CIVIL CODE OF THE PHILIPPINES

COMMON CARRIERS

ARTICLE 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.

Vigilance Over Goods

ARTICLE 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them, according to all the circumstances of each case.
Paitdo
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734,
1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
ARTICLE 1734. Common carriers are responsible for the loss, destruction, or deterioration of the
goods, unless the same is due to any of the following causes only:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers; meriee

(5) Order or act of competent public authority.

ARTICLE 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding
article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as required in article 1733.

ARTICLE 1736. The extraordinary responsibility of the common carrier lasts from the time the
goods are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to the
consignee, or to the person who has a right to receive them, without prejudice to the provisions
of article 1738.
ARTICLE 1737. The common carrier’s duty to observe extraordinary diligence in the vigilance
over the goods remains in full force and effect even when they are temporarily unloaded or
stored in transit, unless the shipper or owner has made use of the right of stoppage in transitu.

ARTICLE 1738. The extraordinary liability of the common carrier continues to be operative even
during the time the goods are stored in a warehouse of the carrier at the place of destination,
until the consignee has been advised of the arrival of the goods and has had reasonable
opportunity thereafter to remove them or otherwise dispose of them.

ARTICLE 1739. In order that the common carrier may be exempted from responsibility, the
natural disaster must have been the proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or minimize loss before, during and after
the occurrence of flood, storm or other natural disaster in order that the common carrier may be
exempted from liability for the loss, destruction, or deterioration of the goods. The same duty is
incumbent upon the common carrier in case of an act of the public enemy referred to in article
1734, No. 2.

ARTICLE 1740. If the common carrier negligently incurs in delay in transporting the goods, a
natural disaster shall not free such carrier from responsibility.

ARTICLE 1741. If the shipper or owner merely contributed to the loss, destruction or
deterioration of the goods, the proximate cause thereof being the negligence of the common
carrier, the latter shall be liable in damages, which however, shall be equitably reduced.

ARTICLE 1742. Even if the loss, destruction, or deterioration of the goods should be caused by
the character of the goods, or the faulty nature of the packing or of the containers, the common
carrier must exercise due diligence to forestall or lessen the loss.

ARTICLE 1743. If through the order of public authority the goods are seized or destroyed, the
common carrier is not responsible, provided said public authority had power to issue the order.

ARTICLE 1744. A stipulation between the common carrier and the shipper or owner limiting the
liability of the former for the loss, destruction, or deterioration of the goods to a degree less than
extraordinary diligence shall be valid, provided it be: mimows

(1) In writing, signed by the shipper or owner;

(2) Supported by a valuable consideration other than the service rendered by the common
carrier; and
(3) Reasonable, just and not contrary to public policy.

ARTICLE 1745. Any of the following or similar stipulations shall be considered unreasonable,
unjust and contrary to public policy:

(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the
goods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less than that of a good father
of a family, or of a man of ordinary prudence in the vigilance over the movables transported;

(5) That the common carrier shall not be responsible for the acts or omission of his or its
employees;

(6) That the common carrier’s liability for acts committed by thieves, or of robbers who do not
act with grave or irresistible threat, violence or force, is dispensed with or diminished;

(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods
on account of the defective condition of the car, vehicle, ship, airplane or other equipment used
in the contract of carriage.

ARTICLE 1746. An agreement limiting the common carrier’s liability may be annulled by the
shipper or owner if the common carrier refused to carry the goods unless the former agreed to
such stipulation.

ARTICLE 1747. If the common carrier, without just cause, delays the transportation of the goods
or changes the stipulated or usual route, the contract limiting the common carrier’s liability
cannot be availed of in case of the loss, destruction, or deterioration of the goods.

ARTICLE 1748. An agreement limiting the common carrier’s liability for delay on account of
strikes or riots is valid.

ARTICLE 1749. A stipulation that the common carrier’s liability is limited to the value of the
goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is
binding.
ARTICLE 1750. A contract fixing the sum that may be recovered by the owner or shipper for the
loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.

ARTICLE 1751. The fact that the common carrier has no competitor along the line or route, or a
part thereof, to which the contract refers shall be taken into consideration on the question of
whether or not a stipulation limiting the common carrier’s liability is reasonable, just and in
consonance with public policy.

ARTICLE 1752. Even when there is an agreement limiting the liability of the common carrier in
the vigilance over the goods, the common carrier is disputably presumed to have been negligent
in case of their loss, destruction or deterioration.

ARTICLE 1753. The law of the country to which the goods are to be transported shall govern the
liability of the common carrier for their loss, destruction or deterioration.

ARTICLE 1754. The provisions of articles 1733 to 1753 shall apply to the passenger’s baggage
which is not in his personal custody or in that of his employee. As to other baggage, the rules in
articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable.

Safety of Passengers

ARTICLE 1755. A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence of very cautious persons, with a due regard
for all the circumstances.

ARTICLE 1756. In case of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755.

ARTICLE 1757. The responsibility of a common carrier for the safety of passengers as required in
articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of
notices, by statements on tickets, or otherwise.

ARTICLE 1758. When a passenger is carried gratuitously, a stipulation limiting the common
carrier’s liability for negligence is valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carrier’s liability.
ARTICLE 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or wilful acts of the former’s employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers. orIsit
This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees.
ARTICLE 1760. The common carrier’s responsibility prescribed in the preceding article cannot be
eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or
otherwise.

ARTICLE 1761. The passenger must observe the diligence of a good father of a family to avoid
injury to himself.

ARTICLE 1762. The contributory negligence of the passenger does not bar recovery of damages
for his death or injuries, if the proximate cause thereof is the negligence of the common carrier,
but the amount of damages shall be equitably reduced.

ARTICLE 1763. A common carrier is responsible for injuries suffered by a passenger on account
of the wilful acts or negligence of other passengers or of strangers, if the common carrier’s
employees through the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.

Common Provisions

ARTICLE 1764. Damages in cases comprised in this Section shall be awarded in accordance with
Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a
passenger caused by the breach of contract by a common carrier.

ARTICLE 1765. The Public Service Commission may, on its own motion or on petition of any
interested party, after due hearing, cancel the certificate of public convenience granted to any
common carrier that repeatedly fails to comply with his or its duty to observe extraordinary
diligence as prescribed in this Section.

ARTICLE 1766. In all matters not regulated by this Code, the rights and obligations of common
carriers shall be governed by the Code of Commerce and by special laws.
REPUBLIC ACT No. 4136
AN ACT TO COMPILE THE LAWS RELATIVE TO LAND TRANSPORTATION AND TRAFFIC RULES,
TO CREATE A LAND TRANSPORTATION COMMISSION AND FOR OTHER PURPOSES

CHAPTER I
PRELIMINARY PROVISIONS ARTICLE
ARTICLE I
Title and Scope of Act
Section 1. Title of Act. – This Act shall be known as the “Land Transportation and Traffic Code.”
Section 2. Scope of Act. – The provisions of this Act shall control, as far as they apply, the
registration and operation of motor vehicles and the licensing of owners, dealers, conductors, drivers,
and similar matters.
ARTICLE II
Definitions
Section 3. Words and phrases defined. – As used in this Act:
(a) “Motor Vehicle” shall mean any vehicle propelled by any power other than muscular power using
the public highways, but excepting road rollers, trolley cars, street-sweepers, sprinklers, lawn
mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used on public highways,
vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used
exclusively for agricultural purposes.

Trailers having any number of wheels, when propelled or intended to be propelled by attachment to a
motor vehicle, shall be classified as separate motor vehicle with no power rating.

(b) “Passenger automobiles” shall mean all pneumatic-tire vehicles of types similar to those usually
known under the following terms: touring car, command car, speedster, sports car, roadster, jeep,
cycle, car (except motor wheel and similar small outfits which are classified with motorcycles), coupe,
landaulet, closed car, limousine, cabriolet, and sedan.

Motor vehicles with changed or rebuilt bodies, such as jeepneys, jitneys, or station wagons, using a
chassis of the usual pneumatic-tire passenger automobile type, shall also be classified as passenger
automobile, if their net allowable carrying capacity, as determined by the Commissioner of Land
Transportation, does not exceed nine passengers and if they are not used primarily for carrying freight
or merchandise.

The distinction between “passenger truck” and “passenger automobile” shall be that of common
usage: Provided, That a motor vehicle registered for more than nine passengers shall be classified as
“truck”: And Provided, further, That a “truck with seating compartments at the back not used for hire
shall be registered under special “S” classifications. In case of dispute, the Commissioner of Land
Transportation shall determine the classification to which any special type of motor vehicle belongs.

(c) “Articulated vehicle” shall mean any motor vehicle with a trailer having no front axle and so
attached that part of the trailer rests upon motor vehicle and a substantial part of the weight of the
trailer and of its load is borne by the motor vehicle. Such a trailer shall be called as “semi-trailer.”

(d) “Driver” shall mean every and any licensed operator of a motor vehicle.

(e) “Professional driver” shall mean every and any driver hired or paid for driving or operating a motor
vehicle, whether for private use or for hire to the public.

Any person driving his own motor vehicle for hire is a professional driver.

(f) “Owner” shall mean the actual legal owner of a motor vehicle, in whose name such vehicle is duly
registered with the Land Transportation Commission.

The “owner” of a government-owned motor vehicle is the head of the office or the chief of the Bureau
to which the said motor vehicle belongs.

(g) “Dealer” shall mean every person, association, partnership, or corporation making, manufacturing,
constructing, assembling, remodeling, rebuilding, or setting up motor vehicles; and every such entity
acting as agent for the sale of one or more makes, styles, or kinds of motor vehicles, dealing in motor
vehicles, keeping the same in stock or selling same or handling with a view to trading same.

(h) “Garage” shall mean any building in which two or more motor vehicles, either with or without
drivers, are kept ready for hire to the public, but shall not include street stands, public service
stations, or other public places designated by proper authority as parking spaces for motor vehicles for
hire while awaiting or soliciting business.

(i) “Gross weight” shall mean the measured weight of a motor vehicle plus the maximum allowable
carrying capacity in merchandise, freight and/or passenger, as determined by the Commissioner of
Land Transportation.

(j) “Highways” shall mean every public thoroughfare, public boulevard, driveway, avenue, park, alley
and callejon, but shall not include roadway upon grounds owned by private persons, colleges,
universities, or other similar institutions.
(k) “The Commissioner of Land Transportation or his deputies” shall mean the actual or acting chief of
the Land Transportation Commission or such representatives, deputies, or assistants as he may, with
the approval of the Secretary of Public Works and Communications, appoint or designate in writing for
the purpose contemplated by this Act.

(l) “Parking or parked”, for the purposes of this Act, shall mean that a motor vehicle is “parked” or
“parking” if it has been brought to a stop on the shoulder or proper edge of a highway, and remains
inactive in that place or close thereto for an appreciable period of time. A motor vehicle which properly
stops merely to discharge a passenger or to take in a waiting passenger, or to load or unload a small
quantity of freight with reasonable dispatch shall not be considered as “parked”, if the motor vehicle
again moves away without delay.

(m) “Tourist” shall mean a foreigner who travels from place to place for pleasure or culture.

ARTICLE III
Administration of Act
Section 4. Creation of the Commission. -
(a) There is created under the Department of Public Works and Communications an office which shall
be designated and known as the Land Transportation Commission, composed of one Commissioner
and one Deputy Commissioner, who shall be vested with the powers and duties hereafter specified.
Whenever the word “Commission” is used in this Act, it shall be deemed to mean the Land
Transportation Commission, and whenever the word “Commissioner” is used in this Act, it shall be
taken to mean the Commissioner or Deputy Commissioner.

The Commissioner and the Deputy Commissioner shall be natural-born citizens and residents of the
Philippines, and they shall be appointed by the President of the Philippines, with the consent of the
Commission on Appointments of the Congress of the Philippines: Provided, however, That the present
Administrator, Assistant Administrator and the personnel of the Motor Vehicles Office shall continue in
office without the necessity of reappointment.

(b) The Commissioner and Deputy Commissioner shall hold office until removed in accordance with
the provisions of the Revised Administrative Code.

(c) The Commissioner shall receive an annual compensation of twelve thousand pesos and the Deputy
Commissioner, an annual compensation of ten thousand four hundred pesos. The Commissioner shall
be assisted by one head executive assistant (MV regulation adviser or chief), one administrative
officer, one registration regulation chief, one inspection, examination and licensing regulation chief,
one law and traffic enforcement regulation chief, one provincial regulation chief, one utility and
property regulation chief, one accounting officer, one internal chief auditor, and one personnel officer,
who shall receive an annual compensation of nine thousand pesos each; eight land transportation
regional directors who shall receive an annual compensation of eight thousand four hundred pesos
each and eight land transportation assistant regional directors, who shall receive an annual
compensation of seven thousand pesos each and ten assistant regulation chiefs, who shall receive an
annual compensation of seven thousand pesos each.

(d) The Commission shall have its offices in Quezon City where the present Motor Vehicle Office is
located, and shall establish a regional branch office each in Tuguegarao (Cagayan), Baguio City, Pasig
(Rizal), Lipa City, San Fernando (La Union), Naga City, Cebu City, Iloilo City, Cagayan de Oro City,
and Davao City, to be headed by a regional director who will have immediate administration,
supervision and control over activities and administration of the Commission in the respective regions.

The Commissioner shall be responsible for the administration of this Act and shall have, in connection
therewith, the following powers and duties, in addition to those mentioned elsewhere in this Act:

(1) With the approval of the Secretary of Public Works and Communications, to issue rules and
regulations not in conflict with the provisions of this Act, prescribing the procedure for the
examination, licensing and bonding of drivers; the registration and re-registration of motor vehicles,
transfer of ownership, change of status; the replacement of lost certificates, licenses, badges, permits
or number plates; and to prescribe the minimum standards and specifications including allowable
gross weight, allowable length, width and height or motor vehicles, distribution of loads, allowable
loads on tires, change of tire sizes, body design or carrying capacity subsequent to registration and all
other special cases which may arise for which no specific provision is otherwise made in this Act.

(2) To compile and arrange all applications, certificates, permits, licenses, and to enter, note and
record thereon transfers, notifications, suspensions, revocations, or judgments of conviction rendered
by competent courts concerning violations of this Act, with the end in view of preserving and making
easily available such documents and records to public officers and private persons properly and
legitimately interested therein.

(3) To give public notice of the certificates, permits, licenses and badges issued, suspended or
revoked and/or motor vehicles transferred and/or drivers bonded under the provisions of this Act.

(4) The Commissioner of Land Transportation, with the approval of the Secretary of Public Works and
Communications, may designate as his deputy and agent any employee of the Land Transportation
Commission, or such other government employees as he may deem expedient to assist in the carrying
out the provisions of this Act.
(5) The Commissioner of Land Transportation and his deputies are hereby authorized to make arrest
for violations of the provisions of this Act in so far as motor vehicles are concerned; to issue subpoena
and subpoena duces tecum to compel the appearance of motor vehicle operators and divers and/or
other persons or conductors; and to use all reasonable means within their powers to secure
enforcement of the provisions of this Act.

(6) The Commissioner of Land Transportation or his deputies may at any time examine and inspect
any motor vehicle to determine whether such motor vehicle is registered, or is unsightly, unsafe,
overloaded, improperly marked or equipped, or otherwise unfit to be operated because of possible
excessive damage to highways, bridges and/or culverts.

(7) The Philippine Constabulary and the city and municipal police forces are hereby given the authority
and the primary responsibility and duty to prevent violations of this Act, and to carry out the police
provisions hereof within their respective jurisdiction: Provided, That all apprehensions made shall be
submitted for final disposition to the Commissioner and his deputies within twenty-four hours from the
date of apprehension.

(8) All cases involving violations of this Act shall be endorsed immediately by the apprehending officer
to the Land Transportation Commission. Where such violations necessitate immediate action, the
same shall be endorsed to the traffic court, city or municipal court for summary investigation, hearing
and disposition, but in all such cases, appropriate notices of the apprehensions and the dispositions
thereof shall be given to the Commissioner of Land Transportation by the law-enforcement agency and
the court concerned.

Notation of all such dispositions shall be entered in the records, and copy shall be mailed to the owner
and to the driver concerned.

CHAPTER II
REGISTRATION OF MOTOR VEHICLES
ARTICLE I
Duty to Register, Reports, Applications, Classifications
Section 5. All motor vehicles and other vehicles must be registered.
(a) No motor vehicle shall be used or operated on or upon any public highway of the Philippines unless
the same is properly registered for the current year in accordance with the provisions of this Act.

(b) Any registration of motor vehicles not renewed on or before the date fixed for different
classifications, as provided hereunder shall become delinquent and invalid:

1. For hire motor vehicles – on or before the last working day of February.
2. Privately-owned motor vehicles – from March one to the last working day of May.

3. All other motor vehicles – from June one to the last working day of June; except when the plates of
such motor vehicles are returned to the Commission in Quezon City or to the Office of the Motor
Vehicles Registrar in the provincial or city agency of the Commission on or before the last working day
of December of the year of issue.

(c) Dealer’s reports – The Commissioner of Land Transportation shall require dealers to furnish him
with such information and reports concerning the sale, importation, manufacture, number of stocks,
transfer or other transactions affecting motor vehicles as may be necessary for the effective
enforcement of the provisions of this Act.

(d) Change of motor number prohibited. – No repair or change in the motor vehicle involving the
exchange, elimination, effacing, or replacing of the original or registered serial or motor number as
stamped or imprinted, shall be allowed, and any motor vehicle with a trace of having its motor
number altered or tampered with shall be refused registration or re-registration, unless such is
satisfactorily explained and approved by the Commissioner.

(e) Encumbrances of motor vehicles. – Mortgages, attachments, and other encumbrances of motor
vehicles, in order to be valid, must be recorded in the Land Transportation Commission and must be
properly recorded on the face of all outstanding copies of the certificates of registration of the vehicle
concerned.

Cancellation or foreclosure of such mortgages, attachments, and other encumbrances shall likewise be
recorded, and in the absence of such cancellation, no certificate of registration shall be issued without
the corresponding notation of mortgage, attachment and/or other encumbrances.

Records of encumbrances of motor vehicles shall be kept by the Land Transportation Commission in
chronological sequence and shall contain, among other things, the time, date and number of the entry
in a “Book of Motor Vehicles” referring to the creation, cancellation or foreclosure of the aforesaid
mortgages, attachments or to other encumbrances.

The Land Transportation Commission shall collect a fee of five pesos for every annotation of a
mortgage, attachment and/or other encumbrances, or cancellation thereof.

Section 6. Application and payments for registration. – Applications and payments for registration
shall be made either personally or by registered mail, and the date of the cancellation of the postage
stamps of envelopes containing money order or check shall be taken as the date of the application
and/or payment for registration: Provided, That the application is properly prepared and the payment
for registration is sufficient as required by law.
Section 7. Registration Classification. – Every motor vehicle shall be registered under one of the
following described classifications:
(a) private passenger automobiles; (b) private trucks; and (c) private motorcycles, scooters, or motor
wheel attachments. Motor vehicles registered under these classifications shall not be used for hire
under any circumstances and shall not be used to solicit, accept, or be used to transport passengers
or freight for pay.

Laborers necessary to handle freight on board private trucks may ride on such trucks: Provided, That
seats shall not be installed in the rear compartment thereof and that only such number of laborers,
not exceeding ten, as may be needed to handle the kind of freight carried, shall ride on the truck:
Provided, further, That the combined weight of cargo and passengers does not exceed the registered
net capacity of the truck.

For the purpose of this section, a vehicle habitually used to carry freight not belonging to the
registered owner thereof, or passengers not related by consanguinity or affinity within the fourth civil
degree to such owner, shall be conclusively presumed to be “for hire.”

No person shall be allowed to register as private truck any truck not actually and reasonably
necessary to carry out his duly licensed business or legitimate occupation or industry regularly paying
taxes.

(d) Public utility automobiles; e) public utility trucks; (f) taxis and auto-calesas; (g) garage
automobiles; (h) garage trucks; (i) hire trucks: and (j) trucks owned by contractors and customs
brokers and customs agents. Application for registration under these classifications shall be
accompanied by a certificate of public convenience or a special permit issued by the Public Service
Commission, and motor vehicles registered under these classifications shall be subject to the Public
Service Law, rules and regulations, as well as the provisions of this Act.

(k) Undertakes

(l) Dealers – Registrations under this classification are intended to cover generally and successively all
the motor vehicles imported or handled by dealers for sale. Motor vehicles registered under the
dealer’s classification shall, under no circumstances, be employed to carry passengers or freight in the
dealer’s business, or for hire. Such vehicles shall be operated under this classification only for the
purpose of transporting the vehicle itself from the pier or factory to the warehouse or sales room or
for delivery to a prospective purchaser or for test or demonstration.
(m) Government automobiles; (n) government trucks; and (o) government motorcycles. Motor
vehicles owned by the Government of the Philippines or any of its political subdivisions shall be
registered under these classifications. Motor vehicles owned by government corporations, by
government employees or by foreign governments shall not be registered under this classification.

(p) Tourists bringing their own motor vehicles to the Philippines may, without registering such motor
vehicles, use the same during but not after ninety days of their sojourn: Provided, That the motor
vehicle displays the number plates for the current year of some other country or state, and said
number plates as well as the name and address (permanent and temporary) of the owner thereof are
registered in the Land Transportation Commission prior to the operation of the motor vehicle.

If such tourist remain in the Philippines longer than ninety days, the motor vehicle shall not be
operated unless registered in accordance with this Act and the corresponding registration fees paid.

(q) Special. The Commissioner of Land Transportation may, in his discretion, allow the registration
under this classification of motor vehicles which do not conform to the foregoing described regular
classification.

ARTICLE II
Registration Fees
Section 8. Schedule of registration fees. – Except as otherwise specifically provided in this Act, each
application for renewal of registration of motor vehicles shall be accompanied by an annual
registration fee in accordance with the following schedule:
(a) Private automobiles with pneumatic rubber tires, an amount based on their respective shipping
weight or factory weight as indicated in the following schedule:

1,000 kilos or less P75.00

1,000 to 1,500 kilos 100.00

1,501 to 2,000 kilos 135.00

2,001 kilos and above 180.00

The factory or shipping weight of a private automobile shall be obtained from the Red Book edited by
the National Market Report, Inc., of the United States of America: Provided, further, That in the case
of automobiles with altered, changed or rebuilt bodies, the weight as obtained: by actual weighing
shall be considered the vehicles weight: Provided, furthermore, That the increase registration fees
herein prescribed shall not apply to jeeps and jeepneys for private use or for hire and the fees hereof
shall be those prescribed for them before the approval of this Act.

The registered passenger capacity of passenger automobiles operated for hire or for private use shall
be determined as follows:

1. For each adult passenger, a horizontal rectangular area, including seat and feet space, not less than
thirty-five centimeters wide and sixty centimeters long, except in the front seat, which shall allow an
area fifty centimeters wide for the operator.

2. For each half passenger, a horizontal rectangular area, including seat and feet spaces, not less that
seventeen and a half centimeters wide by sixty centimeters long, provided, that each continuous row
of seats shall not be allowed to have more that one-half passenger.

(b) Private motor trucks, passenger buses and trailers with pneumatic rubber tires, the sum of five
pesos for every hundred kilograms of maximum allowable gross weight or fraction thereof.

(c) Private motor trucks, passenger buses and trailers with solid rubber tires or with part-solid and
part-pneumatic rubber tires, the sum of seven pesos for every hundred kilograms of maximum
allowable gross weight or fraction thereof.

(d) Private motorcycles and scooters of two or three wheels and bicycles with motor attachments, the
sum of thirty pesos.

(e) The fee for registration of motor vehicles for hire shall be sixty percent more than the fee
prescribed for private motor vehicles of the same category.

(f) The fee for registration of diesel-consuming vehicles shall be fifty percent more than that of
vehicles using motor fuel other than diesel oil. The fee for registration of motor vehicles for hire shall
be sixty percent more than the fees prescribed for private motor vehicles.

(g) No regular registration fees shall be charged for the general registration of motor vehicles
contemplated under the dealer’s classification: Provided, That the Commissioner of Land
Transportation shall provide appropriate dealer’s number plates corresponding to the classification of
vehicles hereinbelow described, and registration fee for every set of such dealer’s number plates shall
be in accordance with the following schedule of rates;

Two hundred pesos for each truck or trailer;

One hundred pesos for each passenger automobile; and

Twenty pesos for each motorcycle and the like.

(h) Registration under the “Government Motor Vehicle” classification shall be free of charge, upon
request of the chief of bureau or office concerned.

(i) Motor vehicles not intended to be operated or used upon any public highway, or which are operated
on highways not constructed or maintained by the Government, or are intended not to be used or
operated at all, shall be exempt from payment of the registration fees provided in this Act, but shall
each pay an annual recording and service fee of fifteen pesos: Provided, however, That no refund,
credit for, or reimbursement of registration fees or part thereof shall be made to any owner on
account of the discontinuance of the use or operation of a motor vehicle subsequent to the payment of
such registration fees: Provided, further, That in the event motor vehicles exempted under this section
shall be found operated on any public highways, the regular registration fees and surcharges shall be
collected in addition to whatever penalties may be imposed for violation of this Act. The Commissioner
of Land Transportation shall provide distinctive number plates for vehicles exempted from payment of
regular registration fees, and the owner of the vehicles concerned shall pay four pesos for each set of
such number plates.

(j) The maximum allowable gross weight of a motor truck, passenger bus, or trailer, upon which to
compute the registration fee thereof, shall be determined by the Commissioner of Land
Transportation. He shall, from time to time as the need of the service may require, prepare, subject to
the approval of the Secretary of Public Works and Communications, suitable tables of maximum
allowable loads per wheel for different sizes kinds of tires.

(k) The registration fees provided in this Act for trucks may be payable in two equal installment, the
first to be paid on or before the last working day of February if for hire, and in March if private; and
the second to be paid on or before the last working day of August: Provided, That the fifty per cent
penalty shall apply only to the unpaid balance of the remaining period of delinquency.

Section 9. Permissible weights and dimensions of vehicles in highways traffic.

(a) The maximum gross weight and measurement of motor vehicles, unladen or with load, permissible
on public highways shall be as specified hereunder, subject to such regulations as the Commissioner
with the approval of the Secretary of Public Works and Communications, may promulgate, from time
to time, as the conditions of the public highways may warrant and the needs of the service may
require.

Permissible maximum weights:

1. Per most heavily loaded wheel three thousand six hundred kilograms;
2. Per most heavily loaded axle eight thousand kilograms;
3. Per most heavily loaded axle group (the two fourteen thousand five hundred kilograms.
axles of the group being at least one meter and
less than two meters apart)
An axle weight shall be the total weight transmitted to the road by all the wheels the centers of which
can be included between the parallel transverse vertical planes one meter apart extending across the
full width of the vehicles.

No provincial, city or municipal authority shall enact or enforce any ordinance or resolution regulating
or prescribing the maximum gross weight of any motor vehicle.

(b) No motor vehicle operating as a single unit shall exceed the following dimensions:

Overall width two and five-tenths meters

Overall height four meters

Overall length:

Freight vehicles with two axles ten meters

Passenger vehicles with two axles eleven meters

Vehicles with three or more axles fourteen meters

(c) No motor vehicle and/or trailer combination shall exceed eighteen meters in overall projected
length, including any load carried on such vehicle and trailer.

(d) No articulated vehicles shall be allowed to draw or pull a trailer and no vehicle already drawing a
trailer shall draw another.

Section 10. Special permits, fees for. – The Commissioner with the approval of the Secretary of
Public Works and Communications, shall issue regulations and schedules of additional fees under
which special permits may be issued in the discretion of the Commissioner or his deputies for each of
the following special cases, without which special permit no vehicles shall be operated on the public
highways:
(a) To operate a motor vehicle or trailer outfit with wheel, axle, or axle group loads in excess of the
limits fixed in subsection (a) of Section nine hereof or in any regulation issued by the Commissioner.

(b) To operate a motor vehicle the size of which exceeds the limit of permissible dimensions specified
in paragraph (b) of Section nine hereof.

(c) To operate a motor vehicle with any part of the load extending beyond the projected width of the
vehicle.

(d) To pull two trailers behind a motor vehicle.

(e) For any other special authority relating to the use of vehicles, not otherwise specifically provided
herein.

Section 11. Additional fees. – In addition to the fees elsewhere provided in this Act, for each change
of registration, from private to for hire or vice-versa; revision of gross weight rating, change of tire
size; transfer of ownership; replacement of a lost registration certificate, number plate, driver’s license
or permit; badge; preparation of affidavit or certified copy of records, or for any similar circumstances
requiring the issue, revision, or reissue of a certificate of registration, driver’s license, badge, permit,
or other document, a fee of two pesos shall be collected.
The replacement of a lost or utterly spoiled certificate, number plate, license, badge or permit shall
render the original invalid.

In case of request in writing for certification of data or facts involving two or more vehicles, a fee of
five pesos a page or part thereof shall be collected for each certification.

Section 12. Fee for original registration for part of year. – If any application for the original
registration is made during the first quarter of a calendar year, the total annual fee for the year shall
be paid, if made during the second quarter, three-fourths of the annual fee for that year shall be paid,
if made during the third quarter, one half of the annual fee shall be paid, and if made during the
fourth quarter, one-fourth of the annual fee shall be paid.
Nothing in this section shall be construed as allowing quarterly renewals of registrations in order to
avoid payment of fees in advance for the entire year.

Section 13. Payment of taxes upon registration. – No original registration of motor vehicles subject to
payment of taxes, customs duties or other charges shall be accepted unless proof of payment of the
taxes due thereon has been presented to the Commission.
ARTICLE III
Registration Certificates, Records, Number Plates
Section 14. Issuance of certificates of registration. – A properly numbered certificate of registration
shall be issued for each separate motor vehicle after due inspection and payment of corresponding
registration fees.
Section 15. Use and authority of certificate of registration.
(a) The said certificate shall be preserved and carried in the car by the owner as evidence of the
registration of the motor vehicle described therein, and shall be presented with subsequent
applications for re-registration, transfer of ownership, or recording of encumbrances: Provided, That in
lieu of the certificate of registration a true copy or photostat thereof may be carried in the motor
vehicle.

(b) The certificate of registration issued under the provisions of this Act for any motor vehicle shall,
while the same is valid and effective and has not been suspended or revoked, be the authority for the
operation of such motor vehicle.

(c) No motor vehicle shall be operated on the public highways in a manner which would place it under
a classification requiring the payment of a larger registration fee than that stated in the certificate of
registration.

Section 16. Suspension of registration certificate. – If on inspection, as provided in paragraph (6) of

Section four hereof, any motor vehicle is found to be unsightly, unsafe, overloaded, improperly
marked or equipped, or otherwise unfit to be operated, or capable of causing excessive damage to the
highways, or not conforming to minimum standards and specifications, the Commissioner may refuse
to register the said motor vehicle, or if already registered, may require the number plates thereof to
be surrendered to him, and upon seventy-two hours notice to the owner of the motor vehicle, suspend
such registration until the defects of the vehicle are corrected and/or the minimum standards and
specifications fully complied with.
Whenever it shall appear from the records of the Commission that during any twelve-month period
more than three warnings for violations of this Act have been given to the owner of a motor vehicle, or
that the said owner has been convicted by a competent court more than once for violation of such
laws, the Commissioner may, in his discretion, suspend the certificate of registration for a period not
exceeding ninety days and, thereupon, shall require the immediate surrender of the number plates.

Whenever a motor vehicle is found to be underweight the owner thereof shall pay the difference in the
registration fees corresponding to the shortage in weight plus a fifty per cent surcharge, and until such
payment is made, the certificate of registration of the motor vehicle concerned shall be suspended by
the Commissioner.

After two such suspension, re-registration of the vehicle concerned for one year may be denied.
The Commissioner shall notify the owner of the motor vehicle of any action taken by him under this
section.

Section 17. Number plates, preparation, preparation and issuance of . -

(a) The Commissioner shall cause number plates to be prepared and issued to owners of motor
vehicles and trailers registered under this Act, charging a fee of four pesos for each pair including the
numerals indicating the year of registry: Provided, however, That in case no number plates are
available, the Commissioner or his deputies may issue, without charge, a written permit temporarily
authorizing the operation of any motor vehicles with other means of identification: Provided, further,
That all motor vehicles exempted from payment of registration fees, motor vehicles for hire, and
privately-owned motor vehicles shall bear plates so designed and painted with different colors to
distinguish one class from another: Provided, furthermore, That the plates of motor vehicles exempted
from payment of registration fees shall be permanently assigned to such motor vehicles during their
entire lifetime while exempted from payment of the fees: And, provided, finally, That the owner
thereof shall return such plates to the Land Transportation Commission within a period of seven
working days after such owner has lost his exemption privilege or has transferred the vehicle to a
non-exempt owner.

(b) In case the design of the number plate is such that the numerals indicating the year of registry are
on a detachable tag, the Commissioner or his deputies may, in their discretion, issue the said tag only
for subsequent re-registration charging a fee of one peso for each tag issued.

Section 18. Use of number plates. – At all times, every motor vehicle shall display in conspicuous
places, one in front and one in the rear thereof, the said number plates.
The number plates shall be kept clean and cared for, and shall be firmly affixed to the motor vehicle in
such a manner as will make it entirely visible and always legible.

Except in the case of dealer’s number plates which may be used successively on various motor
vehicles in stock, no person shall transfer number plates from motor vehicle to another.

No dealer’s number plate shall be used on any motor vehicle after said vehicle has been sold and
delivered to a purchaser, and no dealer shall allow such dealer’s number plates to be used on any
motor vehicle after its sale and delivery to a purchaser.

CHAPTER III
OPERATION OF MOTOR VEHICLE
ARTICLE I
License to Drive Motor Vehicles
Section 19. Duty to procure license. – Except as otherwise specifically provided in this Act, no person
shall operate any motor vehicle without first procuring a license to drive a motor vehicle for the
current year, nor while such license is delinquent, invalid, suspended or revoked.
The license shall be carried by the driver at all times when operating a motor vehicle, and shall be
shown and/or surrendered for cause and upon demand to any person with authority under this Act to
confiscate the same.

Section 20. License for enlisted men operating Government motor vehicles. – Enlisted men operating
a motor vehicle owned by the Government of the Philippines shall be licensed in accordance with the
provisions of this Act, but no license or delinquency fees shall be collected therefrom. All licenses so
issued shall bear the words “For Government Vehicles Only” plainly marked or stamped in red ink
across the face thereof.
A license so marked or stamped shall authorize the holder thereof to operate a private-owned motor
vehicle.

Section 21. Operation of motor vehicles by tourists. – Bona fide tourist and similar transients who are
duly licensed to operate motor vehicles in their respective countries may be allowed to operate motor
vehicles during but not after ninety days of their sojourn in the Philippines.
If any accident involving such tourist or transient occurs, which upon investigation by the
Commissioner or his deputies indicates that the said tourist or transient is incompetent to operate
motor vehicles, the Commissioner shall immediately inform the said tourist or transient in writing that
he shall no longer be permitted to operate a motor vehicle.

After ninety days, any tourist or transient desiring to operate motor vehicles shall pay fees and obtain
and carry a license as hereinafter provided.

Section 22. Driver’s license, fees, examination. – Every person who desires personally to operate any
motor vehicle shall file an application to the Commissioner or his deputies for a license to drive motor
vehicles: Provided, however, That no person shall be issued a professional driver’s license who is
suffering from highly contagious diseases, such as, advanced tuberculosis, gonorrhea, syphilis, and
the like.
Each such application except in the case of enlisted men operating government-owned vehicles, shall
be accompanied by a fee of five pesos, and shall contain such information respecting the applicant and
his ability to operate motor vehicles, as may be required by the Commission.

The Commissioner or his deputies shall also ascertain that the applicant’s sight and hearing are
normal, and may in their discretion, require a certificate to that effect, signed by a reputable
physician.
An examination or demonstration to show any applicant’s ability to operate motor vehicles may also
be required in the discretion of the Commissioner or his deputies.

Section 23. Issuance of driver’s license. – If, after such examination, the Commissioner or his deputy
believes that the applicant possesses the necessary qualifications and is proficient in the operation of
motor vehicles, a license shall be issued to such applicant upon payment of five pesos, but prior to the
issuance of said license, the applicant shall furnish three copies of his recent photograph to be
securely attached to the license, and two copies to be filed and kept as provided by this Act. All
driver’s licenses shall bear the signature and right-hand thumb print of the licensee.
Section 24. Use of driver’s license and badge. – Every license issued under the provisions of this Act
to any driver shall entitle the holder thereof, while the same is valid and effective and not suspended
or revoked, to operate the motor vehicles described in such license: Provided, however, That every
licensed professional driver, before operating a public service motor vehicle registered under
classifications (d) to (j) inclusive of Section seven hereof, shall secure from the Commissioner, upon
payment of the sum of one peso, a driver’s badge which he shall, at all times while so operating a
motor vehicle, display in plain sight on the band of his cap or on his coat or shirt. Such driver’s badge
shall be of metal with a plainly readable number assigned to the licensee stamped thereon.
It shall be unlawful for any duly licensed driver to transfer, lend or otherwise allow any person to use
his license for the purpose of enabling such person to operate a motor vehicle.

No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor vehicle,
unless the person sought to be employed is a duly licensed professional driver.

Section 25. Driver’s records. – Any driver who changes his address shall, within fifteen days, notify
the Commissioner in writing of his new address, name and address of his new employer, the number
of the motor vehicle he is employed to operate, and such other information as the Commissioner may
require.
Section 26. Renewal of license. – Any license not renewed on or before the last working day of the
month when the applicant was born shall become delinquent and invalid, except when the license is
surrendered to the Commissioner or his deputies before the last working day of the month of his birth
in order to avoid payment of the delinquency fees.
The fee for renewal of delinquent license shall be five pesos in addition to the basic fee as hereinabove
prescribed.

Every applicant for renewal of license to operate any motor vehicle shall present to the Commissioner,
in person or by mail or messenger, the license issued to the applicant for the previous year, together
with the proper fee of five pesos and, in the case of professional chauffeurs, three copies of a readily-
recognized photograph of the applicant, which photograph shall have been taken not exceeding three
years prior to the date of applicant for renewal.

Lost license. – In case the license for the previous year has been lost or cannot be produced, the
applicant shall obtain a duplicate in accord with Section eleven of this Act, on penalty of refusal, by
the Commissioner or his deputies, to renew the license: Provided, however, That the Commissioner or
his deputies may, in their discretion accept in lieu of the previous years license, the duly signed and
sworn statement of an operator to the effect that he has not operated any motor vehicle in the
Philippines during the year or years to which no license was issued in his name.

The Commissioner and his deputies are hereby authorized to administer the oath in connection with
such affidavit.

Section 27. Suspension, revocation of driver’s license.

(a) The Commissioner may suspend for a period not exceeding three months or, after hearing, revoke
any driver’s license issued under the provisions of this Act, and may order any such license to be
delivered to him whenever he has reason to believe that the holder thereof is an improper person to
operate motor vehicles, or in operating or using a motor vehicle in, or as an accessory to, the
commission of any crime or act which endangers the public. Any deputy of the Commissioner may, for
the same cause, suspend for a period not exceeding three months any driver’s license issued under
the provisions of this Act: Provided, That such suspension may be appealed to the Commissioner who
may, after reviewing the case, confirm, reverse or modify the action taken by such deputy.

(b) Whenever during any twelve-month period a driver shall have been convicted at least three times
for the violations of any provisions of this Act or of any regulation issued by the Commissioner or any
municipal or city ordinance relating to motor vehicle traffic not in conflict with any of the provisions of
this Act, the Commissioner may, in his discretion, revoke or suspend the license of such driver for a
period not exceeding two years.

(c) The license suspended or revoked under the provisions of subsections (a) and (b) of this section
shall not be reinstated unless the driver has furnished a bond in accordance with Section twenty-nine
of this Act and only after the Commissioner has satisfied himself that such driver may again safely be
permitted to operate a motor vehicle.

(d) A decision of the Commissioner revoking or refusing the reinstatement of a license under the
provisions of this Section may be appealed to the Secretary of Public Works and Communications.

Section 28. Driver’s bond. – The Commissioner before reinstating any driver’s license which has been
suspended or revoked under the provisions of the preceding section or of any provisions of this Act,
may require such driver to post a bond in the sum of one thousand pesos conditioned upon the
satisfaction and payment of any claim which may be filed or of any execution which may be issued
against such driver in any case wherein said driver may be held answerable while operating motor
vehicles. The bond required in this section shall be in such form as to render sureties liable at least for
a period of not less than one year nor more than three years: Provided, however, That upon written
application to the Commissioner for release from such a bond, the Commissioner may after revoking
or suspending the driver’s license, authorize the release of the bondsmen from further responsibility
thereunder: Provided, further, That should the Commissioner decide not to revoke the license of a
driver who has been convicted of homicide through reckless imprudence, or of the violation of the
speed limit or of reckless driving at least three times within a twelve-month period, the said driver
shall post a bond in the sum of not less than two thousand pesos, conditioned upon the payment of
any claim which may be filed or any execution which may be issued against him in any case wherein
said driver may be held answerable while operating motor vehicles.
Section 29. Confiscation of driver’s licenses. – Law enforcement and peace officers duly designated
by the Commissioner shall, in apprehending any driver for violations of this Act or of any regulations
issued pursuant thereto, or of local traffic rules and regulations, confiscate the license of the driver
concerned and issue a receipt prescribed and issued by the Commission therefor which shall authorize
the driver to operate a motor vehicle for a period not exceeding seventy-two hours from the time and
date of issue of said receipt. The period so fixed in the receipt shall not be extended, and shall become
invalid thereafter. Failure of the driver to settle his case within fifteen days from the date of
apprehension will cause suspension and revocation of his license.
Section 30. Student-driver’s permit. – Upon proper application and the payment of three pesos, the
Commissioner or his deputy may issue student-driver’s permits, valid for six months to persons not
under eighteen years of age, who desire to learn to operate motor vehicles. No application for driver’s
license shall be received unless the applicant has undergone instruction in the operation of motor
vehicles for at least a month and has a valid student-driver’s permit: Provided, however, That any
person who has a license to operate vehicles in other countries may, upon presentation of appropriate
evidence of such license, be allowed to pay for a driver’s license without presenting a student driver’s
permit.
A student driver who fails in the examination shall continue as a student driver for at least one
additional month. No student driver shall operate a motor vehicle unless accompanied by a duly
licensed driver.

The licensed driver acting as instructor to the student driver shall likewise be responsible and liable for
any violation of the provisions of this Act and for any injury or damage done by the motor vehicle on
account or as a result of its operation by a student under his direction.
ARTICLE II
Illegal Use of Licenses, Number Plates, Etc.
Section 31. Imitation and false representations. – No person shall make or use attempt to make or
use a driver’s license, badge, certificate of registration, number plate, tag, or permit in imitation or
similitude of those issued under this Act, or intended to be used as or for a legal license, badge,
certificate, plate, tag or permit, or with intent to sell or otherwise dispose of the same to another. No
person shall falsely or fraudulently represent as valid and in force any driver’s license, badge,
certificate, plate, tag or permit issued under this Act which is delinquent or which has been revoked or
suspended.
No person shall, knowingly and with intent to deceive, make one or more false or fraudulent
statements in an application for the registration of vehicles, or for a driver’s license.

ARTICLE III
Passenger and Freight
Section 32. Exceeding registered capacity. – No person operating any vehicle shall allow more
passenger or more freight or cargo in his vehicle than its registered carrying capacity. In the case of
public utility trucks or buses, the conductor shall be exclusively liable for violations of this section or of
Section thirty-two, letter (c) hereof: Provided, That the conductor, before being employed by any
public service operator, shall get a permit or license from the Commission and pay five pesos annually
for said license or permit issued in his favor, and the same is renewable on or before the last working
day of the month of his birth, attaching a readily recognizable photograph and after presentation of a
medical certificate of fitness of applicant.
Passenger trucks may be allowed to construct any cargo carrying device at the rear or at the side of
the truck, subject to the approval of the Commissioner: Provided, however, That the total weight of
the device, including the cargo, shall not exceed one hundred kilos.

(b) Carrying of passengers and freight on top of vehicles. – No person operating a motor vehicle shall
allow any passenger to ride on the cover or top of such vehicles: Provided, however, That subject to
such conditions as may be contained in permits that may be issued by the Commissioner, baggage or
freight may be carried on the top of a truck provided the weight thereof does not exceed twenty kilos
per square meter and is distributed in such a manner as not to endanger the passengers or stability of
the truck.

(c) Riding on running boards. – No driver shall permit any person to ride on the running board, step
board, or mudguard of his motor vehicle for any purpose except to make repair or adjustment in the
motor or to collect fares.
Section 33. Passenger or freight capacity marked on vehicle. – All passengers automobiles for hire
shall have the registered passenger capacity plainly and conspicuously marked on both sides thereof,
in letters and numerals not less than five centimeters in height.
All motor trucks, whether for passenger or freight, private, or for hire, shall have the registered
passenger gross and net weight capacities plainly and conspicuously marked on both sides thereof, in
letters and numerals not less than five centimeters in height.

ARTICLE IV
Accessories of Motor Vehicles
Section 34.
(a) Tires of motor vehicles. – No motor vehicle with metallic tires shall be operated upon any public
highway, and solid tires whenever used shall be of sufficient thickness to prevent the metal rims
thereof from coming in direct contact with the road.

(b) Brakes – Every motor vehicle with four or more wheels shall be provided with dual hydraulic brake
system so that in case of hydraulic line failure affecting the braking efficiency of any of the four wheels
at least either the front or rear wheels shall retain normal braking capabilities. In the absence of such
dual braking system every motor vehicle with four or more wheels shall be provided with safety valve
devices of such design and make so that failure of the hydraulic braking system of the vehicle because
of leakage in the line of other parts of the system will not affect all wheels but rather render at all
times effective the braking power of either the two front wheels or the two rear wheels when brakes
are applied. This requirement, however, does not apply to motor vehicles equipped with pneumatic
braking system.

(b-1) Horns. – Every motor vehicle shall be provided with a horn or signalling devise in good working
order: Provided, however, That no horn or signalling device emitting an exceptionally loud, startling,
or disagreeable sound shall be installed or used on any motor vehicle.

All authorized emergency vehicles, such as ambulance and police cars and fire wagons used for
emergency calls shall be equipped with a bell, siren, or exhaust whistle of a type approved by the
Commissioner, and no such device shall be installed or used in any other vehicle.

No vehicle not classified as a motor vehicle under this Act shall be equipped with a horn or signaling
device similar to the horn customarily used on motor vehicles.

(c) Headlights. – Every motor vehicle of more than one meter of projected width, while in use on any
public highway shall bear two headlights, one on each side, with white or yellowish light visible from
the front, which, not later than one-half hour after sunset and until at least one-half four before
sunrise and whenever weather conditions so require, shall both be lighted.
Additional lamps and light may be carried, but no red lights shall be visible forward or ahead of the
vehicle. Trucks, buses, trailers, and other similar vehicles must carry, while in use on any public
highway during night-time, colored riding lights on each of the four corners not more than ten
centimeters from the top.

All motor vehicles shall be equipped with devices for varying the intensity of light, and the driver must
dim the headlights or tilt the beams downward whenever the vehicle is being operated on well-lighted
streets within the limits of cities, municipalities, and thickly populated barrios or districts, or whenever
such vehicle meets another vehicle on any public highway.

(d) Taillights. – Every motor vehicle and trailer shall, during the above-mentioned hours, also bear on
each side in the rear a lamp showing a red light visible at least one hundred meters from the rear of
the vehicle and a lamp throwing a white light upon the number plate issued for such vehicle.

(e) Stop lights. – Every motor vehicle shall be equipped at the rear with at least one lamp which shall
throw a sustained bright red light visible under all conditions, even under bright sunlight, when the
brakes are applied. Each bus, truck, trailer or similar vehicle shall be equipped, as its stop light at or
near its rear center, with a lamp at least twelve centimeters in diameter with the word “stop” inscribed
in the center.

(f) Motorcycle and other vehicle lights. – Every motor vehicle of less than one meter of projected
width shall be subject to the preceding provisions of this section, except that one headlight and one
taillight shall be required. No signal light shall be necessary.

Additional lamps may be carried provided they comply with the preceding provisions of this section.

Every motor vehicle, or whatever style, kind, make, character, or nature, when upon a highway during
the hours above-mentioned, whether in motion or not, shall have one or more lights so arranged that
the same shall be visible at least fifty meters from the front and the rear of such vehicle.

(g) Lights when parked or disabled. – Appropriate parking lights or flares visible one hundred meters
away shall be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in
places that are not well-lighted or is placed in such manner as to endanger passing traffic.

(h) Windshield wiper. – Every motor vehicle shall be equipped with a mechanically or electrically
operated device for wiping off raindrops or other moisture from its front windshield.

(i) Use of red flag. – Whenever the load of any vehicle extends more than one meter beyond the bed
or body thereof, there shall be displayed at every projecting end of such load a red flag not less than
thirty centimeters both in length and width, except that during the hours fixed under subsection (c),
there shall be displayed, in lieu of the required red flags, red lights visible at least fifty meters away.

(j) Mufflers. – Every motor vehicle propelled by an internal combustion engine shall be equipped with
a muffler, and whenever said motor vehicle passes through a street of any city, municipality, or thickly
populated district or barrio, the muffler shall not be cut out or disconnected. No motor vehicle shall be
operated in such a manner as to cause it to emit or make any unnecessary or disagreeable odor,
smoke or noise.

CHAPTER IV
TRAFFIC RULES
ARTICLE I
Speed Limit and Keeping to the Right
Section 35. Restriction as to speed. -
(a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent
speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the width
of the highway, and of any other condition then and there existing; and no person shall drive any
motor vehicle upon a highway at such a speed as to endanger the life, limb and property of any
person, nor at a speed greater than will permit him to bring the vehicle to a stop within the assured
clear distance ahead.

(b) Subject to the provisions of the preceding paragraph, the rate of speed of any motor vehicle shall
not exceed the following:

Passengers
MAXIMUM ALLOWABLE SPEEDS Motor trucks and buses
Cars and Motorcycle

1. On open country roads, with no “blinds corners” 80 km. per hour 50 km. per hour
not closely bordered by habitations.

2. On “through streets” or boulevards, clear of traffic, 40 km. per hour 30 km. per hour
with no ” blind corners,” when so designated.

3. On city and municipal streets, with light traffic, 30 km. per hour 30 km. per hour
when not designated “through streets”.

4. Through crowded streets, approaching intersections 20 km. per hour 20 km. per hour
at “blind corners,” passing school zones, passing other
vehicles which are stationery, or for similar dangerous
circumstances.
(c) The rates of speed hereinabove prescribed shall not apply to the following:

(1) A physician or his driver when the former responds to emergency calls;

(2) The driver of a hospital ambulance on the way to and from the place of accident or other
emergency;

(3) Any driver bringing a wounded or sick person for emergency treatment to a hospital, clinic, or any
other similar place;

(4) The driver of a motor vehicle belonging to the Armed Forces while in use for official purposes in
times of riot, insurrection or invasion;

(5) The driver of a vehicle, when he or his passengers are in pursuit of a criminal;

(6) A law-enforcement officer who is trying to overtake a violator of traffic laws; and

(7) The driver officially operating a motor vehicle of any fire department, provided that exemption
shall not be construed to allow unless or unnecessary fast driving of drivers aforementioned.

Section 36. Speed limits uniform throughout the Philippines. – No provincial, city or municipal
authority shall enact or enforce any ordinance or resolution specifying maximum allowable speeds
other than those provided in this Act.
Section 37. Driving on right side of highway. – Unless a different course of action is required in the
interest of the safety and the security of life, person or property, or because of unreasonable difficulty
of operation in compliance herewith, every person operating a motor vehicle or an animal-drawn
vehicle on a highway shall pass to the right when meeting persons or vehicles coming toward him, and
to the left when overtaking persons or vehicles going the same direction, and when turning to the left
in going from one highway to another, every vehicle shall be conducted to the right of the center of
the intersection of the highway.
Section 38. Classification of highways. – Public highways shall be properly classified for traffic
purposes by the provincial board, municipal board or city council having jurisdiction over them, and
said provincial board, municipal board or city council shall provide appropriate signs therefor, subject
to the approval of the Commissioner. It shall be the duty of every provincial, city and municipal
secretary to certify to the Commissioner the names, locations, and limits of all “through streets”
designated as such by the provincial board, municipal board or council.
ARTICLE II
Overtaking and Passing a Vehicle, and Turning at Intersections
Section 39. Overtaking a vehicle. – The driver of any motor vehicle overtaking another vehicle
proceeding in the same direction shall pass at a safe distance to the left thereof, and shall not again
drive to the right side of the highway until safety clear of such overtaken vehicle except that on a
highway, within a business or residential district, having two or more lanes for the movement of traffic
in one direction, the driver of a vehicle may overtake and pass another vehicle on the right. Nothing in
this section shall be construed to prohibit a driver overtaking and passing, upon the right, another
vehicle which is making or about to make a left turn.
Section 40. Driver to give way to overtaking vehicle. – The driver of a vehicle about to be overtaken
and passed by another vehicle approaching from the rear shall give way to the overtaking vehicle on
suitable and audible signal being given by the driver of the overtaking vehicle, and shall not increase
the speed of his vehicle until completely passed by the overtaking vehicle.
Section 41. Restrictions on overtaking and passing.
(a) The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking
or passing another vehicle proceeding in the same direction, unless such left side is clearly visible, and
is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be
made in safety.

(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction,
when approaching the crest of a grade, not upon a curve in the highway, where the driver’s view
along the highway is obstructed within a distance of five hundred feet ahead, except on a highway
having two or more lanes for movement of traffic in one direction where the driver of a vehicle may
overtake or pass another vehicle: Provided, That on a highway within a business or residential district,
having two or more lanes for movement of traffic in one direction, the driver of a vehicle may
overtake or pass another vehicle on the right.

(c) The driver of a vehicle shall not overtake or pass any other vehicle proceeding in the same
direction, at any railway grade crossing, not at any intersection of highways unless such intersection
or crossing is controlled by traffic signal, or unless permitted to do so by a watchman or a peace
officer, except on a highway having two or more lanes for movement of traffic in one direction where
the driver of a vehicle may overtake or pass another vehicle on the right. Nothing in this section shall
be construed to prohibit a driver overtaking or passing upon the right another vehicle which is making
or about to make a left turn.

(d) The driver of a vehicle shall not overtake or pass, or attempt to pass, any other vehicle,
proceeding in the same direction, between any points indicated by the placing of official temporary
warning or caution signs indicating that men are working on the highway.
(e) The driver of a vehicle shall not overtake or pass, or attempt to overtake or pass, any other
vehicle proceeding in the same direction in any “no-passing or overtaking zone.”

ARTICLE III
Right of Way and Signals
Section 42. Right of way.
(a) When two vehicles approach or enter an intersection at approximately the same time, the driver of
the vehicle on the left shall yield the right of way to the vehicle on the right, except as otherwise
hereinafter provided. The driver of any vehicle traveling at an unlawful speed shall forfeit any right of
way which he might otherwise have hereunder.

(b) The driver of a vehicle approaching but not having entered an intersection, shall yield the right of
way to a vehicle within such intersection or turning therein to the left across the line of travel of such
first-mentioned vehicle, provided the driver of the vehicle turning left has given a plainly visible signal
of intention to turn as required in this Act.

(c) The driver of any vehicle upon a highway within a business or residential district shall yield the
right of way to a pedestrian crossing such highway within a crosswalk, except at intersections where
the movement of traffic is being regulated by a peace officer or by traffic signal. Every pedestrian
crossing a highway within a business or residential district, at any point other than a crosswalk shall
yield the right of way to vehicles upon the highway.

(d) The driver of a vehicle upon a highway shall bring to a full stop such vehicle before traversing any
“through highway” or railroad crossing: Provided, That when it is apparent that no hazard exists, the
vehicle may be slowed down to five miles per hour instead of bringing it to a full stop.

Section 43. Exception to the right of way rule.

(a) The driver of a vehicle entering a highway from a private road or drive shall yield the right of way
to all vehicles approaching on such highway.

(b) The driver of a vehicle upon a highway shall yield the right of way to police or fire department
vehicles and ambulances when such vehicles are operated on official business and the drivers thereof
sound audible signal of their approach.

(c) The driver of a vehicle entering a “through highway” or a “stop intersection” shall yield the right of
way to all vehicles approaching to either direction on such “through highway”: Provided, That nothing
in this subsection shall be construed as relieving the driver of any vehicle being operated on a
“through highway” from the duty of driving with due regard for the safety of vehicles entering such
“through highway” nor as protecting the said driver from the consequence of an arbitrary exercise off
such right of way.

Section 44. Signals on starting, stopping or turning. -

(a) The driver of any vehicle upon a highway, before starting, stopping or turning from a direct line,
shall first see that such movement can be made in safety, and if any pedestrian may be affected by
such movement, shall give a clearly audible signal by sounding the horn, and whenever the operation
of any other vehicle approaching or following may be affected by such movement, shall give a signal
plainly visible to the driver of such other vehicles of the intention to make such movement.

(b) The signal herein required shall be given by means of extending the hand and arm beyond the left
side of the vehicle, or by an approved mechanical or electrical signal device.

ARTICLE IV
Turning and Parking
Section 45. Turning at intersections. -
(a) The drive of a vehicle intending to run to the right at an intersection shall approach such
intersection in the lane for traffic nearest to the right-hand side of the highway and, in turning, shall
keep as close as possible to the right-hand curb or edge of the highway.

(b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for
traffic to the right of and nearest to the center line of the highway, and, in turning, shall pass to the
left of the center of the intersection, except that, upon highways laned for traffic and upon one-way
highways, a left turn shall be made from the left lane of traffic in the direction in which the vehicle is
proceeding.

(c) For the purpose of this section, the center of the intersection shall mean the meeting point of the
medial lines of the highways intersecting one another, except when it is occupied by a monument,
grass plot or any permanent structure, other than traffic control device.

Section 46. Parking prohibited in specified places. – No driver shall park a vehicle, or permit it to
stand, whether attended or unattended, upon a highway in any of the following places:
(a) Within an intersection

(b) On a crosswalk

(c) Within six meters of the intersection of curb lines.

(d) Within four meters of the driveway entrance to and fire station.
(e) Within four meters of fire hydrant

(f) In front of a private driveway

(g) On the roadway side of any vehicle stopped or parked at the curb or edge of the highway

(h) At any place where official signs have been erected prohibiting parking.

Section 47. Parked vehicle. – Whenever a motor vehicle is parked unattended on any highway, the
driver thereof must turn off the ignition switch and stop the motor and notch effectively the hand
brake.
ARTICLE V
Miscellaneous Traffic Rules
Section 48. Reckless driving. – No person shall operate a motor vehicle on any highway recklessly or
without reasonable caution considering the width, traffic, grades, crossing, curvatures, visibility and
other conditions of the highway and the conditions of the atmosphere and weather, or so as to
endanger the property or the safety or rights of any person or so as to cause excessive or
unreasonable damage to the highway.
Section 49. Right of way for police and other emergency vehicles. – Upon the approach of any police
or fire department vehicle, or of an ambulance giving audible signal, the driver of every other vehicle
shall immediately drive the same to a position as near as possible and parallel to the right-hand edge
or curb of the highway, clear of any intersection of highways, and shall stop and remain in such
position, unless otherwise directed by a peace officer, until such vehicle shall have passed.
Section 50. Tampering with vehicles. – No unauthorized person shall sound the horn, handle the
levers or set in motion or in any way tamper with a damage or deface any motor vehicle.
Section 51. Hitching to a vehicle. – No person shall hang on to, ride on, the outside or the rear end of
any vehicle, and no person on a bicycle, roller skate or other similar device, shall hold fast to or hitch
on to any moving vehicle, and no driver shall knowingly permit any person to hang on to or ride, the
outside or rear end of his vehicle or allow any person on a bicycle, roller skate or other similar device
to hold fast or hitch to his vehicle.
Section 52. Driving or parking on sidewalk. – No person shall drive or park a motor vehicle upon or
along any sidewalk, path or alley not intended for vehicular traffic or parking.
Section 53. Driving while under the influence of liquor or narcotic drug. – No person shall drive a
motor vehicle while under the influence of liquor or narcotic drug.
Section 54. Obstruction of traffic. – No person shall drive his motor vehicle in such a manner as to
obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or
loading or unloading freight, obstruct the free passage of other vehicles on the highway.
Section 55. Duty of driver in case of accident. – In the event that any accident should occur as a
result of the operation of a motor vehicle upon a highway, the driver present, shall show his driver’s
license, give his true name and address and also the true name and address of the owner of the motor
vehicle.
No driver of a motor vehicle concerned in a vehicular accident shall leave the scene of the accident
without aiding the victim, except under any of the following circumstances:

1. If he is in imminent danger of being seriously harmed by any person or persons by reason of the
accident;

2. If he reports the accident to the nearest officer of the law; or

3. If he has to summon a physician or nurse to aid the victim.

CHAPTER V
PENAL AND OTHER PROVISIONS
ARTICLE I
Penalties
Section 56. Penalty for violation. – The following penalties shall be imposed for violations of this Act:
(a) For registering later than seven days after acquiring title to an unregistered motor vehicle or after
conversion of a registered motor vehicle requiring larger registration fee than that for which it was
originally registered, or for renewal of a delinquent registration, the penalty shall be a fine fifty per
cent of the registration fees corresponding to the portion of the year for which the vehicle is registered
for use.

(b) For failure to sign driver’s license or to carry same while driving, twenty pesos fine.

(c) Driving a vehicle with a delinquent or invalid driver’s license, fifty pesos fine.

(d) Driving a motor vehicle with delinquent, suspended or invalid registration, or without registration
or without the proper license plate for the current year, three hundred pesos fine.

(e) Driving a motor vehicle without first securing a driver’s license, three hundred pesos fine.

(f) Driving a motor vehicle while under the influence of liquor or narcotic drug, a fine of not less than
two hundred pesos nor more than five hundred pesos, or imprisonment of not more than three
months, or both, at the discretion of the Court.
(g) Violation of Section thirty-two, thirty-four (a), (b) and (b-1), thirty-five and forty-six a fine not
exceeding one hundred pesos: Provided, however, That in the case of violation of Section 34 (b) the
vehicle or vehicles affected may not be allowed to operate unless the requirements provided in this
section are complied with.

(h) Violations of Sections forty-nine, fifty and fifty-two, a fine not exceeding fifty pesos.

(i) For making, using or attempting to make or use a driver’s license, badge, certificate or registration,
number plate, tag or permit in imitation or similitude of those issued under this Act, or intended to be
used as or for a legal license, badge, certificate, plate, tag or permit or with intent to sell or otherwise
dispose of the same to another, or false or fraudulently represent as valid and in force any driver’s
license, badge, certificate, plate, tag or permit issued under this Act which is delinquent or which has
been suspended or revoked, a fine of not exceeding three hundred pesos.

(j) For using private passenger automobiles, private trucks, private motorcycles, and motor wheel
attachments for hire, in violation of Section seven, subsections (a), (b), and (c), of this Act, a fine of
two hundred pesos and suspension of driver’s license for a period of three months for the first
conviction; a fine of three hundred pesos and six months imprisonment for the second conviction; and
an imprisonment of one year and permanent revocation of the driver’s license for the third conviction.

(k) For permitting, allowing, consenting to, or tolerating the use of a privately-owned motor vehicle for
hire in violation of Section seven, subsections (a), (b), and (c), of this Act, there shall be imposed
upon the owner of the vehicle a fine of five hundred pesos and the certificate of registration shall be
suspended for a period of three months for the first conviction, and an increase of one hundred pesos
in the fine and one month’s suspension of the registration for each subsequent conviction.

(l) For violation of any provisions of this Act or regulations promulgated pursuant hereto, not
hereinbefore specifically punished, a fine of not less than ten or more than fifty pesos shall be
imposed.

(m) In the event an offender cannot pay any fine imposed pursuant to the provisions of this Act, he
shall be made to undergo subsidiary imprisonment as provided for in the Revised Penal Code.

(n) If, as the result of negligence or reckless or unreasonable fast driving, any accident occurs
resulting in death or injury of any person, the motor vehicle operator at fault shall, upon conviction,
be punished under the provisions of the Revised Penal Code.

Section 57. Punishment for other offenses. – The conviction of any person for any offense under this
Act shall not bar his prosecution for any other offense which may have been committed by such
person concurrently with the commission of the offense of which he was convicted or in doing the act
or series of acts which constituted the offense of which he was convicted.
Section 58. Duty of clerks of court. – It is hereby made the duty of clerks of the Court of First
Instance, the City Court of Municipal Court trying traffic violation cases to certify to the Commission
the result of any case, whether criminal or civil, involving violations of any provision of this Act or of
other laws and ordinances relating to motor vehicles. Said certificate shall specifically contain the
name of the driver or owner of the vehicle involved, his address, the number of his license and/or of
the certificate or registration of his vehicle, and the date thereof, and the offense of which he was
convicted or acquitted.
ARTICLE II
Collection of Fees, Taxes and Fines, Liens, Allotment of Funds
Section 59. (a) Collection of fees; national and local taxes; toll fees. – The collection of all fees,
taxes, and fines, under the provisions of this Act shall be made in accordance with regulations to be
prescribed by the Commissioner and approved jointly by the Auditor General.
(b) No taxes or fees other than those prescribed in this Act shall be imposed for the registration or
operation or on the ownership of any motor vehicle, or for the exercise of the profession of chauffeur,
by any municipal corporation, the provisions of any city charter to the contrary notwithstanding:
Provided, however, That any provincial board, city or municipal council or board or other competent
authority may enact and collect such reasonable and equitable toll fees for the use of such bridges and
ferries, within their respective jurisdiction, as may be authorized and approved by the Secretary of
Public Works and Communications, and also for the use of such public roads, as may be authorized by
the President of the Philippines upon recommendation of the Secretary of Public Works and
Communications, but in none of these cases shall any toll fees be charged or collected until and unless
the approved schedule of tolls has been posted legibly in a conspicuous place at such toll station.

Section 60. The lien upon motor vehicles. – Any balance of fees for registration, re-registration or
delinquent registration of a motor vehicle, remaining unpaid and all fines imposed upon any vehicle
owner, shall constitute a first lien upon the motor vehicle concerned.
The Commission is hereby vested with authority to issue a warrant of constructive or actual distraint
or and levy to any owner of motor vehicle who has any balance of fees for registration, re-registration
or delinquent registration of a motor vehicle remaining unpaid, which upon demand by the
Commissioner of the Land Transportation Commission or any of his deputies executing such warrant,
the owner of the said vehicle shall surrender same at the time demanded, except when the
attachment or execution is under any judicial process. Any owner who fails or refuses to surrender any
of such property or vehicle not so surrendered shall be punished by a fine not exceeding the amount
of the fees (including penalties and interests, if any) for the collection of which such warrant has been
issued, together with the costs and interests, if any, from the time of such surrender. In addition, such
owner shall punished by a fine of not more than three hundred pesos or an imprisonment not more
than six months, or both.

Section 61. Disposal of monies collected. – Monies collected under the provisions of this Act shall be
deposited in a special trust account in the National Treasury to constitute the Highway Special Fund,
which shall be apportioned and expended in accordance with the provisions of the “Philippine Highway
Act of 1953″: Provided, however, That the amount necessary to maintain and equip the Land
Transportation Commission but not to exceed fifteen per cent of the total collections during any one
year, shall be set aside for the purpose.
ARTICLE III
Final Provisions
Section 62. No provincial board, city or municipal board or council shall enact or enforce any
ordinance or resolution in conflict with the provisions of this Act, or prohibiting any deputy or agent of
the Commission to enforce this Act within their respective territorial jurisdiction and the provisions of
any charter to the contrary notwithstanding.
Section 63. Repeal of laws and ordinances. – Act Numbered Thirty-nine hundred ninety-two, as
amended, and all laws, executive orders, ordinances, resolutions, regulations, or parts thereof in
conflict with the provisions of this Act are repealed: Provided, however, That nothing contained in this
Act shall be construed as limiting or superseding any provisions of the Public Service Act, as amended,
with respect to the control by the Public Service Commission of motor vehicles operating as public
service, nor shall any provision of this Act be construed as limiting or abridging the powers conferred
upon and exercised by the Public Service Commission with regards to the control and supervision of
the operation of such motor vehicles as public service.
Section 64. Appropriation. – To carry out effectively the provisions of this Act, the amount of two
hundred fifty thousand pesos is hereby appropriated out of the fees collected under this Act, in
addition to the appropriations provided in the General Appropriations Act, for the expense of this
Commission for the fiscal year beginning July first, nineteen hundred and sixty-four, to June thirtieth,
nineteen hundred and sixty-five: Provided, however, That any savings in the appropriations of the
Motor Vehicles Office for the fiscal year beginning July first, nineteen hundred and sixty-three, to June
thirtieth, nineteen hundred and sixty-four shall likewise be available for this purpose.
Section 65. Separability. – If any provisions of this Act or the application thereof to any person or
circumstance is held invalid, the remainder of the Act, and the application of such provision to other
persons or circumstances, shall not be affected thereby.
Section 66. Effectivity. – This Act shall take effect upon its approval.
Approved: June 20, 1964
REPUBLIC ACT NO. 9295
May 03, 2004
AN ACT PROMOTING THE DEVELOPMENT OF PHILIPPINE DOMESTIC SHIPPING,
SHIPBUILDING, SHIP REPAIR AND SHIP BREAKING, ORDAINING REFORMS IN
GOVERNMENT POLICIES TOWARDS SHIPPING IN THE PHILIPPINES AND FOR OTHER
PURPOSES.
CHAPTER I
GENERAL PROVISIONS
Section 1. Short Title. – This Act shall be known as the “Domestic Shipping Development Act of
2004.”
Sec. 2. Declaration of Policy. – The State recognize that shipping is a necessary infrastructure,
which is vital to the economic development of our country.
The Philippines needs a strong and competitive domestic merchant fleet owned and controlled by
Filipinos or by corporations at least sixty percent (60%) of the capital of which is owned by Filipinos
and manned by qualified Filipino officers and crew which shall: (a) bridge our islands by ensuring safe,
reliable, efficient, adequate and economic passenger and cargo services; (b) encourage the dispersal
of industry and the economic development of our regional communities by ensuring the availability of
regular, reliable and efficient shipping services; (c) ensure the growth of exports by providing
necessary, competitive and economical domestic sea linkage; (d) serve as a naval and military
auxiliary in times of war and other national emergencies; and (e) function as an employment support
base for our Filipino seafarers.

To attain these objectives, it is hereby declared to the policy of the State to; (a) promote Filipino
ownership of vessels operated under the Philippine flag; (b) attract private capital to invest in the
shipping industry by creating a healthy and competitive investment and operating environment; (c)
provide necessary assistance and incentives for the continued growth of the Philippine domestic
merchant marine fleet; (d) encourage the improvement and upgrading of the existing domestic
merchant marine fleet and Filipino crew to meet international standards; (e) ensure the continued
viability of domestic shipping operations; and (f) encourage the development of a viable shipbuilding
and ship repair industry to support the expansion and modernization of the Philippine domestic
merchant marine fleet and its strict adherence to safety standards which will ensure the seaworthiness
of all sea-borne structures.

Sec. 3. Definition of Terms. – As used in and for purposes of this Act, the following terms, whether
in singular or plural are hereby defined as follows:
(a) “Domestic shipping” shall mean the transport of passenger or cargo, or both, by ships duly
registered and licensed under Philippine law to engage in trade and commerce between Philippine
ports and within Philippine territorial or internal waters, for hire or compensation, with general or
limited clientele, whether permanent occasional or incidental, with or without fixed routes, and done
for contractual or commercial purposes;

(b) “Domestic trade” shall mean the sale, barter or exchange of goods, materials or products within
the Philippines;

(c) “Domestic Ship Operator” or “Domestic Ship Owner” may be used interchangeably and shall mean
a citizen of the Philippines, or a commercial partnership wholly owned by Filipinos, or a corporation at
least sixty percent (60%) of the capital of which is owned by Filipinos, which is duly authorized by the
Maritime Industry Authority (MARINA) to engage in the business of domestic shipping;

(d) “Shipper” shall mean any person, partnership or corporation who shall procure for itself the
services of a domestic ship operator for the carriage of its cargo in the domestic trade upon payment
of proper compensation;

(e) “MARINA” shall mean the Maritime Industry Authority;

(f) “Ship” or “Vessel” may be used interchangeably and shall mean any kind, class or type of craft or
artificial contrivance capable of floating in water, designed to be used, or capable of being used as a
means of water transport in the domestic trade for the carriage of passengers or cargo, or both,
utilizing its own motive power or that of another;

(g) “Importation” shall mean the direct purchase, lease or charter of newly constructed or previously
owned ships, or the purchase of ship’s spare parts from foreign sources or from registered enterprises
operating in special economic zones as this terms is defined in Republic Act No. 7916 entitled, “The
Special Economic Zone Act of 1995,”

(h) “Spare parts” shall mean the replacement parts or components of vessel, including but not limited
to its hull, engines, machineries, equipment, appurtenances, necessaries accessories, article, supplies,
materials, steelplates, aluminum plates, other metal plates, communications, equipment, and other
parts or components thereof, installed abroad the ships necessary for its safe and efficient navigation
and operation;

(i) “Certificate of Public Convenience’ shall mean the license on authority issued by MARINA to a
domestic ship operator to engage in domestic shipping;

(j) “Cargo handling equipment’ shall mean any machinery, gear or equipment used by the ship
operator or a duly authorized and licensed port operator to service or handle cargo, on board the
vessel at the port or in the terminal or container yard such as, but not limited to cranes, forklifts, top
lifts, stackers, tractor heads, containers, pallet boards and the like, including all spare parts,
replacement parts, appurtenances accessories, articles, supplies and materials thereof;

(k) “Shipbuilding” shall mean the design, construction, launching and outfitting of all types of ships
and watercraft;

(l) “Ship repair” shall mean the overhaul, refurbishment renovation improvement, or alteration of the
hull, machineries, equipment, outfits and components of all types of ships;

(m) “Shipyard” shall mean the shipbuilding or repair facilities which have the capability to lift vessels
above the waterline in order to effect ship work on vessels, appendages, structure, machinery and
equipment; and

(n) “Shipbuilder” or “Ship repairer” shall mean a citizen of the Philippines, or a commercial partnership
owned by majority of Filipinos or a corporation incorporated under the laws of the Philippines, the
capital of which is owned or controlled in any proportion by Filipinos or by foreign nationals, or by both
such Filipinos or foreign nationals, or by corporations whether Filipino or foreign-owned, which is duly
authorized by the MARINA to engage in the business of shipbuilding or ship repair or to otherwise
operate a shipyard, graving dock or marine repair yard.

CHAPTER II
INVESTMENT INCENTIVES
Sec. 4. Investment Incentives. – To insure the continued viability of domestic shipping, and to
encourage investments in the domestic shipping industry, the following incentives shall be granted to
qualified domestic ship operators:
(a) Exemption from value-added tax on the importation and local purchase of passenger and/or cargo
vessels of one hundred fifty (150) tons and above, including engine and spare parts of said vessels:
Provided: That the vessels to be imported shall comply with the age limit requirement at the time of
acquisition counted from the date of the vessels, original commissioning, as follows; 1) For passenger
and/or cargo vessels, the age limit is fifteen (15) years old, 2) For tankers, the age limit is ten (10)
years old, and 3) For high-speed passenger crafts, the age limit is five (5) years old; and

(b) Exemption from value-added tax on the importation of life saving equipment , safety and rescue
equipment and communication and navigational safety equipment, steel plates and other metal plates
including marine-grade aluminum plates, used for transport operations.

The importation of the articles under Sec. 4(a) and (b) of the Act shall be granted exemption from
value-added tax subject to the following conditions: (1) That said articles are not manufactured
domestically in sufficient quantity, of comparable quality and at reasonable prices; (2) That said
articles are directly imported by a MARINA-registered domestic shipping operator; (3) That said
articles are reasonably-needed and will be used exclusively by the registered domestic shipping
operator in its transport operations; (4) That the approval of MARINA was obtained prior to the
importation of said articles; and (5) That exemption from value-added tax on the importation of said
articles shall be granted to all domestic shipping operators within a period of ten (10) years from the
effectivity of this Act.

Any sale, transfer or disposition of articles covered under Sec. 4 (a) and (b) within ten (10) years from
the effectivity of this Act to another registered shipping operator enjoying similar incentive shall
require prior approval of MARINA. If the sale, transfer or disposition was made without prior approval
of MARINA, both the vendor and the transferee or assignee shall be liable to pay twice the amount of
value-added tax exemption given him: Provided, further, That if the sale transfer or disposition was
made to nonexempt entity or to a party other than a registered domestic ship operator within ten (10)
years from the effectivity of this Act, both the vendor and the transferee or assignee shall be solidarily
liable to pay twice the amount of the value-added tax waived: Provided, finally. That the sale, transfer
or disposition made after ten (10) years from the effectivity of this Act shall be made by informing
MARINA in writing. The purchasers, transferees, or recipients shall be considered the importers
thereof, who shall be liable for any internal revenue tax on such importation. The tax due on such
importation shall constitute a lien on the article itself, and such lien shall be superior to all charges or
liens on the goods, irrespective of the possessor thereof. The Bureau of Internal Revenue (BIR) shall
be furnished with notice of actions taken by the MARINA.

(c) Net operating loss carry over. A net operating loss in any taxable year immediately preceding the
current taxable year, which had not been previously offset as a deduction from gross income shall be
carried over for the next three (3) consecutive taxable years immediately following the year of such
loss subject to the pertinent provisions of the National Internal Revenue Code of 1997, as amended.

(d) Accelerated depreciation. Fixed assets my be depreciated as follows:

(i) To the extent of not more than twice as fast as the normal rate of depreciation or depreciated at
normal rate of depreciation if the expected life is ten (100 years or less; or

(ii) Depreciation over any number of years between five (5) years and the expected life if the latter is
more than ten (10) years, and the depreciation thereon allowed as deduction from taxable Income:
Provided, That the domestic shipping operator notifies the BIR at the beginning of the depreciation
period which depreciation rate allowed by this section will be used.
CHAPTER III
DEREGULATION OF THE DOMESTIC SHIPPING INDUSTRY-AUTHORITY
OF THE MARITIME INDUSTRY AUTHORITY
Sec. 5. Authority to Operate. – No franchise, certificate or any other form authorization for the
carriage of cargo or passenger, or both in the domestic trade, shall be granted except of domestic ship
owners or operators.
Sec. 6. Foreign Vessels Engaged in Trade and Commerce in the Philippines Territorial
Waters. – No foreign vessel shall be allowed to transport passengers or cargo between ports or place
within the Philippine territorial waters, except upon the grant Special Permit by the MARINA when no
domestic vessels is available or suitable to provide the needed shipping service and public interest
warrants the same.
Sec. 7. Issuance of Authority to operate. – the MARINA shall have the power and authority to
issue certificates of public convenience to qualified domestic ship operators, taking into consideration
the economic and beneficial effect which the proposed services shall have to the port province or
region which it proposes to serve, and the financial capacity of the domestic ship operator to provide
and sustain safe, reliable, adequate, efficient and economic service in accordance with the standards
set by the government regulation.
Every domestic ship operator shall state in its application the route it proposes to serve, and the
service it proposes to offer. Domestic ship operators who do not intend to operate in a fixed route
shall nevertheless state in its application the service it proposes to offer.

Sec. 8. Deregulation of the Domestic Shipping Industry. – In order to encourage investments in

the domestic shipping industry by existing domestic ship operators and attract new investment from
new operators and investors, domestic ship operators are hereby authorized to establish their own
domestic shipping rates: Provided, That effective competition is fostered and public interest is served.
The MARINA shall monitor all shipping operations and exercise regulatory intervention where it is
established after due process that public interest needs to be protected and safeguarded.

Sec. 9. Safety Standards. – All vessels operate by domestic ship operators shall at all times be in
seaworthy condition properly equipped with adequate life-saving, communication, safety and other
equipment operated and maintained in accordance with the standards set by MARINA, and manned by
duly licensed and competent vessel crew.
The MARINA shall have the power to inspect vessels and all equipment on board to ensure compliance
with safety standards.

Sec. 10. Jurisdiction; Power; and Duties of MARINA. – The MARINA shall have the power and
authority to:
(1) Register vessels;
(2) Issue certificates of public convenience or any extensions or amendments thereto, authorizing the
operation of all kinds. Classes and types of vessels in domestic shipping: Provided, That no such
certificate shall be valid for a period of more than twenty-five (25) years;

(3) Modify, suspend or revoke at any time upon notice and hearing, any certificate, license or
accreditation it may have issued to any domestic ship operator;

(4) Establish and prescribe routes, zones or areas of operations of domestic ship operators;

(5) Require any domestic ship operator to provide shipping services to any coastal area, island or
region in the country where such services are necessary for the development of the area, to meet
emergency sealift requirements, or when public interest so requires;

(6) Set safety standards for vessels in accordance with applicable conventions and regulations;

(7) Require all domestic ship operators to comply with operational and safety standards for vessels set
by applicable conventions and regulations, maintain its vessels in safe and serviceable conditions,
meet the standards of safety of life at sea and safe manning requirements, and furnish safe,
adequate, efficient, reliable and proper service at all times;

(8) Inspect all vessels to ensure and enforce compliance with safety standards and other regulations;

(9) Ensure that all domestic ship operators shall have the financial capacity to provide and sustain
safe, reliable, efficient and economic passenger or cargo service, or both;

(10) Determine the impact which any new service shall have to the locality it will serve;

(11) Adopt and enforce such rules and regulations which will ensure compliance by every domestic
ship operator with required safety standards and other rules and regulations on vessel safety;

(12) Adopt such rules and regulations which ensure the reasonable stability of passengers and freight
rates and, if necessary, to intervene in order to protect public interest;

(13) Hear and adjudicate any complaint made in writing involving any violation of this law or the rules
and regulations of the Authority;

(14) Impose such fines and penalties on, including the revocations of licenses of any domestic ship
operator who shall fail to maintain its vessels in safe and serviceable condition, or who shall violate or
fail to comply with safety regulations;
(15) Investigate any complaint made in writing against any domestic ship operator, or any shipper, or
any group of shippers regarding any matter involving violations of the provisions of this Act;

(16) Upon notice and hearing, impose such fines, suspend or revoke certificates of public convenience
or other license issued, or otherwise penalize any ship operator, shipper or group of shippers found
violating the provisions of this Act; and

(17) Issue such rules and regulations necessary to implement the provisions of this Act: Provided,
That such rules and regulations cannot change or in any way amend or be contrary to the intent and
purposes of this Act.

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

(2) Adequate insurance coverage for cargo in an amount to be computed in accordance with existing
laws, rules and regulations, and the total amount of such coverage shall be equivalent to the total
cargo capacity being offered by the vessel; and

(3) If a domestic ship operator should offer both passenger and cargo service, then the total insurance
coverage shall be in the total sum equivalent to that stipulated in paragraphs (1) and (2) of this
section. Provided, That if a domestic ship operator should operate more than one (1) vessels, the
amount of insurance coverage required under this section, for purposes of providing financial capacity,
shall be the amount equivalent to the total number of passenger accommodations, or total cargo
capacity, or both, of the largest operating vessel which the domestic ship operator may have:
Provided, further, That the total insurance coverage which may be required of any domestic ship
operator shall not exceed the value of such vessel: Provided, finally, that adequate insurance coverage
shall be obtained from any duly licensed insurance company or international protection and indemnity
association.

Sec. 15. Other Insurance Coverage. – the MARINA shall have the power to require every ship
operator to obtain such other compulsory insurance coverage necessary to adequately cover claims for
damages.
CHAPTER VI
PROHIBITED ACT AND PRACTICES
Sec. 16. Prohibited Acts and Practices of Domestic Ship Operators. – the MARINA shall have
the power to impose such fines and penalties against every domestic ship operator who shall:
(1) Operate without a valid certificate of public convenience, accreditation or other form of authority
required by this Act;

(2) Refuse to accept or carry any passenger or cargo without just cause;

(3) Fail to maintain its vessels in safe and serviceable condition, or violate safety rules and
regulations;

(4) Fail to obtain or maintain adequate insurance coverage;

(5) Fail to meet or maintain safe manning requirements; and

(6) Such other acts which the MARINA shall determine, after due notice and hearing, to be detrimental
or prejudice to the safety, stability and integrity of domestic shipping.

CHAPTER VII
FEE, FINES AND PENALTIES
Sec. 17. Fees. – The MARINA shall have the power to impose, fix, collect and receive, in accordance
with the schedules approved by its Board, such fees necessary for the licensing, supervision,
regulation, inspection, approval and accreditation of domestic ship operators and the promotion and
development of the country’s maritime industry. The MARINA shall have the power to establish and
manage a trust fund for this purpose.
Fees prescribed by the MARINA under this section shall be imposed and collected in order to recover
the cost for rendering the service and shall not be used in order to impose a penalty on the domestic
ship operator. Excessive fees, multiple fees and duplicative fees shall at all times be avoided.

The supervision fee provided in Sec. 40(e) of Commonwealth Act No. 146 insofar as the same applies
to the operation, management, control and regulation of vessels, steamboats, steamship lines, ferries,
water craft and the like, is hereby repealed.

Sec. 18. Fines and Penalties. – The MARINA, upon notice and hearing and a determination of the
existence of any breach or violation of the provisions of this Act or any rules and regulations issued
pursuant thereto, shall have the power and authority to:
(1) Suspend or revoke any certificate of public convenience, license, permit, accreditation, or other
form of authority issued to any domestic ship operator who shall violate any provision of this Act or
any rules and regulations issued pursuant thereto, or any condition impose on such certificate of
public convenience, license, permit or accreditation;

(2) Impose a fine on a domestic ship operator who shall operate without a valid certificate of public
convenience, license, permit, accreditation or other form of authority;

(3) Impose a fine on a domestic ship operator in an amount to be determined by the MARINA for
refusing to accept, or to carry passengers or cargo, without just cause, or for engaging in any
prejudicial, discriminatory or disadvantageous act towards any class of passengers or shippers;

(4) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA, or
suspend or revoke the certificate of public convenience of such domestic ship operator, or both, who
shall fail to meet the standards of such safety or who refuses to comply with or violates safety
regulations imposed by the MARINA or fails to maintain its vessels in safe and serviceable condition;

(5) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA, or
impose such other penalty, including the revocation of any certificate or license, who fails to procure
or renew required insurance policies;

(6) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA or
impose such other penalty, including the revocation of any certificate or license who fails to meet or
maintain safe manning requirements; and

(7) Impose such other fines and penalties the MARINA may deem necessary and appropriate in order
to enforce the provision of this Act.
CHAPTER VIII
SHIPBUILDING
Sec. 19. Shipbuilding and Ship Repair Investment Incentives. – To encourage investments and
to and ensure the development of a viable shipbuilding and ship repair industry, the following
incentives are hereby granted:
(a) Exemption from value-added tax on the importation of capital equipment, machinery, spare parts,
life-savings ang navigational equipment, steel plates and other metal plates including marine -grade
aluminum plates to be used in the construction, repair, renovation or alteration or any merchant
marine vessel operated or to be operated in the domestic trade.

The importation of the above articles shall be granted exemption from value-added tax subject to the
following conditions: (1) That said articles are not manufactured domestically in sufficient quantity, of
comparable quality and at reasonable prices; (2) That said articles are directly imported by a MARINA-
registered shipbuilders and ship repairer; (3) That said articles are reasonably needed and will be used
exclusively by the registered shipbuilders and ship repairer; (4) That the approval of MARINA was
obtained prior to the importation of said articles ; and (5) That shipbuilders and ship repairers may
avail of the exemption from value-added tax provided herein within a period of ten (10) years from
the approval of this Act.

Any sale, transfer or disposition of articles under Sec. 19 (a) within ten (10) years from the effectivity
of this Act to another registered shipbuilder or repairer enjoying similar incentive shall require prior
approval of MARINA. If the sale, transfer or disposition was made without prior approval of MARINA,
both the vendor and the transferee or assignee shall be liable to pay twice the amount of the value-
added tax exempt given him: Provided, further, That if the sale, tranfer or disposition was made to a
nonexempt entity or to a party other than that a registered shipbuilder or repairer within ten (10)
years from the effectivity of this Act, both the vendor and the transferee or assignee shall be solidarily
liable to pay twice the amount of the value-added tax waived; Provided, finally, That the sale, transfer
or disposition made after ten (10) years from the effectivity of this Act shall be made by Informing
MARINA in writing. The purchaser, transferees or recipients shall be considered the Importers thereof,
who shall be liable for any internal revenue tax on such importation. The tax due on such importation
shall constitute a lien on the foods superior to all changes or liens on the goods, irrespective of the
possessor thereof. The BIR shall be furnished with notice of actions taken by the MARINA.

(b) Net operating loss carry-over. A net operating loss in any taxable year immediately preceding the
current taxable year, which had not been previously offset as a deduction from gross income shall be
carried over as a deduction from gross income for the next three (3) consecutive taxable years
immediately following the year of such loss subject to the pertinent provisions of the National Internal
Revenue Code of 1997, as amemded;
(c) Accelerated depreciation. Fixed assets may be depreciated as follow:

(i) To the extent of not more than twice as fast as the normal rate of depreciation or depreciated at
normal rate of depreciation if the expected life is ten (10) years or less; or

(ii) Depreciated over any number of years between five (5) years and the expected life if the latter is
more than ten (10) years, and the depreciation thereon allowed as deduction from taxable income.
Provided, That the registered shipbuilder and ship repairer notifies the BIR at the beginning of the
depreciation period which depreciation rate allowed by this section will be used.

Sec. 20. Restrictions on Vessel Importation. – Ten (10) years from the effective date of this Act
and every year thereafter, the MARINA shall evaluate and determine the progressive capability of
MARINA- registered shipyards to build and construct new vessels for the domestic trade.
In the first year of evaluation, the MARINA shall determine the capability of MARINA-registered
shipyards to build new vessels below 500 GRT. If, upon evaluation, the capability of MARINA-
registered shipyards to build classed vessels below 500 GRT in quantities sufficient to meet domestic
demand is proven, then all domestic ship operators shall be discouraged from importing new or
previously owned vessels that are less than 500 GRT for the domestic trade and vessels built in
MARINA-registered shipyards shall be given priority for entry in the Philippines Registry and allowed to
operate in the domestic trade.

The MARINA shall undertake a yearly evaluation of the progressive capabilities of all MARINA-
registered shipyards to build larger classed vessels for the domestic trade in quantities sufficient to
meet the demand of domestic ship owners and shall correspondingly adjust the size of vessels which
may be sourced from MARINA-registered shipyards.

CHAPTER IX
TRANSITORY PROVISIONS
Sec. 21. Period of Transition. – Upon the approval of this Act existing liner operators shall continue
to operate in their route.
Sec. 22. Classification of Vessels in the Domestic Trade. – A vessels, whether newly built or
previously owned, which are acquired or after the effectivity of this Act shall be classed by a
government recognized classification society on the date of acquisition prior to the operation in the
domestic trade.
Sec. 23. Retirement of Old Vessels. – Immediately upon the approved of this Act, the MARINA
shall prepare and implement a mandatory vessel retirement program for all unclassed vessels that fail
to meet the classification standards of a government-recognized classification society.
All vessels which have attained the maximum vessel age stipulate by MARINA’s mandatory vessel
retirement program and which do not carry a class certificate issued by a government-recognized
classification society shall not be allowed to operate in the domestic trade and shall be automatically
de-listed from the Philippine Registry.

CHAPTER X
FINAL PROVISIONS
Sec. 24. Temporary Take-Over of Operations. – In times of national emergency, when the public
interest so requires, the State may during emergencies and under reasonable terms prescribed by it,
temporary take over or direct the operations or any vessel engaged in domestic trade and commerce,
or prescribe its rates or routes of operation. Immediately upon the cessation of the emergency, the
State shall immediately reinstate to the domestic ship operation of its vessel under the same terms
and conditions prior to the occurrence of the emergency.
Sec. 25. Separability Clause. – If, for any reason, any section, subsection, sentence, clause or term
of this Act is held to be illegal invalid or unconstitutional, such parts not affected by such declaration
shall remain in full force and effect.
Sec. 26. Repealing Clause. – The provisions of Commonwealth Act No. 146, insofar as the same
applies to the operation, management control and regulation of vessels, steamboats, steamships,
lines, ferries, water craft and the like, as well as the provisions of Presidential Decree No. 474,
Executive Order Nos. 125 and 125-A, and such other laws, presidential decrees, executive orders,
issuances, rules and regulations or parts thereof, which are inconsistent with the provisions of this Act
are hereby repealed, amended or modified accordingly.
Sec. 27. Effectivity. – This Act shall take effect after fifteen (15) days following its publication in at
least two (2) newspapers of general circulation.

Approved: May 3, 2004

 PRESIDENTIAL DECREE NO. 857
PROVIDING FOR THE REORGANIZATION OF PORT ADMINISTRATIVE AND OPERATION FUNCTIONS IN
THE PHILIPPINES, REVISING PRESIDENTIAL DECREE NO. 505 DATED JULY 11, 1974, CREATING THE
PHILIPPINE PORT AUTHORITY, BY SUBSTITUTION, AND FOR OTHER PURPOSES
WHEREAS, there is a recognized need to integrate and coordinate port planning, development, control
and operations at the national level, and at the same time promote the growth of regional port bodies
responsive to the needs of their individual localities;

WHEREAS, harbors and tributary areas have their own peculiar potentialities to be considered in port
planning and development;

WHEREAS, hitherto, the concept of port administration in this country has been focused on the
traditional functions of revenue collection, harbor maintenance and cargo handling, to the exclusion of
the port’s fuller utilization and development as a spur for regional growth;

WHEREAS, Presidential Decree No. 505 was promulgated on July 11, 1974 to carry out these stated
objectives; and

WHEREAS, it was found necessary in the national interest to amend Presidential Decree No. 505 so as
to enable the Philippine Port Authority to Exercise all the proper powers and functions of a port
authority and in order to better carry out the desired objectives:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution in order to effect desired changes and reforms in the social,
economic and political structure of our society, do hereby decree and order the revision of Presidential
Decree No. 505 by substitution with this Decree which is hereby adopted and made part of the laws of
the land;

ARTICLE I.
Title
Section 1. Title. — This Decree shall be known as the Revised Charter of the Philippine Ports
Authority created under Presidential Decree No. 505 dated July 11, 1974.
ARTICLE II.
Declaration of Policies
Section 2. Declaration of Policies and Objectives. — It is hereby declared to be the policy of the
State to implement an integrated program for the planning, development, financing, and operation of
Ports or Port Districts for the entire country in accordance with the following objectives:
a) To coordinate, streamline, improve, and optimize the planning, development, financing,
construction, maintenance and operation of Ports, port facilities, port physical plants, all 11 equipment
used in connection with the operation of a Port.

b) To ensure the smooth flow of waterborne commerce passing through the country’s Ports whether
public or private, in the conduct of international and domestic trade.

c) To promote regional development through the dispersal of industries and commercial activities
throughout the different regions.

d) To foster inter-island seaborne commerce and foreign trade.

e) To redirect and reorganize port administration beyond its specific and traditional functions of harbor
development and cargo handling operations to the broader function of total port district development,
including encouraging the full and efficient utilization of the Port’s hinterland and tributary areas.

f) To ensure that all income and revenues accruing out of dues, rates, and charges for the use of
facilities and services provided by the Authority are properly collected and accounted for by the
Authority, that all such income and revenues will be adequate to defray the cost of providing the
facilities and services (inclusive of operating and maintenance cost, administration and overhead) of
the Port Districts, and to ensure that a reasonable return on the assets employed shall be realized.

ARTICLE III.
Definitions
Section 3. Definitions. — For the purpose of this Decree and of the by-laws, regulations, or rules
promulgated thereunder, the terms or words used herein shall, unless the context indicates otherwise,
mean or be understood to mean, as follows:
a) “Authority” means the Philippine Ports Authority created by this Decree.

b) “Board” means the Board of Directors of the Authority appointed by the President under Section 7
of this Decree.

c) “Functions” includes powers and duties.

d) “Port District” means the territorial jurisdiction under the control, supervision or ownership of the
Authority over an area (land or sea), declared as such in accordance with Section 5 of this Decree
including but not limited to any Port within said District.
e) “Port” means a place where ships may anchor or tie up for the purpose of shelter, repair, loading or
discharge of cargo, or for other such activities connected with water-borne commerce, and including
all the land and water areas and the structures, equipment and facilities related to these functions.

f) “Navigable waters” means all navigable portions of the seas, estuaries, and inland waterways.

g) “Anchorage” means a place with sufficient depth of water where vessels anchor or may ride at
anchor or may ride at anchor within the harbor.

h) “Terminal Facility” includes the seaport and its facilities of wharves, piers, slips, docks, dry docks,
bulkheads, basins, warehouses, cold storage, and loading or unloading equipment.

i) “Basin” means a naturally or artificially enclosed or nearly enclosed body of water in free
communication with the sea.

j) “Dock” includes locks, cuts, entrances, graving docks, inclined planes, slipways, quays, and other
works and things appertaining to any dock.

k) “Drydock” means a dock from which the water can be temporarily excluded, in order to effect
repairs to hulls and keels of ships or vessels.

l) “Pier” means any structure built into the sea but not parallel to the coast line and includes any
stage, stair, landing place, landing stage, jetty, floating barge or pontoon, and any bridge or other
works connected therewith.

m) “Warehouse” means a building or shed used for the storage of cargo.

n) “Transit Shed” means a building or shed which is situated at or near a quay, wharf or pier, and is
used for the temporary or short-term storage of goods in transit, or to be shipped or discharge from a
vessel.

o) “Wharf” means a continuous structure built parallel to along the margin of the sea or alongside
riverbanks, canals or waterways where vessels may lie alongside to receive or discharge cargo,
embark or disembark passengers, or lie at rest.

p) “Transportation Facility” includes rails and railcars, highways, wheeled vehicles, bridges, tunnels,
tramways, subways, passenger or cargo vessels, ferry-boats, lighters, tugs, barges, scows, ramps,
and any kind of facility in use or for use of the transportation, movement, or carriage of goods or
passengers.
q) “Lighter” means a flat-bottomed boat or barge used in loading or unloading cargo to or from
vessels.

r) “Vessel” includes any ship or boat, or any description of a vessel or boat.

s) “Goods” includes animals, carcasses, baggage, and any movable property of any kind.

t) “Dues” includes harbor fees, tonnage and wharfage dues, berthing charges, and port dues and any
other dues or fees imposed by virtue of existing law or this Decree.

u) “Rates” means any rates or charges including any toll or rent under existing law or imposed by the
Authority by virtue of this Decree for facilities used or services rendered.

ARTICLE IV.
Establishment, Constitution, Powers and Duties
Section 4. Creation of Philippine Ports Authority. —
a) There is hereby established a body corporate to be known as the Philippine Ports Authority
(hereinafter called the Authority), which shall be attached to the Department of Public Works
Transportation and Communications.
b) The principal office of the Authority shall be located in Metropolitan Manila, but it may establish port
management units and other offices elsewhere in the Philippines as may become necessary for the
proper conduct of its business.

Section 5. Port District. — The Authority may, from time to time, submit to the President, through the
National Economic and Development Authority, applications for the declaration of specific areas as
Port Districts. Such applications shall be accompanied by a survey plan indicating the geographical
location of the area or areas to be declared as Port Districts with their respective boundaries properly
delineated.

Section 6. Corporate Powers and Duties. —

a) The corporate duties of the Authority shall be:
(i) To formulate in coordination with the National Economic and Development Authority a
comprehensive and practicable Port Development plan for the State and to program its
implementation, renew and update the same annually in coordination with other national agencies.

(ii) To supervise, control, regulate, construct, maintain, operate, and provide such facilities or services
as are necessary in the ports vested in, or belonging to the Authority.
(iii) To prescribe rules and regulations, procedures, and guidelines governing the establishment,
construction, maintenance, and operation of all other ports, including private ports in the country.

(iv) To license, control, regulate, supervise any construction or structure within any Port District.

(v) To provide services (whether on its own, by contract, or otherwise) within the Port Districts and
the approaches thereof, including but not limited to -

— berthing, towing, mooring, moving, slipping, or docking any vessel;

— loading or discharging any vessel;

— sorting, weighing, measuring, storing, warehousing, or otherwise handling goods.

(vi) To exercise control of or administer any foreshore rights or leases which may be vested in the
Authority from time to time.

(vii) To coordinate with the Bureau of Lands or any other government agency or corporation, in the
development of any foreshore area.

(viii) To control, regulate, and supervise pilotage and the conduct of pilots in any Port District.

(ix) To provide or assist in the provision of training programs and training facilities for its staff or staff
of port operators and users for the efficient discharge of its functions, duties, and responsibilities.

(x) To perform such acts or provide such services as may be deemed proper or necessary to carry out
and implement the provisions of this Decree.

b) The corporate powers of the Authority shall be as follows:

(i) To succeed in its corporate name.

(ii) To sue and be sued in such corporate name.

(iii) To adopt, alter, and use a corporate seal which shall be judicially noticed.

(iv) To adopt, amend, or repeal its by-laws.

(v) To create or alter its own organization or any Port Management Unit, and staff such an
organization or Port Management Unit with appropriate and qualified personnel in accordance with
what may be deemed proper or necessary to achieve the objectives of the Authority.

(vi) To make or enter of any kind or nature to enable it to discharge its functions under this Decree.

(vii) To acquire, purchase, own, lease, mortgage, sell, or otherwise dispose of any land, port facility,
wharf, quay, or property of any kind, whether movable or immovable.

(viii) To exercise the right of eminent domain, by expropriating the land or areas surrounding the Port
of harbor, which in the opinion of the Authority, are vital or necessary for the total development of the
Port District.

(ix) To levy dues, rates, or charges for the use of the premises, works, appliances, facilities, or for
services provided by or belonging to the Authority, or any other organization concerned with port
operations.

(x) To reclaim, excavate, enclose, or raise any part of the lands vested in the Authority.

(xi) To dredge or provide dredging services, within a Port District of elsewhere.

(xii) To acquire any undertaking affording or intending to afford facilities for the loading and
discharging or warehousing of goods in the Port Districts.

(xiii) To supply water or bunkers for ships.

(xiv) To obtain insurance for or require the insurance of any property, movable or immovable,
belonging to the Authority and/or goods in the custody of the Authority.

(xv) To do all such other things and to transfer all such business directly or indirectly necessary,
incidental or conducive to the attainment of the purposes of the Authority.

(xvi) Generally, to exercise all the powers of a corporation under the Corporation Law insofar as they
are not inconsistent with the provisions of this Decree.

Section 7. Board of Directors. —

a) The corporate powers of the Authority shall be vested in a Board of Directors, which shall consist of
the following members:
(i) The Secretary of Public Works, Transportation and Communications, who shall act as Chairman.
(ii) The General Manager of the Authority, who shall act as Vice-Chairman.

(iii) The Director-General of National Economic and Development Authority.

(iv) The Secretary of Finance.

(v) The Secretary of Natural Resources.

(vi) The Secretary of Trade.

The Directors listed under subsections (a) (i) to (vi) shall be ex-officio members of the Board of
Directors.

(vii) One (1) other person who shall be appointed by the President of the Philippines, representing the
private sector, who by reason of his knowledge or experiences is, in the opinion of the President, fit
and proper person to be Director of the Board. Provided, That, in the absence of the Director
appointed in subsections (iii) to (vi), 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.

b) The Director from the private sector shall hold office for a period of three years from the date of his
appointment upon the completion of such period.

c) The members of the Board or their respective alternates shall receive a per diem as it may approve
for each Board meeting actually attended by them: Provided, That, such per diems shall not exceed
one thousand pesos during any one month for each member: Provided further, That no other
allowances or any form of compensation shall be paid them, except actual expenses in travelling to or
from their residences to attend Board meetings.

ARTICLE V.
Organization and Staff
Section 8. Management and Staff . —
a) The President shall, upon the recommendation of the Board, appoint the General Manager and the
Assistant General Managers.
b) All other officials and employees of the Authority shall be selected and appointed on the basis of
merit and fitness based on a comprehensive and progressive merit system to be established by the
Authority immediately upon its organization and consistent with Civil Service rules and regulations.
The recruitment, transfer, promotion, and dismissal of all personnel of the Authority, including
temporary workers, shall be governed by such merit system.
c) The General Manager shall, subject to the approval of the Board, determine the staffing pattern and
the number of personnel of the Authority, define their duties and responsibilities, and fix their salaries
and emoluments. For professional and technical positions, the General Manager shall recommend
salaries and emoluments that are comparable to those of similar positions in other government-owned
corporations, the provisions of existing rules and regulations on wage and position classification
notwithstanding.

d) The General Manager shall, subject to the approval by the Board, appoint and remove personnel
below the rank of Assistant General Manager.

e) The General Manager of the Authority shall receive a salary to be determined by the Board, and
approved by the President.

f) The number of Assistant General Managers of the Authority shall in no case exceed three (3) who
shall each receive a salary to be determined by the Board and approved by the President.

Section 9. General Powers and Duties of the General Manager and Assistant General
Managers
a) General Powers and Duties of the General Manager. —
The General Manager shall be responsible to the Board, and shall have the following general powers,
functions, and duties:
(i) To implement, enforce and apply the policies, programs, guidelines, procedures, decisions, rules
and regulations promulgated, prescribed, issued or adopted by the Authority.

(ii) To manage the day to day affairs of the Authority, and ensure the operational efficiency of the
Ports under the jurisdiction and ownership of the Authority.

(iii) To sign contracts, to approve expenditures and payments within the budget provisions, and
generally to do any all acts or things for the proper operations of the Authority or any of the Ports
under the jurisdiction, control or ownership of the Authority.

(iv) To submit an annual budget to the Board for Recurrent Income and Expenditure and the
Estimated Capital Expenditure for its option not later than two months before the commencement of
the ensuing fiscal year.

(v) To undertake research, studies, investigations, and other activities and projects, and to submit
comprehensive reports and appropriate recommendations to the Board for its information and
approval.
(vi) To perform such other duties as the Board may assign from time to time.

b) General Powers and Duties of the Assistant General Managers —

The Assistant General Managers shall be responsible to the General Manager of the Authority, and
shall have the following general powers, functions and duties:
(i) To assist the General Manager in implementing, enforcing, and applying the policies, programs,
guidelines, procedures, decisions, rules and regulations promulgated, prescribed, issued, or adopted
by the Authority.

(ii) To assist the General Manager in the performance of his other functions and duties.

(iii) To perform such other duties as the General Manager may assign from time to time.

ARTICLE VI.
Capital, Finance and Accounts
Section 10. Capital. —
a) The authorized capital of the Authority shall be three billion pesos.
b) The initial paid in capital shall consist of:

(i) The value of assets (including port facilities, quays, wharves, and equipment) and such other
properties, movable and immovable as may be contributed by the Government or transferred by the
Government or any of its agencies as valued at the date of such contribution or transfer and after
deducting or taking into account the loans and other liabilities of the Authority at the time of the
takeover of the assets and other properties.

(ii) The initial cash appropriation of P2 million out of the funds of the National Treasury and such
further sums, including working capital, as may be contributed by the Government.

Section 11. Creation of Reserves. — The balance of any revenue or income of the Authority
remaining at the end of each year shall be applied to the creation of a general reserve or such other
reserves as the Authority may deem appropriate.
Section 12. Investment of Funds. — The Authority may, from time to time, invest any of its funds
not immediately required to be expended in meeting its obligations or in the discharge of the functions
of the Authority in such government securities approved by the Board.
Section 13. Borrowing Powers. —
a) The Authority may after consultation with the Central Bank and the Department of Finance, and
with the approval of the President of the Philippines, raise funds, either from local or international
sources, by way of loans, credits or indebtedness or issue bonds, notes, debentures, securities, and
other borrowing instruments, including the power to create pledges, mortgages, and other voluntary
liens or encumbrances on any of its assets or properties.
b) All loans contracted by the Authority under this Section together with all interests and other sums
payable in respect thereof, shall constitute a charge upon all the revenues and assets of the Authority
and shall rank pari passu with one another, but shall have priority over any other claim or charge on
the revenue and assets of the Authority; Provided, That this provision shall not be construed as a
prohibition or restriction on the power of the Authority to create pledges, mortgages and other
voluntary liens or encumbrances on any property of the Authority.

c) Except as expressly authorized by the President of the Philippines, the total outstanding
indebtedness of the Authority in the principal amount in local and foreign currency shall not at any
time exceed the networth of the Authority at the relevant time.

d) The President of the Philippines, by himself or through his duly authorized representative, is further
hereby authorized to guarantee in the name and on behalf of the Republic of the Philippines, the
payments of the loans or other indebtedness of the Authority up to the amount herein authorized.

e) All interests paid or payable by the Authority on its loans or other forms of indebtedness shall be
exempt from taxes of whatsoever nature.

Section 14. Annual Budget. —

a) The Board shall every year cause to be prepared and shall adopt annual estimates of income and
expenditures and estimates of capital expenditure of the Authority for the ensuing year.
b) Supplementary estimates may be adopted at any of the meetings of the Board.

Section 15. Annual Accounts. —

a) The Board shall cause proper accounts and other records of the Authority in relation thereto to be
kept. An annual statement of account shall be rendered in respect to each year. The Authority shall
maintain such accounts and other records under a commercial system of accounting.
b) The accounts of the Authority shall be kept and made up to 31 December in each year.

c) The annual statement of accounts of the Authority shall present a true and fair value of the financial
position of the Authority and of the results of the operations of the Authority for the year to which it
relates.

Section 16. Auditor. —

a) In consonance with existing laws and regulations, the Commission on Audit shall be appointed to
audit the accounts of the Authority. In the fulfillment of international contractual commitments of the
Authority, however, the Board may engage the services of any person or firm duly authorized by law
for the audit of accounts, to audit the accounts of the Authority.
b) The Auditor shall be paid out of the revenue of the Authority such remuneration, compensation or
expenses as the Board may determine.

Section 17. Auditor’s Reports. — The Auditor shall as soon as practicable, but not later than three
months after the accounts have been submitted for audit, send an annual report to the Board. The
Auditor may also submit such periodical or special reports to the Board as may to him appear
necessary.

Section 18. Annual Report. — The Board shall submit to the President of the Philippines together with
the Auditor’s Report on the relevant accounts, an annual report generally dealing with the activities
and operations of the Authority during the preceding year and containing such information relating to
the proceedings and policies of the Authority.

ARTICLE VII.
Dues and Rates
Section 19. Dues. —
The President of the Philippines may upon recommendation of the Authority increase or decrease such
dues, collectible by the Authority to protect the interest of the Government and to provide a
satisfactory return on the Authority’s assets, and may adjust the schedule of such dues so as to reflect
the costs of providing the services; Provided, however, that the rates of dues on all the ports of the
Philippines upon the coming into operation of this Decree shall be those now provided under Parts 1,
2, 3, and 6 of the Title VII of Book II of the Tariff and Customs Code, until such time that the
President upon recommendation of the Board may order that the adjusted schedule of dues are in
effect.
Section 20. Rates and Charges. —
a) The Authority may impose, fix, prescribe, increase or decrease such rates, charges or fees for the
use of port premises, works, appliances or equipment belonging to the Authority and port facilities
provided, and for services rendered by the Authority or by any organization within a Port District.
Provided, that upon the coming into operation of this Decree, the rates of storage and arrastre
charges in all ports of the Philippines shall be those now provided under Parts 4 and 5 of Title VII Book
II of the Tariff and Customs Code until such time when the President of the Philippines upon
recommendation of the Board may order that the revised rates, charges or fees are in effect.

b) The Authority shall regulate the rates or charges for port services or port related services so that
taking one year with another, such rates or charges furnish adequate working capital and produce an
adequate return on the assets of the Authority. In regulating the rates or charges for individual ports
the Authority shall take into account the development needs of the port’s hinterland.

c) All dues, fees, charges and other sums imposed and collected by the Authority shall accrue to the
Authority and shall be disposed of in accordance with the provisions of this Decree.

Section 21. Remission of Dues, Rates, or Charges. —

No amount due in respect of dues, rates, or charges prescribed by the Authority under this Decree
shall be waived or reduced except:
a) Where the State has arrangements with a foreign government in respect of vessels are not
normally engaged in the conveyance of cargo or passengers; and

b) For vessels seeking shelter from inclement weather or entering the port for medical help and other
maritime necessity.

Section 22. Remedies for Nonpayment. — If the master, owner or agent of any vessel refuses or
neglects to pay on demand any dues, rates, or charges made under this Decree or any part thereof,
the Authority may, in addition to any other remedy provided by law, distrain or arrest on its own
authority such vessel and tackle, apparel or furniture belonging to the vessel, and detain the same
until the amount or amounts due have been paid.
Section 23. When Rates Payable and Lien. —
a) Rates or charges in respect of goods to be landed become payable immediately on landing such
goods.
b) Rates or charges in respect of goods to be shipped are payable before the goods are loaded.

c) Rates or charges in respect of goods to be removed from the premises of the Authority are payable
on demand.

d) For the amount of rates of charges leviable under this Decree in respect of goods, the Authority
shall have lien on such goods and is entitled to detain them until the amount of rates or charges is
fully paid. Such lien shall have priority over all other liens and claims, except claims for duties and
taxes due to the Government and expenses of the sale.

Section 24. Recovery of Lien. — Without prejudice to the authority and rights of the Bureau of
Customs in the disposition of property in Customs custody as provided for in the Tariff and Customs
Code, as amended, if any goods which have been placed in or on the premises of the Authority are not
removed therefrom within the prescribed period after the legal permit for their withdrawal and/or
release from Customs custody, or the authority to load, in case of exports, has been issued by the
Bureau of Customs, the authority, with the prior concurrence of the Bureau of Customs, may dispose
of any such goods in the manner as it deems fit in order to recover the lien; Provided, That the
proceeds of the sale shall be applied in the following manner:
a) Firstly, in the payment of duties and taxes due to the Government;
b) Secondly, in payment of expenses of the sale;
c) Thirdly, in payment of the rates, charges, and fees due to the Authority in respect of the goods;

d) Fourthly, in payment of freight, lighterage or general average, on voyage of importation and in case
of exports, in payment of domestic freight, lighterage and cartage, of which due notice shall have
been given to the Authority;

e) And finally in rendering on demand the surplus, if any, to the person legally entitled thereto:
Provided, That in case no such demand is made within a period of one year from the date of sale of
the goods, the surplus, if any, shall become part of the general funds of the Authority, whereupon all
rights to the same by such person shall be extinguished.

Section 25. Exemption from Realty Taxes. — The Authority shall be exempt from the payment of
real property taxes imposed by the Republic of the Philippines, its agencies, instrumentalities or
political subdivisions; Provided, That no tax exemptions shall be extended to any subsidiaries of the
Authority that may be organized; Provided, finally, That investments in fixed assets shall be deductible
for income tax purposes.
ARTICLE VIII.
Port Regulations
Section 26. Power to Make Port Regulations. —
a) The Authority may, after consultation with relevant Government agencies, make rules or
regulations for the planning, development, construction, maintenance, control, supervision and
management of any Port or Port District and the services to the provided therein, and for the
maintenance of good order therein, and for the maintenance of good order therein, and generally for
carrying out the purposes of this Decree.
b) The Authority may provide separate regulations for each category of ports or port districts.

Section 27. Dangerous Cargo. —

a) The Authority may make regulations for the conveyance, loading, discharging and storage of
dangerous goods within any port, port district, and the approaches to the port.
b) The Authority may provide separate regulations for each category of ports or port districts.

Section 28. Powers of Harbor Master. — Further to the provisions of any regulation under Section
26 and 27 of this Decree, the Authority thru the Harbor Master of a Port or Port District may:
a) Direct where any vessel shall be berthed, moored, or anchored, and the method of anchoring within
the port and the approaches to the port;
b) Direct the removal of any vessel from any berth or anchorage to another berth or anchorage and
the time within such removal is to be effected; and

c) Regulate the mooring of vessels within the port and the approaches to the port.

Section 29. Existing Regulations. — Anything to the contrary notwithstanding and until new rules
or regulations are promulgated by the Authority under Sections 26 and 27 of this Decree, the rules,
regulations or orders made under the Customs Code or any other law of the Philippines relating to the
matters covered by Sections 26, 27 and 28 shall continue to apply as if they were made under said
sections and any reference to a customs official or any other officials under any law of the Philippines
shall be deemed a reference to an equivalent official of the Authority.
ARTICLE IX.
Transfer of Assets and Liabilities
Section 30. Transfer of Existing and Completed Physical Facilities. — In accordance with the
transitory provisions of this Decree, there shall be transferred to the Authority all existing and
completed public port facilities, quays, wharves, docks, lands, buildings and other property, movable
or immovable, belonging to those ports declared as Port Districts for purposes of this Decree.
Section 31. Transfer of Intangible Assets. — In accordance with the transitory provisions of this
Decree, there shall be transferred to the Authority all intangible assets, powers, rights, foreshore
rights, interests and privileges belonging to the Bureau of Customs, and Bureau of Public Works and
other agencies relating to port works or port operations, subject to terms to be arranged by and
between the Authority and agencies concerned. Any disagreement relating to such transfer shall be
elevated to the President for decision.
Section 32. Projects in Progress. — In accordance with the transitory provisions of this Decree, all
ongoing projects relating to the construction of ports and port facilities shall be continued by the
agency or agencies involved until completion. After completion, such projects shall be transferred to
the Authority in accordance with the agreement among agencies concerned. Any disagreement
relating to such transfer shall be elevated to the President for decision.
Section 33. Transfer of Liabilities and Debts. — Upon the transfer and acceptance by the
Authority of the existing physical facilities, intangible assets, and completed projects referred to in the
Sections immediately preceding, all debts, liabilities, and obligations of the government agencies or
entities concerned in respect of such physical facilities, intangible assets and completed projects within
the Port Districts shall likewise be transferred to or deemed incurred by the Authority.
Section 34. The Philippine Coast Guard shall retain ownership of its properties and facilities which are
necessary for the enforcement of laws, rules and regulations pertaining to safety of life and property
at sea (SOLAS) found within ports and port districts and shall continue to administer, operate and
maintain the same as well as assume the obligations and liabilities pertaining to such properties and
facilities. All other properties and facilities of the Philippine Coast Guard found within ports and port
districts, including all obligations and liabilities related thereto shall be deemed transferred to the
Authority in accordance with Section 33 of this Decree.
Section 35. Transfer of Staff . — Officials and employees of existing offices or agencies, or their
subordinate units, which are abolished or reorganized under this Decree may be absorbed by the
Authority on the basis of merit and fitness: Provided, That those officials and employees who are
deemed qualified under both the Authority and the reorganized office agency or unit shall have the
option to either transfer or remain in their present office, agency or unit, or elect to be separated from
the service with all the benefits they may be entitled to under existing laws: Provided, further, That
those who do not qualify under the Authority shall be retained in the office or agency in which the unit
was abolished.
Section 36. Gratuity and Other Benefits. — All officials and employees whose services are
terminated as a result of this Decree shall be given gratuities equivalent to one month’s salary for
every year of continuous satisfactory service rendered but not exceeding twelve months on the basis
accorded to them by existing laws.
ARTICLE X.
Construction and Dredging Works
Section 37. Construction and Dredging Works. —
a) The Bureau of Public Works shall be the executing agency of the Authority for the detailed design,
contract document preparation and advertisement, construction supervision of port terminal facilities
and port works, and the dredging of public ports vested in the Authority; Provided, That when there
are no qualified bidders and for projects less than two hundred thousand pesos (P200,000.00), the
Bureau of Public Works may undertake the construction through force account; Provided, further, That
the Authority shall perform rehabilitation or maintenance works (including maintenance dredging) by
its own personnel or private contractor, whichever arrangement is more advantageous to port and
shipping operations.
b) The Authority shall be responsible for the allocation and control of all funds for the execution of all
construction, rehabilitation and maintenance works mentioned in the preceding paragraph.

ARTICLE XI.
Final Provisions
Section 38. Transitory Provisions. —
a) Until the President declares the Authority to be fully operational, the Bureau of Customs and the
Division of Ports and Harbors of the Bureau of Public Works may continue to perform, in coordination
with the Authority, such port operations and port works as may be deemed necessary, undertake the
phased or gradual takeover of such port operations or port works.
b) The budget for staff operations and other expenses relating to port operations or port works of the
Bureau of Customs or the Bureau of Public Works, as the case may be, during such transitional period,
shall be submitted by them to the Authority for information and guidance before implementation.
c) All expenses and charges relating to port operations and port works during the transitional period
shall be paid out of the funds of the Authority or such other funds as may be allocated to the Authority
in the Annual Appropriations Act or other sources. For this purpose, the current budget provision,
funds and allocations of the Bureau of Customs, the Bureau of Public Works and other government
agencies concerned, pertaining to the expenses, including retirement funds, for personnel involved in
port planning, maintenance and operations, the outlays for port works and port development, the
existing balances as well as subsequent collections from port operations shall be transferred to the
Authority in accordance with transfer arrangements to be negotiated by and among the agencies
concerned: Provided, however, That in case of disagreement relating to such transfer, the same shall
be elevated to the President for decision: Provided, further, That all transitional arrangements
including transfers of property, funds, rights, powers and liabilities under this Decree shall not extend
beyond Fiscal Year 1977.

Section 39. Bureau of Customs. — The Tariff and Customs Code is hereby modified or amended to
the extent that all the powers, duties and jurisdictions of the Bureau of Customs concerning the
following matters shall be transferred to and be vested in the Authority:
a) All dues, fees and rates collectible under Title VII but excluding Part VII of the Code;

b) The general supervision, control, and regulation of all matters and affairs that pertain to the
operation of and the issuance of permits or licenses to construct ports, port facilities, warehouses, and
other facilities within port districts;

c) All such other powers, duties and jurisdictions vested in the Bureau of Customs pertaining to every
matter concerning port facilities, port operations or port works.

Section 40. Other Laws. — Any and all other powers and rights, duties and functions and
jurisdiction vested in and all properties and appropriations of any government agency, authority or
instrumentality pertaining to every matter concerning port facilities, ports operations, or port works
shall be transferred to and be vested in the Authority.
Section 41. Repeal. — All laws, decrees, Letters of Instructions, orders, rules and regulations,
policies, programs or parts thereof inconsistent with or contrary to any of the provisions of this Decree
are hereby repealed or modified, including but not limited to the following:
a) R.A. No. 4567 creating the San Fernando Port Authority and R.A. No. 4663 as amended by R.A. No.
6086 creating the Cagayan de Oro Port Authority.

b) Sections 26 and 27 of Presidential Decree No. 458.

c) Act No. 3592 as amended, creating the Port Work Fund.

d) Presidential Decree No. 505.

e) Section 711 as far as Port Administration is concerned. Section 3304 and such other inconsistent
provisions of the Tariff and Customs Code without prejudice to the provisions of Section 38 of this
Decree.

f) Section 3 (a) as far as it concerns stevedoring, arrastre and customs brokerage services and the
whole of Section 11 (c) of Presidential Decree No. 474 creating the Maritime Industry Authority.

Section 42. Separability Clause. — If, for any reason, any section or provision of this Decree is
declared to be unconstitutional or invalid, the other sections or provisions of this Decree which are not
affected thereby shall continue in full force and effect.
Section 43. Penalties. —
a) Any person who violates any of the provisions of this Decree or any of the rules and regulations
issued or promulgated by the Authority, shall be punished by imprisonment for not less than one day
but not more than six years, and pay a fine of not less than two hundred pesos but not more than one
hundred thousand pesos. If the offender is a government official or employee he shall, in addition to
imprisonment and fine be perpetually disqualified to hold any public office. If the offender is a juridical
person, the penalty of imprisonment and fine shall be imposed upon its manager, director,
representative or employee thereof responsible for the violation. If the offender is an alien he shall be
deported immediately without further proceedings, after serving his sentence and paying the fine.
b) Any license, franchise, authority or permit to exercise any right or privilege, which may have been
issued by the Authority in accordance with this Decree or the rules and regulations issued or
promulgated pursuant to this Decree, shall be deemed withdrawn and revoked upon conviction of the
holder thereof.

Section 44. Effectivity. — This Decree shall take immediate effect upon its promulgation.
Done in the City of Manila, this 23rd day of December in the year of Our Lord, nineteen hundred and
seventy-five.
REPUBLIC ACT NO. 9993
AN ACT ESTABLISHING THE PHILIPPINE COAST GUARD AS AN ARMED AND UNIFORMED SERVICE
ATTACHED TO THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, THEREBY
REPEALING REPUBLIC ACT NO. 5173, AS AMENDED, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representative of the Philippines in Congress assembled:

SECTION 1. Title. – This Act shall be known as the “Philippine Coast Guard Law of 2009”

SECTION 2. Establishment. – The Philippine Coast Guard, hereinafter referred to as the PCG, is
hereby established as an armed and uniformed service attached to the Department of Transportation
and Communications (DOTC): Provided, That in times of war, as declared by Congress, the PCG or
parts thereof, shall be attached to the Department of National Defense.

SECTION 3. Powers and Functions. – The PCG shall have the following powers and functions:
(a) To enforce regulations in accordance with all relevant maritime international conventions, treaties
or instruments and national laws for the promotion of safety of life and property at sea within the
maritime jurisdiction of the Philippines and conduct port state control implementation;
(b) To conduct inspections on all merchant ships and vessels, including but shall not be limited to
inspections prior to departure, to ensure and enforce compliance with safety standards, rules and
regulations;
(c) To detain, stop or prevent a ship or vessel which does not comply with safety standards, rules and
regulations from sailing or leaving port;
(d) To conduct emergency readiness evaluation on merchant marine vessels;
(e) Subject to the approval of the Secretary of the DOTC, to issue and enforce rules and regulations
for the promotion of safety and life and property at sea on all maritime-related activities;
(f) To coordinate, develop, establish, maintain and operate aids to navigation, vessel traffic system,
maritime communications and search and rescue facilities within the maritime jurisdiction of the
Philippines;
(g) To remove, destroy or tow to port, sunken or floating hazards to navigation, including illegal fish
traps and vessels, at or close to sea lanes which may cause hazards to the marine environment;
(h) To issue permits for the salvage of vessels and to supervise all marine salvage operations, as well
as prescribe and enforce rules and regulations governing the same;
(i) To render aid to persons and vessels in distress and conduct search and rescue in marine accidents
within the maritime jurisdiction of the Philippines, including the high seas, in accordance with
applicable international conventions. In the performance of this function, the PCG may enlist the
services of other government agencies and the merchant marine fleet;
(j) To investigate the inquire into the causes of all maritime accidents involving death, casualties and
damage to properties;
(l) To assist in the enforcement of laws on fisheries, immigration, tariff and customs, forestry, firearms
and explosives, human trafficking, dangerous drugs and controlled chemicals, transnational crimes
and other applicable laws within the maritime jurisdiction of the Philippines;
(m) To board and inspect all types of merchant ships and watercrafts in the performance of its
functions;
(n) To enforce laws and promulgate and administer rules and regulations for the protection of marine
environment and resources from offshore sources of pollution within the maritime jurisdiction of the
Philippines;
(o) To develop oil spill response, containment and recovery capabilities against ship-based pollution;
(p) To grant, within its capabilities and consistent with its mandate, requests for assistance of other
government agencies in the performance of their functions;
(q) To organize, train and supervise the PCG Auxiliary (PCGA) for the purpose of assisting the PCG in
carrying out its mandated functions; and
(r) To perform such other functions that may be necessary in the attainment of the objectives of this
Act.

SECTION 4. Gender Sensitivity Program. – Gender concerns should be addressed in all planning
activities, setting of priorities, allocating of resources and identifying actions and activities of the PCG.
It should also incorporate a gender sensitive perspective in the implementation of such plans and
programs.

Gender sensitivity shall also be employed in all its internal policies, strategies, budget, projects,
structures and mechanisms, including but not limited to hiring, promotions, assignment, training
opportunities, pay and benefits. A gender perspective should likewise be integrated in all its training
programs, especially for maritime search and rescue.

SECTION 5. The PCG Commandant. – The PCG shall be headed by a Commandant who shall carry the
rank of Coast Guard Admiral: Provided, that he shall be appointed by the President from among the
Flag Officers in the Coast Guard service. He shall hold a command-at-sea badge and must have served
as a District Commander of the PCG. The Commandant shall have a maximum term of three (3) years.
A commandant who has served for three (3) years prior to his compulsory retirement shall be
considered retired and entitled to all the benefits available to a Coast Guard officer as if he is
compulsorily retired.

SECTION 6. Organization. – The PCG shall consist of the following categories of officers and
employees;
(a) PCG officers;
(b) PCG non-officers;
(c) PCG non-uniformed personnel;
(d) Probationary ensign; and
(e) Cadets and Cadettes.

SECTION 7. Officer Rank Distribution. – The officer rank distribution of the PCG shall be as follows:
two per centum (2%) in the Flag Officer rank; six per centum (6%) in the rank of Coast Guard
Captain; twelve per centum (12%) in the rank of Coast Guard Commander; eighteen per centum
(18%) in the rank of Coast Guard Lieutenant Commander; Twenty per centum (20%) in the rank of
Coast Guard Lieutenant; and forty-two per centum (42%) in the ranks of Coast Guard Lieutenant
Junior Grade and Coast Guard Ensign; Provided, That such distribution is based on the ratio between
officer and non-officer which is one (1) officer to every seven (7) non-officer: Provided, finally, That if
the actual number in a rank is less than the number prescribed in a lower rank.

SECTION 8. Distribution of Flag Officers. – The number of Flag Officers herein authorized shall be
distributed to the various Flag Officer ranks in accordance with the schedule as hereunder prescribed:
Coast Guard Admiral 1
Coast Guard Vice Admiral 1
Coast Guard Rear Admiral 5
Coast Guard Commodore 15
Total 22
Provided, That the herein prescribed Coast Guard ranks shall be distinct from those prescribed in the
Philippine Navy: Provided, further, That the total number of Flag Officers prescribed under this section
shall in no case be less than the number resulting from the implementation of Section 7 hereof,
otherwise the latter shall apply.

The number corresponding to the ranks of Coast Guard Admiral, Coast Guard Vice Admiral, Coast
Guard Rear Admiral, and Coast Guard Commodore, as provided for in this section, shall be the
maximum: Provided, That if the actual number in a rank, except in the case of Coast Guard Admiral
and Coast Guard Vice Admiral, is less than the number herein prescribed the difference may be
applied as an increase to the number prescribed in the lower rank: Provided, finally, That no officer
shall be promoted to the rank of Coast Guard Commodore or higher unless there is an existing
vacancy, and the officer is occupying a position in the table of organization that requires the rank of
which he is being considered for promotion.

SECTION 9. Maximum Tenure in Rank. – The maximum tenure of officers in the ranks of Captain and
Flag Officer in the PCG are hereby prescribed as follows:
Rank Maximum Tenure in Rank
Coast Guard Admiral three (3) years
Coast Guard Vice Admiral three (3) years
Coast Guard Rear Admiral three (3) years
Coast Guard Commodore five (5) years
Coast Guard Captain seven (7) years
Unless earlier separated, retired or promoted to the next higher rank or occupying a position calling
for the higher rank in the PCG table of organization, Captains and Flag Officers shall be compulsorily
retired upon the attainment of the maximum tenure in rank herein prescribed, or upon reaching the
age of compulsory retirement whichever comes earlier: Provided, That officers already holding these
ranks upon the approval of this Act my be allowed one (1) year more of tenure in rank before the
maximum tenure provided in this section shall be applied to them, unless they shall have already
reached the compulsory retirement age under existing laws, in which case the compulsory retirement
age shall prevail.

SECTION 10. Maximum Tenure in Position. – Officer holding the following key positions are hereby
limited a maximum tenure of three (3) years, unless otherwise earlier relieved by competent authority
or compulsorily retired under existing laws:
Coast Guard Commandant;
Coast Guard Deputy Commandant; and
Coast Guard District Commander.
Provided, That except for the Commandant, no other officer shall be assigned/designated to the
aforementioned key positions or promoted to the rank of Commodore or higher if he has less than (1)
year of active service remaining prior to compulsory retirement.

SECTION 11. Organization of a PCG Auxiliary (PCGA). – The PCG shall continue to maintain,
supervise, develop and train the PCGA as a civilian volunteer organization under the direct control and
supervision of the PCG Commandant. The PCGA shall assist the PCG in the promotion of safety of life
and property at sea, the preservation of the marine environment and its resources, the conduct of
maritime search and rescue, the maintenance of aids to navigation and such other activities that
enhance maritime community relations which include civic action, participation under the National
Service Training Program, youth development, recreational safety and other related activities.

SECTION 12. Appointments. – Appointments of PCG officers, which shall be in the initial rank of
Coast Guard Ensign, shall be made by the Secretary of the DOTC upon the recommendation of the
PCG Commandant. The initial appointment ranks of chaplains, dentists, lawyers, medical doctors and
veterinarians shall be Coast Guard Lieutenant.
No person shall be appointed as an officer of the PCG unless he is a natural born citizen of the
Philippines, at least twenty-one (21) years of age at the date of appointment, physically fit and is a
baccalaureate degree holder. The appointment of the PCG Commandant and Flag Officers shall be
approved by the President upon the recommendation of the Secretary of the DOTC. Appointments of
all PCG non-officers shall be made by the PCG Commandant. Appointments of all non-uniformed
personnel shall be in accordance with the Civil Service laws, rules and regulations.

SECTION 13. Promotions. – The promotion of PCG officers, as submitted by the PCG Officers
Selection and Promotion Board, shall be recommended by the PCG Commandant for the approval of
the Secretary of the DOTC: Provided, That the promotion to the rank of Flag Officers in the PCG shall
be submitted by a Board of Senior Officers to the PCG Commandant for approval of the President upon
the recommendation of the Secretary of the DOTC: Provided, further, That said officers shall possess
all the qualifications and none of the disqualification provided under pertinent laws, rules and
regulations, specifically on the completion of the required schooling, training and minimum time and
grade for said ranks.

The PCG Commandant shall approve the promotion of PCG non-officers to the next higher rank based
on the recommendation of the PCG Selection and Promotion Board for Non-Officers: Provided, That
special or meritorious promotion shall be extended to any PCG non-officer for acts of inconspicuous
courage or outstanding achievement in the Coast Guard service as determined by the PCG Selection
and Promotion Board for Non-Officers. The promotion of non-uniformed employees shall be governed
by Civil Service laws, rules and regulations.

SECTION 14. Salaries and Other Benefits. – The uniformed personnel of the PCG shall receive the
same base pay, longevity pay, hazard pay and other benefits and allowances as are now or hereafter
may be authorized for corresponding salary grades and ranks in the Armed Forces of the Philippines
(AFP) until such time that a new law is enacted for the purpose. The salaries and allowances of the
non-uniformed employees of the PCG shall be in accordance with Civil Service laws, rules and
regulations.

SECTION 15. Active Service. – For purposes of this Act, the active service of PCG personnel hereof
shall refer to services rendered as an officer, non-officer, probationary ensign, or those rendered as a
civilian official or employee in the PCG prior to the date of separation or retirement from the PCG:
Provided, That the term active service shall include confirmed services rendered as a civilian employee
in the Philippine government.

SECTION 16. Disciplinary Action. – The applicable and pertinent provisions of the AFP Military Justice
System shall be adopted in disciplinary cases against PCG officers and non-officers. The applicable
rules, regulations and guidelines promulgated by the Civil Service Commission shall govern cases
against PCG non-uniformed employees.

SECTION 17. Retirement. – Upon attaining fifty-six (56) years of age or upon accumulation of thirty
(30) years of continuous satisfactory active service, whichever comes later, a PCG officer or non-
officer shall be compulsorily retired: Provided, That said officer or non-officer shall have a minimum of
twenty (20) years of active service. The retirement of non-uniformed personnel shall be governed by
Civil Service laws, rules and regulations.

SECTION 18. Retirement Benefits. – Monthly retirement pay of officers and non-officers shall be fifty
percent (50%) of base pay and longevity pay of the next higher grade last held in case of twenty (20)
years of active service, increasing by two and one-half percent (2½%) for every year of service
rendered beyond twenty (20) years to a maximum of ninety percent (90%) for thirty-six (36) years of
active service and over. The retirement benefits of non-uniformed personnel shall be governed by Civil
Service/Government Service Insurance System Law.

SECTION 19. Separation from Service. – Officers and non-officers who voluntarily resign or otherwise
fail to comply with the standards of competence and proficiency of the PCG, shall be separated from
the service under existing laws, rules and regulations. The separation of non-uniformed personnel
shall be in accordance with Civil Service laws, rules and regulations.

SECTION 20. Collection of Revenues. – The PCG shall collect fees, dues, charges and fines relevant to
the exercise of its various functions.

SECTION 21. Rules and Regulations. – The Secretary of the DOTC shall issue rules and regulations,
determine, fix, and/or prescribe charges, rates, penalties pertinent, as may be necessary, to
implement the provisions of this Act, as well as the provision of acts, decrees and orders related to the
implementation of the PCG functions.

SECTION 22. PCG Properties and Lighthouse Reservations. – The PCG shall continue to exercise
exclusive ownership, possession, control and supervision over all properties transferred to it by virtue
of Executive Order No. 475 dated 30 March 1998 and Executive Order No. 477 dated 15 April 1998,
such as inter alia, vessels, watercrafts, firearms, armaments, munitions, communications and
electronic equipment, vehicles, buildings, real estate and lighthouse reservations.

SECTION 23. Establishment and Expansion of Coast Guard Bases and Facilities. – In coordination
with other appropriate government agencies, the PCG shall develop and enhance its capabilities in the
performance of its mandated functions and establish its strategic presence.
SECTION 24. Appropriations. – The Secretary of the DOTC shall immediately prepare the necessary
guidelines to cover the establishment of the PCG as an attached agency to the DOTC, the initial
funding of which shall be charged against the current year’s appropriations of the PCG and, thereafter,
in the annual General Appropriations Act.

SECTION 25. Transitory Provisions. – All previous appointments and promotions of PCG uniformed
personnel made prior to the enactment of this Act shall remain valid and subsisting.

SECTION 26. Separability Clause. – If for any reason, any provision of this Act is declared
unconstitutional or invalid, such parts not affected thereby shall remain in full force and effect.

SECTION 27. Repealing Clause. – All laws, decrees, executive orders, rules and regulations and other
issuances or parts thereof which are inconsistent with this Act are hereby repealed, amended or
modified accordingly.

SECTION 28. Effectivity. – This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any two (2) newspapers of general circulations.

This act which is a consolidation of Senate Bill No. 3389 and House Bill No. 5151 was finally passed by
the Senate and the House of Representatives on December 9, 2009 and December 8, 2009,
respectively.
 COMMONWEALTH ACT No. 146
PUBLIC SERVICE ACT, as amended

CHAPTER I
Organization
SECTION 1. This Act shall be known as the “Public Service Act.”
SECTION 2. There is created under the Department of Justice a commission which shall be
designated and known as the Public Service Commission, composed of one Public Service
Commissioner and five Associate Commissioners, and which shall be vested with the powers and
duties hereafter specified. Whenever the word “Commission” is used in this Act, it shall be held to
mean the Public Service Commission, and whenever the word “Commissioner” is used in this Act it
shall be held to mean the Public Service Commissioner or anyone of the Associate Commissioners.
The Public Service Commissioner and the Associate Public Service Commissioners shall be natural born
citizens and residents of the Philippines, not under thirty years of age; members of the Bar of the
Philippines, with at least five years of law practice or five years of employment in the government
service requiring a lawyer’s diploma; and shall be appointed by the President of the Philippines, with
the consent of the Commission on Appointments of the Congress of the Philippines: Provided,
however, That the present Commissioner and the personnel of the Commission shall continue in office
without the necessity of re-appointment.
The Commissioners shall have the rank and privilege of retirement of Judges of the Courts of First
Instance. (As amended by R.A. No. 178, June 21, 1947 and R.A. No. 2677, June 18, 1960 )
SECTION 3. The Commissioner and Associate Commissioners shall hold office until they reach the age
of seventy years, or until removed in accordance with the procedures prescribed in section one
hundred and seventy-three of Act Numbered Twenty-seven hundred and eleven, known as the
Revised Administrative Code: Provided, however, That upon retirement, any Commissioner of
Associate Commissioner shall be entitled to all retirement benefits and privileges for Judges of the
Courts of First Instance or under the retirement law to which he may be entitled on the date of his
retirement. In case of the absence, for any reason, of the Public Service Commissioner, the Associate
Commissioner with seniority of appointment shall act as Commissioner. If on account of absence,
illness, or incapacity of any of three Commissioners, or whenever by reason of temporary disability of
any Commissioner or of a vacancy occurring therein, the requisite number of Commissioners
necessary to render a decision or issue an order in any case is not present, or in the event of a tie
vote among the Commissioners, the Secretary of Justice may designate such number of Judges of the
Courts of First Instance, or such number of attorneys of the legal division of the Commission, as may
be necessary to sit temporarily as Commissioners in the Public Service Commission.
The Public Service Commission shall sit individually or as a body en banc or in two divisions of three
Commissioners each. The Public Service Commissioner shall preside when the Commission sits en
banc and in one division. In the other division, the Associate Commissioner with seniority of
appointment in that division shall preside. Five Commissioners shall constitute a quorum for sessions
en banc and two Commissioners shall constitute a quorum for the sessions of a division. In the
absence of a quorum, the session shall be adjourned until the requisite number is present.
All the powers herein vested upon the Commission shall be considered vested upon any of the
Commissioners, acting either individually or jointly as hereinafter provided. The Commissioners shall
equitably divide among themselves all pending cases and those that may hereafter be submitted to
the Commissioner, in such manner and form as they may determine, and shall proceed to hear and
determine the case assigned to each or to their respective divisions, or to the Commission en banc as
follows: uncontested cases, except those pertaining to the fixing of rates, shall be decided by one
Commissioner; contested cases and all cases involving the fixing of rates shall be decided by the
Commission in division and the concurrence of at least two Commissioners in the division shall be
necessary for the promulgation of a decision or non-interlocutory order in these cases: Provided,
however, That any motion for reconsideration of a decision or non-interlocutory order of any
Commissioner or division shall be heard directly by the Commission en banc and the concurrence of at
least four Commissioners shall be necessary for the promulgation of a final decision or order resolving
such motion for reconsideration. (As amended by R.A No. 723, June 6, 1952 and R.A. No. 2677, June
18, 1960 )
SECTION 4. The Public Service Commissioner shall receive an annual compensation of thirteen
thousand pesos; and each of the Associate Commissioners an annual compensation of twelve
thousand pesos. The Commissioners shall be assisted by one chief attorney, one finance and rate
regulation officer, one chief utilities regulation engineer, one chief accountant, one transportation
regulation chief, one secretary of the Public Service Commission, and three public utilities advisers
who shall receive an annual compensation of not less than ten thousand eight hundred pesos each;
five assistant chiefs of division who shall receive an annual compensation of not less than nine
thousand six hundred pesos each; twelve attorneys who shall receive an annual compensation of not
less than nine thousand pesos each; and a technical and confidential staff to be composed of two
certified public accounts, two electrical engineers, two mechanical or communication engineers, and
two special assistants who shall receive an annual compensation of not less than seven thousand two
hundred pesos each. (As amended by R.A. No. 178, June 21, 1947, R.A. No. 723, June 6, 1952, R.A.
No. 2677, June 18, 1960 and R.A. No. 3792, June 22, 1963)
SECTION 5. The Public Service Commissioner, the Associate Public Service Commissioners, and all
other officers and employees of the Public Service Commission shall enjoy the same privileges and
rights as the officer and employees of the classified civil service of the Government of the Philippines.
They shall also be entitled to receive from the Government of the Philippines their necessary travelling
expenses while travelling on the business of the Commission, which shall be paid on proper voucher
therefor, approved by the Secretary of Justice, out of funds appropriated for the contingent expenses
of the Commission.
When the exigency of the service so requires and with the approval of the Secretary of Justice, and
subject to the provisions of Commonwealth Act Numbered Two hundred forty-six, as amended, funds
may be set aside from the appropriations provided for the Commission and/or from the fees collected
under Section forty of this Act to defray the expenses to be incurred by the Public Service
Commissioner or any of the Associate Commissioners, officers or employees of the Commission to be
designated by the Commissioner, with the approval of the Secretary of Justice, in the study of modern
trends in supervision and regulation of public services. (As amended by R.A No. 3792, June 22, 1963)
SECTION 6. The Secretary of Justice, upon recommendation of the Public Service Commissioner, shall
appoint all subordinate officers and employees of the Commission as may be provided in the
Appropriation Act. The Public Service Commissioner shall have general executive control, direction,
and supervision over the work of the Commission and of its members, body and personnel, and over
all administrative business. (As amended by R.A. No. 178, June 21, 1947 and R.A. No. 3792, June 22,
1963)
SECTION 7. The Secretary of the Commission, under the direction of the Commissioner, shall have
charge of the administrative business of the Commission and shall perform such other duties as may
be required of him. He shall be the recorder and official reporter of the proceedings of the Commission
and shall have authority to administer oaths in all matters coming under the jurisdiction of the
Commission. He shall be the custodian of the records, maps, profiles, tariffs, itineraries, reports, and
any other documents and papers filed with the Commission or entrusted to his care and shall be
responsible therefor to the Commission. He shall have authority to designate from time to time any of
his delegates to perform the duties of Deputy Secretary with any of the Commissioners.
SECTION 8. The Commission shall furnish the Secretary such of its findings and decisions as in its
judgment may be of general public interest; the Secretary shall compile the same for the purpose of
publication in a series of volumes to be designated “Reports of the Public Service Commission of the
Philippines,” which shall be published in such form and manner as may be best adapted for public
information and use, and such authorized publications shall be competent evidence of the reports and
decisions of the Commission therein contained without any further proof or authentication thereof.
SECTION 9. No member or employee of the Commission shall have any official or professional
relation with any public service as herein defined, or hold any office of profit or trust with the
Government of the Philippines.
SECTION 10. The Commission shall have its office in the City of Manila or at such other place as may
be designated, and may hold hearings on any proceedings at such times and places, within the
Philippines, as it may provide by order in writing: Provided, That during the months of April and May
of each year, at least three Commissioners shall be on vacation in such manner that once every two
years at least three of them shall be on duty during April and May: Provided, however, That in the
interest of public service, the Secretary of Justice may require any or all the Commissioners not on
duty to render services and perform their duties during the vacation months. (As amended by R.A. No.
178, June 21, 1947, R.A. No. 2677, June 18, 1960 and R.A. No. 3792, June 22, 1963)
SECTION 11. The Commission shall have the power to make needful rules for its Government and
other proceedings not inconsistent with this Act and shall adopt a common seal, and judicial notice
shall be taken for such seal. True copies of said rules and other amendments shall be promptly
furnished to the Bureau of Printing and shall be forthwith published in the Official Gazette.
SECTION 12. The Commission shall report annually, as soon as practicable after the first day of
January of each year, to the Secretary of Justice, making such recommendations as it may deem
proper.
CHAPTER II
Jurisdiction, Powers and Duties of the Commission
SECTION 13. (a) The Commission shall have jurisdiction, supervision, and control over all public
services and their franchises, equipment, and other properties, and in the exercise of its authority, it
shall have the necessary powers and the aid of the public force: Provided, That public services owned
or operated by government entities or government-owned or controlled corporations shall be
regulated by the Commission in the same way as privately-owned public services, but certificates of
public convenience or certificates of public convenience and necessity shall not be required of such
entities or corporations: And provided, further, That it shall have no authority to require steamboats,
motor ships and steamship lines, whether 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 public service, who owns a
motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle
is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or
themselves a public service, for operation by the latter for a limited time and for a specific purpose
directly connected with the cultivation of his or their farm, the transportation, processing, and
marketing of agricultural products of such third party or third parties shall not be considered as
operating a public service for the purposes of this Act.
(c) The word “person” includes every individual, co-partnership, 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 Commonwealth Act No. 454, June 8, 1939, R.A. No. 1270, June 14, 1955
and R.A. No. 2677, June 18, 1960)

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 Commonwealth Act No. 454, June 8, 1939 and R.A. No. 2677, June 18, 1960)

SECTION 15. With the exception of those enumerated in the preceding section, no public service shall
operate in the Philippines without possessing a valid and subsisting certificate from the Public Service
Commission known as “certificate of public convenience,” or “certificate of public convenience and
necessity,” as the case may be, to the effect that the operation of said service and the authorization to
do business will promote the public interests in a proper and suitable manner.
The Commission may prescribe as a condition for the issuance of the certificate provided in the
preceding paragraph that the service can be acquired by the Republic of the Philippines or any
instrumentality thereof upon payment of the cost price of its useful equipment, less reasonable
depreciation; and likewise, that the certificate shall be valid only for a definite period of time; and that
the violation of any of these conditions shall produce the immediate cancellation of the certificate
without the necessity of any express action on the part of the Commission.

In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of
the model, or other circumstances affecting its value in the market shall be taken into consideration.
The foregoing is likewise applicable to any extension or amendment of certificates actually in force and
to those which may hereafter be issued, to permit to modify itineraries and time schedules of public
services, and to authorizations to renew and increase equipment and properties. (As amended by
Commonwealth Act No. 454, June 8, 1939)
SECTION 16. Proceedings of the Commission, upon notice and hearing. — The Commission shall have
power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject
to the limitations and exceptions mentioned and saving provisions to the contrary:
(a) To issue certificates which shall be known as certificates of public convenience, authorizing the
operation of public service within the Philippines whenever the Commission finds that the operation of
the public service proposed and the authorization to do business will promote the public interest in a
proper and suitable manner. Provided, That thereafter, certificates of public convenience and
certificates of public convenience and necessity will be granted only to citizens of the Philippines or of
the United States or to corporations, co-partnerships, associations or joint-stock companies
constituted and organized under the laws of the Philippines; Provided, That sixty per centum of the
stock or paid-up capital of any such corporations, co-partnership, association or joint-stock company
must belong entirely to citizens of the Philippines or of the United States: Provided, further, That no
such certificates shall be issued for a period of more than fifty years.

(b) To approve, subject to constitutional limitations any franchise or privilege granted under the
provisions of Act No. Six Hundred and Sixty-seven, as amended by Act No. One Thousand and twenty-
two, by any political subdivision of the Philippines when, in the judgment of the Commission, such
franchise or privilege will properly conserve the public interest, and the Commission shall in so
approving impose such conditions as to construction, equipment, maintenance, service, or operation
as the public interest and convenience may reasonably require, and to issue certificates of public
convenience and necessity when such is required or provided by any law or franchise.

(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof,
as well as commutation, mileage, kilometrage, and other special rates which shall be imposed
observed and followed thereafter by any public service: Provided, That the Commission may, in its
discretion, approve rates proposed by public services provisionally and without necessity of any
hearing; but it shall call a hearing thereon within thirty days, thereafter, upon publication and notice
to the concerns operating in the territory affected: Provided, further, That in case the public service
equipment of an operator is used principally or secondarily for the promotion of a private business, the
net profits of said private business shall be considered in relation with the public service of such
operator for the purpose of fixing the rates.

(d) To fix just and reasonable standards, classifications, regulations, practices, measurement, or
service to be furnished, imposed, observed, and followed thereafter by any public service.

(e) To ascertain and fix adequate and serviceable standards for the measurement of quantity, quality,
pressure, initial voltage, or other condition pertaining to the supply of the product or service rendered
by any public service, and to prescribe reasonable regulations for the examination and test of such
product or service and for the measurement thereof.

(f) To establish reasonable rules, regulations, instructions, specifications, and standards, to secure the
accuracy of all meters and appliances for measurements.

(g) To compel any public service to furnish safe, adequate, and proper service as regards the manner
of furnishing the same as well as the maintenance of the necessary material and equipment.

(h) To require any public service to establish, construct, maintain, and operate any reasonable
extension of its existing facilities, where in the judgment of said Commission, such extension is
reasonable and practicable and will furnish sufficient business to justify the construction and
maintenance of the same and when the financial condition of the said public service reasonably
warrants the original expenditure required in making and operating such extension.

(i) To direct any railroad, street railway or traction company to establish and maintain at any junction
or point of connection or intersection with any other line of said road or track, or with any other line of
any other railroad, street railway or traction to promote, such just and reasonable connection as shall
be necessary to promote the convenience of shippers of property, or of passengers, and in like
manner direct any railroad, street railway, or traction company engaged in carrying merchandise, to
construct, maintain and operate, upon reasonable terms, a switch connection with any private
sidetrack which may be constructed by any shipper to connect with the railroad, street railway or
traction company line where, in the judgment of the Commission, such connection is reasonable and
practicable and can be out in with safety and will furnish sufficient business to justify the construction
and maintenance of the same.

(j) To authorize, in its discretion, any railroad, street railway or traction company to lay its tracks
across the tracks of any other railroad, street railway or traction company or across any public
highway.

(k) To direct any railroad or street railway company to install such safety devices or about such other
reasonable measures as may in the judgment of the Commission be necessary for the protection of
the public ar passing grade crossings 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 wilfully and contumaciously refused to comply with any order, rule or
regulation of the Commission or any provision of this Act: Provided, That the Commission, for good
cause, may prior to the hearing suspend for a period not to exceed thirty days any certificate or the
exercise of any right or authority issued or granted under this Act by order of the Commission,
whenever such step shall in the judgment of the Commission be necessary to avoid serious and
irreparable damage or inconvenience to the public or to private interests.

(o) To fix, determine, and regulate, as the convenience of the state may require, a special type for
auto-busses, trucks, and motor trucks to be hereafter constructed, purchased, and operated by
operators after the approval of this Act; to fix and determine a special registration fee for auto-buses,
trucks, and motor trucks so constructed, purchased and operated: Provided, That said fees shall be
smaller than more those charged for auto-busses, trucks, and motor trucks of types not made
regulation under the subsection.

SECTION 17. Proceedings of Commission without previous hearing. — The Commission shall have
power without previous hearing, subject to established limitations and exception and saving provisions
to the contrary:
(a) To investigate, upon its own initiative, or upon complaint in writing, any matter concerning any
public service as regards matters under its jurisdiction; to require any public service to furnish safe,
adequate, and proper service as the public interest may require and warrant; to enforce compliance
with any standard, rule, regulation, order or other requirement of this Act or of the Commission, and
to prohibit or prevent any public service as herein defined from operating without having first secured
a certificate of public convenience or public necessity and convenience, as the case may be and
require existing public services to pay the fees provided for in this Act for the issuance of the proper
certificate of public convenience or certificate of public necessity and convenience, as the case may
be, under the penalty, in the discretion by the Commission, of the revocation and cancellation of any
acquired rights.

(b) To require any public service to pay the actual expenses incurred by the Commission in any
investigation if it shall be found in the same that any rate, tool, charge, schedule, regulation, practice,
act or service thereof is in violation of any provision of this Act or any certificate, order, rule,
regulation or requirement issued or established by the Commission. The Commission may also assess
against any public service costs not to exceed twenty-five pesos with reference to such investigation.
Irnmrn

(c) From time to time appraise and value the property of any public service, whenever in the
judgment of the Commission it shall be necessary so to do, for the purpose of carrying out any of the
provisions of this Act, and in making such valuation the Commission may have access to and use any
books, documents, or records in the possession of any department, bureau, office, or board of the
government of the Philippines or any political subdivision thereof.

(d) To provide, on motion by or at the request of any consumer or user of a public service, for the
examination and test of any appliance used for the measuring of any product or service of a public
service, and for that purpose, by its agents, experts, or examiners to enter upon any premises where
said appliances may be, and other premises of the public service, for the purpose of setting up and
using on said premises any apparatus necessary therefor. and to fix the fees to be paid by any
consumer or user who may apply to the Commission for such examination or test to be made, and if
the appliance be found defective or incorrect to the disadvantage of the consumer or user to require
the fees paid to be refunded to the consumer or user by the public service concerned.

(e) To permit any street railway or traction company to change its existing gauge to standard steam
railroad gauge, upon such terms and conditions as the Commission shall prescribe.

(f) To grant to any public service special permits to make extra or special trips within the territory
covered by its certificates of public convenience, and to make special excursion trips outside of its own
territory if the public interest or special circumstances required it: Provided, however, that in case a
public service cannot render such extra service on its own line or in its own territory, a special permit
for such extra service may be granted to any other public service.

(g) To require any public service to keep its books, records, and accounts so as to afford an intelligent
understanding of the conduct of its business and to that end to require every such public service of the
same class to adopt a uniform system of accounting. Such system conform to any system approved
and confirmed by the Auditor General.
(h) To require any public service to furnish annual reports of finances and operations. Such reports
shall set forth in detail the capital stock issued, the amounts of said capital stock paid up and the form
of payment thereof; the dividends paid, the surplus, if any and the number of stockholders, the
consolidated and pending obligations and the interest paid thereon; the cost and value of the property
of the operator; concessions or franchises and equipment; the number of employees and salaries paid
to each class; the accidents to passengers, employees, and other person, and the causes thereof; the
annual expenditures on improvements; the manner of their investment and nature of such
improvements; the receipts and profits in each of the branches of the business and of whatever
source; the operating and other expenses; the balance of profits and losses; and a complete
statement of the annual financial operations of the operator, including an annual balance sheet. Such
reports shall also contain any information which the Commission may require concerning freight and
passenger rates, or agreements, compromises or contracts affecting the same. Said reports shall
cover a period of twelve months, ending on December thirty-first of each year, and shall be sworn to
by the officer or functionary of the public service authorized therefor. The Commission shall also have
power to require from time to time special reports containing such information as above provided for
or on other matters as the Commission may deem necessary or advisable.

(i) To require every public service to file with the Commission a statement in writing, verified by the
oaths of the owner or the president and the secretary thereof, if a corporation, setting forth the name,
title of office or portion, and post-office address, and the authority, power and duties of every officer,
member of the board of directors, trustees executive committee, superintendent, chief or head of
construction and operation thereof, in such form as to disclose the source and origin of each
administrative act, rule, decision, order or other action of the operator of such public service; and,
within ten days after any change is made in the title of, or authority, powers or duties appertaining to
any such office or position, or the person holding the same, filed with the Commission a like
statement, verified in like manner, setting forth such change.

(j) To require any public service to comply with the laws of the Philippines and with any provincial
resolution or municipal ordinance relating thereto and to conform to the duties imposed upon it
thereby or by the provisions of its own charter, whether obtained under any general or special law of
the Philippines.

(k) To investigate any or all accidents that may occur on the property of any public service or directly
or indirectly arising from or connected with its maintenance or operation in the Philippines; to require
any public service to give the Commission immediate and effective notice of all any such accidents,
and to make such order or recommendation with respect thereto as the public interest may warrant to
require.
(l) To require every public service is herein defined to file within complete schedules of every
classification employed and of every individual or joint rate, toll fare or charge made, charged or
exacted by it for any product supplied or service rendered within the Philippines and, in the case of
public carriers, to file with it a statement showing the itineraries or routes served as specified in such
requirement.

CHAPTER III
Operators of Public Services Regulations and Prohibitions
SECTION 18. It shall be unlawful for any individual, co-partnership, association, corporation or joint-
stock company, their lessees, trustees or receivers appointed by any court whatsoever, or any
municipality, province, or other department of the Government of the Philippines, to engage in any
public service business without having first secured from the Commission a certificate of public
convenience or certificate of public convenience and necessity as provided for in this Act, except
grantees of legislative franchises expressly exempting such grantees from the requirement of securing
a certificate from this Commission as well as concerns at present existing expressly exempted from
the jurisdiction of the Commission, either totally or in part, by the provisions of section thirteen of this
Act.
SECTION 19. Unlawful Acts. — It shall be unlawful for any public service:
(a) To provide or maintain any service that is unsafe, improper, or inadequate or withhold or refuse
any service which can reasonably be demanded and furnished, as found and determined by the
Commission in a final order which shall be conclusive and shall take effect in accordance with this Act,
upon appeal of otherwise.

(b) To make or give, directly or indirectly, by itself or through its agents, attorneys or brokers, or any
of them, discounts or rebates on authorized rates, or grant credit for the payment of freight charges,
or any undue or unreasonable preference or advantage to any person of corporation or to any locality
or to any particular description of traffic or service, or subject any particular person or corporation or
locality or any particular description of traffic to any prejudice or disadvantage in any respect
whatsoever; to adopt, maintain, or enforce any regulation, practice or measurement which shall be
found or determined by the Commission to be unjust, unreasonable, unduly preferential or unjustly
discriminatory in a final order which shall be conclusive and shall take effect in accordance with the
provisions of this Act, upon repeal or otherwise.

(c) To refuse or neglect, when requested by the Director of Posts or his authorized representative, to
carry public mail on the regular trips of any public land transportation service maintained or operated
by any such public service; upon such terms and conditions and for a consideration in such amount as
may be agreed upon between the Director of Posts and the public service carrier of fixed by the
Commission in the absence of an agreement between the Director of Posts and the carrier. In case the
Director of Posts and public service carrier are unable to agree on the amount of the compensation to
be paid for the carriage of the mail, the Director of Posts shall forthwith request the Commission to fix
a just and reasonable compensation for such carriage and the same shall be promptly fixed by the
Commission in accordance with Section sixteen of this Act.

SECTION 20. Acts requiring the approval of the Commission. — Subject to established limitations and
exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the
owner, lessee or operator thereof, without the approval and authorization of the Commission
previously had
(a) To adopt, establish, fix, impose, maintain, collect or carry into effect any individual or joint rates,
commutation, mileage or other special rate, toll, fare, charge, classification or itinerary. The
Commission shall approve only those that are just and reasonable and not any that are unjustly
discriminatory or unduly preferential, only upon reasonable notice to the public services and other
parties concerned, giving them a reasonable opportunity to be heard and the burden of the proof to
show that the proposed rates or regulations are just and reasonable shall be upon the public service
proposing the same.

(b) To establish, construct, maintain, or operate new units or extend existing facilities or make any
other addition to or general extension of the service.

(c) To abandon any railroad station or stop the sale of passenger tickets, or cease to maintain an
agent to receive and discharge freight at any station now or hereafter established at which passenger
tickets are now or may hereafter be regularly sold, or at which such agent is now or may hereafter be
maintained, or make any permanent change in its time tables or itineraries on any railroad or in its
service.

(d) To lay any railroad or street railway track across any highway, so as to make a new crossing at
grade, or cross the tracks of any other railroad or street railway, provided, that this subsection shall
not apply to replacements of lawfully existing tracks. mdwris

(e) Hereafter to issue any stock or stock certificates representing an increase of capital; or issue any
share of stock without par value; or issue any bonds or other evidence of indebtedness payable in
more than one year from the issuance thereof, provided that it shall be the duty of the Commission,
after hearing, to approve any such issue maturing in more than one year from the date thereof, when
satisfied that the same is to be made in accordance with law, and the purpose of such issue be
approved by the Commission.

(f) To capitalize any franchise in excess of the amount, inclusive of any tax or annual charge, actually
paid to the Government of the Philippines or any political subdivision thereof as the consideration of
said franchise; capitalize any contract for consolidation, merger or lease, or issue any bonds or other
evidence of indebtedness against or as a lien upon any contract for consolidation, merger, or lease:
Provided, however, that the provisions of this section shall not prevent the issuance of stock, bonds,
or other evidence of indebtedness subject to the approval of the Commission by any lawfully merged
or consolidated public services not in contravention of the provisions of this section.

(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or
rights or any part thereof; or merge or consolidate its property, franchises privileges or rights, or any
part thereof, with those of any other public service. The approval herein required shall be given, after
notice to the public and hearing the persons interested at a public hearing, if it be shown that there
are just and reasonable grounds for making the mortgaged or encumbrance, for liabilities of more
than one year maturity, or the sale, alienation, lease, merger, or consolidation to be approved, and
that the same are not detrimental to the public interest, and in case of a sale, the date on which the
same is to be consummated shall be fixed in the order of approval: Provided, however, that nothing
herein contained shall be construed to prevent the transaction from being negotiated or completed
before its approval or to prevent the sale, alienation, or lease by any public service of any of its
property in the ordinary course of its business.

(h) To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that
sale in itself or in connection with another previous sale, shall be to vest in the transferee more than
forty per centum of the subscribed capital of said public service. Any transfer made in violation of this
provision shall be void and of no effect and shall not be registered in the books of the public service
corporation. Nothing herein contained shall be construed to prevent the holding of shares lawfully
acquired. (As amended by Commonwealth Act No. 454, June 8, 1939)

(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 which the public service is an interested party; (8)
persons injured in accidents or wrecks, and physicians and nurses attending such persons; (9) peace
officers and men of regularly constituted fire departments. (As amended by Commonwealth Act No.
454, June 8, 1939)

(k) Adopt, maintain, or apply practices or measures, rules or regulations to which the public shall be
subject in its relations with the public service.

CHAPTER IV
Penalties for Violations
SECTION 21. Every public service violating or failing to comply with the terms and conditions of any
certificate or any orders, decisions or regulations of the Commission shall be subject to a fine of not
exceeding two hundred pesos per day for every day during which such default or violation continues;
and the Commission is hereby authorized and empowered to impose such fine, after due notice and
hearing.
The fines so imposed shall be paid to the Government of the Philippines through the Commission, and
failure to pay the fine in any case within the same specified in the order or decision of the Commission
shall be deemed good and sufficient reason for the suspension of the certificate of said public service
until payment shall be made. Payment may also be enforced by appropriate action brought in a court
of competent jurisdiction. The remedy provided in this section shall not be a bar to, or affect any other
remedy provided in this Act but shall be cumulative and additional to such remedy or remedies.

SECTION 22. Observance of the orders, decisions, and regulations of the Commission and of the
terms and conditions of any certificate may also be enforced by mandamus or injunction in
appropriate cases, or by action to compel the specific performance of the orders, decisions, and
regulations so made, or of the duties imposed by law upon such public service: Provided, that the
Commission may compromise any case that arise under this Act in such manner and for such amount
as it may deem just and reasonable.
SECTION 23. Any public service corporation that shall perform, commit, or do any act or thing
forbidden or prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be
done or performed, shall be punished by a fine not exceeding twenty-five thousand pesos, or by
imprisonment not exceeding five years, or both, in the discretion of the court.
SECTION 24. Any person who shall knowingly and wilfully perform, commit, or do, or participate in
performing, committing, or doing, or who shall knowingly and wilfully cause, participate, or join with
others in causing any public service corporation or company to do, perform or commit, or who shall
advice, solicit, persuade, or knowingly and wilfully instruct, direct, or order any officer, agent, or
employee of any public service corporation or company to perform, commit, or do any act or thing
forbidden or prohibited by this Act, shall be punished by a fine not exceeding two thousand pesos, or
imprisonment not exceeding two years, or both, in the discretion of the court: Provided, however, that
for operating a private passenger automobile as a public service without having a certificate of public
convenience for the same the offender shall be subject to the penalties provided for in section sixty-
seven (j) of Act numbered thirty-nine hundred an ninety-two.
SECTION 25. Any person who shall knowingly and wilfully neglect, fail, or omit to do or perform, or
who shall knowingly and wilfully cause or join or participate with others in causing any public service
corporation or company to neglect, fail or omit to do or perform, or who shall advise, solicit, or
persuade, or knowingly and wilfully instruct, direct, or order any officer, agent, or employee of any
public service corporation or company to neglect, fail, or omit to do any act or thing required to be
done by this Act, shall be published by a fine not exceeding two thousand pesos or by imprisonment
not exceeding two years, or both, in the discretion of the court.
SECTION 26. Any person who shall destroy, injure, or interfere with any apparatus or appliance
owned or operated by to in charge of the Commission or its agents, shall be deemed guilty of a
misdemeanor and upon conviction shall be published by a fine not exceeding one thousand pesos or
imprisonment not exceeding six months, or both in the discretion of the court.
Any public service permitting the destruction, injury to, or interference with, any such apparatus or
appliances shall forfeit a sum not exceeding four thousand pesos for each offense.
SECTION 27. This Act shall not have the effect to release or waive any right of action by the
Commission or by any person for any right, penalty, or forfeiture which may have arisen or which may
arise, under any of the laws of the Philippines, and any penalty or forfeiture enforceable under this Act
shall not be a bar to or affect a recovery for a right, or affect or bar any criminal proceedings against
any public service or person or persons operating such public services, its officers, directors, agents,
or employees.
SECTION 28. Violations of the orders, decisions, and regulations of the Commission and of the terms
and conditions of any certificate issued by the Commission shall prescribe after sixty days, and
violations of the provisions of this Act shall prescribe after one hundred and eighty days.
CHAPTER V
Procedure and Review
SECTION 29. All hearings and investigations before the Commission shall be governed by rules
adopted by the Commission, and in the conduct thereof the Commission shall not be bound by the
technical rules of legal evidence: Provided, That the Public Service Commissioner or associate
commissioners may summarily punish for contempt by a fine not exceeding two hundred pesos or by
imprisonment not exceeding ten days, or both, any person guilty of misconduct in the presence of the
Commissioner or associate commissioners or so near the same as to interrupt the hearing or session
or any proceeding before them, including cases in which a person present at a hearing, session, or
investigation held by either of the commissioners refuses to be sworn as a witness or to answer as
such when lawfully required to do so. To enforce the provisions of this section, the Commission may, if
necessary, request the assistance of the municipal police for the execution of any order made for said
purpose.
(1) While the Commission is authorized to make rules for the conduct of their business, it could not
set at naught the fundamental rule of all proceedings that only parties having a real interest will be
heard.

(2) A party not affected or prejudiced cannot file an opposition.

(3) One public service corporation cannot assume the name and be substituted in the place of another
public service corporation.

(4) A legal representative of the estate of a deceased applicant may be substituted for the latter. If
the right consists in the prosecution of unfinished proceedings upon an application for a certificate of
public convenience of the deceased before the Public Service Commission, it is but logical that the
legal representative be empowered and entitled in behalf of the estate to make the right effective in
that proceeding.

(5) One who has been granted a legislative franchise to operate an ice plant, although not yet an
operator of such public utility, has sufficient interest or personality either to oppose an established
operator’s application for an increase in the capacity of his existing plant, or to ask for a joint hearing
of said application and the grantee’s own application for the issuance of a certificate of public
convenience in order to operate under such franchise.

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

(c) The Commissioner and associate commissioners, the chiefs of divisions, the attorneys of the
Commission, and the deputy secretaries shall have the power to administer oaths in all matters under
the jurisdiction of the Commission.

(d) Any person who shall testify falsely or make any false affidavit or oath before the Commission or
before any of its members shall be guilty of perjury, and upon conviction thereof in a court of
competent jurisdiction, shall be punished as provided by law.

(e) Witnesses appearing before the Commission in obedience to subpoena or subpoena duces tecum,
shall be entitled to receive the same fees and mileage allowance as witnesses attending Courts of First
Instance in civil cases.

(f) Any person who shall obstruct the Commission or either of the Commissioners while engaged in the
discharge of Official duties, or who shall conduct himself in a rude, disrespectful or disorderly manner
before the Commission or either of the Commissioners, while engaged in the discharge of official
duties, or shall orally or in writing be disrespectful to, offend or insult either of the Commissioners on
occasion or by reason of the performance of official duties, upon conviction thereof by a court of
competent jurisdiction, shall be punished for each offense by a fine not exceeding one thousand
pesos, or by imprisonment not exceeding six months, or both, in the discretion of the court.

SECTION 31. No person shall be excused from testifying or from producing any book, document, or
paper in any investigation or inquiry by or upon the hearing before the Commission, when ordered so
to do by said Commission, except when the testimony or evidence required of him may tend to
incriminate him. Without the consent of the interested party no member or employee of the
Commission shall be compelled or permitted to give testimony in any civil suit to which the
Commission is not a party, with regard to secrets obtained by him in the discharge of his official duty.
SECTION 32. The Commission may, in any investigation or hearing, by its order in writing cause the
deposition of witnesses residing within or without the Philippines to be taken in the manner prescribed
by the Rules of Court. Where witnesses reside in places distant from Manila and it would be
inconvenient and expensive for them to appear personally before the Commission, the Commission
may, by proper order, commission any clerk of the Court of First Instance, municipal judge or justice
of the peace of the Philippines to take the deposition of witnesses in any case pending before the
Commission. It shall be the duty of the official so commissioned, to designated promptly a date or
dates for the taking of such deposition, giving timely notice to the parties, and on said date to proceed
to take the deposition, reducing it to writing. After the depositions have been taken, the official so
commissioned shall certify to the depositions taken and forward them as soon as possible to the
Commission. It shall be the duty of the respective parties to furnish stenographers for taking and
transcribing the testimony taken in case there are no stenographers available, the testimony shall be
taken in long hand by such person as the clerk of court, the municipal judge or justice of the peace
may designate. The Commission may also commission a notary public to take the depositions in the
same manner herein provided.
The Commission may also, by proper order, authorize any of the attorneys of the legal division or
division chiefs of the Commission, if they be lawyers, to hear and investigate any case filed, with the
Commission and in connection therewith to receive such evidence as may be material thereto. At the
conclusion of the hearing or investigation, the attorney or division chief so authorized shall submit the
evidence received by him to the Commission to enable the latter to render its decision. (As amended
by R.A. No. 723, June 6, 1952.)

SECTION 33. Every order made by the Commission shall be served upon the person or public service
affected thereby, within ten days from the time said order is filed by personal delivery or by ordinary
mail, upon the attorney of record, or in case there be no attorney of record, upon the party
interested; and in case such certified copy is sent by registered mail, the registry mail receipt shall be
prima facie evidence of the receipt of such order by the public service in due course of mail. All orders
of the Commission to continue an existing service or prescribing rates to be charged shall be
immediately operative; all other orders shall become effective upon the dates specified thereon:
Provided, however, that orders, resolutions or decisions in converted matters and not referring to the
continuance of an existing service or prescribing rates to be charged shall not be effective unless
otherwise provided by the Commission, and shall take effect thirty days after notice to the parties.
SECTION 34. Any interested party may request the reconsideration of any order, ruling, or decision
of the Commission by means of a petition filed not later than fifteen days after the date of the notice
of the order, ruling, or decision in question. The grounds on which the request for reconsideration is
based shall be clearly and specifically stated in the petition. Copies of said petition shall be served on
all parties interested in the matter. It shall be the duty of the Commission to call a hearing to decide
the same promptly, either denying the petition or revoking or modifying the order, ruling or decision
under consideration.
SECTION 35. The Supreme Court is hereby given jurisdiction to review any order, ruling, or decision
of the Commission and to modify or set aside such order, ruling, or decision when it clearly appears
that there was no evidence before the Commission to support reasonably such order, ruling, or
decision, or that the same is contrary to law, or that it was without the jurisdiction of the Commission.
The evidence presented to the Commission, together with the record of the proceedings before the
Commission, shall be certified by the secretary of the Commission to the Supreme Court. Any order,
ruling, or decision of the Commission may likewise be reviewed by the Supreme Court upon a writ of
certiorari in proper cases. The procedure for review, except as herein provided, shall be prescribed by
rules of the Supreme Court.
SECTION 36. Any other, ruling, or decision of the may be reviewed on the application of any person
or public service affected thereby, by certiorari in appropriate cases, or by petition, to be known as
petition for review, which shall be filed within thirty days from the notification of such order, ruling or
decision, or in case of a petition is filed in accordance with the preceding section for the
reconsideration of such order, ruling or decision and the same is denied it shall be filed within fifteen
days after notice of the order denying reconsideration. Said petition shall be placed on file in the office
of the Clerk of the Supreme Court who shall furnish copies thereof to the Secretary of the Commission
and other parties interested.
SECTION 37. The institution of a writ of certiorari or other special remedies in the Supreme Court
shall in no case supersede or stay any order, ruling or decision of the Commission, unless the
Supreme Court shall so direct, and the appellant may be required by the Supreme Court to give bond
in such form and of such amount as may be deemed proper.
SECTION 38. The chief of the legal division or any other attorneys of the Commission shall represent
the same in all judicial proceedings. It shall be the duty of the Solicitor General to represent the
Commission in any judicial proceedings if, for special reason, the Commissioner shall request his
intervention.
There is hereby created under the administrative supervision of the Secretary of Justice an office to be
known as the Office of the People’s Counsel in the Public Service Commission. The people’s Counsel
shall have two assistants and such number of employees as may be necessary to perform the
functions hereinafter specified. The People’s Counsel and his assistants shall be appointed by the
President of the Philippines with the consent of the commission on appointments of the Congress of
the Philippines. The employees of the office of the People’s Counsel shall be appointed by the
Secretary of Justice upon recommendation of the People’s Counsel.
The People’s Counsel and his assistants shall possess the qualifications of a provincial fiscal. The
People’s Counsel shall receive compensation at the rate of seven thousand two hundred pesos per
annum, and the first and second assistant’s People’s Counsel, at the rate of six thousand pesos per
annum each.
The People’s Counsel, his assistants, and the employees of the Office of the People’s Counsel shall not,
during their continuance in office, intervene directly or indirectly in the management or control of, or
be financially interested directly or indirectly in any public service as defined in this Act.
It shall be the duty of the People’s Counsel (1) to institute proceedings before the Commission, in
behalf of the public, for the purpose of fixing just and reasonable rates or charges to be followed and
observed by public services as herein defined, whenever he has reason to believe that the existing
rates or charges of such public services are unjust and unreasonable or unjustly discriminatory; (2) to
represent and appear for the public before the Commission or any court of the Philippines in every
case involving the interest of users of the products of, or service furnished by any public service under
the jurisdiction of the Commission; (3) to represent and appear for petitioners appearing before the
Commission for the purpose of complaining in matters of the rates and services; (4) to investigate the
service given by the rates charged by, and the valuation of the properties of the public services under
the jurisdiction of the Commission, and such other matters relating to said public services as affect the
interests of users of the products or service thereof, and to take all the steps necessary for the
protection of the interests of the person or persons or of the public affected thereby. In connection
with such investigation he is hereby empowered to issue subpoena or subpoena duces tecum.

The People’s Counsel is authorized to call upon and obtain such assistance as he may deem necessary
in the performance of his duties from any officer or employee of any department, bureau, office,
agency, or instrumentality of the government including corporations owned, controlled or operated by
the government. (As amended by R.A No. 178, June 21, 1947.)

SECTION 39. Any preceding in any court of the Philippines directly affecting an order of the
Commission or to which the Commission is a party, shall have preference over all other civil
proceedings pending in such court, except election cases.
CHAPTER VI
Fees
SECTION 40. The Commission is authorized and ordered to charge and collect from any public service
or applicant, as the case may be, the following fees as reimbursement of its expenses in the
authorization, supervision and/or regulation of public services: dnarto
(a) The charge of fifty pesos for the registration of:

(1) Applications under the provisions of Section sixteen (a), (b), (c), and (d), and twenty (a), (b) (c),
(e), (f), and (h): Provided however, That in case of transportation services an additional filing fee of
five pesos shall be charged for each additional unit or vehicle in excess of five units or vehicles applied
for: And provided, finally, That no filing fee shall be collected for the reduction of rates if the same
does not alter or modify in any way the basic rates of the schedule.

(2) Applications for the approval or modification of maximum rates under Section fourteen.

(b) Thirty pesos shall be collected from any operator of land transportation for the registration of:

(1) Applications under Section seventeen (f).

(2) Applications for the extension of time covering a period of thirty days for the registration of motor
vehicles previously authorized by the Commission.

(c) The charge of thirty pesos for the filing of other applications by any public service operator not
specifically provided for in the preceding paragraphs of this section other than motions of a temporary
or incidental character: Provided, however, That fifteen pesos only shall be collected for each
certificate of public convenience or certificate of public convenience and necessity in diploma form
issued to a public service operator.

(d) For annual reimbursement of the expenses incurred by the Commission for the supervision and
regulation of the operations of motor vehicle services:

(1) For each automobile, ten pesos.

(2) For each motor vehicle, truck, or tailer of less than two tons gross transportation capacity, ten
pesos.

(3) For each motor vehicle, truck, or trailer of two tons or more, but less than three tons gross
transportation capacity, twenty pesos.

(4) For each motor vehicle, truck, or trailer of three tons or more but less than four tons gross
transportation capacity, thirty pesos.

(5) Motor vehicles, trucks, trailers or buses of four tons or more gross capacity shall pay at the rate of
ten pesos per ton gross.

The fees provided in paragraphs (d) and (e) hereof shall be paid on or before September thirtieth of
each year with a penalty of fifty per centum in case of delinquency: Provided, further, That if the fees
or any balance thereof are not paid within sixty days from the said date, the penalty shall be increased
by one per centum for every month thereafter of delinquency: Provided, however, That motor vehicles
registered in the Motor Vehicles Office after September thirtieth shall be exempt from payment for
said year.

(e) For annual reimbursement of the expenses incurred by the Commission in the supervision of other
public services and/or in the regulation or fixing of their rates, twenty centavos for each one hundred
pesos or fraction thereof, of the capital stock subscribed or paid, or if no shares have been issued, of
the capital invested, or of the property and equipment, whichever is higher.

(f) For the issue or increase of capital stock, twenty centavos for each one hundred pesos or fraction
thereof, of the increased capital.

(g) For each permit authorizing the increase of equipment, the installation of new units or authorizing
the increase of capacity. or the extension of means or general extension in the services, twenty
centavos for each one hundred pesos or fraction of the additional capital necessary to carry out the
permit.

(h) For the inspection or certification made in the meter laboratory of the Commission or each
apparatus or meter used by any public service, four pesos, and for examination made outside the
meter laboratory of the Commission, the additional expenses as may be incurred in making the
examination shall also be paid.

(i) For certification of copies of official documents in the files of the Commission, fifty centavos plus
fifty centavos for each page or folio so certified.

This section shall not be applicable to the Republic of the Philippines, nor to its instrumentalities.
Aside from the appropriations for the Commission under the annual General Appropriation Act, any
unexpended balance of the fees collected by the Commission under this section shall be constituted
receipts automatically appropriated each year, and together with any surplus in the standardizing
meter laboratory revolving fund under Commonwealth Act Numbered Three hundred forty-nine, shall
be disbursed by the Public Service Commissioner in accordance with special budgets to be approved
by the Department of Justice, the Budget Commission and the Office of the President of the Philippines
for additional needed personal services, maintenance and operating expenses, acquisition of urgently
needed vehicles, furniture and equipment, maintenance of an adequate reference library, acquisition
of a lot and building for the Commission, and other expenses necessary for efficient administration
and effective supervision and regulation of public services. (As amended by Commonwealth Act No.
454, June 8, 1939 and R.A. No. 3792, June 22, 1963.)
CHAPTER VII
General and Transitory Provisions
SECTION 41. A substantial compliance with the requirements of this Act shall be sufficient to give
effect to all the rules, orders, acts and regulations of the Commission and they shall not be declared
inoperative, illegal, or void for any omission of a technical nature in respect thereto.
SECTION 42. Copies of all official documents and orders filled or deposited in the office of the
Commission, certified by either of the commissioners, or by the secretary to be true copy of the
original, under the seal of the Commission shall be evidence in like manner as the originals in all
courts of the Philippines.
SECTION 43. The Commission created under this Act shall succeed the Commission created under Act
numbered thirty-one hundred and eight in the dispatch, hearing, and determination of all pending
matters before the latter; and shall take charge of its archives, books, furniture, equipment, and other
properties of whatsoever nature.

SECTION 44. In addition to the sum appropriated for the former commission under Act numbered
forty-one hundred and thirty-two, the General Appropriation Act for nineteen hundred and thirty-six,
the sum of six thousand seven hundred and sixty-eight pesos and thirty-four centavos is hereby
appropriated out of any funds in the Philippines Treasury not otherwise; and in addition to the sum
appropriated under Act numbered thirty-eight, the General Appropriation Act for nineteen hundred and
thirty-seven, the sum of twenty-three thousand six hundred and ten pesos, or so much thereof as
may be necessary, is hereby appropriated, out of any funds in the Philippines Treasury not otherwise
appropriated, for carrying out the purposes of this Act
SECTION 45. If, any reason, any section, subsection, sentence, clauses or terms of this Act is held to
the unconstitutional such decision shall not affect the validity of the other provisions of this Act
SECTION 46. Act numbered thirty-two hundred and forty-seven and Act numbered thirty-five
hundred and eighteen shall continue in force and effect; but all provisions of Act numbered thirty-one
hundred and eight and amendments thereof, and all other acts or parts or acts inconsistent with the
provisions of this Act are hereby repealed.
SECTION 47. This Act shall take effect upon its approval.
Approved: November 7, 1936
 EXECUTIVE ORDER NO. 277
APPROVING AND ADOPTING THE NATIONAL CIVIL AVIATION SECURITY PROGRAMME,
CREATING THE OFFICE FOR TRANSPORTATION SECURITY IN THE DEPARTMENT OF
TRANSPORTATION AND COMMUNICATIONS, AND RECONSTITUTING THE NATIONAL
COUNCIL FOR CIVIL AVIATION SECURITY AS THE NATIONAL CIVIL AVIATION SECURITY
COMMITTEE
WHEREAS, there is an urgent need to safeguard civil aviation against acts of unlawful interference
while taking into account the safety, regularity and efficiency of flights
WHEREAS, pursuant to Executive Order No. 336 dated January 5, 2001, the National Council for Civil
Aviation Security is responsible for formulating plans to direct, control, supervise and integrate all
measures aimed at preventing and suppressing all terrorist threats to civil aviation;
WHEREAS, under Section 31, Chapter 10, Title III, Book III of the Administrative Code of 1987, the
President has continuing authority to reorganize the administrative, structure of the Office of the
President.
NOW, THERE, I GLORIA MACAPAGAL – ARROYO, President of the Republic of the Philippines, by
virtue of the powers vested in me by law, do hereby order:
SECTION 1. The National Civil Aviation Security Programme (NCASP), hereto attached as Annex “A”,
is hereby approved and adopted.
SECTION 2. An Office for Transportation Security under the Department of Transportation and
Communication is hereby created to be headed by an Undersecretary, who shall be primarily
responsible for the implementation of Annex 17 of the International Civil Aviation Organization (ICAO)
Convention on aviation security.
SECTION 3. The National Council for Aviation Security is hereby reconstituted as the National Civil
Aviation Security Committee (NCASC), to be composed of the following:
Secretary, Department of Transportation and Communications Chairman

Secretary, Department of Interior and Local Government Co-Chairman

Undersecretary, DOTC Office for Transportation Security Vice-Chairman

Assistant Secretary, Air Transportation Office Member

General Manager, Manila International Airport Authority Member

General Manager, Mactan-Cebu International Airport Authority Member

General Manager, Clark International Airport Corporation Member

General Manager, Subic Bay International Airport Authority Member

Manager, Davao International Airport Member

Manager, General Santos International Airport Member

Manager, Laoag International Airport Member

Manager, Zamboanga International Airport Member

Director, Philippine National Police Aviation Security Group Member

Commissioner, Bureau of Customs Member

Commissioner, Bureau of Immigration Member

Administrator, Philippine Overseas Employment Administration Member

Administrator, Overseas Worker Welfare Administration Member

Executive Director, Department of Tourism Member

Protocol Officer, Department of Foreign Affairs Member

Director, National Bureau of Investigation Member

Group Commander, Intelligence Service of the Armed Forces of the Philippines Member

Director General, National Intelligence Coordinating Agency Member

Group Commander, Presidential Security Group Member

Director, DA Bureau of Plant Industry Member

Director, DA Bureau of Animal Industry Member

Chief Superintendent, Bureau of Fire Protection Member

Director, DOH Bureau of Quarantine and International Health Surveillance Member

SECTION 4. In addition to its current functions, the NCASC shall be responsible for the
implementation and maintenance of the NCASP and shall:
1.
1. Define and allocate task and coordinate activities among the agencies of the
government, airport authorities, aircraft operators and other entities concerned
with, or responsible for, the implementation of various aspects of the NCASP;
2. Coordinate security activities among the agencies of the government, airport
authorities, aircraft operators and other entities concerned with, or responsible
for, the implementation of various aspects of the NCASP;
3. Define and allocate tasks for the implementation of the NCASP among the
agencies of the government, airport authorities, aircraft operators and other
concerned entities;
4. Ensure that each airport serving international civil aviation shall establish and
implement a written airport security programme appropriate to meet the
requirements of the NCASP;
5. Arrange for an authority at each airport serving international civil aviation to
be responsible for coordinating the implementation of security controls;
6. Arrange for the establishment of an airport security committee at each airport
serving international civil aviation to assist the authority mentioned in paragraph
(e) above, in the coordination of the implementation of security controls and
procedures;
7. Coordinate and collaborate with the Task Force for Security of Critical
Infrastructure under the Cabinet Oversight Committee on International Security;
and
8. Perform such other Transportation Security shall serve as the Secretariat of
the NCASC.
SECTION 5. Repeal. – All orders, rules, regulations and issuances, or parts thereof, which are
inconsistent with this Executive Order are hereby repealed or modified accordingly.
SECTION 6. Effectivity. – This Executive Order shall take effect immediately.
City of Manila, January 30, 2004