION OF FUNDS THEREFOR, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: CHAPTER I GENERAL PROVISIONS SECTION 1. Short Title. This Act shall be known as the Civil Aviation Authority Act of 2008. SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to provide safe and efficient air transport and regulatory services in the philippines by providing for the creation of a civil aviation authority with jurisdiction over the restructuring of the civil aviation system, the promotion, development and regulation of the technical, operational, safety, and aviation security functions under the civil aviation authority. SEC. 3. Definition of Terms. - For purposes of this Act, the terms: (a) "Aerial work" refers to an aircraft operation in which an aircraft is used for specialized services such as agriculture, construction, photography, surveying, observation and patrol, search and rescue, aerial advertisement, etc.

(i) "Aircraft accident" refers to an occurrence associated with the operation of an aircraft which takes place between the time any person boards the aircraft with the intention of flight until such time as all such persons have disembarked, in which: (1) Any person suffers death or serious injury as a result of being in or upon the aircraft or by direct contact with the aircraft of anything attached thereto; or (2) The aircraft receives substantial damage (j) "Aircraft radio station" refers to a radio station on board any aircraft. (k) "Aircraft engine" refers to any engine use, or intended to be used, for propulsion of aircraft and includes all parts, appurtenances, and accessories thereof other than propellers. (l) "Aircraft incident" refers to the occurrence, other than an accident, which is associated with the operation of an aircraft when the safety of the aircraft has been endangered, or is a situation which could endanger an aircraft and if it occurred again in other circumstances. (m) "Aircraft piracy" refers to any actual or attempted seizure or exercise of control, by force or violence, or by any other form of intimidation, with wrongful intent, of an aircraft within the jurisdiction of the Philippines. (n) "Airman" refers to any individual who engages, as the person in command or as pilot, mechanic, aeronautical engineer, flight radio operator or member of the crew, in the navigation of aircraft while under way and any individual who is directly in charge of inspection, maintenance, overhauling, or repair of aircraft, aircraft engine, propellers, or appliances and individual who serves in the capacity of aircraft dispatcher or air traffic control operator.

(o) "Airman license" refers to a written authorization or permission issued to any person for the exercise of the privileges of flying, maintaining, controlling, directing, dispatching, instructing or any other civil aviation activity which is regulated and supervised by the Authority. (p) "Air navigation" refers to the practice of controlling, guiding and operating aircraft from airport of departure to predetermined airport of destination, including alternate airports. To ensure safety, regularity and efficiency of civil aviation operations, standardization and common understanding among all parties involved are essential in all matters affecting the operation of aircraft and the numerous facilities and services required in their support, such as airports, telecommunications, navigation aids, meteorology, air traffic services, search and rescue, aeronautical information services and aeronautical charts, in accordance with the procedures, rules and regulations contained in the appropriate Annexes to the Chicago Convention. (q) "Air navigation facility" refers to any facility used in, available for use in, or designed for use in aid of air navigation, including airports, landing areas, lights, any apparatus or equipment for disseminating weather information, for signaling, for radio directional finding, or for radio or other electromagnetic communication, and any other structure or mechanism having a similar purpose for guiding or controlling flight in the air or the landing and take-off of aircraft. (r) "Air navigation services" refers to and includes information, directions and other facilities furnished, issued or provided in connection with the navigation or movement of aircraft, and the control of movement of vehicles in any part of an airport used for the movement of aircraft. (s) "Air operator" refers to any organization which undertakes to engage in domestic commercial air transport or international commercial air transport, whether directly or indirectly, or by a lease or any other arrangement.

(t) "Air Operator Certificate (AOC)" refers to a certificate authorizing an operator to carry out specified commercial air transport operations. (u) "Air route" refers to the navigable airspace between two points and the terrain beneath such airspace identified, to the extent necessary, for application of flight rules. (v) "Air route and airway facilities" refers to facilities provided to permit safe navigation of aircraft within the airspace of air routes and airways, including: (1) Visual and non-visual aids along the air routes and airways (2) Visual and non-visual aids to approach and landing at airports; (3) Communication services; (4) Meteorological observations; (5) Air traffic control services and facilities and (6) Flight services and facilities. (w) "Airport" refers to any area of land or water designed, equipped, set apart or commonly used for affording facilities for affording facilities for the landing and departure of aircraft and includes any area or space, whether on the ground, on the roof of a building or elsewhere, which is designed, equipped or set apart for affording facilities for the landing and departure of aircraft capable of descending or climbing vertically. (x) "Air transport" refers to the transportation of persons, property, mail or cargo by aircraft.

(y) "Air transport service" refers to the act of transporting persons, property, mail cargo, in whole or in part, by aircraft to points within or outside of the Philippines. (z) "Airworthiness" means that an aircraft, its engines, propellers, and other components and accessories, are of proper design and construction, and are safe for air navigation purposes, such design and construction being consistent with accepted engineering practice and in accordance with aerodynamic laws and aircraft science. (aa) "Annexes to the Chicago Convention" refers to the documents issued by the International Civil Aviation Organization (ICAO) containing the standards and recommended practices applicable to civil aviation. (bb) "Appliances" refers to instruments, equipment, apparatus, parts, appurtenances, or accessories, of whatever description, which are used, or are capable of being or intended to be used, in the navigation, operation, or control of aircraft in flight (including parachutes and including communication equipment and any other mechanism or mechanisms installed in or attached to aircraft during flight), and which are not part or parts of aircraft, aircraft engines, or propellers. (cc) "Authority" refers to the Philippine Civil Aviation Authority created pursuant to the provisions of this Act and shall, as indicated by the context, include the Board of Directors and/or Director General created pursuant thereto. (dd) "Aviation certificate" means any airworthiness certificate, airman certificate, air operator certificate, certificate authorizing the operation of an aviation school or approved maintenance organization or other document issued by virtue of the provisions of this Act in respect of any person, aircraft, airport or aviation-related service. (ee) "Board of Directors" means the board of the civil aviation authority created under this Act.

(ff) "Chicago Convention" refers to the international basis for civil aviation agreements. (gg) "Citizen of the Philippines" refers to one of the following: (i) An individual who is a citizen of the Philippines; (ii) A partnership of which each member is a citizen of the Philippines; or (iii) A corporation or association created or organized and authorized under the laws of the Philippines. (hh) "Civil aircraft" refers to any aircraft other than a State or public aircraft. . (ii) "Civil aviation" refers to the operation of any civil aircraft for the purpose of general aviation operations, aerial work or commercial air transport operations. (jj) "Crew member" refers to a person assigned to perform duties on an aircraft in flight. (kk) "Dangerous goods" refers to articles or substances that are capable of posing significant risks to health or safety of property when transported by air. (ll) "Director General" refers to the Director General appointed under this Act. (mm) "Domestic air commerce" means and includes air commerce within the limits of the Philippine territory. (nn) "Domestic air transport" means air transportation within the limits of the Philippine territory. (oo) "Foreign air carrier or foreign air operator" meane any operator, not being a Philippine air operator, which undertakes, whether directly or indirectly or by lease or any other arrangement, to engage in commercial air transport

operations within borders or airspace of the Philippines, whether on a scheduled or chartered basis. (pp) "Foreign air transport" refers to air transportation between the Philippines and any place outside it or wholly outside the Philippines. (qq) "General aviation operation" refers to an aircraft operation of a civil aircraft for other than a commercial air transport operation or aerial work operation. (rr) "ICAO." Where used in this Act, refers to the abbreviation for the International Civil Aviation Organization. (ss) "International commercial air transport" refers to the carriage by aircraft of persons or property for remuneration or hire or the carriage of mail between any two (2) or more countries. (tt) "Navigable airspace" refers to the airspace above the minimum altitudes of flight prescribed by regulations under this Act and includes airspace needed to insure safety in the take-off and landing of aircraft. (uu) "Navigation of aircraft" refers to a function that includes the piloting of aircraft. (vv) "Person" refers to any individual, firm, partnership, corporation, company, association, joint-stock association, or body politic, and includes any trustee, receiver, assignee, or other similar representative of these entities. (ww) "Philippine air carrier" means an air carrier who is a citizen of the Philippines. (xx) "Philippine aircraft" means an aircraft registered in the Philippines in accordance with the requirements of this Act. (yy) "Propeller" refers to an inclusive term for all parts, appurtenances, and accessories of a propeller.

(zz) "Public aircraft" refers to an aircraft used exclusively in the service of any government or of any political jurisdiction thereof, including the Government of the Philippines, but not including any government-owned aircraft engaged in operations which meet the definition of commercial air transport operations. (aaa)"Rules of the air" means those provisions for securing the safety of aircraft in flight and in movement on the surface and the safety of persons and property on the surface. These provisions include: (1) Lights and signals to be shown by aircraft; (2) General, visual and instrument flight rules; (3) Airport traffic rules; and (4) Airport signals and markings (bbb)"Spare parts" refers to any parts, appurtenances, and accessories of aircraft (other than aircraft engines and propellers), aircraft engines (other than propellers), propellers, and appliances, maintained for installation or use in an aircraft, aircraft engine, propeller, or appliance, but which at the time are not installed therein or attached thereto. (ccc) "Special aircraft jurisdiction of the Philippines." This includes: (i) Civil aircraft of the Philippines; and (ii) Any other aircraft within the jurisdiction of the Philippines, while the aircraft is in flight, which is from the moment when all external doors are closed following embarkation until the moment when one such door is opened for disembarkation or, in case of a forced landing, until the competent authorities take over the responsibility of the aircraft and the persons and property aboard.

(ddd) "Validation" refers aboard to the written acceptance of an action of the civil aviation authority of another country in lieu of an action that this Act assigns to the Director General. (eee) "Landing fees" refers to all charges for the use of any landing strip or runway by any aircraft landing or taking off at an aerodrome. (fff) "Terminal fees" refers to charges far parking at or near the ramp, terminal area, or building, for purposes of loading or unloading passengers and/or cargo. (ggg) "Royalties" refers to all charges based on gross business or sales, or gross or net profit. (hhh) "Supplies" includes any and all items of whatever nature or description which may be necessary for, or incidental to, the operation of an aircraft. CHAPTER II ORGANIZATION OF AUTHORITY SEC. 4. Creation of the Authority. - There is hereby created an independent regulatory body with quasi-judicial and quasi-legislative powers and possessing corporate attributes to be known as the Civil Aviation Authority of the Philippines (CAAP), hereinafter referred to as the "Authority" attached to the Department of Transportation and Communications (DOTC) for the purpose of policy coordination. For this purpose, the existing Air Transportation Office created under the provisions of Republic Act No. 776, as amended, is hereby abolished. Notwithstanding the foregoing, nothing in this Act shall diminish the powers and functions of the Civil Aeronautics Board (CAB) as provided for under Republic Act. No. 776, also known as "The Civil Aeronautics Act of the Philippines", as amended. (a) Establishment of Authority Headed by a Director General - The Authority shall beheaded by a Director General of Civil Aviation, referred to in this Act as the "Director General," who shall be appointed by the President of the Philippines and shall be responsible for all civil aviation in the Philippines and the administration of this Act. The Director General shall be appointed

based on the qualifications herein provided and shall have a tenure of office for a period of four (4) years. His appointment may be extended for another non-extendible term of four (4) years and shall only be removed for cause in accordance with the rules and regulations prescribed by the Civil Service Commission. (b) Responsibility of the Director General - The Director General shall be responsible for the exercise of all powers and the discharge of all duties of the Authority and shall have control over all personnel and activities of the Authority. SEC. 5 . Composition of the Board Members. - The corporate powers of the Authority shall be vested in a board, which is composed of seven (7) members: (a) The Secretary of the Department of Transportation and Communications shall act as chairman ex officio; (b) The Director General of Civil Aviation (DGCA) shall automatically be the vice chairman of the Board; (c) The Secretary of Finance; (d) The Secretary of Foreign Affairs; (e) The Secretary of Justice; (f) The Secretary of the Interior and Local Government; and (g) The Secretary of the Department of Labor and Employment. The Directors listed under subsection (a) to (g) shall be ex officio members of the Board of Directors: Provided, That, in the absence of the Director appointed in subsections (c) to (g), the Director concerned shall designate the officer next in rank to him in his department or office to act on his behalf as a Director. SEC. 6. Prohibited Interests. - All members of the Board or any of their relatives within the fourth civil degree of consanguinity or affinity, legitimate

or common law, shall be prohibited from holding any interest whatsoever, either as investor, stockholder, officer or director, in any company or entity engaged in air commerce, whether scheduled or unscheduled, passenger or cargo, domestic or international, or in any business providing support services to persons engaged in air commerce (i.e. general sales agencies, travel agencies, cargo forwarders, ground handling, catering, fuel servicing, aircraft maintenance, etc.) and must therefore divest, through sale or legal disposition, of any and all interests in such undertakings upon the member's assumption of office. Any violation of this section shall subject the member concerned to removal from the Authority for cause as well as administrative, civil or criminal prosecution under applicable laws. SEC. 7. Limitation of Subsequent Employment. - No member of the Board or any employee of the Authority shall accept employment or enter into a contract of service with an entity regulated by the Authority until the expiry of one (1) year from the termination of his appointment, whether by resignation or revocation or otherwise. SEC. 8. Quorum. - The presence of at least four (4) members of the Board shall constitute a quorum and the majority vote of three (3) members in a meeting where a quorum is present shall be necessary for the adoption of any rule, ruling, order, resolution, decision or other act of the Board in the exercise of its functions. SEC. 9. Qualifications of Director General. - No person shall be appointed or designated as the Director General unless he is a Filipino citizen, at least thirty-five (35) years of age, of good moral character, unquestionable integrity, recognized competence and a degree holder with at least five (5) years supervisory or management experience in the field of aviation. SEC. 10. Board Meetings. - The Board shall meet regularly once a month and may hold special meetings to consider urgent matters upon call of the Chairman or upon the initiative of four (4) members. Internal rules of procedure in the conduct of Board meetings shall be as prescribed by the Board. SEC. 11. Per Diems. - The members of the Board shall receive a per diem for each meeting actually attended. The per diems of the members of the Board shall be determined pursuant to a resolution adopted by the Board subject to compliance of the guidelines duly existing and applicable by the Commission on Audit.

SEC. 12. Personnel. - Qualified existing personnel of the Air Transportation Office (ATO) shall be given preference in the filling up of plantilla positions created in the Authority, subject to existing civil service rules and regulations. SEC. 13. Principal Office. - The Authority shall have its principal office in Metro Manila and may hold hearings on any proceedings at such time and places within the Philippines, as it may provide by order in writing. SEC. 14. Capitalization. - The Authority shall have an authorized capital stock of Fifty billion pesos (Php50,000,000,000.00) which shall be fully subscribed by the Republic of the Philippines. The subscription of the National Government shall be paid as follows: (a) The unexpended balances of appropriations in the current General Appropriations Act and other acts in force upon approval hereof, pertaining to, held or used by, the ATO, (b) The value of existing assets of the ATO, which shall be determined by an independent and qualified appraiser or appraisers within six (6) months from the effectivity of this Act, and after deducting the loans and other liabilities of the ATO at the time of the takeover of the assets and properties; and (c) Such amounts as may be appropriated from time to time from the funds of the National Treasury, including any outlay from the infrastructure program of the National Government. SEC. 15. Fiscal Autonomy. - The Authority shall enjoy fiscal autonomy. All moneys earned by the Authority from the collection/levy of any and all such fees, charges, dues, assessments and fines it is empowered to collect/levy under this Act shall be used solely to fund the operations of the Authority. The utilization of any funds coming from the collection and/or levy of the Authority shall be subject to the examination of the Congressional Oversight Committee. SEC. 16. Exemption from Taxes, Customs and Tariff Duties. - (a) The importation of equipment, machineries, spare parts, accessories and other

materials including supplies and services used solely and exclusively in the operations of the Authority not obtainable locally shall be exempt from all direct and indirect taxes, wharfage fees and other charges and restrictions, the existence of pertinent laws to the contrary notwithstanding. (b) All obligations entered into by the Authority and any income derived therefrom, including those contracted with private international banking and financial institutions, shall be exempt from all taxes, both principal and interest. The Authority is also exempt from the payment of capital gains tax, documentary stamp tax, real property estate tax and all other local government-imposed taxes and fees. SEC. 17. Schedule of Fees and Charges. - The Authority shall adopt and publish its schedule of fees and charges. The Authority shall hold such public hearings or consultative meetings with stakeholders in the industry before adapting its schedule of fees and charges. The Authority shall not revise its schedule of fees and fines more often than once every three (3) years. SEC. 18. Compensation and Other Emoluments of Authority Personnel. - Within six (6) months from the effectivity of this Act, the Board shall determine the new schedule of salaries of the employees of the Authority subject to the compliance with the existing compensation laws: Provided, That the Board shall determine and fix the compensation and fringe benefits of employees holding technical positions that are not common to the other agencies of the government which shall be specified in the Implementing Rules and Regulations. SEC. 19. Transfer of Properties. - The funds and appropriations, records, equipment and property of the AT0 is hereby transferred to the Authority. SEC. 20. Annual Report. - The Authority shall prepare and submit an annual report to the President of the Philippines, to the Senate and to the House of Representatives on its accomplishments at the close of each calendar year. CHAPTER III GENERAL POLICIES SEC. 21. Policies. - In the exercise and performance of its powers and duties under this Act, the Authority shall consider the following, among other

things, as being in the public interest and in accordance with the public convenience and necessity: (a) The development and utilization of the air potential of the Philippines; (b) The encouragement and development of an air transportation system properly adapted to the present and future of foreign and domestic commerce of the Philippines; (c) The regulation of air transportation in such manner as to support sound economic condition in such transportation and to improve the relations between air carriers; (d) Ensuring the safety, quality, reliability, and affordability of air transport services for the riding public; and (e) The encouragement and development of a viable and globally competitive Philippine aviation industry. CHAPTER IV POWERS OF THE AUTKORITY SEC. 22. Powers and Functions. - The Authority shall have such powers as are granted to the Board and the Director General under the provisions of this Act. SEC. 23. Corporate Powers. - The Authority, acting through the Board, shall have the following corporate powers: (a) To succeed in its corporate name, to sue and be sued in such corporate name, and to adopt, use and alter its corporate seal, which shall be judicially noticed; (b) To adopt, amend or repeal its bylaws; (c) To enter into, make, perform and carry out contracts of every class, kind and description, which are necessary or incidental to the realization of its purposes, with any person, domestic or foreign private firm, or corporation, local or

national government office, agency and with international institutions or foreign government; (d) To raise money, contract loans, indebtedness, credit and issue commercial papers and bonds, in any local or convertible foreign currency from any other international financial institutions under terms and conditions prescribed by law, rules and regulations; (e) To execute any deed of guarantee, mortgage, pledge, trust or assignment of any property for the purpose of financing the programs and projects deemed vital for the attainment of its goals and objectives; (f) To construct, acquire, own, hold, operate, maintain, administer and lease personal and real properties, including buildings, machinery, equipment, other infrastructure, agricultural land, and its improvements, property rights, and interests therein, and to encumber, mortgage, dispose, sell, or alienate or otherwise dispose the same at the fair market value it may deem appropriate; to lease its plant, machinery, equipment or goods not immediately required by it: Provided, That no real property thus acquired and any other real property shall be sold without the approval of the President of the Philippines; (g) To receive gifts, donations, grants, bequests, services, properties, whether personal or real, and assistance of all kinds, from private and public sources, firms, institutions, domestic and foreign governments, and international institutions, and utilize the same for the purposes set forth in this Act; (h) To invest its funds and other assets in such areas, ventures, and projects as it may deem wise; (i) To settle, under such terms and conditions most advantageous to it, any claim by or against it; (j) To determine and keep its own system of accounts following generally accepted principles of accounting, as well

as the forms and contents of its contracts and other business documents; and (k) To perform such other acts, as are necessary or convenient in connection with the performance of its functions, to carry out the purposes of this Act. CHAPTER V POWERS AND FUNCTIONS OF THE BOARD SEC. 24. Powers of the Board. - The Board shall have the following general powers: (a) Provide comprehensive policy guidance for the promotion and development of the Philippine aviation industry, as provided for in this Act; (b) Ensure that the Authority performs its functions in a proper, efficient and effective manner; (c) Decide the objectives, strategies and policies of the Authority in accordance with the provisions of this Act; (d) Determine the organizational structure of the Authority in accordance with the provisions of this Act, establish a human resources management system based on merit and fitness, and adopt a rational compensation and benefits scheme; (e) Exercise appellate powers on any decisions, findings and rulings of the Director General, to issue subpoena ad testificandum or subpoena duces tecum requiring the attendance and testimony of witnesses in any matter or inquiry pending before the Board and require the production of books, papers, contracts, agreements and all other documents submitted for purposes of this section to be under oath and verified by the person in custody thereof as to the truth and correctness of data appearing in such books, papers, tariffs, contracts, agreements and all other documents;

(f) Exercise appellate powers to order the taking of depositions in any proceeding, or investigation, pending before the Board at any stage of such proceeding or investigation; (g) Use available services, equipment, personnel and facilities of other agencies of the Philippine Government, on a reimbursable basis when appropriate and, on a similar basis, to co-operate with those agencies in the establishment and use of services, equipment and facilities of the Authority; (h) Use the property of the Authority in such a manner as may appear to the Authority to be requisite, advantageous or convenient with a view to making the best use of any of the property of the Authority in relation to its functions under this Act; (i) Invest such of the Authority's funds that are not immediately required for operating expenses, or other immediate obligations in any business venture the Board may deem appropriate, or in such secured note, government securities, and other negotiable instruments that satisfy the guidelines prescribed by the Board. Funds of the Authority shall be deposited in such commercial and universal banks as the Board may determine, subject to the requirements of existing laws. The Board shall designate the officials authorized to deposit in or withdraw funds from such depository banks; (j) Promulgate rules and regulations as may be necessary in the interest of safety in air commerce pertaining to the issuance of the airman's certificate including the licensing of operating and mechanical personnel, type certificate for aircraft, aircraft engines, propellers and appliances, airworthiness certificates, air carrier operating certificates, air agency certificates, navigation facility and aerodrome certificates; air traffic routes; radio and aeronautical telecommunications and air navigation aids; aircraft accident inquiries; aerodromes, both public and private-owned; construction of obstructions to aerodromes; height of buildings; antennae and other edifices; registration of aircrafts; search and rescue; facilitation of air transports;

operations of aircrafts, both for domestic and international, including scheduled and non-scheduled; meteorology in relation to civil aviation; rules of the air; air traffic services; rules for prevention of collision of aircrafts, identification of aircraft; rules for safe altitudes of flight; and such other rules and regulations, standards, governing other practices, methods and/or procedures as the Director General may find necessary and appropriate to provide adequately for safety regularity and efficiency in air commerce and air navigation; (k) Impose and fix reasonable charges and fees for the use of government aerodromes or air navigation facilities; for services rendered by the Authority in the rating of any aerodrome or air navigation facilities, civil aviation schools and instructors, aircraft repair stations, and aircraft radio and aeronautical telecommunications stations; (l) Fix the reasonable charges to be imposed in the use of privately-owned air navigation facilities and aerodromes; (m) Adopt a system for the registration of aircraft as hereinafter provided; (n) Determine and fix, landing fees, parking space fees, royalties on sales or deliveries, direct or indirect, to any aircraft for its use of aviation gasoline, oil and lubricants, spare parts, accessories and supplies, tools, other royalties, fees or rentals for the use of any of the property under its management and control; (o) Approve the annual and supplementary budget plan and utilization of retained revenue; (p) Exercise the corporate powers granted to the Authority; (q) Upon its own initiative or the recommendation of the Director General or an application of a private person, grant exemption from the requirements of observing rules or regulations issued in accordance with this Act: Provided, That said grant of exemption is not prejudicial to flight safety;

(r) Formulate rules and regulations concerning compliance of the carrier and the public for the safe transport of goods and materials by air pursuant to international standards or Annexes to the Chicago Convention; and (s) In coordination with the appropriate government agency tasked to provide airport security, shall: (1) Prescribe reasonable regulation requiring that all passengers and all property intended to be carried in the aircraft cabin in commercial air transport be screened by weapon-detecting procedure or facilities employed or operated by employees or agents of the air operator or foreign air operator prior to boarding the aircraft for such transportation; (2) Prescribe such other reasonable rules and regulations requiring such parties, methods and procedures as the Director General may find necessary to protect persons and property aboard aircraft operating in commercial air transport against acts of criminal violence and aircraft piracy; and (3) To the extent practicable, require uniform procedures for the inspection, detention, and search of persons and property in domestic commercial air transport and international commercial air transport to assure their safety and to assure that they will receive courteous and efficient treatment by air operators and their agents and employees. SEC. 25. Issuance of Rules and Regulations. - The Board, in consultation with the Director General, shall issue and provide for the enforcement of such orders, rules and regulations as may be necessary to give effect to the provisions of this Act. All rules and regulations issued in accordance with the provisions of this Act shall be formally promulgated and periodically reviewed and updated in accordance with the requirements of the Administrative Code of the Philippines or any amendment or successor thereto and the International Civil Aviation Organization Standards and Recommended Practices. Pending the promulgation of such new rules and

regulations, the current rules and regulations of the AT0 shall continue to apply. SEC. 26. Setting of Charges and Fees. - The Board, after consultation with the Director General, and after public hearing, shall determine, fix, impose, collect or receive reasonable charges, fees, dues or assessments in respect of aviation certificates, licenses and all other authorizations or permissions authorized to be issued under this Act and all services performed by the Authority. All charges and fees shall be formally promulgated in accordance with the requirements of the Administrative Code of the Philippines or any amendment or successor thereto. Pending the promulgation of such new schedule of charges and fees, the current charges and fees of the AT0 shall continue to apply. SEC. 27. Issuance of Rules of Procedure and Practice. - The Board may authorize the Director General to issue or amend rules of procedures and practice as may be required to be issued pursuant to the provisions of this Act or issue and adopt rules and regulations and other issuances of the ICAO. Pending the promulgation of such new rules of procedures and practice, current rules of procedures and practices of the AT0 shall continue to apply. SEC. 28. Appellate Powers. - The Board, on an appeal properly taken by an interested party from a decision, judgment or order of the Director General, shall have the power to: (a) Review, confirm, modify, revise, amend or reverse, as the case may be, decisions, judgments and/or orders of the Director General; (b) Confirm, remit, mitigate, increase or compromise, as the case may be, fines imposed by the Director General pursuant with the provisions of this Act; and (c) Review, confirm, modify, revise, amend or reverse, as the case may be, impositions by the Director General of liens on personal and real properties of entities, persons, corporations or partnerships in default, or those who have failed to perform their obligations pursuant to rules and regulations promulgated under this Act, or those who shall

have failed to pay the fines or other pecuniary penalties for violation thereof, In no case that the Director General shall participate in the hearing and adjudication of an appealed case before the Board where the subject of appeal is a judgment or decision rendered by his office. In such case, it requires four (4) concurring votes of the members of the Board who actively participated in the deliberation of the appealed case before the judgment or decision of the Director General can be modified or reversed. SEC. 29. Power to Administer Oaths. - The members of the Board, the Director General and such other duly designated officers of the Authority shall have the authority to administer oaths in the transaction and performance of their official duties. SEC. 30. Annual Budget. - The Board shall adopt an annual budget to fund the operations of the Authority. SEC. 31. Delegation of Functions. - (a) Delegation to Officers, Employees and Administrative Units of the Authority - The Director General may, subject to such regulations, supervision and review as may be prescribed, authorize the performance by any officer, employee, or administrative unit under the Director General's jurisdiction of any function under this Act. (b) Delegation to Private Persons - The Director General, in accordance with the policy guidelines prescribed by the Board, is authorized to delegate any assigned powers and duties to any properly qualified private person subject to his continuing supervision, regulation, and review as may be prescribed. However, the Director General shall ensure that such functions are not delegated in such a way that air operators, aerial work or general aviation operators and maintenance facilities, in effect, regulate themselves. SEC. 32. Limitation of Powers. - The Board shall not exercise any power or function not otherwise expressly granted to it under this Act, neither shall the Board exercise, in the first instance, any power or function that properly falls within the authority, jurisdiction, powers or functions of the Director General. CHAPTER VI THE AUTHORITY PROPER

SEC. 33. Organizational Structure of the Authority. - Within fifteen (15) days from the appointment of and acceptance by all members of the Board and the Director General of their respective appointments, the Board, in consultation with the Director General, shall meet to draw-up the Authority's organizational structure. The Board shall agree on the Authority's final organizational structure not later than six (6) months from the date of the effectivity of this Act. In addition to the offices created under Sections 36 and 40 of this Act, the Board shall establish the following permanent offices: (a) Air Traffic Service; (b) Air Navigation Service; (c) Aerodrome Development and Management Service; and (d) Administrative and Finance Service. The Board may agree for the viability for the creation of additional offices and the finalization of the organizational structure not later than six (6) months from the date of the effectivity of this Act. Notwithstanding the qualification standards as may be prescribed by the Board and the Civil Service Commission, the selection and appointment of the heads of the foregoing offices shall be limited from the rank and file employees of the concerned services. SEC. 34. Training Schools. - (a) Authority to Operate - The Director General may conduct a school or schools for the purpose of training employees of the Authority in those subjects necessary for the proper performance of all authorized functions of the Authority. The Director General may also authorize attendance of courses given in such schools by other governmental personnel and personnel of foreign governments, or personnel of the aeronautical industry. (b) Offset of Training Costs - The Director General is hereby authorized, where appropriate, to require payment of appropriate consideration to offset the costs of training provided by such school or schools.

CHAPTER VII THE DIRECTOR GENERAL SEC. 35. Powers and Functions of the Director General. - The Director General shall be the chief executive and operating officer of the Authority. He shall have the following powers, duties and responsibilities: (a) To carry out the purposes and policies established in this Act; to enforce the provisions of the rules and regulations issued in pursuance to said Act; and he shall primarily be vested with authority to take charge of the technical and operational phase of civil aviation matters; (b) To designate and establish civil airways, to acquire, control, operate and maintain along such airways, navigation facilities and to chart such airways and arrange for their publication including the aeronautical charts or maps required by the international aeronautical agencies, by utilizing the equipment, supplies or assistance of existing agencies of the government as far as practicable; (c) To issue airman's certificate specifying the capacity in which the holder thereof is authorized to serve as airman in connection with aircraft and shall be issued only upon the finding that the applicant is properly qualified and physically able to perform the duties of the position. The certificate shall contain such terms, conditions and limitations as the Director General may determine to be necessary to assure safety in air commerce: Provided, however, That the airman's license shall be issued only to qualified persons who are citizens of the Philippines or qualified citizens of countries granting similar rights and privileges to citizens of the Philippines; (d) To issue airworthiness certificate for aircraft which shall prescribe the duration of such certificate, the type of service for which the aircraft may be used, and such other terms and conditions and limitations as are required; (e) To issue air carrier operating certificate in accordance with the minimum safety standards for the operation of the air carrier to whom such certificate is issued. The air carrier

operating certificate shall be issued only to aircrafts registered under the provisions of this Act; (f) To issue type certificate for aircraft, aircraft engine, propellers and appliances; (g) To inspect, classify and rate any air navigation facilities and aerodromes available for the use of aircraft as to its suitability for such use and to issue a certificate for such air navigation facility and aerodrome; and to determine the suitability of foreign aerodromes, air navigation facilities as well as air routes to be used prior to the operation of Philippine-registered aircraft in foreign air transportation and from time to time thereafter as may be required in the interest of safety in air commerce; (h) To issue certificates of persons or civil aviation schools giving instruction in flying, repair stations, and other air agencies and provide for the examination and rating thereof; (i) To provide for the enforcement of the rules and regulations issued under the provisions of this Act and to conduct investigation for violations thereto. In undertaking such investigation, to require by subpoena ad testificandum or subpoena duces tecum, the attendance and testimony of witnesses, the production of books, papers, documents, exhibits matter, evidence, or the taking of depositions before any person authorized to administer oath. Refusal to submit the reasonable requirements of the investigation committee shall be punishable in accordance with the provisions of this Act; (j) To collect and disseminate information relative to civil aeronautics and the development of air commerce and the aeronautical industry; to exchange with foreign governments, information pertaining to civil aeronautics; and to provide for direct communication on all matters relating to the technical or operational phase of aeronautics with international aeronautical agencies:

(k) To acquire and operate such aircraft as may be necessary to execute the duties and functions of the Authority prescribed in this Act; (l) To plan, design, acquire, establish, construct, operate, improve, maintain, and repair necessary aerodromes and other air navigation facilities; (m) To collect and receive charges and fees for the registration of aircraft and for the issuance and/or renewal of licenses or certificates for aircraft, aircraft engines, propellers and appliances, and airmen as provided in this Act; (n) To impose fines and/or civil penalties in respect thereto; (o) To participate actively with the largest possible degree in the development of international standardization of practices in aviation matters important to safe, expeditious, and easy navigation, and to implement as far as practicable the international standards, recommended practices and policies adopted by appropriate international aeronautical agencies; (p) To exercise and perform its powers and duties under this Act consistent with any obligation assumed by the Republic of the Philippines in any treaty, convention or agreement on civil aviation matters; (q) To cooperate, assist and coordinate with any research and technical agency of the government on matters relating to research and technical studies on design, materials, workmanship, construction, performance, maintenance and operation of aircraft, aircraft engines, propellers, appliances, and air navigation facilities including aircraft fuel and oil: Provided, That nothing in this Act shall be construed to authorize the duplication of the laboratory research, activities or technical studies of any existing governmental agency; (r) To designate such prohibited and danger areas, in consonance with the requirements of the international aeronautical agencies and national security;

(s) To issue, deny, suspend, cancel or revoke any certificate, license pertaining to aircraft, airmen and air agencies: Provided, That any order denying, suspending, cancelling, revoking the certificate or license may he appealed to the Board, whose decisions shall he final within fifteen (15) days from the date of notification of such denial, cancellation or revocation; (t) To grant authorization to civil aircraft or persons to carry instruments or photographic devices to be used for aerial photography or taking of pictures by photograph or sketching of any part of the Philippines; and (u) Pursuant to a board resolution, to enter into, make and execute contracts of any kind with any person, firm, or public or private corporation. SEC. 36. The Office of Enforcement and Legal Service. - To effectively implement the civil aviation regulatory, supervisory and administrative mandates of the Director General under this Act, a permanent office within the Authority to be known as the Enforcement and Legal Service, to be composed of in-house counsels of the Authority and its necessary support staff shall be established by the Board. This office shall provide adequate legal assistance and support to the Director General and to the Authority, as a whole, in the exercise of quasilegislative and quasi-judicial power as provided for under this Act. The exercise of the function by the Director General to issue subpoena ad testificandum, subpoenaduces tecum and the imposition of any administrative sanction shall be within the exclusive determination and recommendation of the Enforcement and Legal Service. SEC. 37. Orders. - (a) Effectiveness of Orders - Except in emergency situations, all orders, rules and regulations of the Director General shall take effect within such reasonable times as the Director General may prescribe, and shall continue in force until a further order, rule or regulation, or for a specified period of time, as shall be prescribed in the order, rule or regulation.

(b) Emergencies - Whenever the Director General is of the opinion that an emergency requiring immediate action exists with respect to safety in civil aviation, the Director General shall have the power, either upon complaint or the Director General's initiative without complaint, at once, if the Director General so orders, without answer or other form of pleading by the interested person or persons, and with or without notice, hearing, or the making or filing of a report, to make such just and reasonable orders, rules or regulations as may be essential in the interest of safety in civil aviation to meet such emergency: Provided, That the Director General shall immediately thereafter initiate proceedings relating to the matter giving rise to any such order, rule or regulation. (c) Suspension and Modification of Orders - The Director General shall have the power to suspend or modify orders upon such notice and in such manner as the Director General shall find proper. (d) Public Compliance - It shall be the duty of every person (along with any agents and employees thereof in the case of entities other than individuals), subject to this Act, to observe and comply with any order, rule, regulation, or certificate issued by the Director General under this Act, affecting such person so long as the same shall remain in effect. SEC. 38. Right of Access for Inspection. - (a) The Director General or his authorized representative shall be authorized access to civil aircraft, including aerodromes, without restriction wherever they are operated within the Philippines for purposes of ensuring that those aircraft are airworthy and being operated in accordance with this Act, regulations issued under this Act, and applicable ICAO Annexes. (b) The Director General or his authorized representative shall be authorized access to civil aircraft registered in the Philippines without restriction wherever they are operated in the world for the purposes of ensuring that these aircraft are airworthy and are being operated in accordance with this Act and applicable regulations and directives. (c) The Director General or his authorized representative shall be authorized access by the Philippine air operators at any place and any time to conduct any tests or inspections in their facility or offices in order to determine that those operations are conducted in accordance with this Act and applicable regulations and directives.

(d) The Director General or his authorized representative shall be authorized access to any aerodromes, whether privately or government-owned, to conduct inspections or evaluation of the facilities therein in order to determine that its operations are conducted. SEC. 39. Authority to Prevent Flight. - (a) The Director General is authorized to direct the operator or airman of a civil aircraft that the aircraft is not to be operated in situations where: (1) The aircraft may not be airworthy; or (2) The airman may not be qualified or physically or mentally capable for the flight; or (3) The operation would cause imminent danger to persons or property on the ground. (b) The Director General may take such steps as are necessary to detain such aircraft or airmen. SEC. 40. Creation of Flight Standards Inspectorate Service. - (a) The Board, other than the offices it shall create in furtherance of this Act, shall establish a permanent office known as the Flight Standards Inspectorate Service (FSIS) that will assist the Director General in carrying out the responsibilities of his office for certification and ongoing inspections of aircraft, airmen and air operators. The FSIS shall perform the following functions: (1) Airworthiness inspection; (2) Flight operations inspection and evaluation; and (3) Personnel licensing. Furthermore, the Board shall create, but not limited to, the following offices which will provide support to the functions of the FSIS, namely: Aircraft Registration, Aircraft Engineering and Standards, Airmen Examination Board and Office of the Flight Surgeon.

SEC. 41. Validation. - The Director General is authorized, in the discharge of his certification and inspection responsibilities, to validate the actions of the civil authority of another State in lieu of taking the specific action, with the following restrictions: (a) For actions on airman or airworthiness certificates, the other State must be a signatory to the Chicago Convention and he fulfilling its obligations under the Chicago Convention with respect to the issuance and currency of these certificates; and (b) For actions applicable to air operators, the Director General must exercise discretion and require supporting documents. The Director General should ensure that, when validation is based on the actions of another civil aviation authority, there is no information to indicate that the State does not meet its obligations under the Chicago Convention regarding certification and ongoing validation of its air operators. SEC. 42. Aircraft Accident Investigation and Inquiry Board. - Pending the establishment of an independent and separate government agency created to conduct investigation of accidents on land, air and water, the Director General shall organize an Aircraft Accident Investigation and Inquiry Board (AAIIB), to be composed of personnel of the Authority specialized in the various disciplines of civil aviation. The Board shall appoint the head of the AAIIB. (a) Reporting of Accidents - The Board shall promulgate rules and regulations governing the notification and the reporting of accidents and incidents involving aircraft. (b) General Authority to Investigate - Except as provided in subsection c of this section, the Director General shall have: (1) The power to investigate, or arrange by contract or otherwise for the investigation of, accidents involving aircraft occurring in the Philippines and civil aircraft registered in the Fhilippines occurring outside the territory of any foreign country for the purpose of determining the facts, conditions

and circumstances relating to each accident and the probable cause thereof; and (2) The authority to participate in the investigation of accidents involving aircraft registered in the Philippines occurring outside the territory of a foreign country, consistent with any treaty, convention, agreement, or other arrangemest between the Philippines and the country in whose territory the accident occurred. (c) Accident Prevention - The Director General shall take any corrective actions which, on the basis of the findings of the accident investigations authorized under this section, that, in the judgment of the Director General, will tend to prevent similar accidents in the future. (d) Investigation of Accidents Within Military Sites - Notwithstanding any other provision of this section, and, the investigation of an accident involving aircraft occurring within military sites in the Philippines, or an accident involving solely an aircraft of the armed forces of any foreign country occurring in the Philippines, shall be the responsibility of the military. For the purpose of this subsection, the term 'military sites' means those areas within the Philippines which are under the control of the military of the Philippines or the military of another country. (e) Use as Evidence - No part of any report or reports of the Director General relating to any accident, or the investigation thereof, shall be admitted as evidence or used in any suit or action for damages arising out of any matter mentioned in such report or reports except when the criminal liabilities/aspects of the accident is put into issue. CHAPTER VIII NATIONALITY AND OWNERSHIP OF AIRCRAFT SEC. 43. Establishment of Registry. - The Authority shall: (a) Establish and maintain a system for the national registration of aircraft in the Philippines; (b) Establish and maintain a system for the registration of liens, mortgages or other interests in aircraft or aircraft engines; and

(c) Have sole authority to register aircraft and liens, mortgages or other interests in aircraft or aircraft engines. SEC. 44. Eligibility for Registration. - Except as otherwise provided in the Constitution and existing treaty or treaties, no aircraft shall be eligible for registration unless it is owned by or leased to a citizen or citizens of the Philippines or corporations or associations organized under the laws of the Philippines at least sixty per centum (60%) of whose capital is owned by Filipino citizens. That, under such rules and regulations to be promulgated by the Board, foreign-owned or registered aircraft may be registered if utilized by members of aero clubs organized for recreation, sport or the development of flying skills as a prerequisite to any aeronautical activities of such clubs within the Philippine airspace. (R.A. 776, P.D. 1278, E.O. 546, and B.P. 504) Such certificate shall be conclusive evidence of nationality for international purposes, but not in any proceeding under the laws of the Republic of the Philippines. The certificate of registration is conclusive evidence of ownership, except in a proceeding where such ownership is, or may be, at issue. SEC. 45. Application for Aircraft Registration. - Applications for certificate of registration shall be made in writing, signed and sworn to by the owner or lessee of any aircraft or aircraft engine eligible for registration. The application shall also state: (a) the date and place of filing; (b) the specification, construction and technical description of the aircraft or aircraft engine; and (c) such other information as may be required by the Authority in such manner and form as the Authority may prescribe by regulation. SEC. 46. Issuance of Certificate of Registration. - Should the Director General, upon considering the application for registration, find the aircraft or aircraft engine eligible for registration, such aircraft shall be registered under the provisions of this Act and the owner thereof shall be issued a certificate of registration. SEC. 47. Nationality. - An aircraft shall acquire Philippine nationality when registered pursuant to this Act. SEC. 48. Revocation. - Any certificate of registration may be revoked by the Authority for any cause which renders the aircraft ineligible for registration.

SEC. 49. Conveyance to be Recorded. - No conveyance made or executed, which affects the title to, or interest in, any aircraft of Philippine registry, or any portion thereof shall be valid in respect to such aircraft or portion thereof against any person other than the person by whom the conveyance is made or executed, his heirs, assignees, executors, administrators, devisees, or successors in interest, and any person having actual notice thereof, until such conveyance is recorded in the Authority. Every such conveyance so recorded shall be valid as against all persons. Any instrument, recording of which is required by the provisions of this Act, shall take effect from the date of its record in the books of the Authority, and not from the date of its execution. SEC. 50. Form of Conveyance. - No conveyance may be recorded under the provisions of this Act unless it complies with the requirements for the registration of documents similar to the land registration process. The conveyance to be recorded shall also state: (a) the interest in the aircraft of the person by whom such conveyance is made or executed or, in the case of a contract of conditional sale, the interest of the vendor; and (b) the interest transferred by the conveyance. SEC. 51. Establishment of System of Recording. - The Authority shall establish a national system for recording documents that affect the title to or any interest in any aircraft registered in accordance with this Act and in any aircraft engine, propeller, appliance or spare parts intended for use on any such aircraft. SEC. 52. Method of Recording. - The Authority shall record conveyances delivered to it in the order of their receipt, in files kept for that purpose, indexed to show: (a) The identifying description of the aircraft; (b) The names of the parties to the conveyance; (c) The date of the instrument and the date and time it is recorded; (d) The interest in the aircraft transferred by the conveyance; (e) If such conveyance is made as security for indebtedness, the amount and date of maturity of such indebtedness; and

(f) All particular estates, mortgages, liens, leases, orders and other encumbrances and all decrees, instruments, attachments or entries affecting aircraft and other matters properly determined under this Act. SEC. 53. Validity Before Filing. - Upon the establishment of a recording system in accordance with the provisions of this Act, no document affecting the title to or any interest in such registered aircraft, aircraft engines, propellers, appliances, or spare parts shall be valid except as between the parties thereto, unless the document is registered in such recording system. SEC. 54. Previously Unrecorded Ownership. - Applications for the issuance or renewal of an airworthiness certificate for aircraft whose ownership has not been recorded as provided in this Act shall contain such information with respect to the ownership of the aircraft as the Director General shall deem necessary to show who have property interests in such aircraft and the nature and extent of such interest. CHAPTER IX AVIATION SAFETY POWERS AND FUNCTIONS SEC. 55. General Powers and Functions. - (a) Promoting Safety - The Director General shall have the pawer and duty to promote safety of flight of civil aircraft in civil aviation by prescribing and revising from time to time as necessary: (1) Reasonable rules and regulations implementing, at minimum, all standards of the Annexes to the Chicago Convention; and (2) Such other reasonable rules, regulations, or minimum standards governing other practices, methods, and procedures as the Director General may find necessary to provide adequately for safety in civil aviation. (b) Considerations in the Regulation of Air Operators - In prescribing standards, rules and regulations, and in issuing certificates under this Act, the Director General shall take into consideration the obligation of air operators to perform their services with the highest possible degree of safety pursuant to public interest.

SEC. 56. Form of Applications. - Applications for certificates issued by virtue of this chapter shall be in such form, contain such information, and be filed and served in such manner as the Authority may prescribe and shall be under oath or affirmation whenever the Authority so requires. A. Certification of Airmen SEC. 57. Authority to Certificate Airmen. - The Director General is authorized to issue airmen certificates specifying the capacity in which the holders thereof are authorized to serve as airman in connection with an aircraft. SEC. 58. Application and Issuance. - Any individual may file with the Director General an application for an airman certificate. If the Director General finds, after due investigation, that such individual possesses the proper qualifications for, and is physically able to, perform the duties pertaining to the position for which the airman certificate is sought, the Director General shall issue such certificate. SEC. 59. Terms and Conditions. - The airman certificate shall contain such terms, conditions and tests of physical fitness, and other matters as may be necessary to assure safety in civil aviation. SEC. 60. Contents. - Each airman certificate shall: (a) Be numbered and recorded by the Authority; (b) State the name and address of, and contain a description of the individual to whom the airman certificate is issued; and (c) Be titled with the designation of the airman and its authorized privileges. B. Airworthiness Certificate SEC. 61. Authority to Issue Airworthiness Certificates. - The owner of any aircraft registered in accordance with this Act may file with the Director General an application for an airworthiness certificate for such aircraft.

SEC. 62. Issuance. - If it is found that the aircraft conforms to the appropriate type of certificate and, after inspection, finds that the aircraft is in a condition allowing for safe operation, an airworthiness certificate shall be issued by the Director General. SEC. 63. Terms and Conditions. the Director General shall prescribe in the airworthiness certificate the duration of such certificate, the types of service for which the aircraft may be used, and such other terms, conditions, limitations and information as are required in the interest of safety. Each airworthiness certificate issued by the Director General shall be recorded by it. SEC. 64. Airworthiness Approvals. - The Director General may prescribe the terms under which additional airworthiness approvals, for purposes of modification, may be made. C. Air Operator Certificate SEC. 65. Authority to Certificate Carriers and Establish Safety Standards. - The Director General is authorized to issue air operator certificates and to establish minimum safety standards for the operation of the air carrier to which any such certificate is issued. SEC. 66. Application and Issuance. - Any air carrier who is a citizen of the Philippines may file with the Director General an application for an air operator certificate. If the Director General finds, after thorough investigation, that such air carrier is properly and adequately equipped and has demonstrated the ability to conduct a safe operation in accordance with the requirements of this Act and the rules, regulations and standards issued pursuant thereto, the Director General shall issue an air operator certificate to such air carrier: Provided, however, That in no event shall the Director General issue an air operator certificate to an air carrier that does not possess a valid Certificate of Public Convenience and Necessity (CPCN) issued pursuant to this Act and its implementing rules. D. Aviation Schools and Approved Maintenance Organizations SEC. 67. Examination and Rating. - The Director General is authorized to provide for the examination and rating of:

(a) The adequacy of the course of instruction, the suitability and airworthiness of the equipment and the competency of the instructors of civilian schools providing instruction in flying or in the repair, alteration, maintenance, and overhaul of aircraft, aircraft engines, propellers and appliances; and (b) The adequacy and suitability of the equipment, facilities and materials for, and methods of, repair and overhaul, and the competency of those engaged in the work or giving any instruction in accredited maintenance organizations or shops engaged in the repair, alteration, maintenance and overhaul of aircraft engines, propellers and appliances. SEC. 68. Air Navigation Facility Safety Standards. - (a) Minimum Safety Standards -The Director General shall have the power to prescribe and revise, from time to time as necessary, minimum safety standards for the operation of air navigation facilities located in the Philippines. (b) Certification of Airports - (1) The Director General is empowered to issue airport certificates to, and to establish minimum safety standards for the operation of, airports that serve any scheduled or unscheduled passenger operations of air operator or foreign air operator aircraft. (2) Any person desiring to operate an airport that is described in this section and that is required hy the Director General, by rule, to be certified may file with the Director General an application for an airport operating certificate. If the Director General finds, after investigation, that such person is properly and adequately equipped and able to conduct a safe operation in accordance with the requirements of this Act and the rules and regulations, and standards prescribed thereunder, the Director General shall issue an airport operating certificate to such person. Each airport operating certificate shall prescribe such terms, conditions and limitations as are reasonably necessary to assure safety in commercial air transport. Unless the Director General determines that it would be contrary to public interest, such terms, conditions and limitations shall include, but not limited to, terms and conditions, relating to:

(i) The operation and maintenance of adequate safety equipment, including fire fighting and rescue equipment capable of rapid access to any portion of the airport used for landing, takeoff, or surface maneuvering of aircraft; and (ii) The condition and maintenance of primary and secondary runways as the Director General determines to be necessary. SEC. 69. Duties and Operations of Airmen. - It shall be the duty of: (a) Each air carrier to make or cause to be made, such inspection, maintenance, overhaul and repair of all equipment used in air transport and to ensure that the operations conducted are in accordance with the provisions of this Act and the rules, regulations, directives and orders issued by virtue of this Act; (b) Each air carrier holding an air operator certificate to ensure that the maintenance of aircraft and operations thereof are conducted in the public interest and in accordance with the requirements of this Act and the rules, regulations, directives and orders issued by virtue of this Act; (c) Each holder of an airman certificate to observe and comply with the authority and limitations of that certificate, the requirements of this Act and the rules, regulations, directives and orders issued by virtue of this Act; (d) Every person performing duties in air transportation to observe and comply with the requirements of this Act and the rules, regulations, directives and orders issued by virtue of this Act; and (e) Every person who offers or accepts shipments, cargo or baggage in air commerce to offer or accept such shipments, cargo or baggage in accordance with the provisions of Annex 18 ofthe Chicago Convention and the ICA0 Technical Instructions for the Safe Transport of Dangerous Goods by Air.

SEC. 70. Authority to Inspect. - (a) Authority to Inspect Equipment - The Director General shall have the power and duty to: (1) Make such inspections of aircraft, aircraft engines, propellers and appliances used by an operator of civil aircraft as may be necessary to determine that the operators are maintaining the safe condition for the operation in which they are used; and (2) Advise each operator in the inspection and maintenance of these items. (b) Unsafe Aircraft, Engines, Propellers and Appliances - When the Director General finds that any aircraft, aircraft engine, propeller or appliance, used or intended to be used by any operator in civil aviation, is not in a condition for safe operation, the Director General shall notify the operator. Such aircraft, aircraft engine, propeller or appliance then shall not be used in civil aviation or in such manner also to endanger civil aviation, unless found by the Director General to be in a condition for safe operation. SEC. 71. Amendment, Modifications, Suspension and Revocation of Certificates. - (a) Re-inspection and Reexamination - The Director General may, from time to time, for any reason, reinspect or reexamine any civil aircraft, aircraft engine, propeller, appliance, air operator, school, with approved maintenance organization, or any civil airman holding a certificate issued under this Act. (b) Actions of the Director General - If, as a result of any such re-inspection or reexamination, or if, as a result of any other investigation made by the Director General, the Director General determines that safety in civil aviation or commercial air transport and the public interest requires, the Director General may issue an order amending, modifying, suspending or revoking, in whole or in part, any airworthiness certificate, airman certificate, air operator certificate or certificate for any airport, school, or approved maintenance organization issued under this Act. (c) Notice to Certificate Holders and Opportunity to Answer - Prior to amending, modifying, suspending or revoking any of the foregoing certificates, the Director General shall advise the holder thereof as to any charge or reason relied upon by the Director General for the proposed action and, except in cases of emergency, shall provide the holder of such

certificate opportunity to answer any charges and be heard as to why such certificate should not be amended, modified, suspended or revoked. (d) Appeals - Any person whose certificate is affected by such an order of the Director General under this section may file his motion for reconsideration within five (5) days from receipt thereof and in case of denial shall, within ten (IO) days, file his appeal to the Board. (e) Effectiveness of Orders Pending Appeal - The filing of motion for reconsideration or appeal as provided for under this Act shall not stay the effectiveness of the Director General's order except through an injunctive relief duly issued by a court of competent jurisdiction. SEC. 72. Prohibitions. - (a) It shall be unlawful for any person to: (1) Operate in civil aviation any civil aircraft which there is not currently in effect a certificate of airworthiness and registration, or in violation of the terms of any such certificate and operation of the aircraft in a careless and reckless manner and operation of aircraft in contravention of its approved operating limitations and manual; (2) Serve in any capacity as an airman in connection with any civil aircraft, aircraft engine, propeller or appliance used or intended for use in civil aviation without an airman certificate authorizing that person to serve in such capacity, or in violation of any term, condition or limitation of his certificate, or in violation of any order, rule or regulation issued under this Act: (3) Employ for service in connection with any civil aircraft used in civil aviation an airman who does not have an airman certificate authorizing that person to serve in the capacity for which the person is employed; (4) Operate as an air operator without an air operator certificate or in violation of the terms of any such certificate; (5) Operate aircraft in civil aviation in violation of any rule, regulation, or certificate issued by the Director General under this Act; and

(6) While holding a certificate issued to a school or approved maintenance organization as provided in this Act, to violate any term, condition or limitation thereof, to violate any order, rule or regulation made under this Act relating to the holder of such certificate. (b) Considering that the aircraft operation is impressed with public interest, the Director General may prescribe exemptions of the foregoing provisions for foreign aircraft and airmen. CHAPTER X OTHER POWERS SEC. 73. Statutory Lien. - The Director General, after complying with the required legal formalities provided by law, shall have the power to impose lien on aircraft and machinery: (a) If the charges and other fees are not paid in full on due date or any part of the charges or the late payment penalty thereto remains unpaid; and (b) Failure to pay administrative fines arising from violation of any rules and regulations promulgated by the Authority. SEC. 74. Lien on Personal and Real Properties. - The Director General shall have the power to impose lien on personal and real properties, and other assets of persons, corporations, partnerships, and such other entities that shall be in default, or fail to perform their obligations, or fail to pay the fines and other penalties imposed for violations of the law, rules and regulations of the Authority. Properties and assets levied upon may be sold and the proceeds thereof shall be applied to the satisfaction of the obligation after due notice and hearing. SEC. 75. Police Authority. - The Director General shall have the power to exercise such police authority as may be necessary within the premises of airports under its jurisdiction to carry out its functions and attain its purposes and objectives. The grant of such powers shall be in conformity with the functions exclusively provided by law to be exercised by the Philippine National Police and other concerned government agencies: Provided, That

the Authority may request the assistance of other law enforcement agencies, including request for deputization as may be required. Such police authority shall be exercised in connection with the following: (a) Maintenance of security to passengers, cargoes, aircraft, airport equipment, structures, facilities, personnel, funds and documents; (b) Regulating the entry to, exit from and movement within an airport; (c) Maintenance of peace and order within the premises of an airport in coordination with local police authorities and other authorized peace-keeping entities within an airport; (d) Regulation and supervision of private security agencies operating within an airport; and (e) Enforcement of rules and regulations promulgated by the Board pursuant to the authority granted under this Act. SEC. 76. Regulation of Building Heights. - The Board shall have the power to regulate the height of buildings, towers, antennae, and other edifices, situated within the vicinity of or in close proximity to airports estimated to endanger the flight of aircrafts. It shall also have the power to prohibit or regulate the establishment and operations of electrical, electronics, sound, magnetic, laser, or other electronic gadgets, equipment or installations which will tend to interfere with or impair air navigation in accordance with the international standards and recommended practices on airports, as recommended by the ICAO. SEC. 77. Authority Respecting the Transportation of Dangerous Goods by Air. - The Director General shall monitor and enforce compliance of the rules and regulations concerning the carriage of goods by air in relation to Annex 18 of the Chicago Convention and the ICAO Technical Instructions for the Safe Transport of Dangerous Goods by Air. SEC. 78. Development of New Airports. - The Board shall be responsible for the planning, development, construction, operation, maintenance, or the expansion of airports. In planning and developing new airports, the Board shall consider:

(a) The suitability of a proposed site in terms of terrain and proximity to population center(s); (b) The projected size of the market to be served by a proposed airport; (c) The ability of a proposed airport to generate sufficient revenue to cover costs of operation and maintenance; (d) The availability of funding from both local and foreign sources for the construction of a new airport or expansion of an existing one; (e) The proximity of other airports to a proposed new airport and the capability of such other airport to handle traffic projected to be handled by the new proposed airport; (f) The government's public service obligations, more particularly the government's duty to ensure the availability of air transport infrastructure for remote areas far from major population centers and that are not otherwise easily accessible by transportation via land or sea. In such cases, the Board shall take reasonable steps to ensure that funding will be available for the operation and maintenance of such airports; (g) ICAO best practices and recommendations concerning the development of airports; and (h) Such other considerations as the Board, in the exercise of its reasonable discretion, may consider relevant or important. CHAPTER XI PENALTIES SEC. 79. Power of the Authority to Investigate Violations. - Correlative to the provisions of Section 36 of this Act, the Director General at his own volition, or at the instance of a private person, or upon the initiative of the Board, may conduct investigations based on the procedures that the Board may prescribe and using the Rules of Court as its suppletory guidelines.

SEC. 80. Power to Direct an Immediate Halt to an Offending Practice. The Director General, after due investigation conducted, may issue a cease and desist order directing an air carrier(s) to immediately cease any practice found to be in violation of the provisions of this Act. Such order shall be without prejudice to the civil or criminal prosecution of persons or individuals found to be involved in practices prohibited under Chapter XI of this Act. SEC. 81. Penalties. - (a) The Director General, after due notice and hearing, is authorized to impose the following fines and penalties for each violation of this Act: (1) Any person who operates any aircraft without the current airworthiness certificate, in violation of my rule, regulation or order issued by the Director General relating to aeronautical safety standards or practices or procedures shall be punished by a fine ranging from Twenty thousand pesos (Php20,000.00) to Fifty thousand pesos (Php50,000.00) for the 1st offense, suspension of the license for three (3) months for the 2nd offense and revocation or cancellation of such license for the 3rd offense; (2) Any person serving in any capacity as an airman in connection with any civil aircraft in violation of the terms, conditions or limitations of any such airman license or certificate, or in excess of the rating of such certificate, shall be punished by a fine ranging from Twenty thousand pesos (Php20,000.00) to Fifty thousand pesos (Php50,000.00) for the 1st offense, suspension of the license for three (3) months for the 2nd offense and revocation or cancellation of such license for the 3rd offense. The repetition of this offense shall be sufficient cause for the revocation of the airman's certificate; (3) Any person who employs in connection with any aircraft used in air commerce an airman who does not have an airman's certificate authorizing him to serve in the capacity for which he is employed shall be punished by a fine ranging from Fifty thousand pesos (Php50,000.00) to One hundred thousand pesos (Php100,000.00), as determined by the Director General in the exercise of his reasonable discretion. A repetition of the offense shall be sufficient cause for

revocation of such person's certificate authorizing it to engage in air carrier operation; (4) Any person who was issued by the Director General relating to air carrier operation, aviation school, aircraft maintenance, and other civil aviation regulated activity which are being certificated and regulated by the Director General who have been found to have violated any term, condition or limitation thereof, or violates any order, rule or regulation issued by virtue of this Act relating to the holder of such certificate shall be punished by a fine ranging from Three hundred thousand pesos (Php300,000.00) to Five hundred thousand pesos (Php500,000.00), as determined by the Director General in the exercise of his reasonable discretion. The repetition of this offense shall be sufficient cause for the revocation of such person's certificate. (5) No person shall interfere, obstruct, hinder, or delay the Director General or any person duly delegated by the Director General, in the performance of his duties pursuant to public interest. A fine ranging from Twenty thousand pesos (Php20,000.00) but not exceeding One hundred thousand pesos (Php100,000.00), as determined by the Director General in the exercise of his reasonable discretion, shall be imposed upon anyone who: (i) With intent to interfere in the performance of the duties of the Director General or any person duly delegated by the Director General, shall knowingly or willfully alter, falsify, mutilate any report, accounts, records, books, papers, contracts, agreement and all other documents; or (ii) Shall knowingly and willfully fail or refuse: (a) to make and/or submit aircraft maintenance or flight logbooks, contracts, manuals, technical reports and all other documents required to be submitted by him for consideration before the Director General or his duly authorized representative; or (b) to keep or preserve records, reports, papers and all other documents required by the Director General or his duly authorized representative; or

(iii) Is guilty of misconduct in the presence of the Director General or his duly authorized representative, or to any member of the Board in the performance of their quasi-judicial and quasilegislative functions or so near as to obstruct or interrupt the hearing or session or any proceedings before the Director General or any of his duly authorized representative; or shall orally or in writing disrespectfully offend or insult any of the abovenamed bodies or persons on the occasion of or in the performance of their official duties or during any hearing, session, or investigation held by the Director General or his duly authorized representative; or (iv) Refuses to be sworn in as a witness or to answer as such when lawfully required to do so: Provided, That the Director General or his duly authorized representative shall, if necessary, be entitled to the assistance of law enforcement officials for the execution of any order to compel a witness to be present or to testify; or (v) Neglects or refuses to attend and/or testify and/or to answer any lawful inquiry or to produce books, papers or documents, if in his power to do so, in obedience to the subpoena or lawful requirement of the Director General or his duly authorized representative; or (vi) Testifies falsely or makes false affidavits or both before the Director General or his duly authorized representative. (b) The following penalties may only be imposed by a court of competent jurisdiction after the filing of a proper criminal complaint therein by the Director General and a finding of guilt: (1) Any person who operates any aircraft without a valid or current license or ratings or in violation of rule, regulation or order issued by the Director General relating to aeronautical safety standards or practices or procedures shall be

punished by imprisonment for not more than three (3) years or a fine ranging from Fifty thousand pesos (Php50,000.00) but not exceeding Two hundred thousand pesos (Php200,000.00), or both, at the discretion of the court; (2) Any person who knowingly and willfully forges, counterfeits, alters or falsifies any certificate or aviation certificate authorized to be issued pursuant to the provisions of this Act, or knowingly uses or attempts to use any such fraudulent certificate or aviation certificate, and any person who knowingly and willfully displays or causes to be displayed on any aircraft any marks that are false or misleading as to the nationality or registration of the aircraft shall be punished by imprisonment ranging from three (3) years to six (6) years or a fine of not less than One hundred thousand pesos (php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (3) Any person who shall use for flight operation an unregistered aircraft or engaged in the operation of aviation school, aircraft maintenance facilities, aircraft material distributorship, air carrier operations or any other civil aviation regulated activities without the required air agency certificate issued by the Director General shall be punished by imprisonment ranging from three (3) years to seven (7) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (4) Any person found guilty of violating the conditions attendant to the issuance of the airworthiness certificate of the aircraft shall be subjected to imprisonment ranging from three (3) years to seven (7) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (5) Any person who destroys or seriously damages the facilities of an airport or disrupts the services of an airport shall be subjected to imprisonment ranging from one (1) year to three (3) years or a fine of not less than Fifty thousand

pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; and (6) No person shall interfere with air navigation. An imprisonment for not more than three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court, shall be imposed upon any person who: (i) With intent to interfere with air navigation within the Philippines, exhibits within the Philippines any light or signal at such place or in such manner that it is likely to be mistaken for a true light or signal established pursuant to this Act or for a true light or signal in connection with an airport or other air navigation facility; or (ii) After due warning by the Director General, of his duly authorized representative, continues to maintain any misleading light or signal; or (iii) Knowingly removes, extinguishes, or interferes with the operation of any true light or signal; (7) Any person who destroys or damages air navigation facilities or interferes with their operation shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. If such act endangers the safety of air navigation, the court may impose an increased penalty of imprisonment from three (3) years to six (6) years or a fine ranging from Five hundred thousand pesos (Php500,000.00) to One million pesos (Php1,000,000.00) [Convention for Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal, 23 September 1971, Art. 1(d)];

(8) Any person who, whether on board or on the ground, communicates false information to an aircraft and thereby endangering the safety of an aircraft in flight shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. [Convention for Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal, 23 September 1971, Art. 1(e)]; (9) Any person who, while on board an aircraft, interferes with a crewmember's or flight attendant's performance of their duties, assaults, intimidates, or threatens any crewmember or flight attendant, shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (10) Any person who, while on board or while attempting to board, any aircraft in or intended for operation in commercial air transport, has, on or about his person or his property, a concealed deadly or dangerous weapon which is, or would be accessible to such person in flight, or any person who has on or about his person, or who has placed, or attempted to place aboard such aircraft any bomb or similar explosive or incendiary device, shall be subjected to imprisonment from three (3) years to six (6) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. This subsection shall not apply to persons duly authorized by the Director General to carry deadly or dangerous weapons in commercial air transport nor shall it apply to other persons transporting weapons contained in baggage that is not accessible to passengers in flight if the presence of such weapons has been declared to the air carrier and duIy approved by the proper authority;

(11) Any person who imparts or conveys or causes to be imparted or conveyed false information, knowing the information to be false, concerning an attempt or alleged attempt being made or to be made to do an act which would be a crime prohibited by clauses (8), (9) and (10) of this section, shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. [Convention for Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal, 23 September 1971, Art. 1(e)]; (12) Any person who, while on board an aircraft, commits any other act not otherwise expressly covered under clauses (8), (9), (10) and (11) above which jeopardizes the safety of the aircraft or of persons or property therein, or which jeopardizes good order and discipline on board such aircraft shall be subjected to imprisonment from six (6) months to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. [Convention on Offenses and Certain Other Acts Committed on Board Aircraft, signed at Tokyo, 14 September 1963, Art. 1(b)]; (13) Any person who knowingly and without authority removes, conceals or withholds any part of an aircraft involved in an aircraft accident or any property on board such aircraft at the time of th e aircraft accident shall be subjected to imprisonment from three (3) years to six (6) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court: and (14) Any person who willfully delivers or causes to be delivered to an air carrier for air transport, or if that person recklessly causes the transportation in air transport, of any shipment, cargo, baggage or other property in violation of the provisions of Annex 18 of the Chicago Convention and the ICAO Technical Instruction for the Safe Transport of

Dangerous Goods by Air, or the corresponding rules and regulations issued by the Authority shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. The provisions of paragraph (b), clauses (9), (10), (11) and (12) above shall apply to any aircraft located within the special jurisdiction of the Philippines. Exercise by the Director General of the powers granted to him under paragraph (a) above shall not be a bar to a subsequent criminal prosecution in court for the same act pursuant to the provisiom of paragraph (b). SEC. 82. General Penalty. - Any violation of the provisions of this Act, or any order, rule or regulation issued thereunder, or any term, condition or limitation of any certificate or license issued under this Act for which no penalty is expressly provided shall be punished by a fine ranging from Twenty thousand pesos (Php20,000.00) to One hundred thousand pesos (Php100,000.00) for each violation. SEC. 83. Penalty Considerations. - In determining the amount of any such penalty, the Director General shall take into account the nature, circumstances, extent and gravity of the violation and, with respect to the person found to have committed the violation, the degree of culpability, history of prior offenses, ability to pay, effect on ability to continue to do business, and such other matters as justice may require. SEC. 84. Inflation Adjustment to Civil Penalties. - The Director General shall adjust the monetary level of the penalties, as may be authorized by the Board to impose, at least once every four (4) years: Provided, That the Board shall promulgate such revised penalties in accordance with the Administrative Code of the Philippines and economic/monetary index provided by the Monetary Board, including any revision or successor thereto. CHAPTER XII TRANSITORY PROVISIONS SEC. 85. Abolition of the Air Transportation Office. - The Air Transportation Office (ATO) created under Republic Act No. 776, a sectoral

office of the Department of Transportation and Communications (DOTC), is hereby abolished. All powers, duties and rights vested by law and exercised by the AT0 is hereby transferred to the Authority. All assets, real and personal properties, funds and revenues owned by or vested in the different offices of the AT0 are transferred to the Authority. All contracts, records and documents relating to the operations of the abolished agency and its offices and branches are likewise transferred to the Authority. Any real property owned by the national government or government-owned corporation or authority which is being used and utilized as office or facility by the AT0 shall be transferred and titled in favor of the Authority. SEC. 86. Transfer of Personnel of Air Tramportation Office. - To ensure smooth transition into a corporate structure, the incumbent Assistant Secretary of the AT0 shall continue to hold office and assume the powers of the Director General until his successor shall have been appointed and inducted into office in accordance with this Act. However, affected officials and personnel, with appointments attested by the Civil Service Commission, whether hired on a permanent or temporary basis, who would opt to retire or to be separated from the service, and those hired on a casual or contractual basis, if qualified, shall be given the option to avail themselves of any of the following, whichever is beneficial to them: (a) Retirement gratuity provided under Republic Act No. 1616, as amended, plus the refund of retirement premiums payable by the Government Service Insurance System (GSIS), without the incentive herein provided; (b) Retirement benefit under Republic Act No. 660 or applicable retirement, separation or unemployment benefit provided under Republic Act No. 8291, if qualified, plus the following applicable incentives: (1) One half (1/2) month of the present basic salary for every year of government service and a fraction thereof, for those who have rendered twenty (20) years of service and below;

(2) Three-fourth (3/4) month of the present basic salary for every year of government service and a fraction thereof, computed starting from the 1st year, for those who have rendered twenty-one (21) to thirty (30) years of service; and (3) One (1) month of the present basic salary for every year of government service and a fraction thereof, computed starting from the lst year, for those who have rendered thirty-one (31) years of service and above: Provided, That the GSIS shall pay, on the day of separation, the retirement/separation/unemployment benefits to which an affected employee may be entitled to under Republic Act No. 660 or Republic Act No. 8291 and whenever there is an option, the one which the affected employee has chosen as the most beneficial to him/her: Provided, further, That for the purpose of complying with the required number of years of service under Republic Act No. 8291, the portability scheme under Republic Act No. 7699 may be applied, subject to existing policies and guidelines; and (c) Those with less than three (3) years of government service may opt to avail of the separation gratuity under Republic Act No. 6656, plus the appropriate incentive provided under paragraph (b) of this section. No affected employee who opted for retirement/separation shall receive less than an aggregate of Fifty thousand pesos (Php50,000.00) as his retirement/separation gratuity from both the national government and the GSIS. SEC. 87. Organization of the Authority. - Any officer/employee who availed the benefits of the foregoing provisions shall not qualify for reemployment to the Authority within seven (7) years from the date of retirement/resignation. SEC. 88. Saving Clause. - Unless otherwise provided in this Act, rights or privileges vested or acquired under the provisions of Republic Act No. 776,

as amended, its rules and regulations prior to the effectivity of this Act shall remain in full force and effect. SEC. 89. Legal Counsel. - The Office of the Government Corporate Counsel shall act as the external legal counsel of the Authority before any court of law or any quasi-judicial bodies of the government without prejudice of any deputation or designation that it may issue in favor of the in-house counsel of the Authority. SEC. 90. Implementing Rules and Regulations. - The Authority shall adopt rules and regulations to implement the provisions of this Act within sixty (60) days from the date of its approval. SEC. 91. Congressional Oversight Committee. - A Congressional Oversight Committee, hereinafter referred to as the "Committee", is hereby constituted in accordance with the provisions of this Act. The Committee shall be composed of the Chairman of the Senate Committee on Public Services and Chairman of the House Committee on Transportation and four (4) additional members from each House to be designated by the Senate President and the Speaker of the House of Representatives, respectively. The Committee shall, among others, in aid of legislation: (a) Monitor and ensure the proper implementation of this Act; (b) Review the collection performance of the Authority; (c) Review the proper implementation of the programs of the Authority and the use of its collected fund. In furtherance of the hereinabove cited ohjectives, the Committee is empowered to require the Authority to submit all pertinent information including, but not limited to, its collection performance data and its annual audited financial statements certified by the Commission on Audit. The Congressional Oversight Committee shall be in existence for a period of five (5) years, and thereafter, its oversight functions shall be exercised by the Senate Committee on Public Services and the House Committee on Transportation acting separately.

SEC. 92. Separability Clause. - If any part or provision of this Act shall be declared unconstitutional, the other parts or provisions hereof which are not affected thereby, shall continue in full force and effect. SEC. 93. Repealing Clause. - All laws, decrees, executive orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly, including provisions of any law, decrees, executive orders, rules and regulations or part thereof which provides exemptions to any air carrier, organization or entity from payment of any Civil Aviation Authority of the Philippines imposed fees and charges, relating to, but not limited to, navigation, communication, concession, license and permit. Notwithstanding the foregoing, nothing in this Act shall diminish the powers and functions of the Manila International Airport Authority created by virtue of Executive Order No. 903, series of 1983; Subic Bay Metropolitan Authority as regards the Subic Bay International Airport created by virtue of Republic Act No. 7227; Clark International Airport Corporation as regards the Diosdado Macapagal International Airport Authority, created by virtue of Executive Order No. 193, series of 2003; and the Mactan-Cebu International Airport Authority created by virtue of Republic Act No. 6958. SEC. 94. Effectivity. - This Act shall take effect fifteen (15) days after its complete publication in at least newspapers of general circulation. Approved, (Sgd.) MANNY VILLAR President of the Senate (Sgd.) PROSPERO C. NOGRALES Speaker of the House of Representatives

(Sgd.) GLORIA MACAPAGAL-ARROYO President of the Philippines

This Act which is originated in the House of Representatives was finally passed by the House of Representative and the Senate on February 5, 2008 and February 4, 2008 respectively. (Sgd.) EMMA LIRIO-REYES Secretary of Senate (Sgd.) ROBERTO P. NAZARENO Secretary General House of Represenatives

Approved: March 04, 2008

Executive Order No. 125-A

AMENDING EXECUTIVE ORDER NO. 125, ENTITLED "REORGANIZING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS. DEFINING ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES."
WHEREAS, considering the peculiar situation obtaining in the Department of Transportation and Communications (DOTC), there is a compelling need to clarify and/or modify structural and functional organization of the Department as provided under Executive Order No. 125 in order to ensure compliance with its mandate and the attainment of the corresponding objectives as specified in Section 4 of said Executive Order. NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Republic of the Philippines , by virtue of the powers vested in me by the Constitution, do hereby order: Sec. 1. Sections 5, 8, 9, 10 and 11 of Executive Order No. 125, otherwise known as the Reorganization Act of the Ministry of Transportation and Communications, are hereby amended to read as follows: "Sec. 5. Powers and Functions. To accomplish its mandate, the Department shall have the following powers and functions: a. Formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communications systems at the national, regional and local levels; b. Establish and administer comprehensive and integrated programs for transportation and communications, and for this purpose, may call on any agency, corporation, or organization, whether public or private, whose development programs include transportation and communications as an integral part thereof, to participate and assist in the preparation and implementation of such program; c. Assess, review and provide direction to transportation and communication research and development programs of the government in coordination with other institutions concerned; d. Administer and enforce all laws, rules and regulations in the field of transportation and communications;

e. Coordinate with the Department of Public Works and Highways in the design, location, development, rehabilitation, improvement, construction, maintenance and repair of all infrastructure projects and facilities of the Department. However, government corporate entities attached to the Department shall be authorized to undertake specialized telecommunications, ports, airports and railways projects and facilities as directed by the President of the Philippines or as provided by law; f. Establish, operate and maintain a nationwide postal system that shall include mail processing, delivery services, and money order services and promote the art of philately; g. Issue certificates of public convenience for the operation of public land and rail transportation utilities and services; h. Accredit foreign aircraft manufacturers and/or international organizations for aircraft certification in accordance with established procedures and standards; i. Establish and prescribe rules and regulations for identification of routes, zones and/or areas of operations of particular operators of public land services; j. Establish and prescribe rules and regulations for the establishment, operation and maintenance of such telecommunications facilities in areas not adequately served by the private sector in order to render such domestic and overseas services that are necessary with due consideration for advances in technology; k. Establish and prescribe rules and regulations for the operation and maintenance of a nationwide postal system that shall include mail processing, delivery services, money order services and promotion of philately; l. Establish and prescribe rules and regulations for issuance of certificates of public convenience for public land transportation utilities, such as motor vehicles, trimobiles and railways; m. Establish and prescribe rules and regulations for the inspection and registration of air and land transportation facilities, such as motor vehicles, trimobiles, railways and aircrafts;

n. Establish and prescribe rules and regulations for the issuance of licenses to qualified motor vehicle drivers, conductors, and airmen; o. Establish and prescribe the corresponding rules and regulations for the enforcement of laws governing land transportation, air transportation and postal services, including the penalties for violations thereof, and for the deputation of appropriate law enforcement agencies in pursuance thereof; p. Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air and land transportation utility facilities and services, except such rates and/or charges as may be prescribed by the Civil Aeronautics Board under its charter, and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates; q. Establish and prescribe the rules, regulations, procedures and standards for the accreditation of driving schools; r. Administer and operate the Civil Aviation Training Center (CATC) and the National Telecommunications Training Institute (NTTI); and s. Perform such other powers and functions as may be prescribed by law, or as may be necessary, incidental, or proper to its mandate or as may be assigned from time to time by the President of the Republic of the Philippines ." "Sec. 8. Undersecretaries. The Secretary shall be assisted by four (4) Undersecretaries Appointed by the President upon the recommendation of the Secretary. "Sec. 9. Assistant Secretaries and Service Chiefs. The Secretary shall also be assisted by eight (8) Assistant Secretaries appointed by the President upon the recommendation of the Secretary, each of whom shall respectively be responsible for the following four (4) staff offices composed of eight (8) services and four (4) line offices, and shall report to the respective Undersecretaries assigned by the Secretary, which Undersecretary shall have control and supervision over said respective services and offices: a. Office of the Assistant Secretary for Administrative and Legal Affairs; 1. Administrative Service, and 2. Legal Service

b. Office of the Assistant Secretary for Finance and Comptrollership; 1. Finance and Management Service, and 2. Comptrollership Service c. Office of the Assistant Secretary for Planning and Project Development; 1. Planning Service, and 2. Project Development Service d. Office of the Assistant Secretary for Management Information Service and Project Management; 1. Management Information Service, and 2. Project Management Service e. Office of the Assistant Secretary for Land Transportation; f. Office of the Assistant Secretary for Postal Services; g. Office of the Assistant Secretary for Telecommunications; h. Office of the Assistant Secretary for Air Transportation. Each of the above-named services shall be headed by a service chief appointed by the President upon the recommendation of the Secretary." Sec. 10. Structural Organization. The Department, aside from the Department proper which is comprised of the Offices of the Secretary, Undersecretary and Assistant Secretaries shall include the Department regional offices and the attached agencies and corporations referred to in Section 14 hereof. The Office of the Secretary shall have direct line supervision and control over the Department regional offices. The Department proper shall be responsible for developing and implementing policies, plans, programs and projects for the Department." "Sec. 11. Department Regional Offices. The Department shall have three (3) Department Regional Offices in each of the administrative regions of the country: the Department Regional Office for land Transportation, the Department Regional Office for Telecommunications and the Department Regional Office for Postal Services. The present Regional Offices of the Land Transportation Commission are hereby abolished and their functions are transferred to the respective Department Regional Offices for Land Transportation. The present Regional Offices of the Bureau of Telecommunications are hereby abolished and their functions are transferred to the respective Department Regional Offices for Telecommunications. The present Regional Offices of the Bureau of Posts are hereby abolished and their

functions are transferred to the corresponding Department Regional Offices for Postal Services. Each Department Regional Office shall be headed by a Department Regional Director and assisted by a Department Assistant Regional Director. The present Airport Offices of the Bureau of Air Transportation are hereby abolished and their functions are transferred to the Department Airport Offices. The abolition of the herein Regional Offices and the transfer of their functions shall be governed by the provisions of Section 15 (b) hereof. The Department Regional Offices shall essentially be line in character and shall be responsible for the delivery of all front line services of the Department. For such purposes, the Department Regional Offices shall have within their respective administrative regions, the following functions: a. Implement laws, and policies, plans, programs, projects, rules and regulations of the Department; b. Provide efficient, and effective service to the people; c. Coordinate with regional offices of other departments, offices and agencies; d. Coordinate with local government units; e. Perform such other functions as may be provided by law." Sec. 2. Sections 12, 13, 15 and 16 of said Executive Order are hereby deleted. Sec. 3. Section 14 of said Executive Order is hereby renumbered as Section 12 and amended to read as follows: "Sec. 12. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall have the following functions: a. Develop and formulate plans, policies, programs, projects, standards, specifications and guidelines geared toward the promotion and development of the maritime industry, the growth and effective regulation of shipping enterprises, and for the national security objectives of the country; b. Establish, prescribe and regulate routes, zones and/or areas of operation of particular operators of public water services; c. Issue Certificates of Public Convenience for the operation of domestic and overseas water carriers; d. Register vessels as well as issue certificates, licenses or documents necessary or incident thereto;

e. Undertake the safety regulatory functions pertaining to vessel construction and operation including the determination of manning levels and issuance of certificates of competency to seamen; f. Enforce laws, prescribe and enforce rules and regulations, including penalties for violations thereof, governing water transportation and the Philippine merchant marine, and deputize the Philippine Coast Guard and other law enforcement agencies to effectively discharge these functions; g. Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots; h. Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public water transport utilities, facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine Government as the proper arbiter of such charges or rates. i. Accredit marine surveyors and maritime enterprises engaged in shipbuilding, shiprepair, shipbreaking, domestic and overseas shipping ship management and agency; j. Issue and register the continuous discharge book of Filipino seamen; k. Establish and prescribe rules and regulations, standards and procedures for the efficient and effective discharge of the above functions; l. Perform such other functions as may now or hereafter be provided by law." Sec. 4. Section 17 of Executive Order No. 125 is hereby renumbered as Section 13 and amended to read as follows: "Sec. 13. Abolition/Transfer/Consolidation: a. The Land Transportation Commission is hereby abolished and its staff functions are transferred to the service offices of the Department Proper and its line functions are transferred to the Department Regional Offices for Land Transportation as provided in Section 11 herein. Such transfer of functions is subject to the provisions of Section 15 (b) hereof. The quasi-judicial powers and functions of the Commission are transferred to the Department. The corresponding

position structure and staffing pattern shall be approved and prescribed by the Secretary pursuant to Section 16 hereof. b. PNL Leasing, Inc. is hereby abolished and its functions are transferred to Philippine National Lines, Inc. subject to the provisions of Section 15 (b) hereof. The Secretary of Transportation and Communications or his designated representative shall be the Chairman of the Board. c. The National Aero Manufacturing, Inc. and the Philippine Aero Systems, Inc. are hereby abolished in accordance with the provisions of Section 15 (a) hereof. d. The Civil Aeronautics Board is hereby transferred from the Department of Tourism to the Department as an attached agency in accordance with the provision of Section 15 (a) hereof. The Secretary of Transportation and Communications or his designated representative shall be the Chairman of the Board. e. The Maritime Training Council's function of issuing certificates of competency to seamen under LOI 1404 is hereby transferred to the Maritime Industry Authority." f. Sec. 5. Sections 18, 19, 20, 21, 22, 23, 24, 25 and 26 of said Executive Order are hereby renumbered as Sections 14, 15, 16, 17, 18, 19, 20, 21 and 22, respectively. Sec. 6. Section 27 of said Executive Order is hereby renumbered as Section 23 and amended as follows; "Sec. 23. Repealing Clause. Presidential Decree No. 890, Letter of Instruction Nos. 263 and 371 Executive Order No. 1011 dated March 20, 1985 are hereby repealed. All laws ordinances, rules, regulations, other issuances or parts thereof which are inconsistent with this Executive Order are hereby repealed or modified accordingly." Sec. 7. Section 28 of said Executive Order is hereby renumbered as Section 24. Sec. 8. This Executive Order shall take effect immediately upon its approval. Done in the City of Manila, Philippines, this 13th day of April, in the year, of Our Lord, nineteen hundred and eighty-seven.

EXECUTIVE ORDER NO. 202 June 19, 1987 CREATING THE LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD WHEREAS, the Department of Transportation and Communications is vested with, among others, quasi-judicial powers and functions pursuant to Executive Order No. 125, as amended; NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order: Sec. 1. Creation of the Land Transportation Franchising and Regulatory Board. There is hereby created in the Department of Transportation and Communications, the Land Transportation Franchising and Regulatory Board hereinafter referred to as the "Board". Sec. 2. Composition of the Board. The Board shall be composed of a Chairman and two (2) members with the same rank, salary and privileges of an Assistant Secretary, all of whom shall be appointed by the President of the Philippines upon recommendation of the Secretary of Transportation and Communications. One (1) member of the Board shall be a member of the Bar and shall have engaged in the practice of law in the Philippines for at least five (5) years, another a holder of a degree in civil engineering, and the other a holder of a degree in economics, finance or management both with the same number of years of experience and practice. Sec. 3. Executive Director and Support Staff of the Board. The Board shall have an Executive Director who shall also appointed by the President of the Philippines upon the recommendation of the Secretary of Transportation and Communications. He shall have the rank, salary and privileges of a Department Service Chief. He shall assist the Board in the performance of its powers and functions. The Board shall be supported by the Technical Evaluation Division, Legal Division, Management Information Division, Administrative Division and Finance Division. Sec. 4. Supervision and Control Over the Board. The Secretary of Transportation and Communications, through his duly designated

Undersecretary, shall exercise administrative supervision and control over the Land Transportation Franchising and Regulatory Board. Sec. 5. Powers and Functions of the Land Transportation Franchising and Regulatory Board. The Board shall have the following powers and functions: a. To prescribe and regulate routes of service, economically viable capacities and zones or areas of operation of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans and programs approved by the Department of Transportation and Communications; b. To issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefor; c. To determine, prescribe and approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles; d. To issue preliminary or permanent injunction, whether prohibitory or mandatory, in all cases in which it has jurisdiction, and in which cases the pertinent provisions of the Rules of Court shall apply; e. To punish for contempt of the Board, both direct and indirect, in accordance with the pertinent provisions of, and the penalties prescribed by, the Rules of Court; f. To issue subpoena and subpoena duces tecum and summon witnesses to appear in any proceedings of the Board, to administer oaths and affirmations; g. To conduct investigations and hearings of complaints for violation of the public service laws on land transportation and of the Board's rules and regulations, orders, decisions and/or

rulings and to impose fines and/or penalties for such violations; h. To review motu proprio the decisions/actions of the Regional Franchising and Regulatory Office herein created; i. To promulgate rules and regulations governing proceedings before the Board and the Regional Franchising and Regulatory Office: Provided, That except with respect to paragraphs d, e, f and g hereof, the rules of procedure and evidence prevailing in the courts of laws should not be controlling and it is the spirit and intention of said rules that the Board and the Regional Franchising and Regulatory Offices shall use every and all reasonable means to ascertain facts in its case speedily and objectively and without regard to technicalities of law and procedures, all in the interest of due process; j. To fix, impose and collect, and periodically review and adjust, reasonable fees and other related charges for services rendered; k. To formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standards of measurements and/or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their utilities and in their stations such devices, equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations; l. To coordinate and cooperate with other government agencies and entities concerned with any aspect involving public land transportation services with the end in view of effecting continuing improvement of such services; and m. To perform such other functions and duties as may be provided by law, or as may be necessary, or proper or

incidental to the purposes and objectives of this Executive Order. Sec. 6. Decision of the Board; Appeals therefrom and/or Review thereof. The Board, in the exercise of its powers and functions, shall sit and render its decisions en banc. Every such decision, order, or resolution of the Board must bear the concurrence and signature of at least two (2) members thereof. The decision, order or resolution of the Board shall be appealable to the Secretary within thirty (30) days from receipt of the decision: Provided, That the Secretary may motu proprio review any decision or action of the Board before the same becomes final. Sec. 7. Creation of Regional Franchising and Regulatory Offices. There shall be a Regional Franchising and Regulatory Office in each of the administrative regions of the country which shall be headed by a Board Regional Manager having the rank, salary and privileges of a Department Assistant Regional Director. The Regional Franchising and Regulatory Offices shall hear and decide uncontested applications/petitions for routes, within their respective administrative regions: Provided, That applications/petitions for routes extending their respective territorial jurisdictions shall be heard and decided by the Board. Sec. 8. Appeals. The decisions, orders or resolutions of the Regional Franchising and Regulatory Offices shall be appealable to the Board within thirty (30) days from receipt of the decision. Sec. 9. Appropriations. Funds needed to carry out the provisions of this Executive Order shall be taken from the funds available in the Department of Transportation and Communications. Thereafter, the approved budget of the Board shall be included in the General Appropriations Act. Sec. 10. Effectivity. This Executive Order shall take effect immediately. Done in the City of Manila, this 19th day of June, in the year of Our Lord, nineteen hundred and eighty-seven

EXECUTIVE ORDER NO. 125 January 30, 1987 REORGANIZING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS DEFINING ITS POWERS AND FUNCTIONS AND FOR OTHER PURPOSES. RECALLING that the reorganization of the government is mandated expressly in Article II, Section 1 (a), and Article III of the Freedom Constitution; HAVING IN MIND that pursuant to Executive Order No. 5 (1986), it is directed that necessary and proper changes in the organizational and functional structures of the government, its agencies and instrumentalities, be effected in order to promote efficiency and effectiveness in the delivery of public services; CONSIDERING that viable and dependable transportation and communications networks are necessary tools for economic recovery; CONSIDERING further that rapid technological advances in communication facilities require a distinct response to the peculiar problems of this field; REALIZING that the growing complexity of the transportation sector has necessitated its division into various sub-sectors to facilitate the regulation and promotion of the sector as a whole; and REALIZING further that the State needs to regulate these networks and promote their continuous upgrading in order to preserve their viability and enhance their dependability; NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by the sovereign will of the Filipino people and the Freedom Constitution, do hereby order: Sec. 1. Title. This Executive Order shall otherwise be known as the Reorganization Act of the Ministry of Transportation and Communications. Sec. 2. Reorganization. The Ministry of Transportation and Communications is hereby reorganized, structurally and functionally, in accordance with the provisions of this Executive Order.

Sec. 3. Declaration of Policy. The State is committed to the maintenance and expansion of viable, efficient and dependable transportation and communications systems as effective instruments for national recovery and economic progress. It shall not complete as a matter of policy with private enterprise and shall operate transportation and communications facilities only in those areas where private initiatives are inadequate or non-existent. Sec. 4. Mandate. The Ministry shall be the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated networks of transportation and communication systems as well as in the fast, safe, efficient and reliable postal, transportation and communications services. To accomplish such mandate, the Ministry shall have the following objectives: (a) Promote the development of dependable and coordinated networks of transportation and communications systems; (b) Guide government and private investment in the development of the country's intermodal transportation and communications systems in a most practical, expeditious, and orderly fashion for maximum safety, service, and cost effectiveness; (c) Impose appropriate measures to that technical, economic and other conditions for the continuing economic viability of the transportation and communications entities are not jeopardized and do not encourage inefficiency and distortion of traffic patronage; (d) Develop an integrated plan for a nationwide transmission system in accordance with national and international telecommunications service requirements including, among others, radio and television broadcast relaying, leased channel services and data transmission; (e) Guide government and private investments in the establishment, operation and maintenance of an

international switching system for incoming and outgoing telecommunications services; (f) Encourage the development of a domestic telecommunications industry in coordination with the concerned entities particularly, the manufacture of communications/electronics equipment and components to complete and support, as much as possible, the expansion, development, operation and maintenance of the nationwide telecommunications network; (g) Provide for a safe, reliable and efficient postal system for the country. Sec. 5. Powers and Functions. To accomplish its mandate, the Ministry shall have the following powers and functions: (a) Formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communications systems at the national, regional and local levels; (b) Establish and administer comprehensive and integrated programs for transportation and communications, and for this purpose, may call on any agency, corporation, or organization, whether public or private, whose development programs include transportation and communications as an integral part thereof, to participate and assist in the preparation and implementation of such programs; (c) Assess, review and provide direction to transportation and communications research and development programs of the government in coordination with other institutions concerned; (d) Administer all laws, rules and regulations in the field of transportation and communications; (e) Coordinate with the Ministry of Public Works and Highways in the design, development, rehabilitation,

improvement, construction, maintenance and repair of telecommunications, ports, airports and railways projects and facilities including navigational aids and implement its development works through competitive bidding, negotiated contracts of other methods as the President may authorize; (f) Establish operate and maintain a nationwide postal system that shall include mail processing, delivery services, and money order services and promote the art of philately; (g) Sub-allocate series of frequencies of bands allocated by the International Telecommunications Union to the specific services; (h) Accredit foreign aircraft manufacturer and/or international organizations for aircraft certification in accordance with procedures and standards established by the Bureau of Air Transportation; (i) Deputize the Philippine Airlines and/or the Airline Pilots Association of the Philippines for licensing of pilots in accordance with rules, procedures and standards established by the Bureau of Air Transportation; (j) Perform such other powers and functions as may be prescribed by law. Sec. 6. Authority and Responsibility. The authority and responsibility for the exercise of the mandate of the Ministry and for the discharge of its powers and functions shall be vested in the Minister of Transportation and Communications, hereinafter referred to as the Minister, who shall have supervision and control over the Ministry and shall be appointed by the President. Sec. 7. Office of the Minister. The Office of the Minister shall consist of the Minister and his immediate staff. Sec. 8. Deputy Ministers. The Minister shall be assisted by four (4) Deputy Ministers appointed by the President upon the recommendation of the Minister, one to be responsible for Attached Agencies and Corporations, one

for Transportation, one for Communications and one for Ministry Regional Offices. Sec. 9. Assistant Ministers. The Minister shall also be assisted by seven (7) Assistant Ministers appointed by the President upon the recommendation of the Minister, each of whom shall head each of the following: (a) Administrative and Legal Service; (b) Finance and Management Service; (c) Planning and Research Service; (d) Technical Service; (e) Luzon Regional Offices; (f) Visayas Regional Offices; (g) Mindanao Regional Offices. Sec. 10. Structural organization. The Ministry, side from the Minister Proper which is comprised of the Offices of the Minister, Deputy and Assistant Ministers, shall be composed of the Bureaus and Ministry Regional Offices. There shall be four (4) Bureaus, namely: Bureau of Land Transportation, Bureau of Air Transportation, Bureau of Posts, and Bureau of Telecommunications. The Office of the Minister shall have direct line supervision and control over the Bureaus and Ministry Regional Offices. The Ministry Proper shall be responsible for developing and implementing policies, plans, programs and projects for the Ministry. The Bureaus shall be essentially staff in character. Sec. 11. Ministry Regional Offices. The Ministry shall have two (2) Ministry Regional Offices in each of the administrative regions of the country: The Ministry Regional Office for Transportation and the Ministry Regional Office for Communications. The present Regional Offices of the Bureau of Air

Transportation and Land Transportation Commission are hereby abolished and their functions are transferred to the respective Ministry Regional Offices for Transportation. A Ministry Regional Office for Transportation shall be headed by a Ministry Regional Director assisted by two (2) Assistant Ministry Regional Directors responsible for air and land affairs, respectively. The present Regional Offices of the Bureau of Posts and Bureau of Telecommunications are hereby abolished and their functions are transferred to respective Ministry Regional Office for Communications. A Ministry Regional Office for Communications shall be headed by a Ministry Regional Director assisted by two (2) Assistant Ministry Regional Directors for telecommunications and postal services, respectively. The abolition of the herein Regional Offices and the transfer of their functions shall be governed by the provisions of Section 19 (b) hereof. The Ministry Regional Offices shall be under the direct supervision of the Deputy Minister for Regional Offices. The Ministry Regional Offices shall be essentially line in character and shall be responsible for the delivery of all front line Services of the Ministry. For such purposes, a Ministry Regional Office shall have, within its administrative region, the following functions: (a) Implement laws, and policies, plans, programs, projects, rules and regulations of the Ministry; (b) Provide efficient, and effective service to the people; (c) Coordinate with regional offices of other ministries, offices and agencies; (d) Coordinate with local government units; (e) Perform such other functions as may be provided by law. Sec. 12. Bureau of Air Transportation. The Bureau of Air Transportation, as reorganized herein, shall have the functions of developing, formulating and recommending plans, policies, programs, projects, standards, specifications and guidelines related to air transportation including air space utilization, air traffic control and aeronautics communications and information services, aircraft and air navigational facilities, services, maintenance and operations. For such purposes, it shall, with the approval of the Minister:

(a) Establish and prescribe rules and regulations for the inspection and registration of aircrafts; (b) Establish and prescribe rules and regulations for the issuance of license to qualified airmen; (c) Establish and prescribe rules and regulations for the enforcement of laws governing air transportation, including the penalties for violations thereof, and for the deputization of appropriate law enforcement agencies in pursuance thereof; (d) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine Government as the proper arbiter of such charges or rates; (e) Administer and operate the Civil Aeronautics Training Center; (f) Perform such other functions as may be provided by law. Sec. 13. Bureau of Land Transportation. The Bureau of Land Transportation is hereby created and shall have the functions of developing, formulating and recommending plans, programs, policies, standards, specifications and guidelines pertaining to land transportation. For such purposes, it shall, with the approval of the Minister: (a) Establish and prescribe rules and regulations for routes, zones and/or areas of operations of particular operators of public land services; (b) Establish and prescribe rules and regulations for the issuance of certificates of public convenience for the operation of public and land transportation utilities and services such as motor vehicles, trimobiles, and railroad lines;

(c) Establish and prescribe rules and regulations for the inspection and registration of public and land transportation facilities such as motor vehicles, trimobiles and railroad lines: (d) Establish and prescribe rules and regulations for the issuance of license to qualified motor vehicle drivers, trimobile drivers, motor vehicle conductors, train engineers and train conductors; (e) Establish and prescribe the corresponding rules and regulations for the enforcement of laws governing land transportation, including the penalties for violation thereof, and for the deputization of appropriate law enforcement agencies in pursuance thereof; (f) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public and land utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine Government as the proper arbiter of such charges or rates; (g) Establish and prescribe the rules, regulations, procedure and standards for the accreditation of driving schools; (h) Perform such other functions as may be provided by law. Sec. 14. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall have the following functions: (a) Develop and formulate, plans, policies, programs, projects, standards, specifications and guidelines geared toward the promotion and development of the maritime industry, the growth and effective regulation of shipping enterprises, and for the national security objectives of the country; (b) Establish, prescribe and regulate routes, zones and/or areas of operation of particular operators of public water services;

(c) Issue Certificates of Public Convenience for the operation of domestic and overseas water carriers; (d) Register vessels as well as issue certificates, licenses or documents necessary or incident thereto; (e) Undertake the safety regulatory functions pertaining to vessel construction and operation including the determination of manning levels and issuance of certificates of competency to seamen; (f) Enforce laws, prescribe and enforce rules and regulations, including penalties for violation thereof, governing water transportation and the Philippine Merchant Marine with the aid of other law enforcement agencies; (g) Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots; (h) Determine, fix and/or prescribed charges and/or rates pertinent to the operation of public water transport utilities, facilitate all services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine Government as the proper arbiter if such charges or rates; (i) Accredit marine surveyors and maritime enterprises engaged in shipbuilding, shiprepair, shipbreaking, domestic and overseas shipping, ship management and agency; (j) Supervise the Philippine Merchant Marine Academy as reorganized herein in accordance with its charter, the provisions hereof and applicable laws, rules and regulations under the chairmanship of the maritime administrator; (k) Issue and register the continuous Discharge Book of Pilipino Seamen;

(l) Establish and prescribes rules and regulations, standards and procedures for the efficient and effective discharge of the above functions; (m) Perform such other functions as may now or hereafter be provided by law. Sec. 15. Bureau of Telecommunications. The Bureau of Telecommunications, as recognized herein, shall develop, formulate and recommend plans, policies, programs, standards, specifications and guidelines to provide telecommunications facilities, including telecommunications systems for purposes of augmenting limited or inadequate existing private telecommunications service; provide telecommunications services in areas where no such services are available; and assist the private sector engaged in telecommunication services. For such purposes, it shall, with the approval of the Minister: (a) Establish and prescribe rules and regulations for the operation and maintenance of such telecommunications facilities in areas not adequately served by the private sector in order to render such domestic and overseas services that are necessary or proper with due consideration for advances in technology; (b) Administer and operate the Telecommunications Training Institute; (c) Perform such other functions as may be provided by law. Sec. 16. Bureau of Posts. The Bureau of Posts, presently existing, shall have the functions of developing, formulating and recommending plans, policies, programs, standards, specifications and guidelines to provide safe, fast, reliable and efficient postal service in the country. For such purposes, it shall, with the approval of the Minister: (a) Establish and prescribe rules and regulations for the enforcement of laws governing postal services, including the penalties for violation thereof and for the deputization of appropriate law enforcement agencies in pursuance thereof;

(b) Determine, fix, and/or prescribe charges and/or rates for postal services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies of associations recognized by the Philippine Government as the proper arbiter of such charges or rates; (c) Establish and prescribe rules and regulations for the operation and maintenance of a nationwide postal system that shall include mail processing, delivery services and money order services, and the promotion of philately; (d) Perform such other functions as may be provided by law. Sec. 17. Abolition/Transfer/Consolidation. (a) The Land Transportation Commission is hereby abolished and its staff functions are transferred to the Bureau of Land Transportation as provided in Section 13 herein and its line functions are transferred to the Ministry Regional Offices as provided in Section 11 herein. Such transfer of functions is subject to the provisions of Section 19 (b) hereof. (b) PNL Leasing Inc. is hereby abolished and its functions are transferred to Philippine National Lines, Inc. subject to the provisions of Section 19 (b) hereof. (c) The National Aero Manufacturing Inc. and the Philippine Aero Systems, Inc. are hereby abolished in accordance with the provisions of Section 19 (a) hereof. (d) The Civil Aeronautics Board is hereby transferred from the Ministry as an attached agency in accordance with the provisions of Section 19 (a) hereof. Sec. 18. Attached Agencies and Corporations. (a) The following agencies and corporations are attached to the Ministry; the Philippine National Railways, the Maritime Industry Authority, the Philippine National Lines, Philippine

Aerospace Development Corporation, the Metro Manila Transit Corporation, the Office of Transport Cooperatives, the Philippine Ports Authority, the Philippine Merchant Marine Academy, the Toll Regulatory Board, the Light Rail Transit Authority, the Transport Training Center, the Civil Aeronautics Board, the National Telecommunications Commissions and the Manila International Airport Authority. (b) An Airport Security Center is hereby created within the Manila International Airport Authority, to plan, supervise, control, coordinate, integrate and direct intelligence and operational activities of all police and military units, security and safety service units, government monitoring and intelligence units and other security operating units employed by government entities and/or by private agencies in the Manila International Airport. The Center is under the direct supervision and control of the MIAA General Manager. Moreover, the Authority shall be authorized to organize a Manila International Airport Police Force with all the police powers necessary to implement the objectives of the Center. The exercise of supervision and control by the Airport Security Center does not include the transfer of appropriation, equipment and personnel to the said Authority; PROVIDED, that the Airport Security Center may cause the development of equipment and personnel in such manner it deems necessary in the discharge of its functions. Sec. 19. Transitory Provisions. In accomplishing the acts, of reorganization herein prescribed, the following transitory provisions shall be implied with, unless otherwise provided elsewhere in this Executive Order. (a) The transfer of a government unit shall include the functions, appropriations, funds, records, equipment, facilities, choses in action, rights, other assets, and liabilities, if any, of the transferred unit as well as the personnel thereof, as may be necessary, who shall, in a hold over capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Those

personnel of the transferred unit whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister or who are not reappointed shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of Section 20 hereof. (b) The transfer of functions which results in the abolition of the government unit that has exercised them shall include the appropriations, funds, records, equipment, facilities, choses in action, rights, other assets and personnel as may be necessary to the proper discharge of the transferred functions. The abolished unit's remaining appropriations and funds, if any, shall revert to the General Fund and its remaining assets, if any, shall be allocated to such appropriate units as the Minister shall determine or shall otherwise be disposed in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. Its liabilities, if any, shall likewise be treated in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. Its personnel shall, in a hold-over capacity, continue to perform their duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from the service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Its personnel, whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who are not reappointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20. (c) The transfer of functions which does not result in the abolition of the government unit that has exercised them shall include the appropriations, funds, records, equipment, facilities, choses in action, right, other assets and personnel as may be necessary to the proper discharge of the transferred functions. The liabilities, if any, that may have been incurred in connection with the discharge of the transferred functions, shall be treated in accordance with the Government Auditing Code and other pertinent laws, rules

and regulations. Such personnel shall, in a hold-over capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from the service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Personnel, whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who have not been reappointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20. (d) In case of the abolition of a government unit which does not result in the transfer of its functions to another unit, the appropriations and funds of the abolished unit shall revert to the General Fund, while the records, equipment, facilities, choses in action, rights, and other assets, thereof shall be allocated to such appropriate units as the Minister shall determine or shall otherwise be disposed in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. The liabilities of the abolished unit shall be treated in accordance with the Government Auditing Code and other pertinent laws, rules and regulations, while the personnel thereof, whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who have not been reappointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20. (e) In case of merger or consolidation of government units, the new or surviving unit shall exercise the functions (subject to the reorganization herein prescribed and the laws, rules and regulations pertinent to the exercise of such functions) and shall acquire the appropriations, funds, records, equipment, facilities, choses in action, rights, other assets, liabilities if any, and personnel, as may be necessary, of (1) the units that compose the merger unit or (2) the absorbed unit, as the case may be. Such personnel shall, in a hold over capacity, continue to perform their respective duties

responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from the service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Any such personnel, whose positions is not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who is not reappointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20. (f) In case of termination of a function which does not result in the abolition of the government unit which has performed such function, the appropriations and funds intended to finance the discharge of such function shall revert to the General Fund, while the records, equipment, facilities, choses in action, rights and other assets used in connection with the discharge of such function shall be allocated to the appropriate units as the Minister shall determine or shall otherwise be disposed in accordance with the Governing Auditing Code and other pertinent laws, rules and regulations. The liabilities, if any, that may have been incurred in connection with the discharge of such functions shall likewise be treated in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. The personnel who have performed such function, whose position are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who have not been reappointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20. Sec. 20. New Structure and Pattern. Upon approval of this Executive Order, the officers (the term "officer" as used in this Executive Order is intended to be within the meaning of the term "official as used in the Freedom Constitution) and employees of the Ministry shall, in a hold over capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from

government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. The new position structure and staffing pattern of the Ministry shall be approved and prescribed by the Minister, for the Ministry, within one hundred twenty (120) days from the approval of this Executive Order and the authorized positions created thereunder shall be filled with regular appointments by him or by the President as the case may be. Those incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service. Those separated from the service shall receive the retirement benefits to which they may be entitled under existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of one month basic salary for every year of service, or the equivalent nearest fraction thereof favorable to them on the basis of the highest salary received, but in no case shall such payment exceed the equivalent of 12 months salary. No court or administrative body shall issue any writ or preliminary injunction or restraining order to enjoin the separation/replacement of any officer or employee effected under this Executive Order. Sec. 21. Prohibition Against Changes. No change in the reorganization herein prescribed shall be valid except upon prior approval of the President for the purposes of promoting efficiency and effectiveness in the delivery of public services. Sec. 22. Implementing Authority of Minister. The Minister shall issue such orders, rules, regulations and other issuances as may be necessary to ensure the effective implementation of the provisions of this Executive Order. Sec. 23. Notice or Consent Requirements. If any reorganizational change herein authorized is of such substance or materiality as to prejudice third persons with rights recognized by law or conduct such that notice to or consent of creditors is required to be made or obtained pursuant to any agreement entered into with any of such creditors, such notice or consent

requirement shall be complied with prior to the implementation of such reorganizational change. Sec. 24. Funding. Funds needed to carry out the provisions of this Executive order shall be taken from funds available in the Ministry. Sec. 25. Change of Nomenclature. In the event of the adoption of a new Constitution which provides for a presidential form of government, the Ministry shall be called Department of Transportation and Communications and the titles of Minister, Deputy Minister, and Assistant Minister shall be changed to Secretary, Undersecretary and Assistant Secretary, respectively. Sec. 26. Separability. Any portion or provision of this Executive Order that may be declared unconstitutional shall not have the effect of nullifying other portions or provisions hereof, as long as such remaining portions or provisions can still subsist and be given effect in their entirety. Sec. 27. Repealing Clause. Presidential Decree No. 890 and Letters of Instruction Nos. 263 and 371 are hereby repealed. All laws, ordinances, rules, regulations, other issuances or parts thereof, which are inconsistent with this Executive Order, are hereby repealed or modified accordingly. Sec. 28. Effectivity. This Executive Order shall take effect immediately upon its approval. APPROVED in the City of Manila, Philippines, this 30th day of January, in the year of Our Lord, nineteen hundred and eighty-seven.

Republic of the Philippines Congress of the Philippines Metro Manila Twelfth Congress Third Regular Session

linkage; (d) serve as a naval and military auxiliary in times of war and other national emergencies; and (e) function as an employment support base for our Filipino seafarers. To attain these objectives, it is hereby declared to the policy of the State to; (a) promote Filipino ownership of vessels operated under the Philippine flag; (b) attract private capital to invest in the shipping industry by creating a healthy and competitive investment and operating environment; (c) provide necessary assistance and incentives for the continued growth of the Philippine domestic merchant marine fleet; (d) encourage the improvement and upgrading of the existing domestic merchant marine fleet and Filipino crew to meet international standards; (e) ensure the continued viability of domestic shipping operations; and (f) encourage the development of a viable shipbuilding and ship repair industry to support the expansion and modernization of the Philippine domestic merchant marine fleet and its strict adherence to safety standards which will ensure the seaworthiness of all sea-borne structures. SEC. 3. Definition of Terms. - As used in and for purposes of this Act, the following terms, whether in singular or plural are hereby defined as follows: (a) "Domestic shipping" shall mean the transport of passenger or cargo, or both, by ships duly registered and licensed under Philippine law to engage in trade and commerce between Philippine ports and within Philippine territorial or internal waters, for hire or compensation, with general or limited clientele, whether permanent occasional or incidental, with or without fixed routes, and done for contractual or commercial purposes; (b) "Domestic trade" shall mean the sale, barter or exchange of goods, materials or products within the Philippines; (c) "Domestic Ship Operator" or "Domestic Ship Owner" may be used interchangeably and shall mean a citizen of the Philippines, or a commercial partnership wholly owned by Filipinos, or a corporation at least sixty percent (60%) of the capital of which is owned by Filipinos, which is duly authorized by the Maritime Industry Authority (MARINA) to engage in the business of domestic shipping;

Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand three. Republic Act No. 9295 May 03, 2004

AN ACT PROMOTING THE DEVELOPMENT OF PHILIPPINE DOMESTIC SHIPPING, SHIPBUILDING, SHIP REPAIR AND SHIP BREAKING, ORDAINING REFORMS IN GOVERNMENT POLICIES TOWARDS SHIPPING IN THE PHILIPPINES AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: CHAPTER I GENERAL PROVISIONS SECTION 1. Short Title. - This Act shall be known as the "Domestic Shipping Development Act of 2004." SEC. 2. Declaration of Policy. - The State recognize that shipping is a necessary infrastructure, which is vital to the economic development of our country. The Philippines needs a strong and competitive domestic merchant fleet owned and controlled by Filipinos or by corporations at least sixty percent (60%) of the capital of which is owned by Filipinos and manned by qualified Filipino officers and crew which shall: (a) bridge our islands by ensuring safe, reliable, efficient, adequate and economic passenger and cargo services; (b) encourage the dispersal of industry and the economic development of our regional communities by ensuring the availability of regular, reliable and efficient shipping services; (c) ensure the growth of exports by providing necessary, competitive and economical domestic sea

(d) "Shipper" shall mean any person, partnership or corporation who shall procure for itself the services of a domestic ship operator for the carriage of its cargo in the domestic trade upon payment of proper compensation; (e) "MARINA" shall mean the Maritime Industry Authority; (f) "Ship" or "Vessel" may be used interchangeably and shall mean any kind, class or type of craft or artificial contrivance capable of floating in water, designed to be used, or capable of being used as a means of water transport in the domestic trade for the carriage of passengers or cargo, or both, utilizing its own motive power or that of another; (g) "Importation" shall mean the direct purchase, lease or charter of newly constructed or previously owned ships, or the purchase of ship's spare parts from foreign sources or from registered enterprises operating in special economic zones as this terms is defined in Republic Act No. 7916 entitled, "The Special Economic Zone Act of 1995," (h) "Spare parts" shall mean the replacement parts or components of vessel, including but not limited to its hull, engines, machineries, equipment, appurtenances, necessaries accessories, article, supplies, materials, steelplates, aluminum plates, other metal plates, communications, equipment, and other parts or components thereof, installed abroad the ships necessary for its safe and efficient navigation and operation; (i) "Certificate of Public Convenience' shall mean the license on authority issued by MARINA to a domestic ship operator to engage in domestic shipping; (j) "Cargo handling equipment' shall mean any machinery, gear or equipment used by the ship operator or a duly authorized and licensed port operator to service or handle cargo, on board the vessel at the port or in the terminal or container yard such as, but not limited to cranes, forklifts, top lifts, stackers, tractor heads, containers, pallet boards and the like, including all spare parts, replacement parts,

appurtenances accessories, articles, supplies and materials thereof; (k) "Shipbuilding" shall mean the design, construction, launching and outfitting of all types of ships and watercraft; (l) "Ship repair" shall mean the overhaul, refurbishment renovation improvement, or alteration of the hull, machineries, equipment, outfits and components of all types of ships; (m) "Shipyard" shall mean the shipbuilding or repair facilities which have the capability to lift vessels above the waterline in order to effect ship work on vessels, appendages, structure, machinery and equipment; and (n) "Shipbuilder" or "Ship repairer" shall mean a citizen of the Philippines, or a commercial partnership owned by majority of Filipinos or a corporation incorporated under the laws of the Philippines, the capital of which is owned or controlled in any proportion by Filipinos or by foreign nationals, or by both such Filipinos or foreign nationals, or by corporations whether Filipino or foreign-owned, which is duly authorized by the MARINA to engage in the business of shipbuilding or ship repair or to otherwise operate a shipyard, graving dock or marine repair yard. CHAPTER II INVESTMENT INCENTIVES SEC. 4. Investment Incentives. - To insure the continued viability of domestic shipping, and to encourage investments in the domestic shipping industry, the following incentives shall be granted to qualified domestic ship operators: (a) Exemption from value-added tax on the importation and local purchase of passenger and/or cargo vessels of one hundred fifty (150) tons and above, including engine and spare parts of said vessels: Provided: That the vessels to be imported shall comply with the age limit requirement at the time of acquisition counted from the date of the vessels,

original commissioning, as follows; 1) For passenger and/or cargo vessels, the age limit is fifteen (15) years old, 2) For tankers, the age limit is ten (10) years old, and 3) For highspeed passenger crafts, the age limit is five (5) years old; and (b) Exemption from value-added tax on the importation of life saving equipment , safety and rescue equipment and communication and navigational safety equipment, steel plates and other metal plates including marine-grade aluminum plates, used for transport operations. The importation of the articles under Section 4(a) and (b) of the Act shall be granted exemption from value-added tax subject to the following conditions: (1) That said articles are not manufactured domestically in sufficient quantity, of comparable quality and at reasonable prices; (2) That said articles are directly imported by a MARINA-registered domestic shipping operator; (3) That said articles are reasonably-needed and will be used exclusively by the registered domestic shipping operator in its transport operations; (4) That the approval of MARINA was obtained prior to the importation of said articles; and (5) That exemption from value-added tax on the importation of said articles shall be granted to all domestic shipping operators within a period of ten (10) years from the effectivity of this Act. Any sale, transfer or disposition of articles covered under Section 4 (a) and (b) within ten (10) years from the effectivity of this Act to another registered shipping operator enjoying similar incentive shall require prior approval of MARINA. If the sale, transfer or disposition was made without prior approval of MARINA, both the vendor and the transferee or assignee shall be liable to pay twice the amount of valueadded tax exemption given him: Provided, further, That if the sale transfer or disposition was made to nonexempt entity or to a party other than a registered domestic ship operator within ten (10) years from the effectivity of this Act, both the vendor and the transferee or assignee shall be solidarily liable to pay twice the amount of the value-added tax waived: Provided, finally. That the sale, transfer or disposition made

after ten (10) years from the effectivity of this Act shall be made by informing MARINA in writing. The purchasers, transferees, or recipients shall be considered the importers thereof, who shall be liable for any internal revenue tax on such importation. The tax due on such importation shall constitute a lien on the article itself, and such lien shall be superior to all charges or liens on the goods, irrespective of the possessor thereof. The Bureau of Internal Revenue (BIR) shall be furnished with notice of actions taken by the MARINA. (c) Net operating loss carry over. A net operating loss in any taxable year immediately preceding the current taxable year, which had not been previously offset as a deduction from gross income shall be carried over for the next three (3) consecutive taxable years immediately following the year of such loss subject to the pertinent provisions of the National Internal Revenue Code of 1997, as amended. (d) Accelerated depreciation. Fixed assets my be depreciated as follows: (i) To the extent of not more than twice as fast as the normal rate of depreciation or depreciated at normal rate of depreciation if the expected life is ten (100 years or less; or (ii) Depreciation over any number of years between five (5) years and the expected life if the latter is more than ten (10) years, and the depreciation thereon allowed as deduction from taxable Income: Provided, That the domestic shipping operator notifies the BIR at the beginning of the depreciation period which depreciation rate allowed by this section will be used. CHAPTER III DEREGULATION OF THE DOMESTIC SHIPPING INDUSTRYAUTHORITY OF THE MARITIME INDUSTRY AUTHORITY

SEC. 5. Authority to Operate. - No franchise, certificate or any other form authorization for the carriage of cargo or passenger, or both in the domestic trade, shall be granted except of domestic ship owners or operators. SEC. 6. Foreign Vessels Engaged in Trade and Commerce in the Philippines Territorial Waters. - No foreign vessel shall be allowed to transport passengers or cargo between ports or place within the Philippine territorial waters, except upon the grant Special Permit by the MARINA when no domestic vessels is available or suitable to provide the needed shipping service and public interest warrants the same. SEC. 7. Issuance of Authority to operate. - the MARINA shall have the power and authority to issue certificates of public convenience to qualified domestic ship operators, taking into consideration the economic and beneficial effect which the proposed services shall have to the port province or region which it proposes to serve, and the financial capacity of the domestic ship operator to provide and sustain safe, reliable, adequate, efficient and economic service in accordance with the standards set by the government regulation. Every domestic ship operator shall state in its application the route it proposes to serve, and the service it proposes to offer. Domestic ship operators who do not intend to operate in a fixed route shall nevertheless state in its application the service it proposes to offer. SEC. 8. Deregulation of the Domestic Shipping Industry. - In order to encourage investments in the domestic shipping industry by existing domestic ship operators and attract new investment from new operators and investors, domestic ship operators are hereby authorized to establish their own domestic shipping rates: Provided, That effective competition is fostered and public interest is served. The MARINA shall monitor all shipping operations and exercise regulatory intervention where it is established after due process that public interest needs to be protected and safeguarded. SEC. 9. Safety Standards. - All vessels operate by domestic ship operators shall at all times be in seaworthy condition properly equipped with adequate life-saving, communication, safety and other equipment operated and maintained in accordance with the standards set by MARINA, and manned by duly licensed and competent vessel crew.

The MARINA shall have the power to inspect vessels and all equipment on board to ensure compliance with safety standards. SEC. 10. Jurisdiction; Power; and Duties of MARINA. - The MARINA shall have the power and authority to: (1) Register vessels; (2) Issue certificates of public convenience or any extensions or amendments thereto, authorizing the operation of all kinds. Classes and types of vessels in domestic shipping: Provided, That no such certificate shall be valid for a period of more than twenty-five (25) years; (3) Modify, suspend or revoke at any time upon notice and hearing, any certificate, license or accreditation it may have issued to any domestic ship operator; (4) Establish and prescribe routes, zones or areas of operations of domestic ship operators; (5) Require any domestic ship operator to provide shipping services to any coastal area, island or region in the country where such services are necessary for the development of the area, to meet emergency sealift requirements, or when public interest so requires; (6) Set safety standards for vessels in accordance with applicable conventions and regulations; (7) Require all domestic ship operators to comply with operational and safety standards for vessels set by applicable conventions and regulations, maintain its vessels in safe and serviceable conditions, meet the standards of safety of life at sea and safe manning requirements, and furnish safe, adequate, efficient, reliable and proper service at all times; (8) Inspect all vessels to ensure and enforce compliance with safety standards and other regulations;

(9) Ensure that all domestic ship operators shall have the financial capacity to provide and sustain safe, reliable, efficient and economic passenger or cargo service, or both; (10) Determine the impact which any new service shall have to the locality it will serve; (11) Adopt and enforce such rules and regulations which will ensure compliance by every domestic ship operator with required safety standards and other rules and regulations on vessel safety; (12) Adopt such rules and regulations which ensure the reasonable stability of passengers and freight rates and, if necessary, to intervene in order to protect public interest; (13) Hear and adjudicate any complaint made in writing involving any violation of this law or the rules and regulations of the Authority; (14) Impose such fines and penalties on, including the revocations of licenses of any domestic ship operator who shall fail to maintain its vessels in safe and serviceable condition, or who shall violate or fail to comply with safety regulations; (15) Investigate any complaint made in writing against any domestic ship operator, or any shipper, or any group of shippers regarding any matter involving violations of the provisions of this Act; (16) Upon notice and hearing, impose such fines, suspend or revoke certificates of public convenience or other license issued, or otherwise penalize any ship operator, shipper or group of shippers found violating the provisions of this Act; and (17) Issue such rules and regulations necessary to implement the provisions of this Act: Provided, That such rules and regulations cannot change or in any way amend or be contrary to the intent and purposes of this Act.

CHAPTER IV RATES SEC. 11. Rates. - Every domestic ship operator shall have the right to fix its own passenger pr cargo rates, or both. SEC. 12. Government Cargo. - Every domestic ship operator shall have the obligation to carry mail on mutually agreed terms and conditions and preferential, negotiated conditions shall be given for the carriage of other government cargo. SEC. 13. Monopolized Routes. - The MARINA shall have the authority to draw up such rules and regulations necessary for service in monopolized routes to determine the fairness of passenger and cargo rates needed to sustain the service taking into consideration the economic and beneficial effect which the service shall have to the port, province, island or region it proposes to serve, the volume of passengers and cargo available, the level and quality of service offered by the ship operator, and the available port facilities and terminal handling services. CHAPTER V COMPULSORY INSURANCE COVERAGE SEC. 14. Compulsory Insurance Coverage for Passenger and Cargo. To meet its financial responsibility for any liability which a domestic ship operator may incur for any breach of the contract of carriage, every domestic ship operator shall be required to submit annually the following; (1) Adequate insurance coverage for each passenger in an amount to be computer in accordance with existing laws, rules and regulations, and the total amount of such coverage shall be equivalent to the total number of passenger accommodations being offered by the vessel; (2) Adequate insurance coverage for cargo in an amount to be computed in accordance with existing laws, rules and regulations, and the total amount of such coverage shall be equivalent to the total cargo capacity being offered by the vessel; and

(3) If a domestic ship operator should offer both passenger and cargo service, then the total insurance coverage shall be in the total sum equivalent to that stipulated in paragraphs (1) and (2) of this section. Provided, That if a domestic ship operator should operate more than one (1) vessels, the amount of insurance coverage required under this section, for purposes of providing financial capacity, shall be the amount equivalent to the total number of passenger accommodations, or total cargo capacity, or both, of the largest operating vessel which the domestic ship operator may have: Provided, further, That the total insurance coverage which may be required of any domestic ship operator shall not exceed the value of such vessel: Provided, finally, that adequate insurance coverage shall be obtained from any duly licensed insurance company or international protection and indemnity association. SEC. 15. Other Insurance Coverage. - the MARINA shall have the power to require every ship operator to obtain such other compulsory insurance coverage necessary to adequately cover claims for damages. CHAPTER VI PROHIBITED ACT AND PRACTICES SEC. 16. Prohibited Acts and Practices of Domestic Ship Operators. the MARINA shall have the power to impose such fines and penalties against every domestic ship operator who shall: (1) Operate without a valid certificate of public convenience, accreditation or other form of authority required by this Act; (2) Refuse to accept or carry any passenger or cargo without just cause; (3) Fail to maintain its vessels in safe and serviceable condition, or violate safety rules and regulations; (4) Fail to obtain or maintain adequate insurance coverage; (5) Fail to meet or maintain safe manning requirements; and

(6) Such other acts which the MARINA shall determine, after due notice and hearing, to be detrimental or prejudice to the safety, stability and integrity of domestic shipping. CHAPTER VII FEE, FINES AND PENALTIES SEC. 17. Fees. - The MARINA shall have the power to impose, fix, collect and receive, in accordance with the schedules approved by its Board, such fees necessary for the licensing, supervision, regulation, inspection, approval and accreditation of domestic ship operators and the promotion and development of the country's maritime industry. The MARINA shall have the power to establish and manage a trust fund for this purpose. Fees prescribed by the MARINA under this section shall be imposed and collected in order to recover the cost for rendering the service and shall not be used in order to impose a penalty on the domestic ship operator. Excessive fees, multiple fees and duplicative fees shall at all times be avoided. The supervision fee provided in Section 40(e) of Commonwealth Act No. 146 insofar as the same applies to the operation, management, control and regulation of vessels, steamboats, steamship lines, ferries, water craft and the like, is hereby repealed. SEC. 18. Fines and Penalties. - The MARINA, upon notice and hearing and a determination of the existence of any breach or violation of the provisions of this Act or any rules and regulations issued pursuant thereto, shall have the power and authority to: (1) Suspend or revoke any certificate of public convenience, license, permit, accreditation, or other form of authority issued to any domestic ship operator who shall violate any provision of this Act or any rules and regulations issued pursuant thereto, or any condition impose on such certificate of public convenience, license, permit or accreditation; (2) Impose a fine on a domestic ship operator who shall operate without a valid certificate of public convenience, license, permit, accreditation or other form of authority;

(3) Impose a fine on a domestic ship operator in an amount to be determined by the MARINA for refusing to accept, or to carry passengers or cargo, without just cause, or for engaging in any prejudicial, discriminatory or disadvantageous act towards any class of passengers or shippers; (4) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA, or suspend or revoke the certificate of public convenience of such domestic ship operator, or both, who shall fail to meet the standards of such safety or who refuses to comply with or violates safety regulations imposed by the MARINA or fails to maintain its vessels in safe and serviceable condition; (5) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA, or impose such other penalty, including the revocation of any certificate or license, who fails to procure or renew required insurance policies; (6) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA or impose such other penalty, including the revocation of any certificate or license who fails to meet or maintain safe manning requirements; and (7) Impose such other fines and penalties the MARINA may deem necessary and appropriate in order to enforce the provision of this Act. CHAPTER VIII SHIPBUILDING Sec. 19. Shipbuilding and Ship Repair Investment Incentives. T o encourage investments and to and ensure the development of a viable shipbuilding and ship repair industry, the following incentives are hereby granted: (a) Exemption from value-added tax on the importation of capital equipment, machinery, spare parts, life-savings ang

navigational equipment, steel plates and other metal plates including marine -grade aluminum plates to be used in the construction, repair, renovation or alteration or any merchant marine vessel operated or to be operated in the domestic trade. The importation of the above articles shall be granted exemption from value-added tax subject to the following conditions: (1) That said articles are not manufactured domestically in sufficient quantity, of comparable quality and at reasonable prices; (2) That said articles are directly imported by a MARINA-registered shipbuilders and ship repairer; (3) That said articles are reasonably needed and will be used exclusively by the registered shipbuilders and ship repairer; (4) That the approval of MARINA was obtained prior to the importation of said articles ; and (5) That shipbuilders and ship repairers may avail of the exemption from value-added tax provided herein within a period of ten (10) years from the approval of this Act. Any sale, transfer or disposition of articles under Section 19 (a) within ten (10) years from the effectivity of this Act to another registered shipbuilder or repairer enjoying similar incentive shall require prior approval of MARINA. If the sale, transfer or disposition was made without prior approval of MARINA, both the vendor and the transferee or assignee shall be liable to pay twice the amount of the value-added tax exempt given him: Provided, further, That if the sale, tranfer or disposition was made to a nonexempt entity or to a party other than that a registered shipbuilder or repairer within ten (10) years from the effectivity of this Act, both the vendor and the transferee or assignee shall be solidarily liable to pay twice the amount of the value-added tax waived; Provided, finally, That the sale, transfer or disposition made after ten (10) years from the effectivity of this Act shall be made by Informing MARINA in writing. The purchaser, transferees or recipients shall be considered the Importers thereof, who shall be liable for any internal revenue tax on such importation. The tax due on such importation shall constitute a lien on the foods superior to all changes or liens on the goods, irrespective of the possessor thereof. The BIR

shall be furnished with notice of actions taken by the MARINA. (b) Net operating loss carry-over. A net operating loss in any taxable year immediately preceding the current taxable year, which had not been previously offset as a deduction from gross income shall be carried over as a deduction from gross income for the next three (3) consecutive taxable years immediately following the year of such loss subject to the pertinent provisions of the National Internal Revenue Code of 1997, as amemded; (c) Accelerated depreciation. Fixed assets may be depreciated as follow: (i) To the extent of not more than twice as fast as the normal rate of depreciation or depreciated at normal rate of depreciation if the expected life is ten (10) years or less; or (ii) Depreciated over any number of years between five (5) years and the expected life if the latter is more than ten (10) years, and the depreciation thereon allowed as deduction from taxable income. Provided, That the registered shipbuilder and ship repairer notifies the BIR at the beginning of the depreciation period which depreciation rate allowed by this section will be used. SEC. 20. Restrictions on Vessel Importation. - Ten (10) years from the effective date of this Act and every year thereafter, the MARINA shall evaluate and determine the progressive capability of MARINA- registered shipyards to build and construct new vessels for the domestic trade. In the first year of evaluation, the MARINA shall determine the capability of MARINA-registered shipyards to build new vessels below 500 GRT. If, upon evaluation, the capability of MARINA-registered shipyards to build classed vessels below 500 GRT in quantities sufficient to meet domestic demand is proven, then all domestic ship operators shall be discouraged from importing new or previously owned vessels that are less than 500 GRT for the domestic trade and vessels built in MARINA-registered shipyards shall be

given priority for entry in the Philippines Registry and allowed to operate in the domestic trade. The MARINA shall undertake a yearly evaluation of the progressive capabilities of all MARINA-registered shipyards to build larger classed vessels for the domestic trade in quantities sufficient to meet the demand of domestic ship owners and shall correspondingly adjust the size of vessels which may be sourced from MARINA-registered shipyards. CHAPTER IX TRANSITORY PROVISIONS SEC. 21. Period of Transition. - Upon the approval of this Act existing liner operators shall continue to operate in their route. SEC. 22. Classification of Vessels in the Domestic Trade. - A vessels, whether newly built or previously owned, which are acquired or after the effectivity of this Act shall be classed by a government recognized classification society on the date of acquisition prior to the operation in the domestic trade. SEC. 23. Retirement of Old Vessels. - Immediately upon the approved of this Act, the MARINA shall prepare and implement a mandatory vessel retirement program for all unclassed vessels that fail to meet the classification standards of a government-recognized classification society. All vessels which have attained the maximum vessel age stipulate by MARINA's mandatory vessel retirement program and which do not carry a class certificate issued by a government-recognized classification society shall not be allowed to operate in the domestic trade and shall be automatically de-listed from the Philippine Registry. CHAPTER X FINAL PROVISIONS SEC. 24. Temporary Take-Over of Operations. - In times of national emergency, when the public interest so requires, the State may during emergencies and under reasonable terms prescribed by it, temporary take over or direct the operations or any vessel engaged in domestic trade and commerce, or prescribe its rates or routes of operation. Immediately upon the cessation of the emergency, the State shall immediately reinstate to the

domestic ship operation of its vessel under the same terms and conditions prior to the occurrence of the emergency. SEC. 25. Separability Clause. - If, for any reason, any section, subsection, sentence, clause or term of this Act is held to be illegal invalid or unconstitutional, such parts not affected by such declaration shall remain in full force and effect. SEC. 26. Repealing Clause. - The provisions of Commonwealth Act No. 146, insofar as the same applies to the operation, management control and regulation of vessels, steamboats, steamships, lines, ferries, water craft and the like, as well as the provisions of Presidential Decree No. 474, Executive Order Nos. 125 and 125-A, and such other laws, presidential decrees, executive orders, issuances, rules and regulations or parts thereof, which are inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly. SEC. 27. Effectivity. - This Act shall take effect after fifteen (15) days following its publication in at least two (2) newspapers of general circulation.

Approved, FRANKLIN DRILON President of the Senate JOSE DE VENECIA JR. Speaker of the House of Representatives

This Act which is a consolidation of Senate Bill No. 2731 and House Bill No. 5563 was finally passed by the Senate and House of Representatives on February 6, 2004 and February 7, 2004, respectively. OSCAR G. YABES Secretary of Senate ROBERTO P. NAZARENO Secretary General House of Represenatives

Approved: May 03, 2004 GLORIA MACAPAGAL-ARROYO President of the Philippines

Republic of the Philippines CONGRESS OF THE PHILIPPINES Metro Manila Fourteenth Congress Third Regular Session

(b) To inspections on all merchant ships and vessels, including but shall not be limited to inspections prior to departure, to ensure and enforce compliance with safety standards, rules and regulations; (c) To detain, stop or prevent a ship or vessel which does not comply with safety standards, rules and regulations from sailing or leaving port; (d) To conduct emergency readiness evaluation on merchant marine vessels; (e) Subject to the approval of the Secretary of the DOTC, to issue and enforce rules and regulation for the promotion of safety and life and property at sea on all maritime-related activities; (f) To coordinate, develop, establish, maintain and operate aids to navigation, vessel traffic system, maritime communications and search and rescue facilities within the maritime jurisdiction of the Philippines; (g) To remove, destroy or low to port, sunken or floating hazards to navigation, including illegal fish and vessels, at or close to sea lanes which may cause hazards to the marine environment; (h) To issue permits for the salvage of vessels and to supervise all marine salvage operations, as well as prescribe and enforce rules and regulations governing the same; (i) To render aid to persons and vessels in distress and conduct search rescue in marine accidents within the maritime jurisdiction of the Philippines, including the high seas, in accordance with applicable international conventions. In the performance of this function, the PCG may enlist the services of other government agencies and the merchant marine fleet;

Begun and held in Metro Manila, on Monday, the twenty-seven day of July, two thousand nine. Republic Act No. 9993 AN ACT ESTABLISHING THE PHILIPPINES COAST GUARD AS AN ARMED AND UNIFORMED SERVICE ATTACHES TO THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, THEREBY REPEALING REPUBLIC ACT NO. 5173, AS AMENDED, AND FOR OTHER PURPOSES. Be if enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Title. - This Act shall be known as the "Philippines Coast Guard Law of 2009" Section 2. Establishment. - The Philippine Coast Guard, hereinafter referred to as the PCG, is hereby established as an armed and uniformed service attached to the Department of Transportation and Communications (DOTC): Provided, That in times of war, as declared by Congress, the PCG or parts thereof, shall be attached to the Department of National Defense. Section 3. Powers and Functions. - The PCG shall have the following powers and functions: (a) To enforce regulations in accordance with all relevant maritime international conventions, treaties or instruments and national laws for the promotion of safety of life property at sea within the maritime jurisdiction of the Philippines and conduct port state control implementation;

(j) To investigate the inquire into the causes of all maritime accidents involving death, casualties and damage to properties;
lawphil.net

Gender sensitivity shall also be employed in all its internal policies, strategies, budget, projects, structures and mechanisms, including but not limited to hiring, promotions, assignment, training opportunities, pay and benefits. A gender perspective should likewise be integrated in all its training programs, especially for maritime search and rescue. Section 5. The PCG Commandant. - The PCG shall be headed by a Commandant who shall carry the rank of Coast Guard Admiral; Provided, that he shall be appointed by the president from among the Flag Officers in the Coast Guard service. He shall hold a command-at-sea badge and must have served as a District Commander of the PCG. The Commander shall have a maximum term of three (3) years. A commandant who has served for three (3) years prior to his compulsory retirement shall be considered retired and entitled to all the benefits available to a Coast Guard officer as if he is compulsory retired. Section 6. Organization. - The PCG shall consist of the following categories of officers and employees; (a) PCG officers; (b) PCG non-officers; (c) PCG non-uniformed personnel; (d) Probationary ensign; and (e) Cadets and Cadettes. Section 7. Officer Rank Distribution. - The officer rank distribution or the PCG shall be as follows: two per centum (2%) in the Flag Officer rank; six per centum (6%) in the rank of Coast Guard Captain; twelve per centum (12%) in the rank of Coast Guard Commander; eighteen per centum (18%) in the rank of Coast Guard Lieutenant Commander; Twenty per centum (20%) in the rank of Coast Guard Lieutenant; and forty-two per centum (42%) in the ranks of Coast Guard Lieutenant Junior Grade and Coast Guard Ensign; Provided, That such distribution is based on the ratio between officer and non-officer which is one (1) officer to every seven (7) non-officer: Provided. finally, That if the actual number in a rank is less than the number prescribed in a lower rank.

(l) To assist in the enforcement of laws on fisheries, immigration, tariff and customs, forestry, firearms and explosives, human trafficking, dangerous drugs and controlled chemicals, transnational crimes and other applicable laws within the maritime jurisdiction of the Philippines; (m) To board and inspect all types of merchant ships and watercrafts in the performance of this functions; (n) To enforce laws and promulgated and administer rules and regulations for the protection of marine environment and resources from offshore sources or pollution within the maritime jurisdiction of the Philippines; (o) To develop oil spill response, containment and recovery capabilities against ship-based pollution; (p) To grant, within the capabilities and consistent with its mandate, requests for assistance of other government agencies in the performance of their functions; (q) To organize, train and supervise the PCG Auxiliary (PCGA) for the purpose of assisting the PCG in carrying out its mandated functions; and (r) To perform such other functions that may be necessary in the attainment of the objectives of this Act. Section 4. Gender Sensitivity Program. - Gender concerns should be addressed in all planning activities, setting of priorities, allocating of resources and identifying actions and activities of the PCG. It should also incorporate a gender sensitive perspective in the implementation of such plans and programs.

Section 8. Distribution of Flag Officers. - The number of Flag Officers herein authorized shall be distributed to the various Flag Officer ranks in accordance with the schedule as hereunder prescribed: Coast Guard Admiral 1

Coast Guard Rear Admiral three (3) years Coast Guard Commodore Coast Guard Captain five (5) years seven (7) years

Coast Guard Vice Admiral 1 Coast Guard Rear Admira l5 Coast Guard Commodore 15 Total 22

Provided, That the herein prescribed Coast Guard ranks shall be distinct from those prescribed in the Philippine Navy: Provided, further, That the total number of Flag Officers prescribed under this section shall in no case be less than the number resulting from the implementation of Section 7 hereof, otherwise the latter shall apply. The number corresponding to the ranks of Coast Guard Admiral, Coast Guard Vice Admiral, Coast Guard Rear Admiral, and Coast Guard Commodore, as provided for in this section, shall be the maximum: Provided, That if the actual number in a rank, except in the case of Coast Guard Admiral and Coast Guard Vice Admiral, is less than the number herein prescribed the difference may be applied as an increase to the number prescribed in the lower rank: Provided, finally, That no officer shall be promoted to the rank of Coast Guard Commodore or higher unless there is an existing vacancy, and the officer is occupying a position in the table of organization that requires the rank of which he is being considered for promotion.
1avv phi 1

Unless easier separated, retired or promoted to the next higher rank or occupying a position calling for the higher rank in the PCG table of organization. Captain and Flag Officers shall be compulsory retired upon the attainment of the maximum tenure in rank herein prescribed, or upon reaching the age of compulsory retirement whichever comes earlier: Provided, That officers already holding these ranks upon the approval of this Act my be allowed one (1) year more of tenure in rank before the maximum tenure provided in this section shall be applied to them, unless they shall have already reached the compulsory retirement age under existing laws, in which case the compulsory retirement age shall prevail. Section 10. Maximum Tenure in Position. - Officer holding the following key positions are hereby limited a maximum tenure of three (3) years, unless otherwise earlier relieved by competent authority or compulsory retired under existing laws: Coast Guard Commandant; Coast Guard Deputy Commandant; and Coast Guard District Commander. Provided, That except for the Commandant, no other officer shall be assigned/designated to the aforementioned key positions or promoted to the rank of Commodore or higher if he has less than (1) year of active service remaining prior to compulsory retirement. Section 11. Organization of a PCG Auxiliary (PCGA). - The PCG shall continue to maintain, supervise, develop and train the PCGA as a civilian volunteer organization under the direct control and supervision of the PCG Commandant. The PCGA shall assist the PCG in the promotion of safety of life and property at sea. The preservation of the marine environment and its resources, the conduct of maritime search and rescue, the maintenance of aids to navigation and such other activities that enhance maritime community relations which include civic action, participation under the

Section 9. Maximum Tenure in Rank. - The maximum tenure of officers in the ranks of Captain and Flag Officer in the PCG are hereby prescribed as follows: Rank Coast Guard Admiral Coast Guard Vice Admiral Maximum Tenure in Rank three (3) years three (3) years

National Service Training Program, youth development, recreational safety and other related activities. Section 12. Appointments. - Appointments of PCG officers, which shall be in the initial rank of Coast Guard Ensign, shall be made by the Secretary of the DOTC upon the recommendation of the PCG Commandant. The initial appointment ranks of chaplains, dentists, lawyers, medical doctors and veterinarians shall be Coast Guard Lieutenant. No person shall be appointed as an officer of the PCG unless he is a natural born citizen of the Philippines, at least twenty-one (21) years of age at the date of appointment, physically fit and is a baccalaureate degree holder. The Appointment of the PCG Commandant and Flag Officers shall be approved by the President upon the recommendation of the Secretary of the DOTC. Appointments of all PCG non-officers shall be made by the PCG Commandant. Appointments of all non-uniformed personnel shall be in accordance with the Civil Service laws, rules and regulations. Section 13. Promotions. - The promotion of PCG officers, as submitted by the PCG Officers Selection and Promotion Board, shall be recommended by the PCG Commandant for the approval of the Secretary of the DOTC: Provided, That the promotion to the rank of Flag Officers in the PCG be submitted by a Board of Senior Officers to the PCG Commandant for approval of the President upon the recommendation of the Secretary of the DOTC: Provided, further, That said officers shall possess all the qualifications and none of the disqualification provided under pertinent laws, rules and regulations, specifically on the completion of the required schooling, training and minimum time and grade for said ranks. The PCG Commandant shall approve the promotion of PCG non-officers to the next higher rank based on the recommendation of the PCG Selection and Promotion Board for non-Officers: Provided, That special or meritorious promotion shall be extended to any PCG non-officer for acts of inconspicuous courage or outstanding achievement in the Coast Guard service as determined by the PCG Selection and Promotion Board for NonOfficers. The promotion of non-uniformed employees shall be governed by Civil Service laws, rules and regulations. Section 14. Salaries and Other Benefits. - The uniformed personnel of the PCG shall receive the same base pay, longevity pay, hazard pay and other benefits and allowances as are now or hereafter may be authorized for

corresponding salary grades and ranks in the Armed Forces of the Philippines (AFP) until such time that a new law is enacted for the purpose. The salaries and allowances of the non-uniformed employees of the PCG shall be in accordance with Civil Service laws, rules and regulations. Section 15. Active Service. - For purposes of this Act, the active service of PCG personnel hereof shall refer to services rendered as an officer, nonofficer, probationary ensign, or those rendered as a civilian official or employee in the PCG prior to the date of separation or retirement from the PCG: Provided, That the term active service shall include confirmed services rendered as a civilian employee in the Philippine government. Section 16. Disciplinary Action. - The applicable and pertinent provisions of the AFP Military Justice System shall be adopted in disciplinary cases against PCG officers and non-officers. The applicable rules, regulations and guidelines promulgated by the Civil Service Commission shall govern cases against PCG non-uniformed employees. Section 17. Retirement. - Upon attaining fifty-six (56) years of age or upon accumulation of thirty (30) years of continuous satisfactory active service, whichever comes later, a PCG officer or non-officer shall be compulsorily retired: Provided, That said officer or non-officer shall have a minimum of twenty (20) years of active service. The retirement of non-uniformed personnel shall be governed by Civil Service laws, rules and regulations. Section 18. Retirement Benefits. - Monthly retirement pay of officers and non-officers shall be fifty percent (50%) of base pay and longevity pay of the next higher grade last held in case of twenty (20) years of active service, increasing by two and one-half percent (2%) for every year of service rendered beyond twenty (20) years to a maximum of ninety percent (90%) for thirty-six (36) years of active service and over. The retirement benefits of non-uniformed personnel shall be governed by Civil Service/Government Service Insurance System Law. Section 19. Separation from Service. - Officers and non-officers who voluntary resign or otherwise fail to comply with the standards of competence and proficiency of the PCG, shall be separated from the service under existing laws, rules and regulations. The separation of non-uniformed personnel shall be in accordance with Civil Service laws, rules and regulations.

Section 20. Collection of Revenues. - The PCG shall collect fees, dues, charges and fines relevant to the exercise of its various functions. Section 21. Rules and Regulations. - The Secretary of the DOTC shall issue rules and regulations, determine, fix, and/or prescribe charges, rates, penalties pertinent, as may be necessary to implement the provisions of this Act, as well as the provision of acts, decrees and orders related to the implementation of the PCG functions. Section 22. PCG Properties and Lighthouse Reservations. - The PCG shall continue to exercise exclusive ownership, possession, control and supervision over all properties transferred to it by virtue of Executive Order No. 475 dated 30 March 1998 and Executive Order No. 477 dated 15 April 1998, such as inter alia, vessels, watercrafts, firearms, armaments, munitions, communications and electronic equipment, vehicles, buildings, real state and lighthouse reservations. Section 23. Establishment and Expansion of Coast Guard Bases and Facilities. - In accordance with other appropriate government agencies, the PCG shall develop and enhance its capabilities in the performance of its mandated functions and establish its strategic presence. Section 24. Appropriations. - The Secretary of the DOTC shall immediately prepare the necessary guidelines to cover the establishment of the PCG as an attached agency to the DOTC, the initial funding of which shall be charged against the current year's appropriations of the PCG and, thereafter, in the annual General Appropriations Act. Section 25. Transitory Provisions. - All previous appointments and promotions of PCG uniformed personnel made prior to the enactment of this Act shall remain valid and subsisting. Section 26. Separability Clause. - If for any reason, any provision of this Act is declared unconstitutional or invalid, such parts not affected thereby shall remain in full force and effect. Section 27. Repealing Clause. - All laws, decrees, executive orders, rules and regulations and other issuance's or parts thereof which are inconsistent with this Act are hereby repealed, amended or modified accordingly.

Section 28. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in any two (2) newspapers of general circulation's. Approved

(Sgd.) PROSPERO C. NOGRALES Speaker of the House of Representatives

(Sgd.) JUAN PONCE ENRILE President of the Senate

This Act which is a consolidation of Senate Bill No. 3389 and House Bill No. 5151 was finally passed by the Senate and the House of Representatives on December 9, 2009 and December 8, 2009, respectively.

(Sgd.) MARILYN B. BARUAYAP Secretary General House of Represenatives

(Sgd.) EMMA LIRIO-REYES Secretary of Senate

Approved: FEB 12, 2010 (Sgd.) GLORIA MACAPAGAL-ARROYO President of the Philippines

EXECUTIVE ORDER NO. 292 INSTITUTING THE ADMINISTRATIVE CODE OF 1987 Administrative Code of 1987 TOC Book IV The Executive Branch Title XV TRANSPORTATION AND COMMUNICATIONS CHAPTER 1 GENERAL PROVISIONS Section 1. Declaration of Policy. The State is committed to the maintenance and expansion of viable, efficient, fast, safe and dependable transportation and communications systems as effective instruments for national recovery and economic progress. It shall not compete as a matter of policy with private enterprise and shall operate transportation and communications facilities only in those areas where private initiatives are inadequate or non-existent. Section 2. Mandate. The Department of Transportation and Communications shall be the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated networks of transportation and communications systems as well as in the fast, safe, efficient and reliable postal, transportation and communications services. Section 3. Powers and Functions. To accomplish its mandate, the Department shall: (1) Formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communications systems at the national, regional and local levels;

(2) Establish and administer comprehensive and integrated programs for transportation and communications, and for this purpose, it may call on any agency, corporation or organization, whether public or private, whose development programs include transportation and communications as integral parts thereof, to participate and assist in the preparation and implementation of such programs; (3) Assess, review and provide direction to transportation and communications research and development programs of the government in coordination with other institutions concerned; (4) Administer and enforce all laws, rules and regulations in the field of transportation and communications; (5) Coordinate with the Department of Public Works and Highways in the design, location, development, rehabilitation, improvement, construction, maintenance and repair of all infrastructure projects and facilities of the Department. However, government corporate entities attached to the Department shall be authorized to undertake specialized telecommunications, ports, airports and railways projects and facilities as directed by the President of the Philippines or as provided by law; (6) Establish, operate and maintain a nationwide postal system that shall include mail processing, delivery services and money order services and promote the art of philately; (7) Issue certificates of public convenience for the operation of public land and rail transportation utilities and services; (8) Accredit foreign aircraft manufacturers or international organizations for aircraft certification in accordance with established procedures and standards; (9) Establish and prescribe rules and regulations for identification of routes, zones or areas of operation of particular operators of public land services;

(10) Establish and prescribe rules and regulations for the establishment, operation and maintenance of such telecommunications facilities in areas not adequately served by the private sector in order to render such domestic and overseas services that are necessary with due consideration for advances in technology; (11) Establish and prescribe rules and regulations for the issuance of certificates of public convenience for public land transportation utilities, such as motor vehicles, trimobiles and railways; (12) Establish and prescribe rules and regulations for the inspection and registration of air and land transportation facilities, such as motor vehicles, trimobiles, railways and aircraft; (13) Establish and prescribe rules and regulations for the issuance of licenses to qualified motor vehicle drivers, conductors and airmen; (14) Establish and prescribe the corresponding rules and regulations for enforcement of laws governing land transportation, air transportation and postal services, including the penalties for violations thereof, and for the deputation of appropriate law enforcement agencies in pursuance thereof; (15) Determine, fix or prescribe charges or rates pertinent to postal services and to the operation of public air and land transportation utility facilities and services, except such rates or charges as may be prescribed by the Civil Aeronautics Board under its charter and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates; (16) Establish and prescribe the rules, regulations, procedures and standards for the accreditation of driving schools; (17) Administer and operate the Civil Aviation Training Center (CATC) and the National Telecommunications Training Institute (NTTI); and

(18) Perform such other powers and functions as may be provided by law. Section 4. Organizational Structure. The Department shall consist of the Department Proper, the Department Regional Offices, the Land Transportation Franchising and Regulatory Board, and the Attached Agencies. CHAPTER 2 DEPARTMENT PROPER Section 5. Office of the Secretary. The Office of the Secretary shall consist of the Secretary, his immediate staff, the Franchising Review Staff and the Investigation, Security and Law Enforcement Staff. The Franchising Review Staff shall be headed by a Review Staff Director with the same rank, salary and privileges of a Department Regional Director who shall be appointed by the President upon the recommendation of the Secretary. The Franchising Review Staff shall assist the Secretary in the review of cases and matters pertaining to, among others, grants of franchises and the regulation thereof. The Investigation, Security and Law Enforcement Staff shall be headed by a Staff Director with the same rank, salary and privileges of a Department Service Chief. The Investigation, Security and Law Enforcement Staff shall be responsible for: (a) providing security and intelligence for the Department; (b) coordinating security and intelligence activities of security units of its offices and attached agencies; and (c) undertaking law enforcement, functions and activities relating to land transportation. Section 6. Undersecretaries. The Secretary shall be assisted by four (4) Undersecretaries. Each Undersecretary shall have control and supervision over the respective offices and services assigned to him by the Secretary. Section 7. Assistant Secretaries. The Secretary shall also be assisted by eight (8) Assistant Secretaries each of whom shall be responsible for the four (4) staff offices and four (4) line offices. Each Assistant Secretary

shall report to the respective Undersecretary to whom he is assigned by the President. Section 8. Staff Offices. The Department shall have the following staff offices: (1) The Office of the Assistant Secretary for Administrative and Legal Affairs composed of the Administrative Service and the Legal Service; (2) The Office of the Assistant Secretary for Finance and Comptrollership composed of the Finance and Management Service and the Comptrollership Service; (3) The Office of the Assistant Secretary for Planning and Project Development composed of the Planning Service and the Project Development Service; and (4) The Office of the Assistant Secretary for Management Information and Project Management composed of the Management Information Service and the Project Management Service. Section 9. Line Offices. The Department shall have the following line offices: (1) The Office of the Assistant Secretary for Land Transportation; (2) The Office of the Assistant Secretary for Postal Services; (3) The Office of the Assistant Secretary for Telecommunications; and (4) The Office of the Assistant Secretary for Air Transportation. The line offices shall each have an Executive Director who shall assist the respective Assistant Secretary in the implementation and enforcement of the policies, programs and projects, and the pertinent laws on their respective areas of responsibilities.

Section 10. Service Units in the Office of the Assistant Secretary for Land Transportation. There shall be two service units in the Office of the Assistant Secretary for Land Transportation, namely: (1) Law Enforcement Service, and (2) Traffic Adjudication Service. Each of the aforesaid service units shall be headed by a Service Chief to be appointed by the President upon recommendation of the Secretary of Transportation and Communication. Section 11. Functions of the Law Enforcement Service. The Law Enforcement Service shall have the same functions and powers as those that the former Law Enforcement Division in the Office of the Assistant Secretary for Land Transportation exercised. Section 12. Functions of the Traffic Adjudication Service. The Traffic Adjudication Service shall have the following powers and functions: (1) To hear and decide cases involving violations of laws, rules and regulations governing land transportation and to impose fines and/or penalties therefor; provided that violations resulting in damage to property and/or physical injuries or violations constituting offenses punishable under the Revised Penal Code and other penal laws shall be under the jurisdiction of the regular courts; (2) To order the impounding of motor vehicles and confiscation of plates or the arrest of violators of laws, rules and regulations governing land transportation; (3) To issue subpoena and subpoena duces tecum and to summon witnesses to appear in any proceedings thereof, and to administer oaths and affirmations; (4) To promulgate rules and regulations governing the proceedings before it; provided that except with respect to paragraph c, the rules of procedure

and evidence prevailing in the courts of law shall not be controlling and all reasonable means to ascertain the facts in each case shall be used without regard to technicalities of law and procedures but all in the interest of due process; and (5) To perform such other functions and duties as may be provided by law, or as may be necessary, or proper or incidental to its powers and functions. CHAPTER 3 DEPARTMENT SERVICES Section 13. Department Services. The Department Services shall include the following: (1) Administrative Service;

Section 14. Regional Offices. The Department shall have three (3) Regional Offices in each of the administrative regions of the country: the Regional Office for Land Transportation, the Regional Office for Telecommunications and the Regional Office for Postal Services. Each Regional Office shall be headed by a Regional Director to be assisted by an Assistant Regional Director. The Regional Offices shall essentially be line in character and shall be responsible for the delivery of all front line services of the Department. For such purposes, the Regional Offices shall have, within their respective administrative regions, the following functions: (1) Implement laws, policies, plans, programs, projects, rules and regulations of the Department; (2) Provide efficient and effective service to the people;

(2) Legal Service; (3) Finance and Management Service; (4) Comptrollership Service; (5) Planning Service; (6) Project Development Service; (7) Management Information Service; and (8) Project Management Service. Each of the above named services shall be headed by a Service Chief appointed by the President upon the recommendation of the Secretary. CHAPTER 4 REGIONAL OFFICES CHAPTER 5 REGULATORY BOARD Section 15. Land Transportation Franchising and Regulatory Board. The quasi-judicial powers and functions with respect to land transportation shall be exercised through the Land Transportation and Regulatory Board, hereinafter referred to as the Board. (3) Coordinate with regional offices of other departments, offices and agencies; (4) Coordinate with local government units; and (5) Perform such other functions as may be provided by law. The Office of the Secretary shall have direct line supervision and control over Regional Offices.

Section 16. Composition of the Board. The Board shall be composed of a Chairman and two (2) members with the rank, salary and privileges of an Assistant Secretary, all of whom shall be appointed by the President of the Philippines upon recommendation of the Secretary of Transportation and Communications. One (1) member of the Board shall be a member of the Bar and shall have been engaged in the practice of law in the Philippines for at least five (5) years, another a holder of a degree in civil engineering, and the other a holder of a degree in economics, finance or management both with the same number of years of experience and practice. Section 17. Executive Director and Support Staff of the Board. The Board shall have an Executive Director who shall also be appointed by the President of the Philippines upon the recommendation of the Secretary of Transportation and Communications. He shall have the rank, salary and privileges of a Department Service Chief. He shall assist the Board in the performance of its powers and functions. The Board shall be supported by the Technical Evaluation Division, Legal Division, Management Information Division, Administrative Division and Finance Division. Section 18. Supervision and Control Over the Board. The Secretary of Transportation and Communications, through his duly designated Undersecretary, shall exercise administrative supervision and control over the Land Transportation Franchising and Regulatory Board. Section 19. Powers and Functions of the Land Transportation Franchising and Regulatory Board. The Board shall: (1) Prescribe and regulate routes, economically viable capacities, and zones or areas of operation of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans and programs approved by the Department of Transportation and Communications;

(2) Issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and prescribe the appropriate terms and conditions therefor; (3) Determine, prescribe, approve and periodically review and adjust reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles; (4) Issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction and in which cases the pertinent provisions of the Rules of Court shall apply; (5) Punish for contempt of the Board, both direct and indirect, in accordance with the pertinent provisions of, and the penalties prescribed by, the Rules of Court; (6) Issue subpoena and subpoena duces tecum and to summon witnesses to appear in any proceedings of the Board, to administer oaths and affirmations, and, in appropriate cases, to order the search and seizure of all vehicles and documents, upon probable cause and as may be necessary for the proper disposition of the cases before it; (7) Conduct investigations and hearings of complaints for violation of the public service laws on land transportation and of the Boards rules and regulations, orders, decisions or rulings and to impose fines or penalties for such violations; (8) Review motu propio the decisions/actions of the Regional Franchising and Regulatory Offices; (9) Promulgate rules and regulations governing proceedings before the Board and the Regional Franchising and Regulatory Office. However, except with respect to paragraphs 4, 5, 6, and 7 hereof, the rules of procedure and evidence prevailing in the courts of law should not be controlling but rather the spirit and intention of said rules. The Board and the Regional Franchising and Regulatory Offices shall use every and all

reasonable means to ascertain facts in each case speedily and objectively and without regard to technicalities of law and procedures, all in the interest of due process; (10) Fix, impose and collect, and periodically review and adjust, reasonable fees and other related charges for services rendered; (11) Formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standards of measurements or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their utilities and in their stations such devices, equipment, facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operation; (12) Coordinate and cooperate with other government agencies and entities concerned with any aspect involving public land transportation services with the end in view of effecting continuing improvement of such services; and (13) Perform such other functions and duties as may be provided by law, or as may be necessary, or proper or incidental to the purposes and objectives of the Department; Section 20. Decisions of the Board; Appeals therefrom or Review Thereof. The Board, in the exercise of its powers and functions, shall sit and render its decision en banc. Every such decision, order, or resolution of the Board must bear the concurrence and signature of at least two (2) members thereof. The decision, order or resolution of the Board shall be appealable to the Secretary within thirty (30) days from receipt of the decision. However, the Secretary may motu propio review and decision or action of the Board before the same becomes final.

Section 21. Regional Franchising and Regulatory Offices. There shall be a Regional Franchising and Regulatory Office in each of the administrative regions of the country which shall be headed by a Regional Director having the rank, salary and privileges of a Department Assistant Regional Director. The Regional Franchising and Regulatory Offices shall hear and decide uncontested applications/petitions for routes, within their respective administrative regions but that applications/petitions for routes extending beyond their respective territorial jurisdiction shall be heard and decided by the Board. Section 22. Appeals. The decisions, orders or resolutions of the Regional Franchising and Regulatory Offices shall be appealable to the Board within thirty (30) days from receipt of the decision. CHAPTER 6 ATTACHED AGENCIES Section 23. Attached Agencies and Corporations. The following agencies and corporations are attached to the Department: The Philippine National Railways, the Maritime Industry Authority, the Philippine National Lines, the Philippine Aerospace Development Corporation, the Metro Manila Transit Corporation, the Office of Transport Cooperatives, the Philippine Ports Authority, the Philippine Merchant Marine Academy, the Toll Regulatory Board, the Light Rail Transit Authority, the Transport Training Center, the Civil Aeronautics Board, the National Telecommunications Commission and the Manila International Airport Authority. Section 24. Functions of Attached Agencies and Corporations. The Agencies attached to the Department shall continue to operate and function in accordance with the respective charters or laws creating them, except when they conflict with this Code.