What is the primary domestic legislation governing the aviation industry in your

jurisdiction?

The principal domestic legislation applicable to aviation finance and leasing

includes:

• the Republic Act 386, as amended (the Civil Code of the Philippines);

• the Republic Act 9497 (the Civil Aviation Authority Act); and

• the Republic Act 776, as amended (the Civil Aeronautics Board Law).

International law

What international aviation agreements has your jurisdiction concluded?

The Philippines is a party to the following conventions:

• the Convention on International Civil Aviation;

• the Convention on the International Recognition of Rights in Aircraft; and

the Convention for the Unification of Certain Rules relating to International

Carriage by Air.

Passenger protection

What rules and liabilities are air carriers subject to in respect of:

(a) Flight delays and cancellations?

Economic Regulation 7, issued by the Civil Aeronautics Board, provides for

passenger rights in cases of delay and cancellation, as well as for the filing of

relevant incident reports by the carrier.

In case of flights delayed for more than two hours, the air carrier must provide the

passengers with free meals, communication and first-aid medicines, if necessary.

If the flight is deferred until the next day, the air carrier must provide the

passengers with free meals, hotel accommodation and communication. If a

passenger opts not to fly the remaining sector of the flight (ie, a portion of an

itinerary or journey), the value of any fare (including surcharges) of the remaining

un-flown sector must be reimbursed to the passenger.

In case of flight cancellations attributable to the air carrier, the air carrier must

provide passengers with free meals, hotel accommodation, transportation from

the airport to the hotel, free communication and first-aid medicines, if necessary.

If a passenger opts not to fly on the ticket, the value of any fare, (including taxes

and surcharges) of the cancelled flight sector must be reimbursed to the passenger.

If all sections of the itinerary are cancelled, the carrier must reimburse the total

value of the fare, taxes and surcharges.

(b) Oversold flights?

Economic Regulation 9, issued by the Civil Aeronautics Board, on the bill of rights
for air passengers and carrier obligations provides for passenger rights to

compensation and amenities in case of overbooked flights.

While it is accepted practice for an air carrier to overbook flights, any expense,

consequence or inconvenience caused to affected passengers must be borne by the

air carrier. Among other things, the air carrier must provide the interested

passengers or volunteers who are willing to give up their seats a list of amenities

and offers from which they can choose. Such a list should always include the

option to be given priority booking on the next flight with available space or to be

endorsed to another carrier on payment of any fare difference (provided that space

and other circumstances permit such accommodation) at the passenger’s

discretion, as well as a cash incentive. In case the number of volunteers is too few

to resolve the overbooking, the air carrier should increase the compensation

package by degrees or by adding more amenities and services until the required

number of volunteers is met.

(c) Denied boarding?

Economic Regulation 7, issued by the Civil Aeronautics Board, provides for:

• a denied boarding procedure;

• compensation; and

• exceptions to liability for denied boarding compensation.

In general, air carriers must pay compensation at specified rates to passengers

which:

• hold confirmed reserved space;

• have presented themselves for carriage at the proper time and place and have

fully complied with the carrier’s check-in and reconfirmation procedures;

• are acceptable for carriage under the carrier’s tariff; and

• have been denied boarding due to lack of space.

If accepted by the passenger, such compensation should constitute liquidated

damages for all damages incurred by the passenger as a result of the carrier’s

failure to provide the confirmed space. The passenger must, in addition to the

damages, have priority booking for the next available flight using the same ticket

for which he or she was denied boarding.

(d) Access for disabled passengers?

Economic Regulation 9, issued by the Civil Aeronautics Board, mandates air

carriers to designate at least one check-in counter that will prioritise persons with

disabilities, senior citizens and persons requiring special assistance or handling. If

this is not practicable, the air carrier must instead provide for priority handling

and processing of such passengers. The air carrier must likewise coordinate with

the appropriate authorities for the use of proper airport equipment, entryways and

aerobridges to facilitate transactions, movement, boarding and disembarkation of

persons with disabilities, senior citizens and persons requiring special equipment
at the airport.

(e) Lost, damaged or destroyed luggage?

Economic Regulation 9 issued by the Civil Aeronautics Board on the bill of rights

for air passengers and carrier obligations provides the right of passengers to

compensation for delayed, lost and damaged baggage.

For international flights, the relevant convention will apply. For domestic flights,

the passenger (on presentation of proof) will be compensated up to the equivalent

of 50% of the amount stated in the relevant convention (for international flights)

in its peso equivalent. For compensation purposes, a passenger’s baggage is

presumed to have been permanently and totally lost if within seven days from the

date on which the passenger or consignee should have received the baggage, it is

not delivered to said passenger or consignee.

(f) Retention and protection of passenger data?

Passenger data is covered by the Republic Act 10173 (the Data Privacy Act) which

seeks to protect the confidentiality of personal information.

‘Personal information’ is defined under the Data Privacy Act as any information,

whether recorded in material form or not, from which the identity of an individual

is apparent or can be reasonably and directly ascertained by the entity holding the

information, or when put together with other information would directly and
certainly identify an individual.

The act imposes certain obligations on personal information controllers and those

that process personal information. Personal information controllers are persons

that control the collection, holding, processing or use of personal information,

while processors are those to whom processing has been outsourced. Under the

law, collection and processing must be conducted in accordance with general

guidelines based on the principles of transparency, legitimate purpose and

proportionality. Processing is permitted only if one of a number of certain specific

conditions is present, which includes:

• consent;

• necessity under the contract with the data subject; and

• necessity for the protection of the data subject’s interests.

The law also provides for penal and monetary penalties for violations therein. The

act has extraterritorial application and applies even to acts or practices executed

by a non-resident outside the Philippines, provided that:

• the processing relates to personal information about a Philippine citizen or

resident;

• the entity has a link with the Philippines and is processing personal information

in the Philippines or, if the processing is done outside the Philippines, that

it is about Philippine citizens or residents; and

• the entity has other links to the Philippines (eg, when the entity conducts

business in the Philippines or the information was collected or held by an

entity in the Philippines).

Complaints handling

Do any special rules apply to consumer complaints handling in the aviation

industry?

Economic Regulation 9 on the bill of rights for air passengers and carrier

obligations provides that air carriers must provide customer service

representatives who can address common problems on the spot. It also plans

complaints and assistance desks in all airports to be established by the board.

These desks are to be manned by the board or deputised personnel, who will assist

passengers whose rights to the service have not been fully satisfied by the air

carrier. The personnel will also assist in the filing and prosecution of the

complaints of passengers whose rights have been violated and who wish to pursue

the concerned air carrier.

Dispute resolution

Disputes

What aviation-related disputes typically arise in your jurisdiction and how are

they usually resolved?

Typical aviation-related disputes in the Philippines involve consumer protection

and liability. Most cases are related to cancelled or delayed flights, lost or damaged

cargo and aircraft accidents. The majority of these cases are settled with the

complainant, while a few are resolved by the courts.

Under the Warsaw Convention for the Unification of Certain Rules Relating to

International Carriage by Air (which the Philippines has ratified), an action for

damages must be brought, at the plaintiff’s discretion, in the territory of one of the

contracting parties to such convention, either:

• before the court having jurisdiction where the carrier is ordinarily resident, has

his or her principal place of business or has an establishment by which the

contract has been made; or

before the court having jurisdiction at the place of destination.

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

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 provision of paragraph (b).
REPUBLIC ACT NO. 776
(As amended by PD No. 1462 & EO No. 217)

AN ACT, TO REORGANIZE THE CIVIL AERONAUTICS BOARD AND THE

CIVIL AERONAUTICS ADMINISTRATION TO PROVIDE FOR THE
REGULATION OF CIVIL AERONAUTICS IN THE PHILIPPINES AND
AUTHORIZING THE APRO- PRIATION OF FUNDS THEREFOR.

CHAPTER VII - Violation and Penalties


SECTION 42. Specific Penalties. - (A) Any person engaging in air commerce
without a permit issued by the Board as provided in this Act shall be punished by
a fine not exceeding five thousand pesos or by imprisonment for not more than
one year, or both, in the discretion of the court: Provided, That a person engaging
in air commerce on the date of the approval of this Act may continue so to engage
until such time as the Board shall pass upon an application for a permit for such
service, which application must be filed, as provided in Chapter IV of this Act
within one hundred and twenty days after the approval of this Act.

(B) Any air carrier or person who violates or fails to comply with any provision of
this Act of the terms, conditions, or limitations in a permit or amendment thereto
or any orders, rules, or regulations, issued by the Board, shall be subject to a fine
not ex- ceeding five thousand pesos for each violation. In addition thereto, a fine
not exceeding two hundred pesos per day for every day during which such default
or violation contin- ues shall likewise be imposed. The Board is hereby empowered
to impose such fine, after due notice and hearing.
The fines so imposed shall be paid to the government of the Philippines through
the Board, and failure to pay fine in any case within the time specified in the order
or decision of the Board shall be a ground for the suspension of the permit of such
air carrier until payment shall be made. Payment may also be enforced by
appropriate action brought to a court of competent jurisdiction.

The other fines as penalty for violation prescribed elsewhere under this Section are
amended and/or modified accordingly.

(C) Any air carrier violating any order, rule or regulation issued by the Board shall
be punished by a fine not exceeding one thousand pesos for each offense:

• (1) Discounts or rebates on authorized rates, fares and charges; 


• (2) Adopting rates, fares and charges which have been found or determine by

the Board to be unjust, unreasonable, unduly preferential or unjustly

discriminatory in a final order; or which have not been previously approved and
authorized by the Board.

(3) Issuing any free pass, free tickets or free or reduced rates, fares or charges for
passengers except to the following persons: (a) officers agents, employees of the
air carrier and their immediate families; (b) witnesses and attorneys attending any
legal investigation into accidents or any legal investigation in which such air
carrier is interest- ed; (c) persons injured in aircraft accidents and physicians and
nurses attending such per- sons; (d) members of the Board; (e) officers and
personnel of the Civil Aeronautics Administration when traveling on official
business upon the exhibition of their creden- tials; (f) members of Congress of the
Philippines; and (g) such other persons dully ap- proved by the Board.

(E) Any person who operates any civil aircraft in violation of any rule, reg- ulation
or order issued by the Administrator relating to aeronautical safety standards or
practices or procedures shall be punished by a fine not exceeding five thousand
pesos or by imprisonment for not more than one year, or both, in the discretion of
the Court.

(F) Any person who, without the previous approval of the Civil Aeronautics
Board, effects any consolidation, merger, purchase, lease, operating contract or ac-
quisition and control between domestic air carriers, or between domestic carrier
and any

19

person engaged in any phase of aeronautics shall be punished by a fine of five

thousand pesos or by imprisonment for not more than one year, or both, in the
discretion of the Court.

(G) No person shall use an unregistered aircraft eligible for registration under the
provisions of this Act, any person who operates such aircraft shall be punished by
a fine not exceeding five thousand pesos or by imprisonment for not more than six
months, or both, in the discretion of the Court.

(H) Any person serving in any capacity as an airman in connection with any civil
aircraft without an airman certificate, or in violation of the terms of any such
certificate or in excess of the rating of such certificate shall be punished by a fine
not exceeding five thousand pesos. The repetition of this offense shall be sufficient
cause for the revocation of the airman's certificate.
(I) Any person who employs in connection with any civil aircraft used in air
commerce and 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 not
exceeding five thousand pesos. A repetition of the offense shall be sufficient cause
for revocation of the permit.

(J) Any person who operates any civil aircraft for which there is not currently in
effect an airworthiness certificate or in violation of the terms of such certificate
shall be punished by a fine not exceeding five thousand pesos. The repetition of
this offense shall be sufficient cause for the revocation of the permit.

(K) Any person who without previous approval and authorization of the Board,
shall adopt, establish, maintain, change, revise, abandon, alter, amend, defer,
reject, discontinue, suspend, or restore, any classification, rule or regulation or
practice affecting routes, itineraries, schedules, classifications, increase or decrease
of frequency of flights, in any manner whatsoever, shall be punished by a fine of
five thousand pe- sos. The repetition of such offense shall be sufficient cause for
revocation of the per- mit.

(L) No person shall interfere, obstruct, hinder, or delay the Civil Aeronautics
Board or any person duly delegated by the Board in the performance of its duties
in the public interest. A fine not exceeding five thousand pesos shall be imposed
upon anyone who:

(1) With intent to interfere with the performance of the duties of the Board or any
person duly delegated by the Board, shall knowingly or willfully alter, falsify,
muti- late any report, accounts, records, books, papers, contracts, agreements and
all other documents, or
(2) shall knowingly and willfully fair or refuse: (a) to make and/or submit the
books, contracts, tariffs, papers, agreements, reports and all other documents
required to be submitted by him for consideration before the Administrator or his
duly authorized representative or before the Board; or (b) to keep or preserve
accounts, records,

20

memoranda, books, reports, papers and all other documents required by the
Administrator or his duly authorized representative, or by the Civil Aeronautics
Board; or

(3) is guilty of misconduct in the presence of the Board or so near the same as to
obstruct or interrupt the hearing or session or any proceedings before the Board
and/or the Administrator or any representative duly authorized by them; or shall
conduct himself in a rude or disorderly manner before the Administrator or his
duly au- thorized representative or any member of the Board engaged in the
discharge of official duty; or shall orally or in writing disrespectfully offend or
insult any of the above named bodies or persons on the occasion of or in the
performance of their official duty or during any hearing session, or investigation
held by either the Board or Administrator or their duly designated representative;
or

(4) refuses to be sworn in as a witness or to answer
 as such when lawfully

required to do: Provided, that the Board or the Administrator or their duly
authorized representative shall, if necessary, be entitled to the assistance of the
municipal police for the execution of any order to compel a witness to be present
or to testify; or
(5) without lawful justification or excuse, hinders, obstruct, or delays the Civil
Aeronautics Board, the Administrator or their duly designated representative in
the inspection or examination of the books and/or accounts of an air carrier for
the purpose of ascertaining the correctness in any material particular of any report,
papers, documents submitted by such air carrier, or for any other purpose deemed
by the Board and/or the Civil Aeronautics Administration to be in accordance
with the public interest; or

(6) 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 obe-
dience to the subpoena or lawful requirements of the Civil Aeronautics Board or
the Civil Aeronautics Administration; or

(7) testifies falsely or makes false affidavits or both before the Board or Civil
Aeronautics Administration or any duly designated representative of either.

(M) No person shall interfere with air navigation. A fine not exceeding five
thousand pesos or imprisonment for not more than one year, or both, in the
discretion of the court, shall be imposed upon any person who:

(1) 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

(2) after due warning by the Administrator, continuous to maintain any

misleading light or signal; or

(3) knowingly removes, extinguishes, or interfere with the operation of any true
light or signal.

21

(N) Any person, who shall knowingly and willfully forge, counterfeit, alter, or
falsely make any certificate authorized to be issued under this Act or knowingly
use or attempt to use any fraudulent certificate shall be punished by a fine not
exceeding five thousand pesos or imprisonment for not more than one year, or
both in the discretion of the court.

(O) For the purpose of carrying out the provisions of this section, the manager, or
general manager or business manager, or person in charge of the business of the
firm or corporation committing an unlawful act shall be held personally liable.

(P) The Administrator may file the necessary complaints for the imposition of the
penalties provided by this Act.

SECTION 43. General Penalty. - Any violation of the provisions of this Act, or any
order, rules or regulation issued thereunder, or any term, condition or limitation
of any certificate or permit issued under this Act for which no penalty is expressly
provided shall be punished by a fine not exceeding five hundred pesos for each
violation.

SECTION 44. Compromise Regarding Penalty. - The Civil Aeronautics Board

may enter into compromise with respect to any penalty or fine imposed by virtue
of the provisions of this Act. Failure to comply with the order or decision of the
Board respecting such compromise shall deemed good and sufficient reason for
the suspension of the permit or any certificate until compliance is made.
Compliance may also be enforced by appropriate action brought in a court of
competent jurisdiction.