Toll Regulatory Board

A Report by Group 3
Federico S. Rayos del Sol
Erica C. Perez
Janette J. Payoyo
Pierre E. Collado
Nadine B. Lichauco
Roslayn H. Enano

History and Creation of the TRB

March 1977 P.D. 1112 was issued creating the Toll Regulatory Board
(TRB).
P.D. 1113 granted the PNCC (Philippine National Construction Corporation,
formerly Construction Development Corporation of the Philippines) the
franchise to operate, construct and maintain toll facilities in the North and
South Luzon Tollways.
1989 the Department of Budget and Management allowed the TRB to
employ 17 regular employees.
1991 - the General Appropriations Act recognized the TRB as a regular
government agency, providing for 35 permanent employees.
The current members of the board:

Quasilegislative and Powers of the TRB

- Power to grant administrative franchises for toll
facility projects
PD 1112, Section 3
a.Subject to the approval of the President of the Philippines, to enter into
contracts in behalf of the Republic of the Philippines with persons,
natural or juridical, for the construction, operation and maintenance of
toll facilities such as but not limited to national highways, roads, bridges,
and public thoroughfares.
b.Determine and decide the kind, type and nature of public improvement
that will be constructed and/or operated as toll facilities;
c.Condemn private property for public use subject to the provisions of
existing law;
d.Issue, modify and promulgate from time to time rates of toll that will be
charges the direct users of toll facilities and upon notice of hearing

e. To grant authority to operate a toll facility and to issue therefore the necessary
Toll Operation Certificate
(1) That the Operator shall desist from collecting toll upon the expiration of the Toll
Operation Certificate.
(2) That the entire facility operated as a toll system including all operation and
maintenance equipment directly related thereto shall be turned over to the
government immediately upon the expiration of the Toll Operation Certificate.
(3) That the toll operator shall not lease, transfer, grant the usufruct of, sell or
assign the rights or privileges acquired under the Toll Operation Certificate to any
person, firm, company, corporation or other commercial or legal entity, nor merge
with any other company or corporation organized for the same purpose, without the
prior approval of the President of the Philippines. In the event of any valid transfer
of the Toll Operation Certificate, the Transferee shall be subject to all the
conditions, terms, restrictions and limitations of this Decree as fully and completely
and to the same extent as if the Toll Operation Certificate has been granted to the
same person, firm, company, corporation or other commercial or legal entity.

(4) That in time of war, rebellion, public peril, emergency, calamity, disaster or
disturbance of peace and order, the President of the Philippines may cause the
total or partial closing of the toll facility or order to take over thereof by the
Government without prejudice to the payment of just compensation.
(5) That no guarantee, Certificate of Indebtedness, collateral, securities, or bonds
shall be issued by any government agency or government-owned or controlled
corporation on any financing program of the toll operator in connection with his
undertaking under the Toll Operation Certificate.
(6) The Toll Operation Certificate may be amended, modified or revoked whenever
the public interest so requires.
(a) The Board shall promulgate rules and regulations governing the procedures for
the grant of Toll Certificates. The rights and privileges of a grantee under a Toll
Operation Certificate shall be defined by the Board.
(b) To issue rules and regulations to carry out the purposes of this Decree.

TRB Quasi-Judicial Function

Rate-fixing
Issuance of Subpoena
Case Decisions
arising from
Petition for Review of Initial Toll Rates and
Opposition to Proposed Toll Rates
Petition for Review of Approved Provisional Toll Rates
Motion for Reconsideration
(filed within 30 days from the date of 1st publication)
(within 5 days, applicant to comment)

SCOPE

Pleadings
Hearings
Decisions and Orders
Appeal
Jurisprudence
- Francisco, Jr. v TRB
- Baraquel v TRB

Pleadings
Filed at the TRB Executive Directors
Office for any relief
Form (caption, title, signature, address
and in 7 copies)
Substance
Verification

Pleadings
Certification of Non-Forum Shopping
a. no action/claim was commenced to any
court;
b. if theres pending case, state the status;
c. if learned thereafter that same
action/claim has been filed or
pending, notify TRB within five (5)
days from the time it was known.
Service upon parties (pleadings/order) thru personal
delivery or by mail.

Hearings

The TRB may, at his discretion, convene en banc or designate any

Member of the Board or the ED to hear applications, petitions for
review, or oppositions to initial or adjusted toll rates.
Subject to the requirements of DUE PROCESS, hearing officer
shall:
a. Preside during hearings and regulate the proceedings before
him and to do acts and take all measures necessary or proper
for the efficient performance of his duties;
b. Avail of all reasonable means to ascertain relevant facts; and
c. Issue subpoenas and subpoena duces tecum, swear
witnesses, rule upon admissibility of evidence, and issue
interlocutory orders.

Hearings
During clarificatory conference or proceeding, ask
questions only for the purpose of clarifying points of law or
fact involved in the matters at hand and shall limit to
matters relevant to issues.
The hearing officer shall file his report in writing setting
forth his findings of facts and conclusions of law with all the
supporting documents
The Board may accept the report and render judgement or
it may recommit the same to the hearing officer for further
report of facts or it may accept the report in part and reject
it in part, and it may make such order or render such
judgement in accordance with law and evidence.

Decisions and Orders

In writing and served upon the parties
Motion for reconsideration within fifteen (15) days from
notice (No more than one (1) motion for reconsideration will
be entertained)
If no appeal or motion for reconsideration is filed within 15
days, the judgment or order shall become final and executory.
The motions under this Rule shall be served to all parties and
will be set for hearing within 3 days from service thereof.
Any party to the proceeding may file an OPPOSITION to the
motion for reconsideration accompanied by supporting
affidavits and documents, if necessary, serving a copy thereof
upon the movant.

Appeal
Mode and Period: A party adversely affected by
any decision, order, ruling or resolution of the
Board may, within a period of fifteen (15) days
from notice thereof or within fifteen (15) days
from notice of denial of a motion of
reconsideration, file an appeal with the Office
of the President in accordance with the
procedure set forth in Chapter 4, Book VII of the
1987 Administrative Code.

Jurisprudence
Francisco, Jr v. TRB G.R. Nos. 166910,169917,
173630,183599. October 19, 2010
- petitioners sought to nullify the Apr 27, 2007 TOC
w/c TRB issued to PNCC to extend tollway operation
franchise for SLEX (PD 1894) because they argued
that only Congress can extend the term of PNCCs
franchise w/c expired on May 1, 2007.
- The RTC ruled in favor of YPES and that the TOC
issued by TRB was ordered annulled and set aside.

Francisco, Jr v. TRB G.R. Nos. 166910,169917, 173630,183599.

October 19, 2010

Issue: Whether TRBs power to enter into contracts,

issue, modify and promulgate toll rates and to rule
petitions relative to toll rates level and increases is valid.
Ruling: The fact that an administrative agency is
exercising its administrative or executive functions (such
as the granting of franchises or awarding of contracts)
and at the same time exercising its quasi-legislative (e.g.
rule-making) and/or

Francisco, Jr v. TRB G.R. Nos. 166910,169917, 173630,183599.

October 19, 2010

quasi-judicial functions (e.g. rate-fixing), does not

support a finding of a violation of due process or the
Constitution.
In C.T. Torres Enterprises, Inc. v. Hibionada, the
Supreme Court explained the rationale, thus:
It is by now commonplace learning that many
administrative agencies exercise and perform
adjudicatory powers and functions, though to a limited
extent only.

Francisco, Jr v. TRB G.R. Nos. 166910,169917, 173630,183599.

October 19, 2010

Limited delegation of judicial or quasi-judicial

authority to administrative agencies is well
recognized in our jurisdiction, basically because
the need for special competence and
experience as essential in the resolution of
questions of complex or specialized character
and because of a companion recognition that
the dockets of our regular courts have remained
crowded and clogged.

2. Baraquel v. TRB, G.R. No. 181293. February 23, 2015

TRB & PNCC entered into a Toll Operation Agreement (TOA)
pursuant to PD 1113 granting to the latter the right, privilege and
authority to construct, operate and maintain toll facilities in the
NLEX and SLEX for a period of 30 years starting May 1, 1977.
Metro Manila Expressway (MME) project was included with the
coverage of PNCC pursuant to PD 1894 which amended PD 1113.
30 years remained the same for the NLEX & SLEX while the
franchise granted for MME provided a term of 30 years
commencing from the date of completion of the project.
In August 1995, PNCC and CITRA entered into a business and
joint venture agreement and created Citra Metro Manila Tollways
Corp (CMMTC)

Baraquel v. TRB, G.R. No. 181293. February 23, 2015

-

In November 1995, the TRB as grantor, CMMTC as investor and PNCC as

operator executed a Supplemental Toll Operation Agreement (STOA) covering
Stage 1, Phase 1 & 2; and Stage 2, Phase 1 of the South Metro Manila Skyway.
Under the STOA, the design and construction of the project roads became the
primary and exclusive privilege and responsibility of CMMTC. The operation
and maintenance of the project roads became the primary and exclusive
privilege and responsibility of the PNCC Skyway Corp (PSC), a wholly owned
subsidiary of PNCC, which undertook and performed the latters obligations
under the STOA
- On July 18, 2007, the Philippines thru TRB, CMMTC and PNCC executed the
assailed Amendment to the Supplemental Toll Operation Agreement (ASTOA).
The ASTOA incorporated the amendments, revisions, and modification
necessary to cover the design and construction of Stage 2 of the South
Metro manila Skyway and SOMCO replaced PSC in performing the
operations and maintenance of Stage 1 of the South Metro manila Skyway.

Baraquel v. TRB, G.R. No. 181293. February 23, 2015

-

On July 20, 2007, Secretary Leandro Mendoza of DOTC approved the ASTOA
pursuant to EO 497.
- On December 28, 2007, the TRB issued TOC to SOMCO authorizing to operate
and maintain Stage 1 of the South Metro manila Skyway effective 10:00pm on
December 31, 2007.
- The petitioners sought to annul the: 1. ASTOA, 2. Memorandum approving the
ASTOA; and 3. TOC issued to SOMCO.
ISSUES:
1. Whether the TRB has the power to grant authority to operate a toll facility?
2. Whether the TOC issued to SOMCO was valid?
3. Whether the approval of the ASTOA by the DOTC Secretary was valid?
RULING:
1. By explicit provision of law, the TRB was given the power to grant administrative
franchise for toll facility projects, Sections 3a & e of PD 1112 and Section 4 of PD
1894. Likewise, this matter has already been settled by the Court in Francisco,
Jr v. TRB

Baraquel v. TRB, G.R. No. 181293. February 23, 2015

Section 6 of P.D. 1894 specifically mentions the Toll

Operation Agreement. The STOA was one such
modification or amendment of the franchise of PNCC. So
was the ASTOA, which further modified the franchise.
PNCC cannot be said to have breached its franchise
when it transferred the toll operations to SOMCO.
PNCC remained the franchise holder for the
construction, operation, and maintenance of the
project roads; it only opted to partner with investors in
the exercise of its franchise leading to the organization of
companies such as PSC and SOMCO.

Baraquel v. TRB, G.R. No. 181293. February 23, 2015

2. The TOC, as a grant of authority from the government, is subject to the

latters control insofar as the grant affects or concerns the public. For TRB,
those specified under Sec 3 of PD 1112.
Part of the TOC issued to SOMCO reads: Pursuant to Sec 3e of PD 1112,
SOMCO is hereby given authority to operate and maintain Stage 1 of the
South Metro manila Skyway effective as of 10:00PM of 31 December 2007.
This authorization is issued upon the clear understanding that the operation
and maintenance of Stage 1 of the South Metro Manila Skyway as a toll
facility and the collection of toll fees shall be closely supervised and
regulated by the Grantor, by and through the Board of Directors, in
accordance with the terms and conditions set forth in the STOA, as
amended, the rules and regulations duly promulgated by the Grantor for toll
road operations and maintenance, as well as the lawful orders, instructions
and conditions which the Grantor, through the TRB, may impose from time
to time in view of the public nature of the facility.

Baraquel v. TRB, G.R. No. 181293. February 23, 2015

Allegation that none of the requirements for public bidding was observed
before the TOC was issued to SOMCO, this matter was also squarely
answered by the Court in Francisco, Jr. v. TRB
Under the STOA in this case, PNCC partnered with CMMTC in Stages 1
and 2 of the South Metro Manila Skyway. The STOA gave birth to PSC,
which was put in charge of the operation and maintenance of the project
roads. The ASTOA had to be executed for Stage 2 to accommodate
changes and modifications in the original design. The ASTOA then brought
forth the incorporation of SOMCO to replace PSC in the operations and
maintenance of Stage 1 of the South Metro Manila Skyway. Clearly, no
public bidding was necessary because PNCC, the franchisee, merely
exercised its management prerogative when it decided to undertake
the construction, operation, and maintenance of the project roads
through companies which are products of joint ventures with chosen
partners.

Baraquel v. TRB, G.R. No. 181293. February 23, 2015

The petitioners assumed that PNCC in some way leased,

transferred, granted the usufruct of, sold, or assigned to SOMCO its
franchise or the rights or privileges PNCC had acquired by it.

In joint ventures with investor companies, PNCC contributes the

franchise it possesses, while the partner contributes the financing
both necessary for the construction, maintenance, and operation of
the toll facilities. PNCC did not thereby lease, transfer, grant the
usufruct of, sell, or assign its franchise or other rights or privileges.
This remains true even though the partnership acquires a distinct
and separate personality from that of the joint venturers or leads to
the formation of a new company that is the product of such joint
venture, such as PSC and SOMCO in this case.

Baraquel v. TRB, G.R. No. 181293. February 23, 2015

3. The Doctrine of qualified political agency applies where

acts of the cabinet secretaries on circumstances that
require the President to act personally, executive and
administrative functions are presumably the acts of the
latter unless disapproved. Secretaries are the Presidents
wn alter ego (Constantino v. Cuisia; Angeles v. Gaite)
In this case, approval of the ASTOA by the DOTC
Secretary had the same effect as approval by the President
even without the issuance of EO 407, which specifically
delegate to the DOTC Secretary the authority to approve
contracts entered into by the TRB.

Rule 4
Procedure for Approval of Initial, Adjusted
or Periodic Toll Rates
Section 1. Coverage
Section 2. Initial Toll Rate
Section 3. Adjustment of Toll Rates
Section 7. Factors in Determining Just and
Reasonable Toll

Section 2
Once the initial toll rate is approved, the grantee has to
publish in full its application or petition, the approved rate,
and toll fee matrix at least once a week for three
consecutive weeks in a newspaper of general circulation.
The publication has to include:
The date of effectivity
A notice that a user of the toll way may file, within 30
days after the first publication, a petition for the review
of the rates.
No approved toll rate will be imposed and collected without
a Notice to Start Collection being first issued by the Board.

Section 3
Unless otherwise told to do so, the grantee shall
submit on or before September 30 of the year an
application for the adjustment of toll rates.
The Board shall have it in publication, both the
old rate and the proposed rate, including a
notice that users may file a petition for review of
the proposed adjusted toll rates within thirty days
after the date of publication.

Section 7
In order to determine the rates that will be just and
reasonable, the board may consider the following:

Cost of Investment of the toll Grantee

Cost of Operations/Maintenance
Internal Rate of Return
Period of Concession
Operating Taxes
Income Taxes
Other Taxes
Estimates of the projected traffic volume/first year
traffic volume
And other factors the Board may deem applicable.

Rule 5: Procedure for Approval of

Provisional Toll Rates
The Board may grant the application for approval of provisional
toll rates, including the date of implementation when petition
meets the following requisites:
Petition is sufficient in form and substance
It includes an affidavit of merit showing that the rate increase
conforms to the formula as agreed upon the original agreement,
and that such matter is of extreme urgency that it may cause
damage to the applicant or general public if delayed.
There is a surety bond that guarantees the refund of the rate
increase to affected toll users if ever the board ascertains that the
applicant is not entitled to the rate increase.

Has to be published again once a week for three consecutive

weeks, at the expense of the applicant.

Rule 6: Power to Modify Toll

Rates

Section 1: Notice of Hearing

If the Board determines that the rate imposed by the grantee
should be lower than that should be using the formula stipulated,
the Board will ask the Grantee to respond or make a comment
about the findings of the board. If the Board deems the
Grantees comment unmeritorious, it may conduct a clarificatory
hearing in accordance with Rule 7.
If the Board rules that a decrease on the rate is proper, it shall
ask the grantee to effect the decrease immediately, along with
the collection. The Board shall publish the notice for the adjusted
rates in a newspaper of general circulation.

Rule 10: Miscellaneous

Provisions

Section 1: Access to Records

The Board may require the parties to submit records such as books of accounts,
financial statements, etc.

Section 2: Confidential Information

If there is a trade secret involved, or other confidential research, the Hearing Officer
may issue an order to protect the partys confidentiality.

Section 3: Publication of Toll Rates

Approved toll rates, except for decreases, have to be published once a week for three
consecutive weeks in a newspaper of general circulation.

Section 4: Release of the Bond

The surety bond maybe released once the Board deems that the applicant is eligible
for the proposed rates.

Section 5: Opening of an Escrow Account

If ever the applicant is deemed by the Board to be not entitled to the provisionally
approved initial and adjusted toll rates, the Board directs the applicant to open an
escrow account and deposit therein excess collections from the toll fee. The excess
amount will be refunded to the users of the express way paid either in cash, toll
coupons, electronic toll payments units, or by other means the Board may prescribe.

The TRB in Public-Private

Partnerships

The BOT Law

Franchise Awarding
Public Bidding
Direct Negotiation

TOA/STOA

The BOT Law

RA 6957
RA 7718

Build-Operate-Transfer
A contractual arrangement whereby the
project proponent undertakes the
construction, including financing, of a given
infrastructure facility, and the operation
maintenance thereof.

Build-Operate-Transfer
The project proponent operates the facility
over a fixed term during which it is
allowed to charge facility users appropriate
tolls, fees, rentals, and charges not exceeding
those proposed in its bid or as negotiated and
incorporated in the contract to enable the

project proponent to recover its

investment, and operating and
maintenance expenses in the
project.

Build-Operate-Transfer
The project proponent transfers the facility to
the government agency or local government
unit concerned at the end of the fixed term
which shall not exceed fifty (50) years:
Provided, That in case of an infrastructure or
development facility whose operation requires a
public utility franchise, the proponent must be
Filipino or, if a corporation, must be duly
registered with the Securities and Exchange
Commission and owned up to at least sixty
percent (60%) by Filipino

1987 Constitution Article II

Section 20. The State recognizes the
indispensable role of private sector,
encourages private enterprise and
provides incentives to needed
investments.

Processes
Awarding of Franchise Certificates
Originally, franchises are awarded to the PNCC
through PD 1113
Through RA 6957, as amended by RA 7718,
private companies may be awarded franchises
for government projects

How are franchises awarded?

1.Public Bidding
2.Direct Negotiation

Through Public Bidding

the contract shall be awarded to the lowest
complying bidder based on the present value
of its proposed tolls, fees, rentals, and charges
over a fixed term [] For this purpose, the
winning contractor shall be automatically
granted by the infrastructure agency or local
government unit the franchise to operate and
maintain the facility, including the collection of
tools, fees, rentals, and charges in accordance
with Section 6 hereof

Through Direct Negotiation

Direct negotiation shall be resorted
to when there is only one complying
bidder left as defined hereunder:

(a) If, after advertisement, only one contractor applies for pre-qualification[]
(b) If, after advertisement, more than one contractor applied for prequalification but only one meets the pre-qualification requirements, []
(c) If, after pre-qualification of more than one contractor, only one submits a
bid which is found by the agency/LGU to be complying.
(d) If, after pre-qualification, more than one contractor submit bids but only
one is found by the agency/LGU to be complying: Provided, That any of the
disqualified prospective bidder may appeal the decision of the implementing
agencys/LGUs Pre-qualification Bids and Awards Committee within fifteen
(15) working days to the head of the agency, in case of national projects; to
the Department of the Interior and Local Government (DILG), in case of local
projects from the date the disqualification was made known to the disqualified
bidder: Provided, furthermore, That the implementing agency concerned or
DILG should act on the appeal within forty-five (45) working days from receipt
thereof.

Public Bidding Process

TOA/STOA
TOA
Provides detailed terms and conditions for the
construction, maintenance and operation of
expressways

TOA/STOA
STOA
The STOA defines the scope of the road project
coverage, the terminal date of the concession,
and includes provisions on initial toll rate and a
built-in formula for adjustment of toll rates,
investment recovery clauses and contract
termination in the event of the concessionaires,
PNCCs or TRBs default, as the case may be

Francisco v. TRB, GR No. 166910

(b) the Republic of the Philippines, through the TRB, as
grantor, PNCC, as operator, and the new corporation, as
investor/concessionaire, with its lender, as the case may
be, then execute a Supplemental Toll Operation
Agreement (STOA) to implement the TOA previously
issued; and (c) once the requisite STOA approval is given,
project prosecution starts and upon the completion of the
toll road project or of a divisible phase thereof, the TRB
fixes or approves the initial toll rate after which, it passes a
board resolution prescribing the periodic toll rate
adjustment.

Electronic Toll Collection On-Board Unit

Easy Trip

E-Pass

E-Tap

References:

Corpuz, J., Turbolencia, J., & Turingan, J. (2015, June 06). (R. Enano, N. Lichauco, J. Payoyo, E. Perez, & F.
Rayos del Sol, Interviewers)
DTC Toll Regulatory Board. (n.d.). Retrieved June 25, 2015, from DTC Toll Regulatory Board:
http://www.trb.gov.ph/index.php/welcome-to-the-toll-regulatory-board/historical-background
DTC Toll Regulatory Board. (n.d.). Retrieved June 25, 2015, from DTC Toll Regulatory Board:
http://www.trb.gov.ph/index.php/welcome-to-the-toll-regulatory-board/vision-mission
Marcos, F. E. (1977, March 31). Presidential Decree No. 1112.
Meruenas, M. (2015, March 17). SC rules Skyway O&M may operate Skyway toll facilities. Retrieved June 29,
2015, from GMA News Online: http://www.gmanetwork.com/news/story/453905/economy/companies/sc-rulesskyway-o-amp-m-may-operate-skyway-toll-facilities
Vision & Mission . (n.d.). Retrieved June 25, 2015, from DTC Toll Regulatory Board:
http://www.trb.gov.ph/index.php/welcome-to-the-toll-regulatory-board/vision-mission
http://www.trb.gov.ph/index.php/welcome-to-the-toll-regulatory-board/historical-background
Baraquel v. TRB
http://www.chanrobles.com/cralaw/2015februarydecisions.php?id=180
Francisco Jr. V TRB http://sc.judiciary.gov.ph/jurisprudence/2010/october2010/166910.htm

Thank you!