THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES –

ARTICLE XII ARTICLE XII NATIONAL ECONOMY AND PATRIMONY

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.

Commonwealth Act No. 146, “The Public Service Law of 1936, as amended by
R.A. No. 2677;

CHAPTER II
JURISDICTION, POWERS AND DUTIES OF THE COMMISSION

Section 13. (a) The Commission shall have jurisdiction, supervision, and control over all
public services and their franchises, equipment, and other properties, and in the
exercise of its authority, it shall have the necessary powers and the aid of the public
force: Provided, That public services owned or operated by government entities or
government-owned or controlled corporations shall be regulated by the Commission in
the same way as privately-owned public services, but certificates of public convenience
or certificates of public convenience and necessity shall not be required of such entities
or corporations: And provided, further, That it shall have no authority to require
steamboats, motor ships and steamship lines, whether privately-owned, or owned or
operated by any Government controlled corporation or instrumentality to obtain
certificate of public convenience or to prescribe their definite routes or lines of service.

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 (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)

EXECUTIVE ORDER NO. 125

REORGANIZING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS

DEFINING ITS POWERS AND FUNCTIONS AND FOR OTHER PURPOSE

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;

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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.

EXECUTIVE ORDER NO. 125-A

AMENDING EXECUTIVE ORDER NO. 125, ENTITLED "REORGANIZING THE
MINISTRY OF TRANSPORTATION AND COMMUNICATIONS. DEFINING ITS
POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES."

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

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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;

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 (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

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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

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 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:

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"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;

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 (l) Perform such other functions as may now or hereafter be provided by
law."

REPUBLIC ACT NO. 776

REPUBLIC ACT NO. 776 - 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 APPROPRIATION OF FUNDS THEREFOR

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 ofr transportation, and
shall have the general supervision and regulation of, and jurisdiction and control over,r
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.

(B) The Board may perform such acts, conduct such investigations, issue and amend
such orders, and make and amend such general or special rules, and regulations, and
procedures as it shall deem necessary to carry 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 foreignr
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 anr carrier may demand, collect or receive for any service in connection withr
commerce. The Board may adopt any original, amended, or new individual, joint or
special rates, charges or fares proposed by anr 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 are reasonable shall be upon ther 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;

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(b) The need in the public interest of adequate and efficient transportation of persons
and property byr 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 byr
carriers as may be prescribed by or pursuant to law;

(d) The inherent advantages or transportation byrcraft; and

(e) The need of eachr carrier for revenue sufficient to enable suchr carrier, under
honest, economical, and efficient management, to provide adequate and efficientr
carrier service.

(3) To authorize charters whether domestic or international and specialr 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 anr carrier

engaged inr commerce, consolidation, merger, purchase, lease, operating contract or
acquisition and control between domesticr carriers; or between domesticr carriers and
foreignr carriers; or between domesticr carriers and any person engaged in any phase
of aeronautics.

(5) To inquire into the management of the business of anyr 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, suchr 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 anyr carrier; to
prescribe the manner and form in which such reports shall be made; and to require from
anyr 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 anyr carrier to file with it any contract, agreement,
understanding or arrangement, or a true copy thereof between suchr carrier and any
other carrier or person, in relation to any traffic affected by the provisions of this Act.

(7) To prescribe 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 anyr
carrier may keep additional accounts, records and memoranda if they do not impair the

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integrity of the accounts, records, or memoranda prescribed or approved by the Board
and do not constitute an undue financial burden on suchr carrier.

(8) To require each officer and director of anyr carrier to transmit a report describing the
shares of stock or other interest held by suchr 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.

(D) The Board may investigate, upon complaint or upon its own initiative, whether any
individual orr carrier, domestic or foreign, is violating any provision of this Act, or the
rules and regulations issued thereunder, and shall take such action, consistent with the
provisions of this Act, as may be necessary to prevent further violation of such
provision, or rules and regulations so issued.

(E) The Board may issue subpoena or subpoena duces tecum, require the attendance
and testimony of witnesses in any matter or inquiry pending before the Board or its duly
authorized representative, and require the production of books, papers, tariffs,
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) The Board may review, revise, reverse, modify, or affirm on appeal any
administrative decision or order of the Administrator on matters pertaining to:

(1) Grounding ofrmen andrcrafts; or

(2) Revocation of any certificate or the denial by the Administrator of issuance of any
certificate; or

(3) Imposition of civil penalty or fine in connection with the violation of any provision of
this Act or rules and regulations issued thereunder.

(G) The Board shall have the power, either on its own initiative or upon review on
appeal from an order or decision of the administrator, to determine whether to impose,
remit, mitigate, increase, or compromise, such fines and civil penalties, as the case may
be.

(H) (1) The Civil Aeronautics Board shall be advised of, and shall consult with the
Department of Foreign Affairs concerning the negotiation of anyr agreement with foreign
governments for the promotion, establishment, or development of foreignr
transportation.

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(2) In exercising and performing its powers and duties under the provisions of this Act,
the Civil Aeronautics Board shall take into consideration the obligation assumed by the
Republic of the Philippines in any treaty, convention or agreement with foreign countries
on matters affecting civil aviation.
Executive Order No. 202, s. 1994

SECTION 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”.

SECTION. 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.

SECTION 3. 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 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

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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 therefore;

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 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;

e. To punish for contempt of the Board, both direct and indirect, in

accordance with the pertinent provisions of, and the penalties
prescribe by, the Rules of Court;

f. To issue subpoena and subpoena duces tecum and to 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 ruling and to
impose fines and/ or penalties for such violations;

h. To review motu propio 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 law 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;

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k. To formulate. Promulgate, administer, implement and enforce rules and
Regulations on land transportation public utilities, standard of
measurements and/ or design, and rules and regulations requiring
operators of any public land transportation service to equip, install
and provide 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, as may be provided by law, as may be necessary, or proper or incidental
to the purposes and objectives of this Executive Order.

SECTION 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 decision en banc. Every such decision, order, or resolution of
the Board must bear the concurrence and signature of at least tow (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 propio review any decision or
action or the Board before the same becomes final.

SECTION 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 application/ 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.

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:

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 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

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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

16
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

17
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 aviation-related
service.

(ee) "Board of Directors" means the board of the civil aviation authority created
under this Act.

(ff) "Chicago Convention" refers to the international basis for civil aviation
agreements.

(gg) "Citizen of the Philippines" refers to one of the following:

18
 (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.

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(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

20
 (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 quasi-judicial 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

21
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

22
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

23
 (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.

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 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

25
 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;

26
(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-

27
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

28
 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:

29
 (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.

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 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:

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(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

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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;

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 (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.

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(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.

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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.

36
(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.

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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

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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:

39
 (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

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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

41
 (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

42
 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,

43
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

44
 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;

45
 (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;

46
 (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 1 st 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 3rd 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

47
(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 above-
named 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

48
 (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

49
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)];

50
(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

51
 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.

52
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
1st 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 l st 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,

53
 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.

54
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,

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

55
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

56
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

57
 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.

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(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

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 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.

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 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

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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.

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 (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

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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

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 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:

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 1. Per most heavily three thousand six hundred
loaded wheel kilograms;
2. Per most heavily eight thousand kilograms;
loaded axle
3. Per most heavily fourteen thousand five
loaded axle group (the hundred kilograms.
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:

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 (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.

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 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.

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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

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 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.

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The Commissioner or his deputies shall also ascertain that the applicant's sight and
hearing are normal, and may in their discretion, require a certificate to that effect, signed
by a reputable physician.

An examination or demonstration to show any applicant's ability to operate motor

vehicles may also be required in the discretion of the Commissioner or his deputies.

Section 23. Issuance of driver's license. - If, after such examination, the Commissioner
or his deputy believes that the applicant possesses the necessary qualifications and is
proficient in the operation of motor vehicles, a license shall be issued to such applicant
upon payment of five pesos, but prior to the issuance of said license, the applicant shall
furnish three copies of his recent photograph to be securely attached to the license, and
two copies to be filed and kept as provided by this Act. All driver's licenses shall bear
the signature and right-hand thumb print of the licensee.

Section 24. Use of driver's license and badge. - Every license issued under the
provisions of this Act to any driver shall entitle the holder thereof, while the same is valid
and effective and not suspended or revoked, to operate the motor vehicles described in
such license: Provided, however, That every licensed professional driver, before
operating a public service motor vehicle registered under classifications (d) to (j)
inclusive of Section seven hereof, shall secure from the Commissioner, upon payment
of the sum of one peso, a driver's badge which he shall, at all times while so operating a
motor vehicle, display in plain sight on the band of his cap or on his coat or shirt. Such
driver's badge shall be of metal with a plainly readable number assigned to the licensee
stamped thereon.

It shall be unlawful for any duly licensed driver to transfer, lend or otherwise allow any
person to use his license for the purpose of enabling such person to operate a motor
vehicle.

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

Section 25. Driver's records. - Any driver who changes his address shall, within fifteen
days, notify the Commissioner in writing of his new address, name and address of his
new employer, the number of the motor vehicle he is employed to operate, and such
other information as the Commissioner may require.

Section 26. Renewal of license. - Any license not renewed on or before the last working
day of the month when the applicant was born shall become delinquent and invalid,
except when the license is surrendered to the Commissioner or his deputies before the
last working day of the month of his birth in order to avoid payment of the delinquency
fees.

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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

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 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.

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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

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 contained in permits that may be issued by the Commissioner, baggage or freight
may be carried on the top of a truck provided the weight thereof does not exceed
twenty kilos per square meter and is distributed in such a manner as not to
endanger the passengers or stability of the truck.

(c) Riding on running boards. - No driver shall permit any person to ride on the
running board, step board, or mudguard of his motor vehicle for any purpose
except to make repair or adjustment in the motor or to collect fares.

Section 33. Passenger or freight capacity marked on vehicle. - All passengers

automobiles for hire shall have the registered passenger capacity plainly and
conspicuously marked on both sides thereof, in letters and numerals not less than five
centimeters in height.

All motor trucks, whether for passenger or freight, private, or for hire, shall have the
registered passenger gross and net weight capacities plainly and conspicuously marked
on both sides thereof, in letters and numerals not less than five centimeters in height.

ARTICLE IV
Accessories of Motor Vehicles

Section 34.

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

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

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

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

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

(c) Headlights. - Every motor vehicle of more than one meter of projected width,
while in use on any public highway shall bear two headlights, one on each side,
with white or yellowish light visible from the front, which, not later than one-half
hour after sunset and until at least one-half four before sunrise and whenever
weather conditions so require, shall both be lighted.

Additional lamps and light may be carried, but no red lights shall be visible
forward or ahead of the vehicle. Trucks, buses, trailers, and other similar vehicles
must carry, while in use on any public highway during night-time, colored riding
lights on each of the four corners not more than ten centimeters from the top.

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

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

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

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

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

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

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

(h) Windshield wiper. - Every motor vehicle shall be equipped with a

mechanically or electrically operated device for wiping off raindrops or other
moisture from its front windshield.

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

(j) Mufflers. - Every motor vehicle propelled by an internal combustion engine

shall be equipped with a muffler, and whenever said motor vehicle passes
through a street of any city, municipality, or thickly populated district or barrio, the
muffler shall not be cut out or disconnected. No motor vehicle shall be operated
in such a manner as to cause it to emit or make any unnecessary or
disagreeable odor, smoke or noise.

CHAPTER IV
TRAFFIC RULES

ARTICLE I
Speed Limit and Keeping to the Right

Section 35. Restriction as to speed. -

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

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

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 Passengers
Motor trucks
MAXIMUM ALLOWABLE SPEEDS Cars and
and buses
Motorcycle
1. On open country roads, with no "blinds 80 km. per hour 50 km. per hour
corners" not closely bordered by
habitations.
2. On "through streets" or boulevards, clear 40 km. per hour 30 km. per hour
of traffic, with no " blind corners," when so
designated.
3. On city and municipal streets, with light 30 km. per hour 30 km. per hour
traffic, when not designated "through
streets".
4. Through crowded streets, approaching 20 km. per hour 20 km. per hour
intersections at "blind corners," passing
school zones, passing other vehicles which
are stationery, or for similar dangerous
circumstances.

(c) The rates of speed hereinabove prescribed shall not apply to the following:

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

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

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

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

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

criminal;

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

laws; and

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

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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.

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

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

(d) The driver of a vehicle shall not overtake or pass, or attempt to pass, any
other vehicle, proceeding in the same direction, between any points indicated by
the placing of official temporary warning or caution signs indicating that men are
working on the highway.

(e) The driver of a vehicle shall not overtake or pass, or attempt to overtake or
pass, any other vehicle proceeding in the same direction in any "no-passing or
overtaking zone."

ARTICLE III
Right of Way and Signals

Section 42. Right of way.

(a) When two vehicles approach or enter an intersection at approximately the

same time, the driver of the vehicle on the left shall yield the right of way to the
vehicle on the right, except as otherwise hereinafter provided. The driver of any
vehicle traveling at an unlawful speed shall forfeit any right of way which he might
otherwise have hereunder.

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

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 (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

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Section 45. Turning at intersections. -

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

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

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

Section 46. Parking prohibited in specified places. - No driver shall park a vehicle, or

permit it to stand, whether attended or unattended, upon a highway in any of the
following places:

(a) Within an intersection

(b) On a crosswalk

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

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

(e) Within four meters of fire hydrant

(f) In front of a private driveway

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

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

Section 47. Parked vehicle. - Whenever a motor vehicle is parked unattended on any

highway, the driver thereof must turn off the ignition switch and stop the motor and
notch effectively the hand brake.

ARTICLE V
Miscellaneous Traffic Rules

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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;

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 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.

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 (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

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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

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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

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