1987 Constitution, Article 12 Section 11.

No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. Section 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest. Section 18. The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government. Section 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.

CA 146, Sec. 13(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 use business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line , pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railway, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, That a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purpose of this Act.

Public Service Act Section 13. (a) The Commission shall have jurisdiction, supervision, and control over all public services and their franchises, equipment, and other properties, and in the exercise of its authority, it shall have the necessary powers and the aid of the public force: Provided, That public services owned or operated by government entities or government-owned or controlled corporations shall be regulated by the Commission in the same way as privately-owned public services, but certificates of public convenience or certificates of public convenience and necessity shall not be required of such entities or corporations: And provided, further, That it shall have no authority to require steamboats, motor ships and steamship lines, whether privately-owned, or owned or operated by any Government controlled corporation or instrumentality to obtain certificate of public convenience or to prescribe their definite routes or lines of service. (b) The term "public service" includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether may be its classification, freight or carrier service of any class, express service, steamboat or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, That a person engaged in agriculture, not otherwise a 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 Com. Act 454 and RA No. 2677) Section 14. The following are exempted from the provisions of the preceding section: (a) Warehouses; (b) Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and lighters; (c) Airships within the Philippines except as regards the fixing of their maximum rates on freight and passengers; (d) Radio companies except with respect to the fixing of rates; (e) Public services owned or operated by any instrumentality of the National Government or by any government-owned or controlled corporation, except with respect to the fixing of rates. (As amended by Com. Act 454, RA No. 2031, and RA No. 2677 ) Section 15. With the exception of those enumerated in the preceding section, no public service shall operate in the Philippines without possessing a valid and subsisting certificate from the Public Service Commission known as "certificate of public convenience," or "certificate of public convenience and necessity," as the case may be, to the effect that the operation of said service and the authorization to do business will promote the public interests in a proper and suitable manner. The Commission may prescribe as a condition for the issuance of the certificate provided in the preceding paragraph that the service can be acquired by the Republic of the Philippines or any instrumentality thereof upon payment of the cost price of its useful equipment, less reasonable depreciation; and likewise, that the certificate shall be valid only for a definite period of time; and that the violation of any of these conditions shall produce the immediate cancellation of the certificate without the necessity of any express action on the part of the Commission. In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model, or other circumstances affecting its value in the market shall be taken into consideration.

The foregoing is likewise applicable to any extension or amendment of certificates actually in force and to those which may hereafter be issued, to permit to modify itineraries and time schedules of public services, and to authorizations to renew and increase equipment and properties. Section 16. Proceedings of the Commission, upon notice and hearing. - The Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary : (a) To issue certificates which shall be known as certificates of public convenience, authorizing the operation of public service within the Philippines whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. Provided, That thereafter, certificates of public convenience and certificates of public convenience and necessity will be granted only to citizens of the Philippines or of the United States or to corporations, co-partnerships, associations or joint-stock companies constituted and organized under the laws of the Philippines; Provided, That sixty per centum of the stock or paid-up capital of any such corporations, co-partnership, association or joint-stock company must belong entirely to citizens of the Philippines or of the United States: Provided, further, That no such certificates shall be issued for a period of more than fifty years. (b) To approve, subject to constitutional limitations any franchise or privilege granted under the provisions of Act No. Six Hundred and Sixty-seven, as amended by Act No. One Thousand and twenty-two, by any political subdivision of the Philippines when, in the judgment of the Commission, such franchise or privilege will properly conserve the public interests, and the Commission shall in so approving impose such conditions as to construction, equipment, maintenance, service, or operation as the public interests and convenience may reasonably require, and to issue certificates of public convenience and necessity when such is required or provided by any law or franchise. (c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as commutation, mileage, kilometrage, and other special rates which shall be imposed observed and followed thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by public services provisionally and without necessity of any hearing; but it shall call a hearing thereon within thirty days, thereafter, upon publication and notice to the concerns operating in the territory affected: Provided, further, That in case the public service equipment of an operator is used principally or secondarily for the promotion of a private business, the net profits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates. (d) To fix just and reasonable standards, classifications, regulations, practices, measurement, or service to be furnished, imposed, observed, and followed thereafter by any public service. (e) To ascertain and fix adequate and serviceable standards for the measurement of quantity, quality, pressure, initial voltage, or other condition pertaining to the supply of the product or service rendered by any public service, and to prescribe reasonable regulations for the examination and test of such product or service and for the measurement thereof. (f) To establish reasonable rules, regulations, instructions, specifications, and standards, to secure the accuracy of all meters and appliances for measurements. (g) To compel any public service to furnish safe, adequate, and proper service as regards the manner of furnishing the same as well as the maintenance of the necessary material and equipment. (h) To require any public service to establish, construct, maintain, and operate any reasonable extension of its existing facilities, where in the judgment of said Commission, such extension is reasonable and practicable and will furnish sufficient business to justify the construction and maintenance of the same and when the financial condition of the said public service reasonably warrants the original expenditure required in making and operating such extension. (i) To direct any railroad, street railway or traction company to establish and maintain at any junction or point of connection or intersection with any other line of said road or track, or with any other line of any other railroad, street railway or traction to promote, such just and reasonable connection as shall be necessary to promote the convenience of shippers of property, or of passengers, and in like manner direct any railroad, street railway, or traction company engaged in carrying merchandise, to construct, maintain and operate, upon reasonable terms, a switch connection with any private sidetrack which may be constructed by any shipper to connect with the railroad, street railway or traction company line where, in the judgment of the Commission, such connection is reasonable and practicable and can be out in with safety and will furnish

sufficient business to justify the construction and maintenance of the same. (j) To authorize, in its discretion, any railroad, street railway or traction company to lay its tracks across the tracks of any other railroad, street railway or traction company or across any public highway. (k) To direct any railroad or street railway company to install such safety devices or about such other reasonable measures as may in the judgment of the Commission be necessary for the protection of the public are passing grade crossing of (1) public highways and railroads, (2) public highways and streets railway, or (3) railways and street railways. (l) To fix and determine proper and adequate rates of depreciation of the property of any public service which will be observed in a proper and adequate depreciation account to be carried for the protection of stockholders, bondholders or creditors in accordance with such rules, regulations, and form of account as the Commission may prescribe. Said rates shall be sufficient to provide the amounts required over and above the expense of maintenance to keep such property in a state of efficiency corresponding to the progress of the industry. Each public service shall conform its depreciation accounts to the rates so determined and fixed, and shall set aside the moneys so provided for out of its earnings and carry the same in a depreciation fund. The income from investments of money in such fund shall likewise be carried in such fund. This fund shall not be expended otherwise than for depreciation, improvements, new construction, extensions or conditions to the properly of such public service. (m) To amend, modify or revoke at any time certificate issued under the provisions of this Act, whenever the facts and circumstances on the strength of which said certificate was issued have been misrepresented or materially changed. (n) To suspend or revoke any certificate issued under the provisions of this Act whenever the holder thereof has violated or willfully and contumaciously refused to comply with any order rule or regulation of the Commission or any provision of this Act: Provided, That the Commission, for good cause, may prior to the hearing suspend for a period not to exceed thirty days any certificate or the exercise of any right or authority issued or granted under this Act by order of the Commission, whenever such step shall in the judgment of the Commission be necessary to avoid serious and irreparable damage or inconvenience to the public or to private interests. (o) To fix, determine, and regulate, as the convenience of the state may require, a special type for auto-busses, trucks, and motor trucks to be hereafter constructed, purchased, and operated by operators after the approval of this Act; to fix and determine a special registration fee for auto-buses, trucks, and motor trucks so constructed, purchased and operated: Provided, That said fees shall be smaller than more those charged for auto-busses, trucks, and motor trucks of types not made regulation under the subsection. Section 17. Proceedings of Commission without previous hearing. - The Commission shall have power without previous hearing, subject to established limitations and exception and saving provisions to the contrary: (a) To investigate, upon its own initiative, or upon complaint in writing, any matter concerning any public service as regards matters under its jurisdiction; to require any public service to furnish safe, adequate, and proper service as the public interest may require and warrant; to enforce compliance with any standard, rule, regulation, order or other requirement of this Act or of the Commission, and to prohibit or prevent any public service as herein defined from operating without having first secured a certificate of public convenience or public necessity and convenience, as the case may be and require existing public services to pay the fees provided for in this Act for the issuance of the proper certificate of public convenience or certificate of public necessity and convenience, as the case may be, under the penalty, in the discretion by the Commission, of the revocation and cancellation of any acquired rights. (b) To require any public service to pay the actual expenses incurred by the Commission in any investigation if it shall be found in the same that any rate, tool, charge, schedule, regulation, practice, act or service thereof is in violation of any provision of this Act or any certificate, order, rule, regulation or requirement issued or established by the Commission. The Commission may also assess against any public service costs not to exceed twenty-five pesos with reference to such investigation. (c) From time to time appraise and value the property of any public service, whenever in the judgment of the Commission it shall be necessary so to do, for the purpose of carrying out any of the provisions of this Act, and in making such valuation the Commission may have access to and use any books, documents, or records in the possession of any department, bureau, office, or board of the government of the Philippines or any political subdivision thereof. (d) To provide, on motion by or at the request of any consumer or user of a public service, for the

examination and test of any appliance used for the measuring of any product or service of a public service, and for that purpose, by its agents, experts, or examiners to enter upon any premises where said appliances may be, and other premises of the public service, for the purpose of setting up and using on said premises any apparatus necessary therefor. and to fix the fees to be paid by any consumer or user who may apply to the Commission for such examination or test to be made, and if the appliance be found defective or incorrect to the disadvantage of the consumer or user to require the fees paid to be refunded to the consumer or user by the public service concerned. (e) To permit any street railway or traction company to change its existing gauge to standard steam railroad gauge, upon such terms and conditions as the Commission shall prescribe. (f) To grant to any public service special permits to make extra or special trips within the territory covered by its certificates of public convenience, and to make special excursion trips outside of its own territory if the public interest or special circumstances required it: Provided, however, that in case a public service cannot render such extra service on its own line or in its own territory, a special permit for such extra service may be granted to any other public service. (g) To require any public service to keep its books, records, and accounts so as to afford an intelligent understanding of the conduct of its business and to that end to require every such public service of the same class to adopt a uniform system of accounting. Such system conform to any system approved and confirmed by the Auditor General. (h) To require any public service to furnish annual reports of finances and operations. Such reports shall set forth in detail the capital stock issued, the amounts of said capital stock paid up and the form of payment thereof; the dividends paid, the surplus, if any and the number of stockholders, the consolidated and pending obligations and the interest paid thereon; the cost and value of the property of the operator; concessions or franchises and equipment; the number of employees and salaries paid to each class; the accidents to passengers, employees, and other person, and the causes thereof; the annual expenditures on improvements; the manner of their investment and nature of such improvements; the receipts and profits in each of the branches of the business and of whatever source; the operating and other expenses; the balance of profits and losses; and a complete statement of the annual financial operations of the operator, including an annual balance sheet. Such reports shall also contain any information which the Commission may require concerning freight and passenger rates, or agreements, compromises or contracts affecting the same. Said reports shall cover a period of twelve months, ending on December thirty-first of each year, and shall be sworn to by the officer or functionary of the public service authorized therefor. The Commission shall also have power to require from time to time special reports containing such information as above provided for or on other matters as the Commission may deem necessary or advisable. (i) To require every public service to file with the Commission a statement in writing, verified by the oaths of the owner or the president and the secretary thereof, if a corporation, setting forth the name, title of office or portion, and post-office address, and the authority, power and duties of every officer, member of the board of directors, trustees executive committee, superintendent, chief or head of construction and operation thereof, in such form as to disclose the source and origin of each administrative act, rule, decision, order or other action of the operator of such public service; and, within ten days after any change is made in the title of, or authority, powers or duties appertaining to any such office or position, or the person holding the same, filed with the Commission a like statement, verified in like manner, setting forth such change. (j) To require any public service to comply with the laws of the Philippines and with any provincial resolution or municipal ordinance relating thereto and to conform to the duties imposed upon it thereby or by the provisions of its own character, whether obtained under any general or special law of the Philippines. (k) To investigate any or all accidents that may occur on the property of any public service or directly or indirectly arising from or connected with its maintenance or operation in the Philippines; to require any public service to give the Commission immediate and effective notice of all any such accidents, and to make such order or recommendation with respect thereto as the public interest may warrant or require. (l) To require every public service s herein defined to file within complete schedules of every classification employed and of every individual or joint rate, toll fare or charge made, charged or exacted by it for any product supplied or service rendered within the Philippines and, in the case of public carriers, to file with it a statement showing the itineraries or routes served as specified in such requirement. CHAPTER III OPERATORS OF PUBLIC SERVICES REGULATIONS AND PROHIBITIONS Section 18. It shall be unlawful for any individual, co-partnership, association, corporation or joint-stock company, their lessees, trustees or receivers appointed by any court whatsoever, or any municipality,

province, or other department of the Government of the Philippines to engage in any public service business without having first secured from the Commission a certificate of public convenience or certificate of public convenience and necessity as provided for in this Act, except grantees of legislative franchises expressly exempting such grantees from the requirement of securing a certificate from this Commission as well as concerns at present existing expressly exempted from the jurisdiction of the Commission, either totally or in part, by the provisions of section thirteen of this Act. Section 19. Unlawful Acts. - It shall be unlawful for any public service: (a) To provide or maintain any service that is unsafe, improper, or inadequate or withhold or refuse any service which can reasonably be demanded and furnished, as found and determined by the Commission in a final order which shall be conclusive and shall take effect in accordance with this Act, upon appeal of otherwise. (b) To make or give, directly or indirectly, by itself or through its agents, attorneys or brokers, or any of them, discounts or rebates on authorized rates, or grant credit for the payment of freight charges, or any undue or unreasonable preference or advantage to any person of corporation or to any locality or to any particular description of traffic or service, or subject any particular person or corporation or locality or any particular description of traffic to any prejudice or disadvantage in any respect whatsoever; to adopt, maintain, or enforce any regulation, practice or measurement which shall be found or determined by the Commission to be unjust, unreasonable, unduly preferential or unjustly discriminatory in a final order which shall be conclusive and shall take effect in accordance with the provisions of this Act, upon repeal or otherwise. (c) To refuse or neglect, when requested by the Director of Posts or his authorized representative, to carry public mail on the regular trips of any public land transportation service maintained or operated by any such public service; upon such terms and conditions and for a consideration in such amount as may be agreed upon between the Director of Posts and the public service carrier of fixed by the Commission in the absence of an agreement between the Director of Posts and the carrier. In case the Director of Posts and public service carrier are unable to agree on the amount of the compensation to be paid for the carriage of the mail, the Director of Posts shall forthwith request the Commission to fix a just and reasonable compensation for such carriage and the same shall be promptly fixed by the Commission in accordance with Section sixteen of this Act. Section 20. Acts requiring the approval of the Commission. - Subject to established limitations and exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had (a) To adopt, establish, fix, impose, maintain, collect or carry into effect any individual or joint rates, commutation, mileage or other special rate, toll, fare, charge, classification or itinerary. The Commission shall approve only those that are just and reasonable and not any that are unjustly discriminatory or unduly preferential, only upon reasonable notice to the public services and other parties concerned, giving them a reasonable opportunity to be heard and the burden of the proof to show that the proposed rates or regulations are just and reasonable shall be upon the public service proposing the same. (b) To establish, construct, maintain, or operate new units or extend existing facilities or make any other addition to or general extension of the service. (c) To abandon any railroad station or stop the sale of passenger tickets, or cease to maintain an agent to receive and discharge freight at any station now or hereafter established at which passenger tickets are now or may hereafter be regularly sold, or at which such agent is now or may hereafter be maintained, or make any permanent change in its time tables or itineraries on any railroad or in its service. (d) To lay any railroad or street railway track across any highway, so as to make a new crossing at grade, or cross the tracks of any other railroad or street railway, provided, that this subsection shall not apply to replacements of lawfully existing tracks. (e) Hereafter to issue any stock or stock certificates representing an increase of capital; or issue any share of stock without par value; or issue any bonds or other evidence of indebtedness payable in more than one year from the issuance thereof, provided that it shall be the duty of the Commission, after hearing, to approve any such issue maturing in more than one year from the date thereof, when satisfied that the same is to be made in accordance with law, and the purpose of such issue be approved by the Commission. (f) To capitalize any franchise in excess of the amount, inclusive of any tax or annual charge, actually paid to the Government of the Philippines or any political subdivision thereof as the consideration of said franchise; capitalize any contract for consolidation, merger or lease, or issue any bonds or other evidence of indebtedness against or as a lien upon any contract for consolidation, merger, or lease: Provided, however, that the provisions of this

section shall not prevent the issuance of stock, bonds, or other evidence of indebtedness subject to the approval of the Commission by any lawfully merged or consolidated public services not in contravention of the provisions of this section. (g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights or any part thereof; or merge or consolidate its property, franchises privileges or rights, or any part thereof, with those of any other public service. The approval herein required shall be given, after notice to the public and hearing the persons interested at a public hearing, if it be shown that there are just and reasonable grounds for making the mortgaged or encumbrance, for liabilities of more than one year maturity, or the sale, alienation, lease, merger, or consolidation to be approved, and that the same are not detrimental to the public interest, and in case of a sale, the date on which the same is to be consummated shall be fixed in the order of approval: Provided, however, that nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale, alienation, or lease by any public service of any of its property in the ordinary course of its business. (h) To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that sale in itself or in connection with another previous sale, shall be to vest in the transferee more than forty per centum of the subscribed capital of said public service. Any transfer made in violation of this provision shall be void and of no effect and shall not be registered in the books of the public service corporation. Nothing herein contained shall be construed to prevent the holding of shares lawfully acquired. (As amended by Com. Act No. 454.) (i) To sell, alienate or in any manner transfer shares of its capital stock to any alien if the result of that sale, alienation, or transfer in itself or in connection with another previous sale shall be the reduction to less than sixty per centum of the capital stock belonging to Philippine citizens. Such sale, alienation or transfer shall be void and of no effect and shall be sufficient cause for ordering the cancellation of the certificate. (j) To issue, give or tender, directly or indirectly, any free ticket free pass or free or reduced rate of transportation for passengers, except to the following persons: (1) officers, agents, employees, attorneys, physicians and surgeons of said public service, and members of their families; (2) inmates of hospitals or charity institutions, and persons engaged in charitable work; (3) indigent, destitute, and homeless persons when transported by charitable societies or hospitals, and the necessary agents employed in such transportation; (4) the necessary caretakers, going and returning, of livestock, poultry, fruit, and other freight under uniform and 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 Com. Act No. 454.) (k) Adopt, maintain, or apply practices or measures, rules or regulations to which the public shall be subject in its relations with the public service.

EO 125, Sec 4 SECTION 4. Mandate. The Ministry shall be the primary policy, planning, programming, coordinating, implementing, regulating, and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated networks of transportation and communication system, as well as in the fast, sale, efficient and reliable postal, transportation and communication services. To accomplish such mandate, the Ministry shall have the following objectives: 1. Promote the development of dependable and coordinated networks of transportation and communication systems; 2. Guide government and private investment in the development of the country's inter- model transportation and communication systems in a most practical, expeditious, and orderly fashion for maximum safety, service, and cost effectiveness; 3. Impose appropriate measure so that technical, economic and other condition for the continuing economic viability of the transportation and communication entities are not jeopardized and do not encourage inefficiency and distortion of traffic patronage; 4. Develop an integrated plan for a nationwide transmission system in accordance with the national and international telecommunication service requirement including, among others,radio and television broadcast relaying, leased channel services and data transmission; 5. Guide government and private investment in the establishment, operation and maintenance of an international switching system for incoming and outgoing telecommunication services; 6. Encourage the development of a domestic telecommunication industry in coordination with the concern entities particularly, the manufacture of communications/ electronics equipment and components to complement and support as much as possible, the expansion, development, operation and maintenance of the nationwide telecommunications network; 7. Provide for a safe, reliable and efficient postal system for the country.

SECTION 14. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall have the following functions: 1. Develop and formulate, plans, policies, programs, project, standards, specifications and guidelines geared towards the promotion and development of the Maritime Industry, the growth and effective regulation of shipping enterprises, for the national security objectives of the country; 2. 3. 4. 5. 6. Establish, prescribe and regulate routes, zones and /or areas of operation of particular operators of public water services; Issue certificates of public convenience for the operation of domestic and overseas water carriers; Register vessels as well as issue certificates, licenses or documents necessary or incident thereto; Undertake the safety regulatory functions pertaining to vessels construction and operations including the determination of manning levels and issuance of certificates competency to seamen; Enforce laws, prescribe and enforce rules and regulation, including penalties for violation thereof, governing water transportation and the Philippine merchant marine with the aid of other law enforcement agencies; Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots;

7.

8.

Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public water transport utilities, facilitate all services except in cases where charges or rates are established by international bodies or association of which the Philippine is a participating member or by bodies or association recognized by the Philippine Government as the proper arbiter of such charges or rates; Accredit marine surveyors and maritime enterprises engaged in shipbuilding, ship repair, ship breaking, domestic and overseas shipping, ship management and agency;

9.

10. Supervise the Philippine Merchant Marine Academy as recognized herein in accordance with its charter, the provision hereof and applicable laws, rules and regulation under the chairmanship of the maritime administrator; 11. Issue and register the Continuous Discharge Book of Filipino Seamen; 12. Establish and prescribe rules and regulation, standards and procedures for the efficient and effective discharge of the above functions; 13. Perform such other function as may now or hereafter be provided by the law.

EXECUTIVE ORDER NO. 125-A April 13, 1987 AMENDING EXECUTIVE ORDER NO. 125, ENTITLED "REORGANIZING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS. DEFINING ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES." WHEREAS, considering the peculiar situation obtaining in the Department of Transportation and Communications (DOTC), there is a compelling need to clarify and/or modify structural and functional organization of the Department as provided under Executive Order No. 125 in order to ensure compliance with its mandate and the attainment of the corresponding objectives as specified in Section 4 of said Executive Order. NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order: Sec. 1. Sections 5, 8, 9, 10 and 11 of Executive Order No. 125, otherwise known as the Reorganization Act of the Ministry of Transportation and Communications, are hereby amended to read as follows: "Sec. 5. Powers and Functions. To accomplish its mandate, the Department shall have the following powers and functions: (a) Formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communications systems at the national, regional and local levels; (b) Establish and administer comprehensive and integrated programs for transportation and communications, and for this purpose, may call on any agency, corporation, or organization, whether public or private, whose development programs include transportation and communications as an integral part thereof, to participate and assist in the preparation and implementation of such program; (c) Assess, review and provide direction to transportation and communication research and development programs of the government in coordination with other institutions concerned; (d) Administer and enforce all laws, rules and regulations in the field of transportation and communications; (e) Coordinate with the Department of Public Works and Highways in the design, location, development, rehabilitation, improvement, construction, maintenance and repair of all infrastructure projects and facilities of the Department. However, government corporate entities attached to the Department shall be authorized to undertake specialized telecommunications, ports, airports and railways projects and facilities as directed by the President of the Philippines or as provided by law; (f) Establish, operate and maintain a nationwide postal system that shall include mail processing, delivery services, and money order services and promote the art of philately; (g) Issue certificates of public convenience for the operation of public land and rail transportation utilities and services; (h) Accredit foreign aircraft manufacturers and/or international organizations for aircraft certification in accordance with established procedures and standards; (i) Establish and prescribe rules and regulations for identification of routes, zones and/or areas of operations of particular operators of public land services; (j) Establish and prescribe rules and regulations for the establishment, operation and maintenance of such telecommunications facilities in areas not adequately served by the private sector in order to render such domestic and overseas services that are necessary with due consideration for advances in technology; (k) Establish and prescribe rules and regulations for the operation and maintenance of a nationwide postal system that shall include mail processing, delivery services, money order services and promotion of philately; (l) Establish and prescribe rules and regulations for issuance of certificates of public convenience for public land transportation utilities, such as motor vehicles, trimobiles and railways; (m) Establish and prescribe rules and regulations for the inspection and registration of air and land transportation facilities, such as motor vehicles, trimobiles, railways and aircrafts;

(n) Establish and prescribe rules and regulations for the issuance of licenses to qualified motor vehicle drivers, conductors, and airmen; (o) Establish and prescribe the corresponding rules and regulations for the enforcement of laws governing land transportation, air transportation and postal services, including the penalties for violations thereof, and for the deputation of appropriate law enforcement agencies in pursuance thereof; (p) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air and land transportation utility facilities and services, except such rates and/or charges as may be prescribed by the Civil Aeronautics Board under its charter, and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates; (q) Establish and prescribe the rules, regulations, procedures and standards for the accreditation of driving schools; (r) Administer and operate the Civil Aviation Training Center (CATC) and the National Telecommunications Training Institute (NTTI); and (s) Perform such other powers and functions as may be prescribed by law, or as may be necessary, incidental, or proper to its mandate or as may be assigned from time to time by the President of the Republic of the Philippines." "Sec. 8. Undersecretaries. The Secretary shall be assisted by four (4) Undersecretaries Appointed by the President upon the recommendation of the Secretary. "Sec. 9. Assistant Secretaries and Service Chiefs. The Secretary shall also be assisted by eight (8) Assistant Secretaries appointed by the President upon the recommendation of the Secretary, each of whom shall respectively be responsible for the following four (4) staff offices composed of eight (8) services and four (4) line offices, and shall report to the respective Undersecretaries assigned by the Secretary, which Undersecretary shall have control and supervision over said respective services and offices: (a) Office of the Assistant Secretary for Administrative and Legal Affairs; 1) Administrative Service, and 2) Legal Service (b) Office of the Assistant Secretary for Finance and Comptrollership; 1) Finance and Management Service, and 2) Comptrollership Service c) Office of the Assistant Secretary for Planning and Project Development; 1) Planning Service, and 2) Project Development Service (d) Office of the Assistant Secretary for Management Information Service and Project Management; 1) Management Information Service, and 2) Project Management Service e) Office of the Assistant Secretary for Land Transportation; (f) Office of the Assistant Secretary for Postal Services; (g) Office of the Assistant Secretary for Telecommunications; (h) Office of the Assistant Secretary for Air Transportation. Each of the above-named services shall be headed by a service chief appointed by the President upon the recommendation of the Secretary." Sec. 10. Structural Organization. The Department, aside from the Department proper which is comprised of the Offices of the Secretary, Undersecretary and Assistant Secretaries shall include the Department regional offices and the attached agencies and corporations referred to in Section 14 hereof. The Office of the Secretary shall have direct line supervision and control over the Department regional offices. The Department proper shall be responsible for developing and implementing policies, plans, programs and projects for the Department." "Sec. 11. Department Regional Offices. The Department shall have three (3) Department Regional Offices in each of the administrative regions of the country: the Department Regional Office for land

Transportation, the Department Regional Office for Telecommunications and the Department Regional Office for Postal Services. The present Regional Offices of the Land Transportation Commission are hereby abolished and their functions are transferred to the respective Department Regional Offices for Land Transportation. The present Regional Offices of the Bureau of Telecommunications are hereby abolished and their functions are transferred to the respective Department Regional Offices for Telecommunications. The present Regional Offices of the Bureau of Posts are hereby abolished and their functions are transferred to the corresponding Department Regional Offices for Postal Services. Each Department Regional Office shall be headed by a Department Regional Director and assisted by a Department Assistant Regional Director. The present Airport Offices of the Bureau of Air Transportation are hereby abolished and their functions are transferred to the Department Airport Offices. The abolition of the herein Regional Offices and the transfer of their functions shall be governed by the provisions of Section 15 (b) hereof. The Department Regional Offices shall essentially be line in character and shall be responsible for the delivery of all front line services of the Department. For such purposes, the Department Regional Offices shall have within their respective administrative regions, the following functions: (a) Implement laws, and policies, plans, programs, projects, rules and regulations of the Department; (b) Provide efficient, and effective service to the people; (c) Coordinate with regional offices of other departments, offices and agencies; (d) Coordinate with local government units; (e) Perform such other functions as may be provided by law." Sec. 2. Sections 12, 13, 15 and 16 of said Executive Order are hereby deleted. Sec. 3. Section 14 of said Executive Order is hereby renumbered as Section 12 and amended to read as follows: "Sec. 12. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall have the following functions: (a) Develop and formulate plans, policies, programs, projects, standards, specifications and guidelines geared toward the promotion and development of the maritime industry, the growth and effective regulation of shipping enterprises, and for the national security objectives of the country; (b) Establish, prescribe and regulate routes, zones and/or areas of operation of particular operators of public water services; (c) Issue Certificates of Public Convenience for the operation of domestic and overseas water carriers; (d) Register vessels as well as issue certificates, licenses or documents necessary or incident thereto; (e) Undertake the safety regulatory functions pertaining to vessel construction and operation including the determination of manning levels and issuance of certificates of competency to seamen; (f) Enforce laws, prescribe and enforce rules and regulations, including penalties for violations thereof, governing water transportation and the Philippine merchant marine, and deputize the Philippine Coast Guard and other law enforcement agencies to effectively discharge these functions; (g) Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots; (h) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public water transport utilities, facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine Government as the proper arbiter of such charges or rates. (i) Accredit marine surveyors and maritime enterprises engaged in shipbuilding, shiprepair, shipbreaking, domestic and overseas shipping ship management and agency; (j) Issue and register the continuous discharge book of Filipino seamen; (k) Establish and prescribe rules and regulations, standards and procedures for the efficient and effective discharge of the above functions;

(l) Perform such other functions as may now or hereafter be provided by law." Sec. 4. Section 17 of Executive Order No. 125 is hereby renumbered as Section 13 and amended to read as follows: "Sec. 13. Abolition/Transfer/Consolidation: (a) The Land Transportation Commission is hereby abolished and its staff functions are transferred to the service offices of the Department Proper and its line functions are transferred to the Department Regional Offices for Land Transportation as provided in Section 11 herein. Such transfer of functions is subject to the provisions of Section 15 (b) hereof. The quasi-judicial powers and functions of the Commission are transferred to the Department. The corresponding position structure and staffing pattern shall be approved and prescribed by the Secretary pursuant to Section 16 hereof. (b) PNL Leasing, Inc. is hereby abolished and its functions are transferred to Philippine National Lines, Inc. subject to the provisions of Section 15 (b) hereof. The Secretary of Transportation and Communications or his designated representative shall be the Chairman of the Board. (c) The National Aero Manufacturing, Inc. and the Philippine Aero Systems, Inc. are hereby abolished in accordance with the provisions of Section 15 (a) hereof. (d) The Civil Aeronautics Board is hereby transferred from the Department of Tourism to the Department as an attached agency in accordance with the provision of Section 15 (a) hereof. The Secretary of Transportation and Communications or his designated representative shall be the Chairman of the Board. (e) The Maritime Training Council's function of issuing certificates of competency to seamen under LOI 1404 is hereby transferred to the Maritime Industry Authority." Sec. 5. Sections 18, 19, 20, 21, 22, 23, 24, 25 and 26 of said Executive Order are hereby renumbered as Sections 14, 15, 16, 17, 18, 19, 20, 21 and 22, respectively. Sec. 6. Section 27 of said Executive Order is hereby renumbered as Section 23 and amended as follows; "Sec. 23. Repealing Clause. Presidential Decree No. 890, Letter of Instruction Nos. 263 and 371 Executive Order No. 1011 dated March 20, 1985 are hereby repealed. All laws ordinances, rules, regulations, other issuances or parts thereof which are inconsistent with this Executive Order are hereby repealed or modified accordingly." Sec. 7. Section 28 of said Executive Order is hereby renumbered as Section 24. Sec. 8. This Executive Order shall take effect immediately upon its approval. Done in the City of Manila, Philippines, this 13th day of April, in the year, of Our Lord, nineteen hundred and eighty-seven.

Republic of the Philippines Congress of the Philippines Metro Manila Fourteenth Congress First Regular Session Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand seven. Republic Act No. 9497 March 04, 2008 AN ACT CREATING THE CIVIL AVIATION AUTHORITY OF THE PHILIPPINES, AUTHORIZING THE APPROPRIATION OF FUNDS THEREFOR, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: CHAPTER I GENERAL PROVISIONS SECTION 1. Short Title. This Act shall be known as the Civil Aviation Authority Act of 2008. SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to provide safe and efficient air transport and regulatory services in the philippines by providing for the creation of a civil aviation authority with jurisdiction over the restructuring of the civil aviation system, the promotion, development and regulation of the technical, operational, safety, and aviation security functions under the civil aviation authority. SEC. 3. Definition of Terms. - For purposes of this Act, the terms: (a) "Aerial work" refers to an aircraft operation in which an aircraft is used for specialized services such as agriculture, construction, photography, surveying, observation and patrol, search and rescue, aerial advertisement, etc. (b) "Aerodrome" refers to an airport, a defined area on land or water (including any building, installation and equipment) intended to be used either wholly or in part for the arrival, departure and surface movement of aircraft. (c) "Aeronautics or aviation" refers to the science and art of flight. (d) "Aeronautical telecommunication" refers to and includes any telegraph or telephone communication signs, signals, writings, images and sounds of any nature, by wire, radio or other systems or processes of signaling, used in the aeronautical service. (e) "Aeronautical telecommunication station" refers to any station operated to provide telecommunications for aeronautical purposes. (f) "Air carrier or operator" refers to a person who undertakes, whether directly or indirectly, or by a lease or any other arrangements, to engage in air transportation services or air commerce. The term may likewise refer to either a "Philippine air carrier" or a "foreign air carrier" as indicated by the context. (g) "Air commerce or commercial air transport operation" refers to and includes scheduled or non-scheduled air transport services for pay or hire, the navigation of aircraft in furtherance of a business, the navigation of aircraft from one place to another for operation in the conduct of a business, or an aircraft operation involving the transport of passengers, cargo or mail for remuneration or hire. (h) "Aircraft" refers to any machine that can derive support in the atmosphere from the reactions of the air other than the reactions of the air against the earth's surface. The term "aircraft", when used in this Act or in regulations issued under this Act, shall refer to civil aircraft only, and will not include State or public aircraft. (i) "Aircraft accident" refers to an occurrence associated with the operation of an aircraft which takes place between the time any person boards the aircraft with the intention of flight until such time as all such persons have disembarked, in which: (1) Any person suffers death or serious injury as a result of being in or upon the aircraft or by direct contact with the aircraft of anything attached thereto; or (2) The aircraft receives substantial damage (j) "Aircraft radio station" refers to a radio station on board any aircraft. (k) "Aircraft engine" refers to any engine use, or intended to be used, for propulsion of aircraft and includes all parts, appurtenances, and accessories thereof other than propellers. (l) "Aircraft incident" refers to the occurrence, other than an accident, which is associated with the operation of an aircraft when the safety of the aircraft has been endangered, or is a situation which could endanger an aircraft and if it occurred again in other circumstances. (m) "Aircraft piracy" refers to any actual or attempted seizure or exercise of control, by force or violence, or by any other form of intimidation, with wrongful intent, of an aircraft within the jurisdiction of the Philippines. (n) "Airman" refers to any individual who engages, as the person in command or as pilot, mechanic, aeronautical engineer, flight radio operator or member of the crew, in the navigation of aircraft while under

way and any individual who is directly in charge of inspection, maintenance, overhauling, or repair of aircraft, aircraft engine, propellers, or appliances and individual who serves in the capacity of aircraft dispatcher or air traffic control operator. (o) "Airman license" refers to a written authorization or permission issued to any person for the exercise of the privileges of flying, maintaining, controlling, directing, dispatching, instructing or any other civil aviation activity which is regulated and supervised by the Authority. (p) "Air navigation" refers to the practice of controlling, guiding and operating aircraft from airport of departure to predetermined airport of destination, including alternate airports. To ensure safety, regularity and efficiency of civil aviation operations, standardization and common understanding among all parties involved are essential in all matters affecting the operation of aircraft and the numerous facilities and services required in their support, such as airports, telecommunications, navigation aids, meteorology, air traffic services, search and rescue, aeronautical information services and aeronautical charts, in accordance with the procedures, rules and regulations contained in the appropriate Annexes to the Chicago Convention. (q) "Air navigation facility" refers to any facility used in, available for use in, or designed for use in aid of air navigation, including airports, landing areas, lights, any apparatus or equipment for disseminating weather information, for signaling, for radio directional finding, or for radio or other electromagnetic communication, and any other structure or mechanism having a similar purpose for guiding or controlling flight in the air or the landing and take-off of aircraft. (r) "Air navigation services" refers to and includes information, directions and other facilities furnished, issued or provided in connection with the navigation or movement of aircraft, and the control of movement of vehicles in any part of an airport used for the movement of aircraft. (s) "Air operator" refers to any organization which undertakes to engage in domestic commercial air transport or international commercial air transport, whether directly or indirectly, or by a lease or any other arrangement. (t) "Air Operator Certificate (AOC)" refers to a certificate authorizing an operator to carry out specified commercial air transport operations. (u) "Air route" refers to the navigable airspace between two points and the terrain beneath such airspace identified, to the extent necessary, for application of flight rules. (v) "Air route and airway facilities" refers to facilities provided to permit safe navigation of aircraft within the airspace of air routes and airways, including: (1) Visual and non-visual aids along the air routes and airways (2) Visual and non-visual aids to approach and landing at airports; (3) Communication services; (4) Meteorological observations; (5) Air traffic control services and facilities and (6) Flight services and facilities. (w) "Airport" refers to any area of land or water designed, equipped, set apart or commonly used for affording facilities for affording facilities for the landing and departure of aircraft and includes any area or space, whether on the ground, on the roof of a building or elsewhere, which is designed, equipped or set apart for affording facilities for the landing and departure of aircraft capable of descending or climbing vertically. (x) "Air transport" refers to the transportation of persons, property, mail or cargo by aircraft. (y) "Air transport service" refers to the act of transporting persons, property, mail cargo, in whole or in part, by aircraft to points within or outside of the Philippines. (z) "Airworthiness" means that an aircraft, its engines, propellers, and other components and accessories, are of proper design and construction, and are safe for air navigation purposes, such design and construction being consistent with accepted engineering practice and in accordance with aerodynamic laws and aircraft science. (aa) "Annexes to the Chicago Convention" refers to the documents issued by the International Civil Aviation Organization (ICAO) containing the standards and recommended practices applicable to civil aviation. (bb) "Appliances" refers to instruments, equipment, apparatus, parts, appurtenances, or accessories, of whatever description, which are used, or are capable of being or intended to be used, in the navigation, operation, or control of aircraft in flight (including parachutes and including communication equipment and any other mechanism or mechanisms installed in or attached to aircraft during flight), and which are not part or parts of aircraft, aircraft engines, or propellers. (cc) "Authority" refers to the Philippine Civil Aviation Authority created pursuant to the provisions of this Act

and shall, as indicated by the context, include the Board of Directors and/or Director General created pursuant thereto. (dd) "Aviation certificate" means any airworthiness certificate, airman certificate, air operator certificate, certificate authorizing the operation of an aviation school or approved maintenance organization or other document issued by virtue of the provisions of this Act in respect of any person, aircraft, airport or aviationrelated service. (ee) "Board of Directors" means the board of the civil aviation authority created under this Act. (ff) "Chicago Convention" refers to the international basis for civil aviation agreements. (gg) "Citizen of the Philippines" refers to one of the following: (i) An individual who is a citizen of the Philippines; (ii) A partnership of which each member is a citizen of the Philippines; or (iii) A corporation or association created or organized and authorized under the laws of the Philippines. (hh) "Civil aircraft" refers to any aircraft other than a State or public aircraft. . (ii) "Civil aviation" refers to the operation of any civil aircraft for the purpose of general aviation operations, aerial work or commercial air transport operations. (jj) "Crew member" refers to a person assigned to perform duties on an aircraft in flight. (kk) "Dangerous goods" refers to articles or substances that are capable of posing significant risks to health or safety of property when transported by air. (ll) "Director General" refers to the Director General appointed under this Act. (mm) "Domestic air commerce" means and includes air commerce within the limits of the Philippine territory. (nn) "Domestic air transport" means air transportation within the limits of the Philippine territory. (oo) "Foreign air carrier or foreign air operator" meane any operator, not being a Philippine air operator, which undertakes, whether directly or indirectly or by lease or any other arrangement, to engage in commercial air transport operations within borders or airspace of the Philippines, whether on a scheduled or chartered basis. (pp) "Foreign air transport" refers to air transportation between the Philippines and any place outside it or wholly outside the Philippines. (qq) "General aviation operation" refers to an aircraft operation of a civil aircraft for other than a commercial air transport operation or aerial work operation. (rr) "ICAO." Where used in this Act, refers to the abbreviation for the International Civil Aviation Organization. (ss) "International commercial air transport" refers to the carriage by aircraft of persons or property for remuneration or hire or the carriage of mail between any two (2) or more countries. (tt) "Navigable airspace" refers to the airspace above the minimum altitudes of flight prescribed by regulations under this Act and includes airspace needed to insure safety in the take-off and landing of aircraft. (uu) "Navigation of aircraft" refers to a function that includes the piloting of aircraft. (vv) "Person" refers to any individual, firm, partnership, corporation, company, association, joint-stock association, or body politic, and includes any trustee, receiver, assignee, or other similar representative of these entities. (ww) "Philippine air carrier" means an air carrier who is a citizen of the Philippines. (xx) "Philippine aircraft" means an aircraft registered in the Philippines in accordance with the requirements of this Act. (yy) "Propeller" refers to an inclusive term for all parts, appurtenances, and accessories of a propeller. (zz) "Public aircraft" refers to an aircraft used exclusively in the service of any government or of any political jurisdiction thereof, including the Government of the Philippines, but not including any government-owned aircraft engaged in operations which meet the definition of commercial air transport operations. (aaa)"Rules of the air" means those provisions for securing the safety of aircraft in flight and in movement on the surface and the safety of persons and property on the surface. These provisions include: (1) Lights and signals to be shown by aircraft; (2) General, visual and instrument flight rules; (3) Airport traffic rules; and (4) Airport signals and markings (bbb)"Spare parts" refers to any parts, appurtenances, and accessories of aircraft (other than aircraft engines and propellers), aircraft engines (other than propellers), propellers, and appliances, maintained for

installation or use in an aircraft, aircraft engine, propeller, or appliance, but which at the time are not installed therein or attached thereto. (ccc) "Special aircraft jurisdiction of the Philippines." This includes: (i) Civil aircraft of the Philippines; and (ii) Any other aircraft within the jurisdiction of the Philippines, while the aircraft is in flight, which is from the moment when all external doors are closed following embarkation until the moment when one such door is opened for disembarkation or, in case of a forced landing, until the competent authorities take over the responsibility of the aircraft and the persons and property aboard. (ddd) "Validation" refers aboard to the written acceptance of an action of the civil aviation authority of another country in lieu of an action that this Act assigns to the Director General. (eee) "Landing fees" refers to all charges for the use of any landing strip or runway by any aircraft landing or taking off at an aerodrome. (fff) "Terminal fees" refers to charges far parking at or near the ramp, terminal area, or building, for purposes of loading or unloading passengers and/or cargo. (ggg) "Royalties" refers to all charges based on gross business or sales, or gross or net profit. (hhh) "Supplies" includes any and all items of whatever nature or description which may be necessary for, or incidental to, the operation of an aircraft. CHAPTER II ORGANIZATION OF AUTHORITY SEC. 4. Creation of the Authority. - There is hereby created an independent regulatory body with quasijudicial and quasi-legislative powers and possessing corporate attributes to be known as the Civil Aviation Authority of the Philippines (CAAP), hereinafter referred to as the "Authority" attached to the Department of Transportation and Communications (DOTC) for the purpose of policy coordination. For this purpose, the existing Air Transportation Office created under the provisions of Republic Act No. 776, as amended, is hereby abolished. Notwithstanding the foregoing, nothing in this Act shall diminish the powers and functions of the Civil Aeronautics Board (CAB) as provided for under Republic Act. No. 776, also known as "The Civil Aeronautics Act of the Philippines", as amended. (a) Establishment of Authority Headed by a Director General - The Authority shall beheaded by a Director General of Civil Aviation, referred to in this Act as the "Director General," who shall be appointed by the President of the Philippines and shall be responsible for all civil aviation in the Philippines and the administration of this Act. The Director General shall be appointed based on the qualifications herein provided and shall have a tenure of office for a period of four (4) years. His appointment may be extended for another non-extendible term of four (4) years and shall only be removed for cause in accordance with the rules and regulations prescribed by the Civil Service Commission. (b) Responsibility of the Director General - The Director General shall be responsible for the exercise of all powers and the discharge of all duties of the Authority and shall have control over all personnel and activities of the Authority. SEC. 5 . Composition of the Board Members. - The corporate powers of the Authority shall be vested in a board, which is composed of seven (7) members: (a) The Secretary of the Department of Transportation and Communications shall act as chairman ex officio; (b) The Director General of Civil Aviation (DGCA) shall automatically be the vice chairman of the Board; (c) The Secretary of Finance; (d) The Secretary of Foreign Affairs; (e) The Secretary of Justice; (f) The Secretary of the Interior and Local Government; and (g) The Secretary of the Department of Labor and Employment. The Directors listed under subsection (a) to (g) shall be ex officio members of the Board of Directors: Provided, That, in the absence of the Director appointed in subsections (c) to (g), the Director concerned shall designate the officer next in rank to him in his department or office to act on his behalf as a Director. SEC. 6. Prohibited Interests. - All members of the Board or any of their relatives within the fourth civil degree of consanguinity or affinity, legitimate or common law, shall be prohibited from holding any interest whatsoever, either as investor, stockholder, officer or director, in any company or entity engaged in air commerce, whether scheduled or unscheduled, passenger or cargo, domestic or international, or in any business providing support services to persons engaged in air commerce (i.e. general sales agencies, travel agencies, cargo forwarders, ground handling, catering, fuel servicing, aircraft maintenance, etc.) and must

therefore divest, through sale or legal disposition, of any and all interests in such undertakings upon the member's assumption of office. Any violation of this section shall subject the member concerned to removal from the Authority for cause as well as administrative, civil or criminal prosecution under applicable laws. SEC. 7. Limitation of Subsequent Employment. - No member of the Board or any employee of the Authority shall accept employment or enter into a contract of service with an entity regulated by the Authority until the expiry of one (1) year from the termination of his appointment, whether by resignation or revocation or otherwise. SEC. 8. Quorum. - The presence of at least four (4) members of the Board shall constitute a quorum and the majority vote of three (3) members in a meeting where a quorum is present shall be necessary for the adoption of any rule, ruling, order, resolution, decision or other act of the Board in the exercise of its functions. SEC. 9. Qualifications of Director General. - No person shall be appointed or designated as the Director General unless he is a Filipino citizen, at least thirty-five (35) years of age, of good moral character, unquestionable integrity, recognized competence and a degree holder with at least five (5) years supervisory or management experience in the field of aviation. SEC. 10. Board Meetings. - The Board shall meet regularly once a month and may hold special meetings to consider urgent matters upon call of the Chairman or upon the initiative of four (4) members. Internal rules of procedure in the conduct of Board meetings shall be as prescribed by the Board. SEC. 11. Per Diems. - The members of the Board shall receive a per diem for each meeting actually attended. The per diems of the members of the Board shall be determined pursuant to a resolution adopted by the Board subject to compliance of the guidelines duly existing and applicable by the Commission on Audit. SEC. 12. Personnel. - Qualified existing personnel of the Air Transportation Office (ATO) shall be given preference in the filling up of plantilla positions created in the Authority, subject to existing civil service rules and regulations. SEC. 13. Principal Office. - The Authority shall have its principal office in Metro Manila and may hold hearings on any proceedings at such time and places within the Philippines, as it may provide by order in writing. SEC. 14. Capitalization. - The Authority shall have an authorized capital stock of Fifty billion pesos (Php50,000,000,000.00) which shall be fully subscribed by the Republic of the Philippines. The subscription of the National Government shall be paid as follows: (a) The unexpended balances of appropriations in the current General Appropriations Act and other acts in force upon approval hereof, pertaining to, held or used by, the ATO, (b) The value of existing assets of the ATO, which shall be determined by an independent and qualified appraiser or appraisers within six (6) months from the effectivity of this Act, and after deducting the loans and other liabilities of the ATO at the time of the takeover of the assets and properties; and (c) Such amounts as may be appropriated from time to time from the funds of the National Treasury, including any outlay from the infrastructure program of the National Government. SEC. 15. Fiscal Autonomy. - The Authority shall enjoy fiscal autonomy. All moneys earned by the Authority from the collection/levy of any and all such fees, charges, dues, assessments and fines it is empowered to collect/levy under this Act shall be used solely to fund the operations of the Authority. The utilization of any funds coming from the collection and/or levy of the Authority shall be subject to the examination of the Congressional Oversight Committee. SEC. 16. Exemption from Taxes, Customs and Tariff Duties. - (a) The importation of equipment, machineries, spare parts, accessories and other materials including supplies and services used solely and exclusively in the operations of the Authority not obtainable locally shall be exempt from all direct and indirect taxes, wharfage fees and other charges and restrictions, the existence of pertinent laws to the contrary notwithstanding. (b) All obligations entered into by the Authority and any income derived therefrom, including those contracted with private international banking and financial institutions, shall be exempt from all taxes, both principal and interest. The Authority is also exempt from the payment of capital gains tax, documentary stamp tax, real property estate tax and all other local government-imposed taxes and fees. SEC. 17. Schedule of Fees and Charges. - The Authority shall adopt and publish its schedule of fees and charges. The Authority shall hold such public hearings or consultative meetings with stakeholders in the industry before adapting its schedule of fees and charges. The Authority shall not revise its schedule of fees and fines more often than once every three (3) years.

SEC. 18. Compensation and Other Emoluments of Authority Personnel. - Within six (6) months from the effectivity of this Act, the Board shall determine the new schedule of salaries of the employees of the Authority subject to the compliance with the existing compensation laws: Provided, That the Board shall determine and fix the compensation and fringe benefits of employees holding technical positions that are not common to the other agencies of the government which shall be specified in the Implementing Rules and Regulations. SEC. 19. Transfer of Properties. - The funds and appropriations, records, equipment and property of the AT0 is hereby transferred to the Authority. SEC. 20. Annual Report. - The Authority shall prepare and submit an annual report to the President of the Philippines, to the Senate and to the House of Representatives on its accomplishments at the close of each calendar year. CHAPTER III GENERAL POLICIES SEC. 21. Policies. - In the exercise and performance of its powers and duties under this Act, the Authority shall consider the following, among other things, as being in the public interest and in accordance with the public convenience and necessity: (a) The development and utilization of the air potential of the Philippines; (b) The encouragement and development of an air transportation system properly adapted to the present and future of foreign and domestic commerce of the Philippines; (c) The regulation of air transportation in such manner as to support sound economic condition in such transportation and to improve the relations between air carriers; (d) Ensuring the safety, quality, reliability, and affordability of air transport services for the riding public; and (e) The encouragement and development of a viable and globally competitive Philippine aviation industry. CHAPTER IV POWERS OF THE AUTKORITY SEC. 22. Powers and Functions. - The Authority shall have such powers as are granted to the Board and the Director General under the provisions of this Act. SEC. 23. Corporate Powers. - The Authority, acting through the Board, shall have the following corporate powers: (a) To succeed in its corporate name, to sue and be sued in such corporate name, and to adopt, use and alter its corporate seal, which shall be judicially noticed; (b) To adopt, amend or repeal its bylaws; (c) To enter into, make, perform and carry out contracts of every class, kind and description, which are necessary or incidental to the realization of its purposes, with any person, domestic or foreign private firm, or corporation, local or national government office, agency and with international institutions or foreign government; (d) To raise money, contract loans, indebtedness, credit and issue commercial papers and bonds, in any local or convertible foreign currency from any other international financial institutions under terms and conditions prescribed by law, rules and regulations; (e) To execute any deed of guarantee, mortgage, pledge, trust or assignment of any property for the purpose of financing the programs and projects deemed vital for the attainment of its goals and objectives; (f) To construct, acquire, own, hold, operate, maintain, administer and lease personal and real properties, including buildings, machinery, equipment, other infrastructure, agricultural land, and its improvements, property rights, and interests therein, and to encumber, mortgage, dispose, sell, or alienate or otherwise dispose the same at the fair market value it may deem appropriate; to lease its plant, machinery, equipment or goods not immediately required by it: Provided, That no real property thus acquired and any other real property shall be sold without the approval of the President of the Philippines; (g) To receive gifts, donations, grants, bequests, services, properties, whether personal or real, and assistance of all kinds, from private and public sources, firms, institutions, domestic and foreign governments, and international institutions, and utilize the same for the purposes set forth in this Act; (h) To invest its funds and other assets in such areas, ventures, and projects as it may deem wise; (i) To settle, under such terms and conditions most advantageous to it, any claim by or against it; (j) To determine and keep its own system of accounts following generally accepted principles of accounting, as well as the forms and contents of its contracts and other business documents; and (k) To perform such other acts, as are necessary or convenient in connection with the performance of its functions, to carry out the purposes of this Act. CHAPTER V POWERS AND FUNCTIONS OF THE BOARD

SEC. 24. Powers of the Board. - The Board shall have the following general powers: (a) Provide comprehensive policy guidance for the promotion and development of the Philippine aviation industry, as provided for in this Act; (b) Ensure that the Authority performs its functions in a proper, efficient and effective manner; (c) Decide the objectives, strategies and policies of the Authority in accordance with the provisions of this Act; (d) Determine the organizational structure of the Authority in accordance with the provisions of this Act, establish a human resources management system based on merit and fitness, and adopt a rational compensation and benefits scheme; (e) Exercise appellate powers on any decisions, findings and rulings of the Director General, to issue subpoena ad testificandum or subpoena duces tecum requiring the attendance and testimony of witnesses in any matter or inquiry pending before the Board and require the production of books, papers, contracts, agreements and all other documents submitted for purposes of this section to be under oath and verified by the person in custody thereof as to the truth and correctness of data appearing in such books, papers, tariffs, contracts, agreements and all other documents; (f) Exercise appellate powers to order the taking of depositions in any proceeding, or investigation, pending before the Board at any stage of such proceeding or investigation; (g) Use available services, equipment, personnel and facilities of other agencies of the Philippine Government, on a reimbursable basis when appropriate and, on a similar basis, to co-operate with those agencies in the establishment and use of services, equipment and facilities of the Authority; (h) Use the property of the Authority in such a manner as may appear to the Authority to be requisite, advantageous or convenient with a view to making the best use of any of the property of the Authority in relation to its functions under this Act; (i) Invest such of the Authority's funds that are not immediately required for operating expenses, or other immediate obligations in any business venture the Board may deem appropriate, or in such secured note, government securities, and other negotiable instruments that satisfy the guidelines prescribed by the Board. Funds of the Authority shall be deposited in such commercial and universal banks as the Board may determine, subject to the requirements of existing laws. The Board shall designate the officials authorized to deposit in or withdraw funds from such depository banks; (j) Promulgate rules and regulations as may be necessary in the interest of safety in air commerce pertaining to the issuance of the airman's certificate including the licensing of operating and mechanical personnel, type certificate for aircraft, aircraft engines, propellers and appliances, airworthiness certificates, air carrier operating certificates, air agency certificates, navigation facility and aerodrome certificates; air traffic routes; radio and aeronautical telecommunications and air navigation aids; aircraft accident inquiries; aerodromes, both public and private-owned; construction of obstructions to aerodromes; height of buildings; antennae and other edifices; registration of aircrafts; search and rescue; facilitation of air transports; operations of aircrafts, both for domestic and international, including scheduled and non-scheduled; meteorology in relation to civil aviation; rules of the air; air traffic services; rules for prevention of collision of aircrafts, identification of aircraft; rules for safe altitudes of flight; and such other rules and regulations, standards, governing other practices, methods and/or procedures as the Director General may find necessary and appropriate to provide adequately for safety regularity and efficiency in air commerce and air navigation; (k) Impose and fix reasonable charges and fees for the use of government aerodromes or air navigation facilities; for services rendered by the Authority in the rating of any aerodrome or air navigation facilities, civil aviation schools and instructors, aircraft repair stations, and aircraft radio and aeronautical telecommunications stations; (l) Fix the reasonable charges to be imposed in the use of privately-owned air navigation facilities and aerodromes; (m) Adopt a system for the registration of aircraft as hereinafter provided; (n) Determine and fix, landing fees, parking space fees, royalties on sales or deliveries, direct or indirect, to any aircraft for its use of aviation gasoline, oil and lubricants, spare parts, accessories and supplies, tools, other royalties, fees or rentals for the use of any of the property under its management and control; (o) Approve the annual and supplementary budget plan and utilization of retained revenue; (p) Exercise the corporate powers granted to the Authority; (q) Upon its own initiative or the recommendation of the Director General or an application of a private person, grant exemption from the requirements of observing rules or regulations issued in accordance with this Act: Provided, That said grant of exemption is not prejudicial to flight safety;

(r) Formulate rules and regulations concerning compliance of the carrier and the public for the safe transport of goods and materials by air pursuant to international standards or Annexes to the Chicago Convention; and (s) In coordination with the appropriate government agency tasked to provide airport security, shall: (1) Prescribe reasonable regulation requiring that all passengers and all property intended to be carried in the aircraft cabin in commercial air transport be screened by weapon-detecting procedure or facilities employed or operated by employees or agents of the air operator or foreign air operator prior to boarding the aircraft for such transportation; (2) Prescribe such other reasonable rules and regulations requiring such parties, methods and procedures as the Director General may find necessary to protect persons and property aboard aircraft operating in commercial air transport against acts of criminal violence and aircraft piracy; and (3) To the extent practicable, require uniform procedures for the inspection, detention, and search of persons and property in domestic commercial air transport and international commercial air transport to assure their safety and to assure that they will receive courteous and efficient treatment by air operators and their agents and employees. SEC. 25. Issuance of Rules and Regulations. - The Board, in consultation with the Director General, shall issue and provide for the enforcement of such orders, rules and regulations as may be necessary to give effect to the provisions of this Act. All rules and regulations issued in accordance with the provisions of this Act shall be formally promulgated and periodically reviewed and updated in accordance with the requirements of the Administrative Code of the Philippines or any amendment or successor thereto and the International Civil Aviation Organization Standards and Recommended Practices. Pending the promulgation of such new rules and regulations, the current rules and regulations of the AT0 shall continue to apply. SEC. 26. Setting of Charges and Fees. - The Board, after consultation with the Director General, and after public hearing, shall determine, fix, impose, collect or receive reasonable charges, fees, dues or assessments in respect of aviation certificates, licenses and all other authorizations or permissions authorized to be issued under this Act and all services performed by the Authority. All charges and fees shall be formally promulgated in accordance with the requirements of the Administrative Code of the Philippines or any amendment or successor thereto. Pending the promulgation of such new schedule of charges and fees, the current charges and fees of the AT0 shall continue to apply. SEC. 27. Issuance of Rules of Procedure and Practice. - The Board may authorize the Director General to issue or amend rules of procedures and practice as may be required to be issued pursuant to the provisions of this Act or issue and adopt rules and regulations and other issuances of the ICAO. Pending the promulgation of such new rules of procedures and practice, current rules of procedures and practices of the AT0 shall continue to apply. SEC. 28. Appellate Powers. - The Board, on an appeal properly taken by an interested party from a decision, judgment or order of the Director General, shall have the power to: (a) Review, confirm, modify, revise, amend or reverse, as the case may be, decisions, judgments and/or orders of the Director General; (b) Confirm, remit, mitigate, increase or compromise, as the case may be, fines imposed by the Director General pursuant with the provisions of this Act; and (c) Review, confirm, modify, revise, amend or reverse, as the case may be, impositions by the Director General of liens on personal and real properties of entities, persons, corporations or partnerships in default, or those who have failed to perform their obligations pursuant to rules and regulations promulgated under this Act, or those who shall have failed to pay the fines or other pecuniary penalties for violation thereof, In no case that the Director General shall participate in the hearing and adjudication of an appealed case before the Board where the subject of appeal is a judgment or decision rendered by his office. In such case, it requires four (4) concurring votes of the members of the Board who actively participated in the deliberation of the appealed case before the judgment or decision of the Director General can be modified or reversed. SEC. 29. Power to Administer Oaths. - The members of the Board, the Director General and such other duly designated officers of the Authority shall have the authority to administer oaths in the transaction and performance of their official duties. SEC. 30. Annual Budget. - The Board shall adopt an annual budget to fund the operations of the Authority. SEC. 31. Delegation of Functions. - (a) Delegation to Officers, Employees and Administrative Units of the Authority - The Director General may, subject to such regulations, supervision and review as may be prescribed, authorize the performance by any officer, employee, or administrative unit under the Director General's jurisdiction of any function under this Act.

(b) Delegation to Private Persons - The Director General, in accordance with the policy guidelines prescribed by the Board, is authorized to delegate any assigned powers and duties to any properly qualified private person subject to his continuing supervision, regulation, and review as may be prescribed. However, the Director General shall ensure that such functions are not delegated in such a way that air operators, aerial work or general aviation operators and maintenance facilities, in effect, regulate themselves. SEC. 32. Limitation of Powers. - The Board shall not exercise any power or function not otherwise expressly granted to it under this Act, neither shall the Board exercise, in the first instance, any power or function that properly falls within the authority, jurisdiction, powers or functions of the Director General. CHAPTER VI THE AUTHORITY PROPER SEC. 33. Organizational Structure of the Authority. - Within fifteen (15) days from the appointment of and acceptance by all members of the Board and the Director General of their respective appointments, the Board, in consultation with the Director General, shall meet to draw-up the Authority's organizational structure. The Board shall agree on the Authority's final organizational structure not later than six (6) months from the date of the effectivity of this Act. In addition to the offices created under Sections 36 and 40 of this Act, the Board shall establish the following permanent offices: (a) Air Traffic Service; (b) Air Navigation Service; (c) Aerodrome Development and Management Service; and (d) Administrative and Finance Service. The Board may agree for the viability for the creation of additional offices and the finalization of the organizational structure not later than six (6) months from the date of the effectivity of this Act. Notwithstanding the qualification standards as may be prescribed by the Board and the Civil Service Commission, the selection and appointment of the heads of the foregoing offices shall be limited from the rank and file employees of the concerned services. SEC. 34. Training Schools. - (a) Authority to Operate - The Director General may conduct a school or schools for the purpose of training employees of the Authority in those subjects necessary for the proper performance of all authorized functions of the Authority. The Director General may also authorize attendance of courses given in such schools by other governmental personnel and personnel of foreign governments, or personnel of the aeronautical industry. (b) Offset of Training Costs - The Director General is hereby authorized, where appropriate, to require payment of appropriate consideration to offset the costs of training provided by such school or schools. CHAPTER VII THE DIRECTOR GENERAL SEC. 35. Powers and Functions of the Director General. - The Director General shall be the chief executive and operating officer of the Authority. He shall have the following powers, duties and responsibilities: (a) To carry out the purposes and policies established in this Act; to enforce the provisions of the rules and regulations issued in pursuance to said Act; and he shall primarily be vested with authority to take charge of the technical and operational phase of civil aviation matters; (b) To designate and establish civil airways, to acquire, control, operate and maintain along such airways, navigation facilities and to chart such airways and arrange for their publication including the aeronautical charts or maps required by the international aeronautical agencies, by utilizing the equipment, supplies or assistance of existing agencies of the government as far as practicable; (c) To issue airman's certificate specifying the capacity in which the holder thereof is authorized to serve as airman in connection with aircraft and shall be issued only upon the finding that the applicant is properly qualified and physically able to perform the duties of the position. The certificate shall contain such terms, conditions and limitations as the Director General may determine to be necessary to assure safety in air commerce: Provided, however, That the airman's license shall be issued only to qualified persons who are citizens of the Philippines or qualified citizens of countries granting similar rights and privileges to citizens of the Philippines; (d) To issue airworthiness certificate for aircraft which shall prescribe the duration of such certificate, the type of service for which the aircraft may be used, and such other terms and conditions and limitations as are required; (e) To issue air carrier operating certificate in accordance with the minimum safety standards for the operation of the air carrier to whom such certificate is issued. The air carrier operating certificate shall be issued only to aircrafts registered under the provisions of this Act;

(f) To issue type certificate for aircraft, aircraft engine, propellers and appliances; (g) To inspect, classify and rate any air navigation facilities and aerodromes available for the use of aircraft as to its suitability for such use and to issue a certificate for such air navigation facility and aerodrome; and to determine the suitability of foreign aerodromes, air navigation facilities as well as air routes to be used prior to the operation of Philippine-registered aircraft in foreign air transportation and from time to time thereafter as may be required in the interest of safety in air commerce; (h) To issue certificates of persons or civil aviation schools giving instruction in flying, repair stations, and other air agencies and provide for the examination and rating thereof; (i) To provide for the enforcement of the rules and regulations issued under the provisions of this Act and to conduct investigation for violations thereto. In undertaking such investigation, to require by subpoena ad testificandum or subpoena duces tecum, the attendance and testimony of witnesses, the production of books, papers, documents, exhibits matter, evidence, or the taking of depositions before any person authorized to administer oath. Refusal to submit the reasonable requirements of the investigation committee shall be punishable in accordance with the provisions of this Act; (j) To collect and disseminate information relative to civil aeronautics and the development of air commerce and the aeronautical industry; to exchange with foreign governments, information pertaining to civil aeronautics; and to provide for direct communication on all matters relating to the technical or operational phase of aeronautics with international aeronautical agencies: (k) To acquire and operate such aircraft as may be necessary to execute the duties and functions of the Authority prescribed in this Act; (l) To plan, design, acquire, establish, construct, operate, improve, maintain, and repair necessary aerodromes and other air navigation facilities; (m) To collect and receive charges and fees for the registration of aircraft and for the issuance and/or renewal of licenses or certificates for aircraft, aircraft engines, propellers and appliances, and airmen as provided in this Act; (n) To impose fines and/or civil penalties in respect thereto; (o) To participate actively with the largest possible degree in the development of international standardization of practices in aviation matters important to safe, expeditious, and easy navigation, and to implement as far as practicable the international standards, recommended practices and policies adopted by appropriate international aeronautical agencies; (p) To exercise and perform its powers and duties under this Act consistent with any obligation assumed by the Republic of the Philippines in any treaty, convention or agreement on civil aviation matters; (q) To cooperate, assist and coordinate with any research and technical agency of the government on matters relating to research and technical studies on design, materials, workmanship, construction, performance, maintenance and operation of aircraft, aircraft engines, propellers, appliances, and air navigation facilities including aircraft fuel and oil: Provided, That nothing in this Act shall be construed to authorize the duplication of the laboratory research, activities or technical studies of any existing governmental agency; (r) To designate such prohibited and danger areas, in consonance with the requirements of the international aeronautical agencies and national security; (s) To issue, deny, suspend, cancel or revoke any certificate, license pertaining to aircraft, airmen and air agencies: Provided, That any order denying, suspending, cancelling, revoking the certificate or license may he appealed to the Board, whose decisions shall he final within fifteen (15) days from the date of notification of such denial, cancellation or revocation; (t) To grant authorization to civil aircraft or persons to carry instruments or photographic devices to be used for aerial photography or taking of pictures by photograph or sketching of any part of the Philippines; and (u) Pursuant to a board resolution, to enter into, make and execute contracts of any kind with any person, firm, or public or private corporation. SEC. 36. The Office of Enforcement and Legal Service. - To effectively implement the civil aviation regulatory, supervisory and administrative mandates of the Director General under this Act, a permanent office within the Authority to be known as the Enforcement and Legal Service, to be composed of in-house counsels of the Authority and its necessary support staff shall be established by the Board. This office shall provide adequate legal assistance and support to the Director General and to the Authority, as a whole, in the exercise of quasi-legislative and quasi-judicial power as provided for under this Act. The exercise of the function by the Director General to issue subpoena ad testificandum, subpoenaduces tecum and the imposition of any administrative sanction shall be within the exclusive determination and

recommendation of the Enforcement and Legal Service. SEC. 37. Orders. - (a) Effectiveness of Orders - Except in emergency situations, all orders, rules and regulations of the Director General shall take effect within such reasonable times as the Director General may prescribe, and shall continue in force until a further order, rule or regulation, or for a specified period of time, as shall be prescribed in the order, rule or regulation. (b) Emergencies - Whenever the Director General is of the opinion that an emergency requiring immediate action exists with respect to safety in civil aviation, the Director General shall have the power, either upon complaint or the Director General's initiative without complaint, at once, if the Director General so orders, without answer or other form of pleading by the interested person or persons, and with or without notice, hearing, or the making or filing of a report, to make such just and reasonable orders, rules or regulations as may be essential in the interest of safety in civil aviation to meet such emergency: Provided, That the Director General shall immediately thereafter initiate proceedings relating to the matter giving rise to any such order, rule or regulation. (c) Suspension and Modification of Orders - The Director General shall have the power to suspend or modify orders upon such notice and in such manner as the Director General shall find proper. (d) Public Compliance - It shall be the duty of every person (along with any agents and employees thereof in the case of entities other than individuals), subject to this Act, to observe and comply with any order, rule, regulation, or certificate issued by the Director General under this Act, affecting such person so long as the same shall remain in effect. SEC. 38. Right of Access for Inspection. - (a) The Director General or his authorized representative shall be authorized access to civil aircraft, including aerodromes, without restriction wherever they are operated within the Philippines for purposes of ensuring that those aircraft are airworthy and being operated in accordance with this Act, regulations issued under this Act, and applicable ICAO Annexes. (b) The Director General or his authorized representative shall be authorized access to civil aircraft registered in the Philippines without restriction wherever they are operated in the world for the purposes of ensuring that these aircraft are airworthy and are being operated in accordance with this Act and applicable regulations and directives. (c) The Director General or his authorized representative shall be authorized access by the Philippine air operators at any place and any time to conduct any tests or inspections in their facility or offices in order to determine that those operations are conducted in accordance with this Act and applicable regulations and directives. (d) The Director General or his authorized representative shall be authorized access to any aerodromes, whether privately or government-owned, to conduct inspections or evaluation of the facilities therein in order to determine that its operations are conducted. SEC. 39. Authority to Prevent Flight. - (a) The Director General is authorized to direct the operator or airman of a civil aircraft that the aircraft is not to be operated in situations where: (1) The aircraft may not be airworthy; or (2) The airman may not be qualified or physically or mentally capable for the flight; or (3) The operation would cause imminent danger to persons or property on the ground. (b) The Director General may take such steps as are necessary to detain such aircraft or airmen. SEC. 40. Creation of Flight Standards Inspectorate Service. - (a) The Board, other than the offices it shall create in furtherance of this Act, shall establish a permanent office known as the Flight Standards Inspectorate Service (FSIS) that will assist the Director General in carrying out the responsibilities of his office for certification and ongoing inspections of aircraft, airmen and air operators. The FSIS shall perform the following functions: (1) Airworthiness inspection; (2) Flight operations inspection and evaluation; and (3) Personnel licensing. Furthermore, the Board shall create, but not limited to, the following offices which will provide support to the functions of the FSIS, namely: Aircraft Registration, Aircraft Engineering and Standards, Airmen Examination Board and Office of the Flight Surgeon. SEC. 41. Validation. - The Director General is authorized, in the discharge of his certification and inspection responsibilities, to validate the actions of the civil authority of another State in lieu of taking the specific action, with the following restrictions: (a) For actions on airman or airworthiness certificates, the other State must be a signatory to the Chicago

Convention and he fulfilling its obligations under the Chicago Convention with respect to the issuance and currency of these certificates; and (b) For actions applicable to air operators, the Director General must exercise discretion and require supporting documents. The Director General should ensure that, when validation is based on the actions of another civil aviation authority, there is no information to indicate that the State does not meet its obligations under the Chicago Convention regarding certification and ongoing validation of its air operators. SEC. 42. Aircraft Accident Investigation and Inquiry Board. - Pending the establishment of an independent and separate government agency created to conduct investigation of accidents on land, air and water, the Director General shall organize an Aircraft Accident Investigation and Inquiry Board (AAIIB), to be composed of personnel of the Authority specialized in the various disciplines of civil aviation. The Board shall appoint the head of the AAIIB. (a) Reporting of Accidents - The Board shall promulgate rules and regulations governing the notification and the reporting of accidents and incidents involving aircraft. (b) General Authority to Investigate - Except as provided in subsection c of this section, the Director General shall have: (1) The power to investigate, or arrange by contract or otherwise for the investigation of, accidents involving aircraft occurring in the Philippines and civil aircraft registered in the Fhilippines occurring outside the territory of any foreign country for the purpose of determining the facts, conditions and circumstances relating to each accident and the probable cause thereof; and (2) The authority to participate in the investigation of accidents involving aircraft registered in the Philippines occurring outside the territory of a foreign country, consistent with any treaty, convention, agreement, or other arrangemest between the Philippines and the country in whose territory the accident occurred. (c) Accident Prevention - The Director General shall take any corrective actions which, on the basis of the findings of the accident investigations authorized under this section, that, in the judgment of the Director General, will tend to prevent similar accidents in the future. (d) Investigation of Accidents Within Military Sites - Notwithstanding any other provision of this section, and, the investigation of an accident involving aircraft occurring within military sites in the Philippines, or an accident involving solely an aircraft of the armed forces of any foreign country occurring in the Philippines, shall be the responsibility of the military. For the purpose of this subsection, the term 'military sites' means those areas within the Philippines which are under the control of the military of the Philippines or the military of another country. (e) Use as Evidence - No part of any report or reports of the Director General relating to any accident, or the investigation thereof, shall be admitted as evidence or used in any suit or action for damages arising out of any matter mentioned in such report or reports except when the criminal liabilities/aspects of the accident is put into issue. CHAPTER VIII NATIONALITY AND OWNERSHIP OF AIRCRAFT SEC. 43. Establishment of Registry. - The Authority shall: (a) Establish and maintain a system for the national registration of aircraft in the Philippines; (b) Establish and maintain a system for the registration of liens, mortgages or other interests in aircraft or aircraft engines; and (c) Have sole authority to register aircraft and liens, mortgages or other interests in aircraft or aircraft engines. SEC. 44. Eligibility for Registration. - Except as otherwise provided in the Constitution and existing treaty or treaties, no aircraft shall be eligible for registration unless it is owned by or leased to a citizen or citizens of the Philippines or corporations or associations organized under the laws of the Philippines at least sixty per centum (60%) of whose capital is owned by Filipino citizens. That, under such rules and regulations to be promulgated by the Board, foreign-owned or registered aircraft may be registered if utilized by members of aero clubs organized for recreation, sport or the development of flying skills as a prerequisite to any aeronautical activities of such clubs within the Philippine airspace. (R.A. 776, P.D. 1278, E.O. 546, and B.P. 504) Such certificate shall be conclusive evidence of nationality for international purposes, but not in any proceeding under the laws of the Republic of the Philippines. The certificate of registration is conclusive evidence of ownership, except in a proceeding where such ownership is, or may be, at issue.

SEC. 45. Application for Aircraft Registration. - Applications for certificate of registration shall be made in writing, signed and sworn to by the owner or lessee of any aircraft or aircraft engine eligible for registration. The application shall also state: (a) the date and place of filing; (b) the specification, construction and technical description of the aircraft or aircraft engine; and (c) such other information as may be required by the Authority in such manner and form as the Authority may prescribe by regulation. SEC. 46. Issuance of Certificate of Registration. - Should the Director General, upon considering the application for registration, find the aircraft or aircraft engine eligible for registration, such aircraft shall be registered under the provisions of this Act and the owner thereof shall be issued a certificate of registration. SEC. 47. Nationality. - An aircraft shall acquire Philippine nationality when registered pursuant to this Act. SEC. 48. Revocation. - Any certificate of registration may be revoked by the Authority for any cause which renders the aircraft ineligible for registration. SEC. 49. Conveyance to be Recorded. - No conveyance made or executed, which affects the title to, or interest in, any aircraft of Philippine registry, or any portion thereof shall be valid in respect to such aircraft or portion thereof against any person other than the person by whom the conveyance is made or executed, his heirs, assignees, executors, administrators, devisees, or successors in interest, and any person having actual notice thereof, until such conveyance is recorded in the Authority. Every such conveyance so recorded shall be valid as against all persons. Any instrument, recording of which is required by the provisions of this Act, shall take effect from the date of its record in the books of the Authority, and not from the date of its execution. SEC. 50. Form of Conveyance. - No conveyance may be recorded under the provisions of this Act unless it complies with the requirements for the registration of documents similar to the land registration process. The conveyance to be recorded shall also state: (a) the interest in the aircraft of the person by whom such conveyance is made or executed or, in the case of a contract of conditional sale, the interest of the vendor; and (b) the interest transferred by the conveyance. SEC. 51. Establishment of System of Recording. - The Authority shall establish a national system for recording documents that affect the title to or any interest in any aircraft registered in accordance with this Act and in any aircraft engine, propeller, appliance or spare parts intended for use on any such aircraft. SEC. 52. Method of Recording. - The Authority shall record conveyances delivered to it in the order of their receipt, in files kept for that purpose, indexed to show: (a) The identifying description of the aircraft; (b) The names of the parties to the conveyance; (c) The date of the instrument and the date and time it is recorded; (d) The interest in the aircraft transferred by the conveyance; (e) If such conveyance is made as security for indebtedness, the amount and date of maturity of such indebtedness; and (f) All particular estates, mortgages, liens, leases, orders and other encumbrances and all decrees, instruments, attachments or entries affecting aircraft and other matters properly determined under this Act. SEC. 53. Validity Before Filing. - Upon the establishment of a recording system in accordance with the provisions of this Act, no document affecting the title to or any interest in such registered aircraft, aircraft engines, propellers, appliances, or spare parts shall be valid except as between the parties thereto, unless the document is registered in such recording system. SEC. 54. Previously Unrecorded Ownership. - Applications for the issuance or renewal of an airworthiness certificate for aircraft whose ownership has not been recorded as provided in this Act shall contain such information with respect to the ownership of the aircraft as the Director General shall deem necessary to show who have property interests in such aircraft and the nature and extent of such interest. CHAPTER IX AVIATION SAFETY POWERS AND FUNCTIONS SEC. 55. General Powers and Functions. - (a) Promoting Safety - The Director General shall have the pawer and duty to promote safety of flight of civil aircraft in civil aviation by prescribing and revising from time to time as necessary: (1) Reasonable rules and regulations implementing, at minimum, all standards of the Annexes to the Chicago Convention; and (2) Such other reasonable rules, regulations, or minimum standards governing other practices, methods, and procedures as the Director General may find necessary to provide adequately for safety in civil aviation. (b) Considerations in the Regulation of Air Operators - In prescribing standards, rules and regulations, and in issuing certificates under this Act, the Director General shall take into consideration the obligation of air

operators to perform their services with the highest possible degree of safety pursuant to public interest. SEC. 56. Form of Applications. - Applications for certificates issued by virtue of this chapter shall be in such form, contain such information, and be filed and served in such manner as the Authority may prescribe and shall be under oath or affirmation whenever the Authority so requires. A. Certification of Airmen SEC. 57. Authority to Certificate Airmen. - The Director General is authorized to issue airmen certificates specifying the capacity in which the holders thereof are authorized to serve as airman in connection with an aircraft. SEC. 58. Application and Issuance. - Any individual may file with the Director General an application for an airman certificate. If the Director General finds, after due investigation, that such individual possesses the proper qualifications for, and is physically able to, perform the duties pertaining to the position for which the airman certificate is sought, the Director General shall issue such certificate. SEC. 59. Terms and Conditions. - The airman certificate shall contain such terms, conditions and tests of physical fitness, and other matters as may be necessary to assure safety in civil aviation. SEC. 60. Contents. - Each airman certificate shall: (a) Be numbered and recorded by the Authority; (b) State the name and address of, and contain a description of the individual to whom the airman certificate is issued; and (c) Be titled with the designation of the airman and its authorized privileges. B. Airworthiness Certificate SEC. 61. Authority to Issue Airworthiness Certificates. - The owner of any aircraft registered in accordance with this Act may file with the Director General an application for an airworthiness certificate for such aircraft. SEC. 62. Issuance. - If it is found that the aircraft conforms to the appropriate type of certificate and, after inspection, finds that the aircraft is in a condition allowing for safe operation, an airworthiness certificate shall be issued by the Director General. SEC. 63. Terms and Conditions. the Director General shall prescribe in the airworthiness certificate the duration of such certificate, the types of service for which the aircraft may be used, and such other terms, conditions, limitations and information as are required in the interest of safety. Each airworthiness certificate issued by the Director General shall be recorded by it. SEC. 64. Airworthiness Approvals. - The Director General may prescribe the terms under which additional airworthiness approvals, for purposes of modification, may be made. C. Air Operator Certificate SEC. 65. Authority to Certificate Carriers and Establish Safety Standards. - The Director General is authorized to issue air operator certificates and to establish minimum safety standards for the operation of the air carrier to which any such certificate is issued. SEC. 66. Application and Issuance. - Any air carrier who is a citizen of the Philippines may file with the Director General an application for an air operator certificate. If the Director General finds, after thorough investigation, that such air carrier is properly and adequately equipped and has demonstrated the ability to conduct a safe operation in accordance with the requirements of this Act and the rules, regulations and standards issued pursuant thereto, the Director General shall issue an air operator certificate to such air carrier: Provided, however, That in no event shall the Director General issue an air operator certificate to an air carrier that does not possess a valid Certificate of Public Convenience and Necessity (CPCN) issued pursuant to this Act and its implementing rules. D. Aviation Schools and Approved Maintenance Organizations SEC. 67. Examination and Rating. - The Director General is authorized to provide for the examination and rating of: (a) The adequacy of the course of instruction, the suitability and airworthiness of the equipment and the competency of the instructors of civilian schools providing instruction in flying or in the repair, alteration, maintenance, and overhaul of aircraft, aircraft engines, propellers and appliances; and (b) The adequacy and suitability of the equipment, facilities and materials for, and methods of, repair and overhaul, and the competency of those engaged in the work or giving any instruction in accredited maintenance organizations or shops engaged in the repair, alteration, maintenance and overhaul of aircraft engines, propellers and appliances. SEC. 68. Air Navigation Facility Safety Standards. - (a) Minimum Safety Standards -The Director General

shall have the power to prescribe and revise, from time to time as necessary, minimum safety standards for the operation of air navigation facilities located in the Philippines. (b) Certification of Airports - (1) The Director General is empowered to issue airport certificates to, and to establish minimum safety standards for the operation of, airports that serve any scheduled or unscheduled passenger operations of air operator or foreign air operator aircraft. (2) Any person desiring to operate an airport that is described in this section and that is required hy the Director General, by rule, to be certified may file with the Director General an application for an airport operating certificate. If the Director General finds, after investigation, that such person is properly and adequately equipped and able to conduct a safe operation in accordance with the requirements of this Act and the rules and regulations, and standards prescribed thereunder, the Director General shall issue an airport operating certificate to such person. Each airport operating certificate shall prescribe such terms, conditions and limitations as are reasonably necessary to assure safety in commercial air transport. Unless the Director General determines that it would be contrary to public interest, such terms, conditions and limitations shall include, but not limited to, terms and conditions, relating to: (i) The operation and maintenance of adequate safety equipment, including fire fighting and rescue equipment capable of rapid access to any portion of the airport used for landing, takeoff, or surface maneuvering of aircraft; and (ii) The condition and maintenance of primary and secondary runways as the Director General determines to be necessary. SEC. 69. Duties and Operations of Airmen. - It shall be the duty of: (a) Each air carrier to make or cause to be made, such inspection, maintenance, overhaul and repair of all equipment used in air transport and to ensure that the operations conducted are in accordance with the provisions of this Act and the rules, regulations, directives and orders issued by virtue of this Act; (b) Each air carrier holding an air operator certificate to ensure that the maintenance of aircraft and operations thereof are conducted in the public interest and in accordance with the requirements of this Act and the rules, regulations, directives and orders issued by virtue of this Act; (c) Each holder of an airman certificate to observe and comply with the authority and limitations of that certificate, the requirements of this Act and the rules, regulations, directives and orders issued by virtue of this Act; (d) Every person performing duties in air transportation to observe and comply with the requirements of this Act and the rules, regulations, directives and orders issued by virtue of this Act; and (e) Every person who offers or accepts shipments, cargo or baggage in air commerce to offer or accept such shipments, cargo or baggage in accordance with the provisions of Annex 18 ofthe Chicago Convention and the ICA0 Technical Instructions for the Safe Transport of Dangerous Goods by Air. SEC. 70. Authority to Inspect. - (a) Authority to Inspect Equipment - The Director General shall have the power and duty to: (1) Make such inspections of aircraft, aircraft engines, propellers and appliances used by an operator of civil aircraft as may be necessary to determine that the operators are maintaining the safe condition for the operation in which they are used; and (2) Advise each operator in the inspection and maintenance of these items. (b) Unsafe Aircraft, Engines, Propellers and Appliances - When the Director General finds that any aircraft, aircraft engine, propeller or appliance, used or intended to be used by any operator in civil aviation, is not in a condition for safe operation, the Director General shall notify the operator. Such aircraft, aircraft engine, propeller or appliance then shall not be used in civil aviation or in such manner also to endanger civil aviation, unless found by the Director General to be in a condition for safe operation. SEC. 71. Amendment, Modifications, Suspension and Revocation of Certificates. - (a) Re-inspection and Reexamination - The Director General may, from time to time, for any reason, reinspect or reexamine any civil aircraft, aircraft engine, propeller, appliance, air operator, school, with approved maintenance organization, or any civil airman holding a certificate issued under this Act. (b) Actions of the Director General - If, as a result of any such re-inspection or reexamination, or if, as a result of any other investigation made by the Director General, the Director General determines that safety in civil aviation or commercial air transport and the public interest requires, the Director General may issue an order amending, modifying, suspending or revoking, in whole or in part, any airworthiness certificate, airman certificate, air operator certificate or certificate for any airport, school, or approved maintenance organization issued under this Act.

(c) Notice to Certificate Holders and Opportunity to Answer - Prior to amending, modifying, suspending or revoking any of the foregoing certificates, the Director General shall advise the holder thereof as to any charge or reason relied upon by the Director General for the proposed action and, except in cases of emergency, shall provide the holder of such certificate opportunity to answer any charges and be heard as to why such certificate should not be amended, modified, suspended or revoked. (d) Appeals - Any person whose certificate is affected by such an order of the Director General under this section may file his motion for reconsideration within five (5) days from receipt thereof and in case of denial shall, within ten (IO) days, file his appeal to the Board. (e) Effectiveness of Orders Pending Appeal - The filing of motion for reconsideration or appeal as provided for under this Act shall not stay the effectiveness of the Director General's order except through an injunctive relief duly issued by a court of competent jurisdiction. SEC. 72. Prohibitions. - (a) It shall be unlawful for any person to: (1) Operate in civil aviation any civil aircraft which there is not currently in effect a certificate of airworthiness and registration, or in violation of the terms of any such certificate and operation of the aircraft in a careless and reckless manner and operation of aircraft in contravention of its approved operating limitations and manual; (2) Serve in any capacity as an airman in connection with any civil aircraft, aircraft engine, propeller or appliance used or intended for use in civil aviation without an airman certificate authorizing that person to serve in such capacity, or in violation of any term, condition or limitation of his certificate, or in violation of any order, rule or regulation issued under this Act: (3) Employ for service in connection with any civil aircraft used in civil aviation an airman who does not have an airman certificate authorizing that person to serve in the capacity for which the person is employed; (4) Operate as an air operator without an air operator certificate or in violation of the terms of any such certificate; (5) Operate aircraft in civil aviation in violation of any rule, regulation, or certificate issued by the Director General under this Act; and (6) While holding a certificate issued to a school or approved maintenance organization as provided in this Act, to violate any term, condition or limitation thereof, to violate any order, rule or regulation made under this Act relating to the holder of such certificate. (b) Considering that the aircraft operation is impressed with public interest, the Director General may prescribe exemptions of the foregoing provisions for foreign aircraft and airmen. CHAPTER X OTHER POWERS SEC. 73. Statutory Lien. - The Director General, after complying with the required legal formalities provided by law, shall have the power to impose lien on aircraft and machinery: (a) If the charges and other fees are not paid in full on due date or any part of the charges or the late payment penalty thereto remains unpaid; and (b) Failure to pay administrative fines arising from violation of any rules and regulations promulgated by the Authority. SEC. 74. Lien on Personal and Real Properties. - The Director General shall have the power to impose lien on personal and real properties, and other assets of persons, corporations, partnerships, and such other entities that shall be in default, or fail to perform their obligations, or fail to pay the fines and other penalties imposed for violations of the law, rules and regulations of the Authority. Properties and assets levied upon may be sold and the proceeds thereof shall be applied to the satisfaction of the obligation after due notice and hearing. SEC. 75. Police Authority. - The Director General shall have the power to exercise such police authority as may be necessary within the premises of airports under its jurisdiction to carry out its functions and attain its purposes and objectives. The grant of such powers shall be in conformity with the functions exclusively provided by law to be exercised by the Philippine National Police and other concerned government agencies: Provided, That the Authority may request the assistance of other law enforcement agencies, including request for deputization as may be required. Such police authority shall be exercised in connection with the following: (a) Maintenance of security to passengers, cargoes, aircraft, airport equipment, structures, facilities, personnel, funds and documents; (b) Regulating the entry to, exit from and movement within an airport; (c) Maintenance of peace and order within the premises of an airport in coordination with local police authorities and other authorized peace-keeping entities within an airport;

(d) Regulation and supervision of private security agencies operating within an airport; and (e) Enforcement of rules and regulations promulgated by the Board pursuant to the authority granted under this Act. SEC. 76. Regulation of Building Heights. - The Board shall have the power to regulate the height of buildings, towers, antennae, and other edifices, situated within the vicinity of or in close proximity to airports estimated to endanger the flight of aircrafts. It shall also have the power to prohibit or regulate the establishment and operations of electrical, electronics, sound, magnetic, laser, or other electronic gadgets, equipment or installations which will tend to interfere with or impair air navigation in accordance with the international standards and recommended practices on airports, as recommended by the ICAO. SEC. 77. Authority Respecting the Transportation of Dangerous Goods by Air. - The Director General shall monitor and enforce compliance of the rules and regulations concerning the carriage of goods by air in relation to Annex 18 of the Chicago Convention and the ICAO Technical Instructions for the Safe Transport of Dangerous Goods by Air. SEC. 78. Development of New Airports. - The Board shall be responsible for the planning, development, construction, operation, maintenance, or the expansion of airports. In planning and developing new airports, the Board shall consider: (a) The suitability of a proposed site in terms of terrain and proximity to population center(s); (b) The projected size of the market to be served by a proposed airport; (c) The ability of a proposed airport to generate sufficient revenue to cover costs of operation and maintenance; (d) The availability of funding from both local and foreign sources for the construction of a new airport or expansion of an existing one; (e) The proximity of other airports to a proposed new airport and the capability of such other airport to handle traffic projected to be handled by the new proposed airport; (f) The government's public service obligations, more particularly the government's duty to ensure the availability of air transport infrastructure for remote areas far from major population centers and that are not otherwise easily accessible by transportation via land or sea. In such cases, the Board shall take reasonable steps to ensure that funding will be available for the operation and maintenance of such airports; (g) ICAO best practices and recommendations concerning the development of airports; and (h) Such other considerations as the Board, in the exercise of its reasonable discretion, may consider relevant or important. CHAPTER XI PENALTIES SEC. 79. Power of the Authority to Investigate Violations. - Correlative to the provisions of Section 36 of this Act, the Director General at his own volition, or at the instance of a private person, or upon the initiative of the Board, may conduct investigations based on the procedures that the Board may prescribe and using the Rules of Court as its suppletory guidelines. SEC. 80. Power to Direct an Immediate Halt to an Offending Practice. - The Director General, after due investigation conducted, may issue a cease and desist order directing an air carrier(s) to immediately cease any practice found to be in violation of the provisions of this Act. Such order shall be without prejudice to the civil or criminal prosecution of persons or individuals found to be involved in practices prohibited under Chapter XI of this Act. SEC. 81. Penalties. - (a) The Director General, after due notice and hearing, is authorized to impose the following fines and penalties for each violation of this Act: (1) Any person who operates any aircraft without the current airworthiness certificate, in violation of my rule, regulation or order issued by the Director General relating to aeronautical safety standards or practices or procedures shall be punished by a fine ranging from Twenty thousand pesos (Php20,000.00) to Fifty thousand pesos (Php50,000.00) for the 1st offense, suspension of the license for three (3) months for the 2nd offense and revocation or cancellation of such license for the 3rd offense; (2) Any person serving in any capacity as an airman in connection with any civil aircraft in violation of the terms, conditions or limitations of any such airman license or certificate, or in excess of the rating of such certificate, shall be punished by a fine ranging from Twenty thousand pesos (Php20,000.00) to Fifty thousand pesos (Php50,000.00) for the 1st offense, suspension of the license for three (3) months for the 2nd offense and revocation or cancellation of such license for the 3 rd offense. The repetition of this offense shall be sufficient cause for the revocation of the airman's certificate; (3) Any person who employs in connection with any aircraft used in air commerce an airman who does not

have an airman's certificate authorizing him to serve in the capacity for which he is employed shall be punished by a fine ranging from Fifty thousand pesos (Php50,000.00) to One hundred thousand pesos (Php100,000.00), as determined by the Director General in the exercise of his reasonable discretion. A repetition of the offense shall be sufficient cause for revocation of such person's certificate authorizing it to engage in air carrier operation; (4) Any person who was issued by the Director General relating to air carrier operation, aviation school, aircraft maintenance, and other civil aviation regulated activity which are being certificated and regulated by the Director General who have been found to have violated any term, condition or limitation thereof, or violates any order, rule or regulation issued by virtue of this Act relating to the holder of such certificate shall be punished by a fine ranging from Three hundred thousand pesos (Php300,000.00) to Five hundred thousand pesos (Php500,000.00), as determined by the Director General in the exercise of his reasonable discretion. The repetition of this offense shall be sufficient cause for the revocation of such person's certificate. (5) No person shall interfere, obstruct, hinder, or delay the Director General or any person duly delegated by the Director General, in the performance of his duties pursuant to public interest. A fine ranging from Twenty thousand pesos (Php20,000.00) but not exceeding One hundred thousand pesos (Php100,000.00), as determined by the Director General in the exercise of his reasonable discretion, shall be imposed upon anyone who: (i) With intent to interfere in the performance of the duties of the Director General or any person duly delegated by the Director General, shall knowingly or willfully alter, falsify, mutilate any report, accounts, records, books, papers, contracts, agreement and all other documents; or (ii) Shall knowingly and willfully fail or refuse: (a) to make and/or submit aircraft maintenance or flight logbooks, contracts, manuals, technical reports and all other documents required to be submitted by him for consideration before the Director General or his duly authorized representative; or (b) to keep or preserve records, reports, papers and all other documents required by the Director General or his duly authorized representative; or (iii) Is guilty of misconduct in the presence of the Director General or his duly authorized representative, or to any member of the Board in the performance of their quasi-judicial and quasi-legislative functions or so near as to obstruct or interrupt the hearing or session or any proceedings before the Director General or any of his duly authorized representative; or shall orally or in writing disrespectfully offend or insult any of the abovenamed bodies or persons on the occasion of or in the performance of their official duties or during any hearing, session, or investigation held by the Director General or his duly authorized representative; or (iv) Refuses to be sworn in as a witness or to answer as such when lawfully required to do so: Provided, That the Director General or his duly authorized representative shall, if necessary, be entitled to the assistance of law enforcement officials for the execution of any order to compel a witness to be present or to testify; or (v) Neglects or refuses to attend and/or testify and/or to answer any lawful inquiry or to produce books, papers or documents, if in his power to do so, in obedience to the subpoena or lawful requirement of the Director General or his duly authorized representative; or (vi) Testifies falsely or makes false affidavits or both before the Director General or his duly authorized representative. (b) The following penalties may only be imposed by a court of competent jurisdiction after the filing of a proper criminal complaint therein by the Director General and a finding of guilt: (1) Any person who operates any aircraft without a valid or current license or ratings or in violation of rule, regulation or order issued by the Director General relating to aeronautical safety standards or practices or procedures shall be punished by imprisonment for not more than three (3) years or a fine ranging from Fifty thousand pesos (Php50,000.00) but not exceeding Two hundred thousand pesos (Php200,000.00), or both, at the discretion of the court; (2) Any person who knowingly and willfully forges, counterfeits, alters or falsifies any certificate or aviation certificate authorized to be issued pursuant to the provisions of this Act, or knowingly uses or attempts to use any such fraudulent certificate or aviation certificate, and any person who knowingly and willfully displays or causes to be displayed on any aircraft any marks that are false or misleading as to the nationality or registration of the aircraft shall be punished by imprisonment ranging from three (3) years to six (6) years or a fine of not less than One hundred thousand pesos (php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (3) Any person who shall use for flight operation an unregistered aircraft or engaged in the operation of

aviation school, aircraft maintenance facilities, aircraft material distributorship, air carrier operations or any other civil aviation regulated activities without the required air agency certificate issued by the Director General shall be punished by imprisonment ranging from three (3) years to seven (7) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (4) Any person found guilty of violating the conditions attendant to the issuance of the airworthiness certificate of the aircraft shall be subjected to imprisonment ranging from three (3) years to seven (7) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (5) Any person who destroys or seriously damages the facilities of an airport or disrupts the services of an airport shall be subjected to imprisonment ranging from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; and (6) No person shall interfere with air navigation. An imprisonment for not more than three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court, shall be imposed upon any person who: (i) With intent to interfere with air navigation within the Philippines, exhibits within the Philippines any light or signal at such place or in such manner that it is likely to be mistaken for a true light or signal established pursuant to this Act or for a true light or signal in connection with an airport or other air navigation facility; or (ii) After due warning by the Director General, of his duly authorized representative, continues to maintain any misleading light or signal; or (iii) Knowingly removes, extinguishes, or interferes with the operation of any true light or signal; (7) Any person who destroys or damages air navigation facilities or interferes with their operation shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. If such act endangers the safety of air navigation, the court may impose an increased penalty of imprisonment from three (3) years to six (6) years or a fine ranging from Five hundred thousand pesos (Php500,000.00) to One million pesos (Php1,000,000.00) [Convention for Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal, 23 September 1971, Art. 1(d)]; (8) Any person who, whether on board or on the ground, communicates false information to an aircraft and thereby endangering the safety of an aircraft in flight shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. [Convention for Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal, 23 September 1971, Art. 1(e)]; (9) Any person who, while on board an aircraft, interferes with a crewmember's or flight attendant's performance of their duties, assaults, intimidates, or threatens any crewmember or flight attendant, shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court; (10) Any person who, while on board or while attempting to board, any aircraft in or intended for operation in commercial air transport, has, on or about his person or his property, a concealed deadly or dangerous weapon which is, or would be accessible to such person in flight, or any person who has on or about his person, or who has placed, or attempted to place aboard such aircraft any bomb or similar explosive or incendiary device, shall be subjected to imprisonment from three (3) years to six (6) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. This subsection shall not apply to persons duly authorized by the Director General to carry deadly or dangerous weapons in commercial air transport nor shall it apply to other persons transporting weapons contained in baggage that is not accessible to passengers in flight if the presence of such weapons has been declared to the air carrier and duIy approved by the proper authority; (11) Any person who imparts or conveys or causes to be imparted or conveyed false information, knowing the information to be false, concerning an attempt or alleged attempt being made or to be made to do an act which would be a crime prohibited by clauses (8), (9) and (10) of this section, shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than Fifty thousand pesos

(Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. [Convention for Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal, 23 September 1971, Art. 1(e)]; (12) Any person who, while on board an aircraft, commits any other act not otherwise expressly covered under clauses (8), (9), (10) and (11) above which jeopardizes the safety of the aircraft or of persons or property therein, or which jeopardizes good order and discipline on board such aircraft shall be subjected to imprisonment from six (6) months to three (3) years or a fine of not less than Fifty thousand pesos (Php50,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. [Convention on Offenses and Certain Other Acts Committed on Board Aircraft, signed at Tokyo, 14 September 1963, Art. 1(b)]; (13) Any person who knowingly and without authority removes, conceals or withholds any part of an aircraft involved in an aircraft accident or any property on board such aircraft at the time of th e aircraft accident shall be subjected to imprisonment from three (3) years to six (6) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court: and (14) Any person who willfully delivers or causes to be delivered to an air carrier for air transport, or if that person recklessly causes the transportation in air transport, of any shipment, cargo, baggage or other property in violation of the provisions of Annex 18 of the Chicago Convention and the ICAO Technical Instruction for the Safe Transport of Dangerous Goods by Air, or the corresponding rules and regulations issued by the Authority shall be subjected to imprisonment from one (1) year to three (3) years or a fine of not less than One hundred thousand pesos (Php100,000.00) but not exceeding Five hundred thousand pesos (Php500,000.00), or both, as determined by the court. The provisions of paragraph (b), clauses (9), (10), (11) and (12) above shall apply to any aircraft located within the special jurisdiction of the Philippines. Exercise by the Director General of the powers granted to him under paragraph (a) above shall not be a bar to a subsequent criminal prosecution in court for the same act pursuant to the provisiom of paragraph (b). SEC. 82. General Penalty. - Any violation of the provisions of this Act, or any order, rule or regulation issued thereunder, or any term, condition or limitation of any certificate or license issued under this Act for which no penalty is expressly provided shall be punished by a fine ranging from Twenty thousand pesos (Php20,000.00) to One hundred thousand pesos (Php100,000.00) for each violation. SEC. 83. Penalty Considerations. - In determining the amount of any such penalty, the Director General shall take into account the nature, circumstances, extent and gravity of the violation and, with respect to the person found to have committed the violation, the degree of culpability, history of prior offenses, ability to pay, effect on ability to continue to do business, and such other matters as justice may require. SEC. 84. Inflation Adjustment to Civil Penalties. - The Director General shall adjust the monetary level of the penalties, as may be authorized by the Board to impose, at least once every four (4) years: Provided, That the Board shall promulgate such revised penalties in accordance with the Administrative Code of the Philippines and economic/monetary index provided by the Monetary Board, including any revision or successor thereto. CHAPTER XII TRANSITORY PROVISIONS SEC. 85. Abolition of the Air Transportation Office. - The Air Transportation Office (ATO) created under Republic Act No. 776, a sectoral office of the Department of Transportation and Communications (DOTC), is hereby abolished. All powers, duties and rights vested by law and exercised by the AT0 is hereby transferred to the Authority. All assets, real and personal properties, funds and revenues owned by or vested in the different offices of the AT0 are transferred to the Authority. All contracts, records and documents relating to the operations of the abolished agency and its offices and branches are likewise transferred to the Authority. Any real property owned by the national government or government-owned corporation or authority which is being used and utilized as office or facility by the AT0 shall be transferred and titled in favor of the Authority. SEC. 86. Transfer of Personnel of Air Tramportation Office. - To ensure smooth transition into a corporate structure, the incumbent Assistant Secretary of the AT0 shall continue to hold office and assume the powers of the Director General until his successor shall have been appointed and inducted into office in accordance with this Act. However, affected officials and personnel, with appointments attested by the Civil Service Commission, whether hired on a permanent or temporary basis, who would opt to retire or to be separated from the service, and those hired on a casual or contractual basis, if qualified, shall be given the option to avail

themselves of any of the following, whichever is beneficial to them: (a) Retirement gratuity provided under Republic Act No. 1616, as amended, plus the refund of retirement premiums payable by the Government Service Insurance System (GSIS), without the incentive herein provided; (b) Retirement benefit under Republic Act No. 660 or applicable retirement, separation or unemployment benefit provided under Republic Act No. 8291, if qualified, plus the following applicable incentives: (1) One half (1/2) month of the present basic salary for every year of government service and a fraction thereof, for those who have rendered twenty (20) years of service and below; (2) Three-fourth (3/4) month of the present basic salary for every year of government service and a fraction thereof, computed starting from the 1 st year, for those who have rendered twenty-one (21) to thirty (30) years of service; and (3) One (1) month of the present basic salary for every year of government service and a fraction thereof, computed starting from the lst year, for those who have rendered thirty-one (31) years of service and above: Provided, That the GSIS shall pay, on the day of separation, the retirement/separation/unemployment benefits to which an affected employee may be entitled to under Republic Act No. 660 or Republic Act No. 8291 and whenever there is an option, the one which the affected employee has chosen as the most beneficial to him/her: Provided, further, That for the purpose of complying with the required number of years of service under Republic Act No. 8291, the portability scheme under Republic Act No. 7699 may be applied, subject to existing policies and guidelines; and (c) Those with less than three (3) years of government service may opt to avail of the separation gratuity under Republic Act No. 6656, plus the appropriate incentive provided under paragraph (b) of this section. No affected employee who opted for retirement/separation shall receive less than an aggregate of Fifty thousand pesos (Php50,000.00) as his retirement/separation gratuity from both the national government and the GSIS. SEC. 87. Organization of the Authority. - Any officer/employee who availed the benefits of the foregoing provisions shall not qualify for reemployment to the Authority within seven (7) years from the date of retirement/resignation. SEC. 88. Saving Clause. - Unless otherwise provided in this Act, rights or privileges vested or acquired under the provisions of Republic Act No. 776, as amended, its rules and regulations prior to the effectivity of this Act shall remain in full force and effect. SEC. 89. Legal Counsel. - The Office of the Government Corporate Counsel shall act as the external legal counsel of the Authority before any court of law or any quasi-judicial bodies of the government without prejudice of any deputation or designation that it may issue in favor of the in-house counsel of the Authority. SEC. 90. Implementing Rules and Regulations. - The Authority shall adopt rules and regulations to implement the provisions of this Act within sixty (60) days from the date of its approval. SEC. 91. Congressional Oversight Committee. - A Congressional Oversight Committee, hereinafter referred to as the "Committee", is hereby constituted in accordance with the provisions of this Act. The Committee shall be composed of the Chairman of the Senate Committee on Public Services and Chairman of the House Committee on Transportation and four (4) additional members from each House to be designated by the Senate President and the Speaker of the House of Representatives, respectively. The Committee shall, among others, in aid of legislation: (a) Monitor and ensure the proper implementation of this Act; (b) Review the collection performance of the Authority; (c) Review the proper implementation of the programs of the Authority and the use of its collected fund. In furtherance of the hereinabove cited ohjectives, the Committee is empowered to require the Authority to submit all pertinent information including, but not limited to, its collection performance data and its annual audited financial statements certified by the Commission on Audit. The Congressional Oversight Committee shall be in existence for a period of five (5) years, and thereafter, its oversight functions shall be exercised by the Senate Committee on Public Services and the House Committee on Transportation acting separately. SEC. 92. Separability Clause. - If any part or provision of this Act shall be declared unconstitutional, the other parts or provisions hereof which are not affected thereby, shall continue in full force and effect. SEC. 93. Repealing Clause. - All laws, decrees, executive orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly, including provisions of any law, decrees, executive orders, rules and regulations or part thereof which provides exemptions to any

air carrier, organization or entity from payment of any Civil Aviation Authority of the Philippines imposed fees and charges, relating to, but not limited to, navigation, communication, concession, license and permit. Notwithstanding the foregoing, nothing in this Act shall diminish the powers and functions of the Manila International Airport Authority created by virtue of Executive Order No. 903, series of 1983; Subic Bay Metropolitan Authority as regards the Subic Bay International Airport created by virtue of Republic Act No. 7227; Clark International Airport Corporation as regards the Diosdado Macapagal International Airport Authority, created by virtue of Executive Order No. 193, series of 2003; and the Mactan-Cebu International Airport Authority created by virtue of Republic Act No. 6958. SEC. 94. Effectivity. - This Act shall take effect fifteen (15) days after its complete publication in at least newspapers of general circulation. Approved, (Sgd.) MANNY VILLAR President of the Senate (Sgd.) PROSPERO C. NOGRALES Speaker of the House of Representatives This Act which is originated in the House of Representatives was finally passed by the House of Representative and the Senate on February 5, 2008 and February 4, 2008 respectively. (Sgd.) EMMA LIRIO-REYES Secretary of Senate (Sgd.) ROBERTO P. NAZARENO Secretary General House of Represenatives Approved: March 04, 2008 (Sgd.) GLORIA MACAPAGAL-ARROYO President of the Philippines

RA 776 Section 5. Composition of the Board. The Civil Aeronautics shall be composed of the Secretary of Commerce and Industry as Chairman, the Civil Aeronautics Administrator, the Commanding Officer of the Philippine Air Force and two other members to be appointed by the President of the Philippines. They shall hold office at the pleasure of the President and shall be entitled to per diem for each meeting actually attended by them in such amount as may be fixed by the President. In case of absence or incapacity of the Secretary of Commerce and Industry, the Civil Aeronautics Administrator shall act as Chairman. In case the Under-Secretary of Commerce and Industry and/or Deputy Administrator act in the stead of the Secretary of Commerce and Industry and/or Administrator respectively, they shall hold office and be entitled to per diem for each meeting actually attended by them in the Civil Aeronautics Board. No member of the Board shall have any pecuniary interest in, or own any stock or bond of, any civil aeronautics enterprise. Section 10. Powers and duties of the Board. A. Except as otherwise provided herein, the Board shall have the power to regulate the economic aspect of air transportation, and shall have the general supervision and regulation of, and jurisdiction and control over, air carriers as well as their property, property rights, equipment, facilities, and franchise, in so far as may be necessary for the purpose of carrying out the provisions of this Act. C. The Board shall have the following specific powers and duties: 1. In accordance with the provisions of Chapter IV of this Act, to issue, deny, amend, revise, alter, modify, cancel, suspend or revoke, in whole or in part, upon petition or complaint, or upon its own initiative, any temporary operating permit or Certificate of Public Convenience and Necessity: Provided, however, That in the case of foreign air carriers, the permit shall be issued with the approval of the President of the Republic of the Philippines. 2. To fix and determine reasonable individual, joint or special rates, charges or fares which an air carrier may demand, collect or receive for any service in connection with air commerce. The Board may adopt any original amended, or new individual, joint or special rates, charges or fares proposed by an air carrier if the proposed individual, joint, or special rates, charges or fares are not unduly preferential or unduly discriminatory or unreasonable. The burden of proof to show that the proposed individual, joint or special rates, charges or fares are just and reasonable shall be upon the air carrier proposing the same. In fixing rates, charges, or fares under the provisions of this Act, the Board shall take into consideration, among other factors: a. The effect of such rates upon the movement of traffic; b. The need in the public interest of adequate and efficient transportation of persons and property by air carriers at the lowest cost consistent with the furnishing of such service; c. Such standards respecting the character and quality of service to be rendered by air carriers as may be prescribed by or pursuant to law; d. The inherent advantages of transportation by aircraft; and e. The need of each air carrier for revenue sufficient to enable such air carrier, under honest, economical, and efficient management, to provide adequate and efficient air carrier service. 3. To authorize charters whether domestic or international and special air services or flight heretofore

exercised by the Department of Commerce and Industry under Commonwealth Act Numbered Ninety-seven under such terms and conditions as in its judgment the public interest requires. 4. To approve or disapprove increase of capital, sale of equipment of an air carrier engaged in air commerce, consolidation, merger, purchase, lease, operating contract or acquisition and control between domestic air carriers; or between domestic air carriers and foreign air carriers; between domestic air carriers and any person engaged in any phase of aeronautics. 5. To inquire into the management of the business of any air carrier and, to the extent reasonably necessary for such inquiry, to obtain from such carrier, and from any person controlling, or controlled by, or under common control with, such air carrier, full and complete reports and other information. Such reports shall be under oath whenever the Board so requires. 6. To require annual, monthly, periodical, and special reports from any air carrier; to prescribe the manner and form in which such reports shall be made; and to require from any air carrier specific answers to all questions upon which the Board may deem information to be necessary. Such reports shall be under oath whenever the Board so Requires. The Board may also require any air carrier tofilewith it any contract, agreement, understanding or arrangement, or a true copy thereof, between such air carrier and any other carrier or person, in relation to any traffic affected by the provisions of this Act. 7. To prescribed the forms of any and all accounts, records, and memoranda of the movement of traffic, as well as of the receipt and expenditures of money, and the length of time such accounts, records and memoranda shall be preserved: Provided, That any air carrier may keep additional accounts, records or memoranda if they do not impair the integrity of the accounts, records, or memoranda prescribed or approved by the Board and do not constitute an undue financial burden on such air carrier. 8. To require each officer and director of any air carrier to transmit a report describing the shares of stock or other interest held by such air carrier with any persons engaged in any phase of aeronautics, and the holding of the stock in, and control of, other persons engaged in any phase of aeronautics.

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 2. Per most heavily loaded axle three thousand six hundred kilograms; eight thousand kilograms;

3. Per most heavily loaded axle group fourteen thousand five hundred kilograms. (the two 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 righthand 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.

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 welllighted 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.

ARTICLE IV Accessories of Motor Vehicles

(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: MAXIMUM ALLOWABLE SPEEDS 1. On open country roads, with no "blinds corners" not closely bordered by habitations. Passengers Cars and Motorcycle 80 km. per hour Motor trucks and buses 50 km. per hour 30 km. per hour

2. On "through streets" or boulevards, clear of 40 km. per hour traffic, with no " blind corners," when so designated. 3. On city and municipal streets, with light traffic, when not designated "through streets". 4. Through crowded streets, approaching intersections at "blind corners," passing school zones, passing other vehicles which are stationery, or for similar dangerous circumstances. 30 km. per hour

30 km. per hour

20 km. per hour

20 km. per hour

(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."

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:

ARTICLE III Right of Way and Signals

(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

EXECUTIVE ORDER NO. 202 June 19, 1987 CREATING THE LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD WHEREAS, the Department of Transportation and Communications is vested with, among others, quasijudicial powers and functions pursuant to Executive Order No. 125, as amended; NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order: Sec. 1. Creation of the Land Transportation Franchising and Regulatory Board. There is hereby created in the Department of Transportation and Communications, the Land Transportation Franchising and Regulatory Board hereinafter referred to as the "Board". Sec. 2. Composition of the Board. The Board shall be composed of a Chairman and two (2) members with the same rank, salary and privileges of an Assistant Secretary, all of whom shall be appointed by the President of the Philippines upon recommendation of the Secretary of Transportation and Communications. One (1) member of the Board shall be a member of the Bar and shall have engaged in the practice of law in the Philippines for at least five (5) years, another a holder of a degree in civil engineering, and the other a holder of a degree in economics, finance or management both with the same number of years of experience and practice. Sec. 3. Executive Director and Support Staff of the Board. The Board shall have an Executive Director who shall also appointed by the President of the Philippines upon the recommendation of the Secretary of Transportation and Communications. He shall have the rank, salary and privileges of a Department Service Chief. He shall assist the Board in the performance of its powers and functions. The Board shall be supported by the Technical Evaluation Division, Legal Division, Management Information Division, Administrative Division and Finance Division. Sec. 4. Supervision and Control Over the Board. The Secretary of Transportation and Communications, through his duly designated Undersecretary, shall exercise administrative supervision and control over the Land Transportation Franchising and Regulatory Board. Sec. 5. Powers and Functions of the Land Transportation Franchising and Regulatory Board. The Board shall have the following powers and functions: a. To prescribe and regulate routes of service, economically viable capacities and zones or areas of operation of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans and programs approved by the Department of Transportation and Communications; b. To issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefor; c. To determine, prescribe and approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles; d. To issue preliminary or permanent injunction, whether prohibitory or mandatory, in all cases in which it has jurisdiction, and in which cases the pertinent provisions of the Rules of Court shall apply; e. To punish for contempt of the Board, both direct and indirect, in accordance with the pertinent provisions of, and the penalties prescribed by, the Rules of Court; f. To issue subpoena and subpoena duces tecum and summon witnesses to appear in any proceedings of the Board, to administer oaths and affirmations; g. To conduct investigations and hearings of complaints for violation of the public service laws on land transportation and of the Board's rules and regulations, orders, decisions and/or rulings and to impose fines and/or penalties for such violations; h. To review motu proprio the decisions/actions of the Regional Franchising and Regulatory Office herein created; i. To promulgate rules and regulations governing proceedings before the Board and the Regional Franchising and Regulatory Office: Provided, That except with respect to paragraphs d, e, f and g hereof, the rules of procedure and evidence prevailing in the courts of laws should not be controlling and it is the spirit and intention of said rules that the Board and the Regional Franchising and Regulatory Offices shall use every and all reasonable means to ascertain facts in its case speedily and objectively and without regard to technicalities of law and procedures, all in the interest of due process;

j. To fix, impose and collect, and periodically review and adjust, reasonable fees and other related charges for services rendered; k. To formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standards of measurements and/or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their utilities and in their stations such devices, equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations; l. To coordinate and cooperate with other government agencies and entities concerned with any aspect involving public land transportation services with the end in view of effecting continuing improvement of such services; and m. To perform such other functions and duties as may be provided by law, or as may be necessary, or proper or incidental to the purposes and objectives of this Executive Order. Sec. 6. Decision of the Board; Appeals therefrom and/or Review thereof. The Board, in the exercise of its powers and functions, shall sit and render its decisions en banc. Every such decision, order, or resolution of the Board must bear the concurrence and signature of at least two (2) members thereof. The decision, order or resolution of the Board shall be appealable to the Secretary within thirty (30) days from receipt of the decision: Provided, That the Secretary may motu proprio review any decision or action of the Board before the same becomes final. Sec. 7. Creation of Regional Franchising and Regulatory Offices. There shall be a Regional Franchising and Regulatory Office in each of the administrative regions of the country which shall be headed by a Board Regional Manager having the rank, salary and privileges of a Department Assistant Regional Director. The Regional Franchising and Regulatory Offices shall hear and decide uncontested applications/petitions for routes, within their respective administrative regions: Provided, That applications/petitions for routes extending their respective territorial jurisdictions shall be heard and decided by the Board. Sec. 8. Appeals. The decisions, orders or resolutions of the Regional Franchising and Regulatory Offices shall be appealable to the Board within thirty (30) days from receipt of the decision. Sec. 9. Appropriations. Funds needed to carry out the provisions of this Executive Order shall be taken from the funds available in the Department of Transportation and Communications. Thereafter, the approved budget of the Board shall be included in the General Appropriations Act. Sec. 10. Effectivity. This Executive Order shall take effect immediately. Done in the City of Manila, this 19th day of June, in the year of Our Lord, nineteen hundred and eighty-seven.

EXECUTIVE ORDER NO. 292 INSTITUTING THE ADMINISTRATIVE CODE OF 1987 Administrative Code of 1987 TOC Book IV The Executive Branch Title XV TRANSPORTATION AND COMMUNICATIONS Section 9. Line Offices. The Department shall have the following line offices: (1) The Office of the Assistant Secretary for Land Transportation; (2) The Office of the Assistant Secretary for Postal Services; (3) The Office of the Assistant Secretary for Telecommunications; and (4) The Office of the Assistant Secretary for Air Transportation. The line offices shall each have an Executive Director who shall assist the respective Assistant Secretary in the implementation and enforcement of the policies, programs and projects, and the pertinent laws on their respective areas of responsibilities. CHAPTER 5 REGULATORY BOARD Section 15. Land Transportation Franchising and Regulatory Board. The quasi-judicial powers and functions with respect to land transportation shall be exercised through the Land Transportation and Regulatory Board, hereinafter referred to as the Board. Section 16. Composition of the Board. The Board shall be composed of a Chairman and two (2) members with the rank, salary and privileges of an Assistant Secretary, all of whom shall be appointed by the President of the Philippines upon recommendation of the Secretary of Transportation and Communications. One (1) member of the Board shall be a member of the Bar and shall have been engaged in the practice of law in the Philippines for at least five (5) years, another a holder of a degree in civil engineering, and the other a holder of a degree in economics, finance or management both with the same number of years of experience and practice. Section 17. Executive Director and Support Staff of the Board. The Board shall have an Executive Director who shall also be appointed by the President of the Philippines upon the recommendation of the Secretary of Transportation and Communications. He shall have the rank, salary and privileges of a Department Service Chief. He shall assist the Board in the performance of its powers and functions. The Board shall be supported by the Technical Evaluation Division, Legal Division, Management Information Division, Administrative Division and Finance Division. Section 18. Supervision and Control Over the Board. The Secretary of Transportation and Communications, through his duly designated Undersecretary, shall exercise administrative supervision and control over the Land Transportation Franchising and Regulatory Board. Section 19. Powers and Functions of the Land Transportation Franchising and Regulatory Board. The Board shall: (1) Prescribe and regulate routes, economically viable capacities, and zones or areas of operation of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans and programs approved by the Department of Transportation and Communications; (2) Issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and prescribe the appropriate terms and conditions therefor; (3) Determine, prescribe, approve and periodically review and adjust reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles; (4) Issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction and in which cases the pertinent provisions of the Rules of Court shall apply; (5) Punish for contempt of the Board, both direct and indirect, in accordance with the pertinent provisions of, and the penalties prescribed by, the Rules of Court; (6) Issue subpoena and subpoena duces tecum and to summon witnesses to appear in any proceedings of the Board, to administer oaths and affirmations, and, in appropriate cases, to order the search and seizure of all vehicles and documents, upon probable cause and as may be necessary for the proper disposition of the cases before it;

(7) Conduct investigations and hearings of complaints for violation of the public service laws on land transportation and of the Boards rules and regulations, orders, decisions or rulings and to impose fines or penalties for such violations; (8) Review motu propio the decisions/actions of the Regional Franchising and Regulatory Offices; (9) Promulgate rules and regulations governing proceedings before the Board and the Regional Franchising and Regulatory Office. However, except with respect to paragraphs 4, 5, 6, and 7 hereof, the rules of procedure and evidence prevailing in the courts of law should not be controlling but rather the spirit and intention of said rules. The Board and the Regional Franchising and Regulatory Offices shall use every and all reasonable means to ascertain facts in each case speedily and objectively and without regard to technicalities of law and procedures, all in the interest of due process; (10) Fix, impose and collect, and periodically review and adjust, reasonable fees and other related charges for services rendered; (11) Formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standards of measurements or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their utilities and in their stations such devices, equipment, facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operation; (12) Coordinate and cooperate with other government agencies and entities concerned with any aspect involving public land transportation services with the end in view of effecting continuing improvement of such services; and (13) Perform such other functions and duties as may be provided by law, or as may be necessary, or proper or incidental to the purposes and objectives of the Department; Section 20. Decisions of the Board; Appeals therefrom or Review Thereof. The Board, in the exercise of its powers and functions, shall sit and render its decision en banc. Every such decision, order, or resolution of the Board must bear the concurrence and signature of at least two (2) members thereof. The decision, order or resolution of the Board shall be appealable to the Secretary within thirty (30) days from receipt of the decision. However, the Secretary may motu propio review and decision or action of the Board before the same becomes final. Section 21. Regional Franchising and Regulatory Offices. There shall be a Regional Franchising and Regulatory Office in each of the administrative regions of the country which shall be headed by a Regional Director having the rank, salary and privileges of a Department Assistant Regional Director. The Regional Franchising and Regulatory Offices shall hear and decide uncontested applications/petitions for routes, within their respective administrative regions but that applications/petitions for routes extending beyond their respective territorial jurisdiction shall be heard and decided by the Board. Section 22. Appeals. The decisions, orders or resolutions of the Regional Franchising and Regulatory Offices shall be appealable to the Board within thirty (30) days from receipt of the decision.