Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

a “CEIVED i
é are: MAY 3.1.21

Tse:

SEVENTEENTH CONGRESS
First Regular Session

581?

House Bill No.

Introduced by Rep. Pantaleon D. Alvarez, Rep. Rodolfo C. Farinas and Rep. Danilo E.
Suarez

EXPLANATORY NO!

Article XII Section 11 of the Philippine Constitution states that no. franchise,
certificate, or any other form of authorization for the operation of a public utility shall 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.

Article 1733 of the Civil Code on the other hand provides that common carriers are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety
of the passengers transported by them, according to all circumstances of each case.

It is in this regard that Southeast Asian Airlines, Inc. (rebranded as Tigerair
Philippines which was bought by Cebu Pacific and now called as SEAIR International
[SEAIR-I]) was granted a legislative franchise by Congress through Republic Act No, 9517
on December 27, 2008, with the express provision that it will charge just and reasonable rates
and provide efficient service to the riding publ

Unfortunately, numerous complaints have been made by passengers regarding the
poor service of SEAIR-I, specifically exorbitant fees charged during peak season, inordinate
delays in flights, and worse, unilateral cancellation of flights, causing, severe inconvenience
to the people. These practices of SEAIR are detrimental to the common good and do not fall
within the purview of “extraordinary diligence.”

In fact, these are grounds for the amendment and alteration of the franchise of
SEAIR-L, something that this bill seeks to achieve to make the franchise of SEAIR more
beneficial to the riding, public

In view of the foregoing, bills carnestly sought.

<2

PANTALEON D. ALWAREZ

Cte snss rie

DANILO E. SUAREZ Sorts C. FARINAS


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

Seventeenth Congress
First Regular Session

House Bill No. S817

Introduced by Honorable Pantaleon D. Alvarez, Honorable Rodolfo C. Farinas and
Honorable Danilo E.

AN ACT.
AMENDING REPUBLIC ACT NO. 9517, OTHERWISE KNOWN AS “AN ACT.
GRANTING SOUTHEAST ASIAN AIRLINES (SEAir) INC. A FRANCHISE TO.
5 RATE, AND MAINTAIN DOMESTIC AND INTERNATIONAL,
1D, PAMPANGA AS ITS BASE”

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled.

SECTION 1. Section 4 of Republic Act No. 951

otherwise known as “An ‘Act Granting,
Southeast Asian Airlines (Seair) Inc. a Franchise to Establish, Operate and Maintain
Domestic and International Air Transport Services, with Clarkfield, Pampanga as its base” is

hereby amended to read as follows:

“SECTION 4. Rates for Services. ~ The grantee shall fix just and reasonable rates for
the transportation of passengers, mail, and freight, subject to the regulations and
approval of the Civil Aeronautics Board and other proper regulatory agencies of the
government. PROVIDED HOWEVER, THAT ANY INCREASE IN RATES THAT IS
A NATURAL CONSEQUENCE OF THE INCREASE IN DEMAND DURING PEAK-
SEASON, SHALL BE SUBJECT TO A CAP OF 20% OVER THE REGULAR OFF-
PEAK RATES.”

SECTION 2. Section 5 of Republic Act No. 9517 is hereby amended to read as follows:

“SECTION 5. Terw of Franchise. — This franchise shall be for a term of twenty-five (25)

years from the date of effectivity of this Act, unless sooner revoked or cancelled. In


1 the event that the grantee fails to operate within two (2) years from the effectivity of
2 this Act, this franchise shall be deemed ipso facto revoked: PROVIDED THAT, THIS
FRANCHISE SHALL BE SUBJECT TO REVIEW BY CONGRESS EVERY FIVE
YEARS FROM THE EFFECTIVITY OF THIS AMENDATORY ACT.”

SECTION. 3. A new Section 13 is hereby inserted in Republic Act No. 9517, to read as
follows:

“SEC. 11. TAX PROVISIONS. — THE GRANTEE, ITS SUCCESSORS OR ASSIGNS,
9 SHALL PAY TO THE PHILIPPINE GOVERNMENT DURING THE LIFE OF ITS
10 FRANCHISE, THE VALUE-ADDED TAX UNDER REPUBLIC ACT NO 7716, AS
u AMENDED, OR A FRANCHISE TAX OF FIVE PERCENT (5%) PER ANNUM OR

2 AT SUCH PERCENTAGE AS MAY BE PRESCRIBED BY LAW ON ALL GROSS
13 RECEIPTS OF ITS TRANSPORT BUSINESS TRANSCTED UNDER THIS
4 FRANCHISE, WHICHEVER IS HIGHER; PROVIDED THAT THE GRANTEE, ITS
15 SUCCESSORS OR ASSIGNS, SHALL CONTINUE TO BE LIABLE FOR INCOME
16 TAXES PAYABLE UNDER TITLE [1 OF THE NATIONAL INTERNAL REVENUE
17 CODE PURSUANT TO SEC. 2 OF EXECUTIVE ORDER NO. 72, UNLESS THE
18 LATTER ENACTMENT IS AMENDED OR REPEALED, IN WHICH CASE, THE
19 AMENDMENT OR REPEAL SHALL BE APPLICABLE THERETO.

20

21 THE GRANTEE, ITS SUCCESSORS OR ASSIGNS, SHALL BE LIABLE TO PAY THE
22 SAME TAXES ON THEIR REAL ESTATE, BUILDINGS AND PERSONAL
23 PROPERTY, EXCLUSIVE OF THIS FRANCHISE, AS OTHER PERSONS OR
24 CORPORATIONS ARE NOW OR HEREAFTER MAY BE REQUIRED BY LAW TO
25 PAY.”

26

27 SECTION. 4. A new Section 14 is hereby inserted in Republic Act No. 9517, to read as

28 follows:

29 “SECTION 14. COMPLIANCE WITH APPLICABLE LAWS. - THE GRANTEE
30 SHALL COMPLY WITH ALL APPLICABLE LAWS, RULES, AND REGULATIONS,
31 PARTICULARLY REPUBLIC ACT NO. 7432, AS AMENDED BY REPUBLIC ACT
32 NO, 9994, OTHERWISE KNOWN AS THE “EXPANDED SENIOR CITIZENS ACT
33 OF 2010” AND REPUBLIC ACT NO. 7277, AS AMENDED BY REPUBLIC ACT NO.


au re

10754, OTHERWISE KNOWN AS “AN ACT EXPANDING THE BENEFITS AND
PRIVILEGES OF PERSONS WITH DISABILITY (PWD)”.

Allother sections are hereby renumbered accordingly.

SECTION 5. Repealability and Non-exclusivity Clause. - This franchise shall be
subject to amendment, alteration, or repeal by the Congress of the Philippines when
the public interest so requires and shall not be interpreted as an exclusive grant of

the privileges herein provided for.

SECTION 6. Separability Clause. - Any portion or provisions of this Act that may be

declared unconstitutional or invalid shall not have the effect of nullifying other portions or
provisions hereof as long, as such remaining portions or provisions can still subsist and be

given effect in their entirety.

SECTION 7. Repealing Clause. - All laws, ordinances, rules, regulations, and other
issuances or parts thereof, which are inconsistent with this Act are hereby repealed or

modified accordingly.

TION 8. Effectivity. - This Act shall take effect fifteen (15) days from the date of its

publication in at least two (2) newspapers of general circulation.

Approved,