transpo codals

7/31/2019 Transpo Codals

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1987 Constitution, Article 12

Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility

shall be granted except to citizens of the Philippines or to corporations or associations organized under the

laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such

franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither

shall any such franchise or right be granted except under the condition that it shall be subject to amendment,alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity

participation in public utilities by the general public. The participation of foreign investors in the governing

body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the

executive and managing officers of such corporation or association must be citizens of the Philippines.

Section 17. In times of national emergency, when the public interest so requires, the State may, during the

emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any

privately-owned public utility or business affected with public interest.

Section 18. The State may, in the interest of national welfare or defense, establish and operate vital industries

and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises

to be operated by the Government.

Section 19. The State shall regulate or prohibit monopolies when the public interest so requires. No

combinations in restraint of trade or unfair competition shall be allowed.


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CA 146, Sec. 13(b)

The term public service includes every person thatnow 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 use 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 whatever 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 orboth, shipyard, marine railway, marine repair shop, 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 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 purpose of this Act.


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Public Service Act

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

privately-owned, 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 publicservice, 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, joint-stock 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 thepublic 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.


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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 willproperly 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 befurnished, 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 makingand 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


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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 powerwithout 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 thereofis 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


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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 paymentthereof; 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 anypublic 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,


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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 carrypublic 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 shallapprove 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


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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 reasonablegrounds 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 non-discriminatory 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 whichthe 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.


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EO 125, Sec 4

SECTION 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 system, as well as in the fast, sale, efficient and reliable postal, transportation and

communication services.

To accomplish such mandate, the Ministry shall have the following objectives:1.Promote the development of dependable and coordinated networks of transportation and communicationsystems;

2.Guide government and private investment in the development of the country's inter- model transportationand communication systems in a most practical, expeditious, and orderly fashion for maximum

safety, service, and cost effectiveness;

3.Impose appropriate measure so that technical, economic and other condition for the continuing economicviability of the transportation and communication entities are not jeopardized and do not encourage

inefficiency and distortion of traffic patronage;

4.Develop an integrated plan for a nationwide transmission system in accordance with the national andinternational telecommunication service requirement including, among others,radio and televisionbroadcast relaying, leased channel services and data transmission;

5.Guide government and private investment in the establishment, operation and maintenance of aninternational switching system for incoming and outgoing telecommunication services;

6.Encourage the development of a domestic telecommunication industry in coordination with the concernentities particularly, the manufacture of communications/ electronics equipment and components to

complement and support as much as possible, the expansion, development, operation and

maintenance of the nationwide telecommunications network;

7. Provide for a safe, reliable and efficient postal system for the country.SECTION 14. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall havethe following functions:

1. Develop and formulate, plans, policies, programs, project, standards, specifications and guidelinesgeared towards the promotion and development of the Maritime Industry, the growth and effective

regulation of shipping enterprises, for the national security objectives of the country;

2. Establish, prescribe and regulate routes, zones and /or areas of operation of particular operators ofpublic water services;

3. Issue certificates of public convenience for the operation of domestic and overseas water carriers;4. Register vessels as well as issue certificates, licenses or documents necessary or incident thereto;5.

Undertake the safety regulatory functions pertaining to vessels construction and operationsincluding the determination of manning levels and issuance of certificates competency to seamen;

6. Enforce laws, prescribe and enforce rules and regulation, including penalties for violation thereof,governing water transportation and the Philippine merchant marine with the aid of other law

enforcement agencies;

7. Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots;


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EXECUTIVE ORDER NO. 125-A April 13, 1987

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 compliancewith 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 thePresident 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;


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(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 publicair 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 bythe 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 Servicec) 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


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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 DepartmentRegional 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 publicwater 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;


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(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 inSection 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 shallbe 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."

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 andeighty-seven.


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Republic of the Philippines Congress of the PhilippinesMetro ManilaFourteenth Congress First Regular Session

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 PURPOSESBe it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

CHAPTER IGENERAL PROVISIONSSECTION 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.

(b) "Aerodrome" refers to an airport, a defined area on land or water (including any building, installation andequipment) 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 ofaircraft 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.

(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 includesall 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


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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 ofdeparture 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 ofvehicles 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 cl imbing 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 aircraftscience.

(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


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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 Philippineterritory.

(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 forremuneration 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-ownedaircraft 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


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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 theresponsibility 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 IIORGANIZATION OF AUTHORITYSEC. 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 AviationAuthority 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 therules 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


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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 theBoard 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 qualifiedappraiser 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 thecontrary 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.


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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 theAT0 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 IIIGENERAL POLICIESSEC. 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 IVPOWERS OF THE AUTKORITYSEC. 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 foreigngovernment;

(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 assistanceof 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 VPOWERS AND FUNCTIONS OF THE BOARD


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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 rationalcompensation 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 f

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