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PUBLIC

UTILITIES LAW or equipment, for public use: Provided, That


the Commission or Commissioner shall have no
Act 2307 jurisdiction over ice plants, cold storage plants, or
any other kind of public utilities operated by the
SEC. 14. The Board shall have general supervision and Federal Government exclusively for its own and not
regulation of, jurisdiction and control over, all public for public use: And provided, further, That the
utilities, and also over their property, property rights, Public Utility Commissioner shall not exercise any
equipment, facilities and franchises so far as may be control or supervision over the Manila Railroad so
necessary for the purpose of carrying out the provisions of long as the same shall be controlled by the
this Act. The term public utility is hereby defined to Government of the Philippine Islands, except with
include every individual, co-partnership, association, regard to its rates.
corporation or joint stock company, their lessees, trustees
or receivers appointed by any court whatsoever, that not or
hereafter may own, operate, manage or control within the CA 146
Philippine Islands any steam railroad, street railway,
traction railway, canal, express, subway, pipe line, gas, Section 13.
electric light, heat, power, water, oil, sewer, telephone, (a) The Commission shall have jurisdiction,
telegraph system, plant, or equipment for public use, under supervision, and control over all public services and their
privileges granted or hereafter to be granted by the franchises, equipment, and other properties, and in the
Government of the Philippine Islands or by any political exercise of its authority, it shall have the necessary powers
subdivision thereof. 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
Act 2694 regulated by the Commission in the same way as privately-
owned public services, but certificates of public
SEC. 9. Section fourteen of Act Numbered Twenty-three convenience or certificates of public convenience and
hundred and seven, as amended, is hereby further necessity shall not be required of such entities or
amended to read as follows: corporations: And provided, further, That it shall have no
authority to require steamboats, motor ships and
SEC. 14. The Public Utility Commission or steamship lines, whether privately-owned, or owned or
Commissioner shall have general supervision and operated by any Government controlled corporation or
regulation of, jurisdiction and control over, all instrumentality to obtain certificate of public convenience
public utilities, and also over their property, or to prescribe their definite routes or lines of service.
property rights, equipment, facilities and
franchises so far as may be necessary for the (b) The term "public service" includes every person
purpose of carrying out the provisions of this that now or hereafter may own, operate, manage, or
Act. The term public utility is hereby defined to control in the Philippines, for hire or compensation, with
include every individual, co-partnership, general or limited clientele, whether permanent, occasional
association, corporation or joint stock company, or accidental, and done for general business purposes, any
whether domestic or foreign, their lessees, common carrier, railroad, street railway, traction railway,
trustees or receivers appointed by any court sub-way motor vehicle, either for freight or passenger, or
whatsoever, or any municipality, province or other both with or without fixed route and whether may be its
department of the Government of the Philippine classification, freight or carrier service of any class, express
Islands, that now or hereafter may own, operate, service, steamboat or steamship line, pontines, ferries, and
manage or control within the Philippine Islands any water craft, engaged in the transportation of passengers or
common carrier, railroad, street railway, traction freight or both, shipyard, marine railways, marine repair
railway, steamboat or steamship line, small water shop, [warehouse] wharf or dock, ice plant, ice-
craft, such as bancas, virais, lorehas, and others, refrigeration plant, canal, irrigation system, gas, electric
engaged in the transportation of passengers and light, heat and power water supply and power, petroleum,
cargo, line of freight and passenger automobiles, sewerage system, wire or wireless communications system,
shipyard, marine railway, marine repair shop, ferry, wire or wireless broadcasting stations and other similar
freight or any other car service, public warehouse, public services: Provided, however, That a person engaged
public wharf or dock not under the jurisdiction of in agriculture, not otherwise a public service, who owns a
the Insular Collector of Customs, ice, refrigeration, motor vehicle and uses it personally and/or enters into a
cold storage, canal, irrigation, express, subway, special contract whereby said motor vehicle is offered for
telephone, wire or wireless telegraph system, plant hire or compensation to a third party or third parties
engaged in agriculture, not itself or themselves a public necessity of any express action on the part of the
service, for operation by the latter for a limited time and for Commission.
a specific purpose directly connected with the cultivation of
his or their farm, the transportation, processing, and In estimating the depreciation, the effect of the use
marketing of agricultural products of such third party or of the equipment, its actual condition, the age of the model,
third parties shall not be considered as operating a public or other circumstances affecting its value in the market shall
service for the purposes of this Act. be taken into consideration.

(c) The word "person" includes every individual, co- The foregoing is likewise applicable to any
partnership, joint-stock company or corporation, whether extension or amendment of certificates actually in force
domestic or foreign, their lessees, trustees, or receivers, as and to those which may hereafter be issued, to permit to
well as any municipality, province, city, government-owned modify itineraries and time schedules of public services, and
or controlled corporation, or agency of the Government of to authorizations to renew and increase equipment and
the Philippines, and whatever other persons or entities that properties.
may own or possess or operate public services. (As
amended by Com. Act 454 and RA No. 2677)
Section 16. Proceedings of the Commission, upon notice
and hearing. - The Commission shall have power, upon
Section 14. The following are exempted from the provisions proper notice and hearing in accordance with the rules and
of the preceding section: provisions of this Act, subject to the limitations and
(a) Warehouses; exceptions mentioned and saving provisions to the
(b) Vehicles drawn by animals and bancas moved contrary:
by oar or sail, and tugboats and lighters; (a) To issue certificates which shall be known as
(c) Airships within the Philippines except as regards certificates of public convenience, authorizing the
the fixing of their maximum rates on freight and operation of public service within the Philippines
passengers; whenever the Commission finds that the operation
(d) Radio companies except with respect to the of the public service proposed and the
fixing of rates; authorization to do business will promote the
(e) Public services owned or operated by any public interest in a proper and suitable manner.
instrumentality of the National Government or by Provided, That thereafter, certificates of public
any government-owned or controlled corporation, convenience and certificates of public convenience
except with respect to the fixing of rates. (As and necessity will be granted only to citizens of the
amended by Com. Act 454, RA No. 2031, and RA Philippines or of the United States or to
No. 2677 ) corporations, co-partnerships, associations or
joint-stock companies constituted and organized
under the laws of the Philippines; Provided, That
Section 15. With the exception of those enumerated in the sixty per centum of the stock or paid-up capital of
preceding section, no public service shall operate in the any such corporations, co-partnership, association
Philippines without possessing a valid and subsisting or joint-stock company must belong entirely to
certificate from the Public Service Commission known as citizens of the Philippines or of the United States:
"certificate of public convenience," or "certificate of public Provided, further, That no such certificates shall be
convenience and necessity," as the case may be, to the issued for a period of more than fifty years.
effect that the operation of said service and the
authorization to do business will promote the public (b) To approve, subject to constitutional limitations
interests in a proper and suitable manner. any franchise or privilege granted under the
provisions of Act No. Six Hundred and Sixty-seven,
The Commission may prescribe as a condition for as amended by Act No. One Thousand and twenty-
the issuance of the certificate provided in the preceding two, by any political subdivision of the Philippines
paragraph that the service can be acquired by the Republic when, in the judgment of the Commission, such
of the Philippines or any instrumentality thereof upon franchise or privilege will properly conserve the
payment of the cost price of its useful equipment, less public interests, and the Commission shall in so
reasonable depreciation; and likewise, that the certificate approving impose such conditions as to
shall be valid only for a definite period of time; and that the construction, equipment, maintenance, service, or
violation of any of these conditions shall produce the operation as the public interests and convenience
immediate cancellation of the certificate without the may reasonably require, and to issue certificates of
public convenience and necessity when such is warrants the original expenditure required in
required or provided by any law or franchise. making and operating such extension.

(c) To fix and determine individual or joint rates, (i) To direct any railroad, street railway or traction
tolls, charges, classifications, or schedules thereof, company to establish and maintain at any junction
as well as commutation, mileage, kilometrage, and or point of connection or intersection with any
other special rates which shall be imposed other line of said road or track, or with any other
observed and followed thereafter by any public line of any other railroad, street railway or traction
service: Provided, That the Commission may, in its to promote, such just and reasonable connection
discretion, approve rates proposed by public as shall be necessary to promote the convenience
services provisionally and without necessity of any of shippers of property, or of passengers, and in
hearing; but it shall call a hearing thereon within like manner direct any railroad, street railway, or
thirty days, thereafter, upon publication and notice traction company engaged in carrying
to the concerns operating in the territory affected: merchandise, to construct, maintain and operate,
Provided, further, That in case the public service upon reasonable terms, a switch connection with
equipment of an operator is used principally or any private sidetrack which may be constructed by
secondarily for the promotion of a private any shipper to connect with the railroad, street
business, the net profits of said private business railway or traction company line where, in the
shall be considered in relation with the public judgment of the Commission, such connection is
service of such operator for the purpose of fixing reasonable and practicable and can be out in with
the rates. safety and will furnish sufficient business to justify
the construction and maintenance of the same.
(d) To fix just and reasonable standards,
classifications, regulations, practices, (j) To authorize, in its discretion, any railroad, street
measurement, or service to be furnished, imposed, railway or traction company to lay its tracks across
observed, and followed thereafter by any public the tracks of any other railroad, street railway or
service. traction company or across any public highway.

(e) To ascertain and fix adequate and serviceable (k) To direct any railroad or street railway company
standards for the measurement of quantity, to install such safety devices or about such other
quality, pressure, initial voltage, or other condition reasonable measures as may in the judgment of
pertaining to the supply of the product or service the Commission be necessary for the protection of
rendered by any public service, and to prescribe the public are passing grade crossing of (1) public
reasonable regulations for the examination and highways and railroads, (2) public highways and
test of such product or service and for the streets railway, or (3) railways and street railways.
measurement thereof.
(l) To fix and determine proper and adequate rates
(f) To establish reasonable rules, regulations, of depreciation of the property of any public
instructions, specifications, and standards, to service which will be observed in a proper and
secure the accuracy of all meters and appliances adequate depreciation account to be carried for
for measurements. the protection of stockholders, bondholders or
creditors in accordance with such rules,
(g) To compel any public service to furnish safe, regulations, and form of account as the
adequate, and proper service as regards the Commission may prescribe. Said rates shall be
manner of furnishing the same as well as the sufficient to provide the amounts required over
maintenance of the necessary material and and above the expense of maintenance to keep
equipment. such property in a state of efficiency corresponding
to the progress of the industry. Each public service
(h) To require any public service to establish, shall conform its depreciation accounts to the rates
construct, maintain, and operate any reasonable so determined and fixed, and shall set aside the
extension of its existing facilities, where in the moneys so provided for out of its earnings and
judgment of said Commission, such extension is carry the same in a depreciation fund. The income
reasonable and practicable and will furnish from investments of money in such fund shall
sufficient business to justify the construction and likewise be carried in such fund. This fund shall not
maintenance of the same and when the financial be expended otherwise than for depreciation,
condition of the said public service reasonably
improvements, new construction, extensions or
conditions to the properly of such public service. (b) The term public service includes every person
that now or hereafter may own, operate, manage,
(m) To amend, modify or revoke at any time or control in the Philippines, for hire or
certificate issued under the provisions of this Act, compensation, with general or limited clientele,
whenever the facts and circumstances on the whether permanent, occasional or accidental, and
strength of which said certificate was issued have done for general business purposes, any common
been misrepresented or materially changed. carrier, railroad, street railway, traction railway,
sub-way, motor vehicle, either for freight or
(n) To suspend or revoke any certificate issued passenger, or both, with or without fixed route,
under the provisions of this Act whenever the and whatever may be its classification, freight or
holder thereof has violated or willfully and carrier service of any class, express service
contumaciously refused to comply with any order steamboat or steamship line, ponties, ferries, and
rule or regulation of the Commission or any small water craft, engaged in the transportation of
provision of this Act: Provided, That the passengers and freight, shipyard, marine railway,
Commission, for good cause, may prior to the marine repair shop, warehouse, wharf or dock, ice
hearing suspend for a period not to exceed thirty plant, ice-refrigeration plant, canal, irrigation
days any certificate or the exercise of any right or system, sewerage, gas, electric light, heat and
authority issued or granted under this Act by order power, water supply and power, petroleum,
of the Commission, whenever such step shall in the sewerage system, telephone, wire or wireless
judgment of the Commission be necessary to avoid telegraph system and broadcasting radio stations.
serious and irreparable damage or inconvenience
to the public or to private interests. (c) The word person includes every individual,
copartnership, joint-stock company or corporation,
(o) To fix, determine, and regulate, as the whether domestic or foreign, their lessees,
convenience of the state may require, a special trustees or receivers, as well as any municipality,
type for auto-busses, trucks, and motor trucks to province branch or agency of the Government of
be hereafter constructed, purchased, and operated the Philippines, and whatever other persons or
by operators after the approval of this Act; to fix entities that may own or possess or operate public
and determine a special registration fee for auto- services.
buses, trucks, and motor trucks so constructed,
purchased and operated: Provided, That said fees SEC. 14. The following are exempted from the
shall be smaller than more those charged for auto- provisions of the preceding section:
busses, trucks, and motor trucks of types not made
regulation under the subsection. (a) Ice and refrigeration plants and other public
services operated in the Philippines by the
Government of the United States for its exclusive
CA 454 use and not to serve to persons for hire or
compensation;
SECTION 1. Sections thirteen, fourteen, and fifteen
of Commonwealth Act Numbered One hundred and forty- (b) Municipal warehouses;
six, otherwise known as the Public Service Act, are hereby
amended to read as follows: (c) Vehicles drawn by animals and bancas moved
by oar and/or sail;
SEC. 13. (a) The Commission shall have
jurisdiction, supervision, and control over all public (d) Airships within the Philippines except as regard
services and their franchises, equipment, and other the fixing or their maximum rates on freight and
properties, and in the exercise of its authority, it passengers;
shall have the necessary powers and the aid of the
public force: Provided, That it shall have no (e) Radio companies except with respect to the
authority to require steamboats, motorships and fixing of rates;
steamship lines, whether privately owned, or
owned or operated by any Government controlled (f) Public services owned or operated by any
corporation or instrumentality, to obtain instrumentality of the National Government or by
certificates of public convenience or to prescribe any government-owned or controlled
their definite routes or lines of service; corporation.
competitive in both domestic and foreign markets.
SEC. 15. With the exception of those enumerated However, the State shall protect Filipino enterprises against
in the preceding section, no public service shall unfair foreign competition and trade practices.
operate in the Philippines without possessing a
valid and subsisting certificate from the Public In the pursuit of these goals, all sectors of the
Service Commission, known as certificate of economy and all region s of the country shall be given
convenience and public necessity, as the case may optimum opportunity to develop. Private enterprises,
be, to the effect that the operation of said service including corporations, cooperatives, and similar collective
and the authorization to do business will promote organizations, shall be encouraged to broaden the base of
the public interests in a proper and suitable their ownership.
manner. Section 2. All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of
The Commission may prescribe as a condition for potential energy, fisheries, forests or timber, wildlife, flora
the issuance of the certificate provided in the and fauna, and other natural resources are owned by the
preceding paragraph that the service can be State. With the exception of agricultural lands, all other
acquired by the Commonwealth of the Philippines natural resources shall not be alienated. The exploration,
or by any instrumentality thereof upon payment of development, and utilization of natural resources shall be
the cost price of its useful equipment, less under the full control and supervision of the State. The State
reasonable depreciation; and likewise, that the may directly undertake such activities, or it may enter into
certificate shall be valid only for a definite period of co-production, joint venture, or production-sharing
time; and that the violation of these conditions agreements with Filipino citizens, or corporations or
shall produce the immediate cancellation of the associations at least 60 per centum of whose capital is
certificate without the necessity of any express owned by such citizens. Such agreements may be for a
action on the part of the Commission. period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and
In estimating the depreciation, the effect of the conditions as may provided by law. In cases of water rights
use of the equipment, its actual condition, the age for irrigation, water supply, fisheries, or industrial uses
of the model, or other circumstances affecting its other than the development of waterpower, beneficial use
value in the market shall be taken into may be the measure and limit of the grant.
consideration.
The State shall protect the nations marine wealth
The foregoing is likewise applicable to any in its archipelagic waters, territorial sea, and exclusive
extension or amendment of certificates actually in economic zone, and reserve its use and enjoyment
force and to those which may hereafter be issued, exclusively to Filipino citizens.
to permits to modify itineraries and time schedules The Congress may, by law, allow small-scale utilization of
of public services and to authorizations to renew natural resources by Filipino citizens, as well as cooperative
and increase equipment and properties. fish farming, with priority to subsistence fishermen and fish
workers in rivers, lakes, bays, and lagoons.

The President may enter into agreements with
foreign-owned corporations involving either technical or
CONSTI financial assistance for large-scale exploration,
ARTICLE XII development, and utilization of minerals, petroleum, and
NATIONAL ECONOMY AND PATRIMONY other mineral oils according to the general terms and
conditions provided by law, based on real contributions to
Section 1. The goals of the national economy are a more the economic growth and general welfare of the country. In
equitable distribution of opportunities, income, and wealth; such agreements, the State shall promote the development
a sustained increase in the amount of goods and services and use of local scientific and technical resources.
produced by the nation for the benefit of the people; and
an expanding productivity as the key to raising the quality The President shall notify the Congress of every
of life for all, especially the underprivileged. contract entered into in accordance with this provision,
within thirty days from its execution.
The State shall promote industrialization and full
employment based on sound agricultural development and Section 11. No franchise, certificate, or any other form of
agrarian reform, through industries that make full of authorization for the operation of a public utility shall be
efficient use of human and natural resources, and which are 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 Section 16. The Congress shall not, except by general law,
owned by such citizens; nor shall such franchise, certificate, provide for the formation, organization, or regulation of
or authorization be exclusive in character or for a longer private corporations. Government-owned or controlled
period than fifty years. Neither shall any such franchise or corporations may be created or established by special
right be granted except under the condition that it shall be charters in the interest of the common good and subject to
subject to amendment, alteration, or repeal by the the test of economic viability.
Congress when the common good so requires. The State
shall encourage equity participation in public utilities by the Section 17. In times of national emergency, when the public
general public. The participation of foreign investors in the interest so requires, the State may, during the emergency
governing body of any public utility enterprise shall be and under reasonable terms prescribed by it, temporarily
limited to their proportionate share in its capital, and all the take over or direct the operation of any privately-owned
executive and managing officers of such corporation or public utility or business affected with public interest.
association must be citizens of the Philippines.
Section 18. The State may, in the interest of national
Section 18. The State may, in the interest of national welfare or defense, establish and operate vital industries
welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public
and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be
ownership utilities and other private enterprises to be operated by the Government.
operated by the Government.
Section 19. The State shall regulate or prohibit monopolies
Section 10. The Congress shall, upon recommendation of when the public interest so requires. No combinations in
the economic and planning agency, when the national restraint of trade or unfair competition shall be allowed.
interest dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of
whose capital is owned by such citizens, or such higher ARTICLE II
percentage as Congress may prescribe, certain areas of Section 1. The Philippines is a democratic and republican
investments. The Congress shall enact measures that will State. Sovereignty resides in the people and all government
encourage the formation and operation of enterprises authority emanates from them.
whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions
covering the national economy and patrimony, the State
shall give preference to qualified Filipinos.

The State shall regulate and exercise authority over
foreign investments within its national jurisdiction and in
accordance with its national goals and priorities.

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.