FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
7 I.,:+ 
First Regular Session 
1 
Introduced by SENATOR EDGARDO J. ANGARA 
EXPLANATORY NOTE 
One of the more important whereas clause in a resolution adopted by the 
International Civil Aviation Organization (ICAO) in its 32nd General Assembly 
Meeting is that of encouraging each member state to establish a single, 
centralized, and autonomous civil aviation authority to deal with matters 
of civil aviation. 
Countries like the United Kingdom, New Zealand, Australia, Uganda, 
Jordan, Pakistan, Singapore, the Fiji Islands, Ireland, Romania, Jamaica, South 
Africa, Sri Lanka, and Trinidad and Tobago, have all restructured their regulatory 
policies and framework and created a “stand-alone civil aviation authority” that had 
worked to their advantage in promoting their aviation industry thru reduced 
bureaucracy and inefficiency in meeting ICAO standards and recommended 
practices. 
The new Civil Aviation Authority of the Philippines (CAAP) will be 
responsible for the provision of safe and efficient management of all services 
permitting aviation access to and from the Philippines. The main objective of this 
Act is to establish a regulatory framework for maintaining, enhancing and 
promoting domestic and international civil aviation in the country, with particular 
emphasis on the aviation safety at all times. 
I urge my colleagues to support the CAAP bill with the certainty that this 
reform will spur the development of a more state-of-the-art and dynamic civil 
aviation industry and consequently, tourism industry in our country. 
Senator 


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FOURTEENTH CONGRESS OF THE 
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First Regular Session 
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REPUBLIC OF THE PHILIPPINES 
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SENATE 
S.B.No. 8932 
Introduced by SENATOR EDGARDO J. ANGARA 
AN ACT CREATING THE CIVIL AVIATION AUTHORITY OF THE 
PHILIPPINES, AUTHORIZING THE APPROPRIATION OF FUNDS 
THEREFORE, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled. 
SECTION 1. Short Title - This Act shall be known as the "Civil Aviation 
Authority Act of 2008." 
SECTION 2. Declaration of Policies. In the exercise and performance of 
its power 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 foster sound 
economic condition in such transportation and to improve the relations 
between air carries. 
d) Ensuring the safety, quality, reliability, and affordability o f  air transport 
services for the riding public. 
e) The encouragement and development of a viable and globally competitive 
Philippine aviation industry. 
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SECTION 3. Definitions of Terms. For purposes of this Act, 
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 buildings, installations and equipment) intended to be used 
either wholly or in part for the arrival, departure and surface movement of 
aircraft. 
c) “Aeronautics or Aviation” means the science and art of flight 
d) “Aeronautical telecommunication” means 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” means any station operated 
to provide telecommunications for aeronautical purposes. 
f) “Air carrier or carrier” means 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) ‘Yir commerce” means and includes scheduled or non-scheduled air 
transport services for pay or hire, the navigation of aircraft in furtherance 
of a business, or the navigation of aircraft from one place to another for 
operation in the conduct of a business. 
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 
earths surface. The term “aircraft,” when used in this Act or in 
regulations issued under this Act, shall refer to civil aircraft only, and will 
not include state or public aircraft. 
i) “Aircraft Accident” refers to an occurrence associated with the operation 
of an aircraft which takes place between the time any person boards the 
aircraft with the intention of flight until such time as all such persons have 
disembarked, in which: 
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(La) 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 
(i.b) 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 used, or intended to be used, for 
propulsion of aircraft and includes all parts, appurtenances, and accessories 
thereof other than propellers. 
1) “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 
(n.a) Any individual who engages, as the person in command or as pilot, 
mechanic, or member of the crew, or who navigates an aircraft while 
the aircraft is underway; 
(n.b) Any individual in charge of the inspection, maintenance, overhauling, 
or repair of aircraft, and any individual in charge of the inspection, 
maintenance, overhauling, or repair of aircraft, aircraft engines, 
propellers, or appliances; or 
(n.c) Any individual who serves in the capacity of flight operations officer; 
0) “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 pre-determined 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 
3 


affecting the operation of aircraft and the numerous facilities and services 
required in their support, such as airports, telecommunications, navigation 
aids, meteorology, air traffic services, search and rescue, aeronautical 
information services and aeronautical charts, in accordance with the 
procedures, rules and regulations contained in the appropriate Annexes to 
the Chicago Convention. 
q) “Air Navigation facility” refers to any facility used in, available for use 
in, or designed for use in aid of air navigation, including airports, landing 
areas, lights, any apparatus or equipment for disseminating weather 
information, for signaling, for radio directional finding, or for radio or other 
electromagnetic communication, and any other structure or mechanism 
having a similar purpose for guiding or controlling flight in the air or the 
landing and take-off of aircraft. 
r) “Air Navigation Seruices” 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” means 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: 
(v.a) Visual and non-visual aids long the air routes and airways 
(v.b) Visual and non-visual aids to approach and landing at airports; 
(v.c) Communication services; 
(v.d) Meteorological observations; 
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(v.e) Air traffic control services and facilities; and 
(v.0 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 the landing and departure of 
aircraft and includes any area or space, whether on the ground, on the roof 
of a building or elsewhere, which is designed, equipped or set apart for 
affording facilities for the landing and departure of aircraft capable of 
descending or climbing vertically. 
x) “Air Transport” refers to the transportation of persons, property, mail or 
cargo by aircraft 
y) “Air Transport Seruice” 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 Conuention”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 the 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)“Auiation Certificate’’ refers to any airworthiness certificate, airman 
certificate, air operator certificate, certificate authorizing the operation of 
5 


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” refers to the board of the Civil Aviation Authority 
created under this Act. 
ff) “Chicago Convention” refers to the international basis for civil aviation 
agreements. 
gg) “Commercial air transport operation” refers to an aircraft operation 
involving the transport of passengers, cargo or mail for remuneration or 
hire. 
hh) ‘%ommercial Operations” shall refer to the type of air commerce 
proposed to be undertaken by an air carrier under its business plan. 
ii) “Citizen ofthe Philippines” refers to one of the following: 
(ii.a) An individual who is a citizen of the Philippines; 
(jib) A partnership of which each member is a citizen of the Philippines; 
(ii.c) A corporation or association created or organized and authorized under 
the laws of the Philippines. 
jj) “Civil aircrafYrefers to any aircraft other than a state or public aircraft. 
kk) “Civil aviation” refers to the operation of any civil aircraft for the 
purpose of general aviation operations, aerial work or commercial air 
transport operations. 
11) “Crew Member” refers to a person assigned to perform duties on an 
aircraft in flight. 
mm) “Dangerous good” refers to articles or substances that are capable of 
posing significant risks to health, safety of property when transported by 
air. 
nn) “Director” refers to the Director General appointed under this Act. 
00) “Domestic air commerce” refers to and includes air commerce within the 
limits of the Philippine territory. 
pp) “Domestic air transport” refers to air transportation within the limits of 
the Philippine territory 
6 


qq)“Foreign Air Carrier” refers an air carrier who is not a citizen of the 
Philippines and any place outside it. 
rr) “Foreign Air Transport” refers to air transportation between the 
Philippines and any place outside it, or wholly outside the Philippines. 
ss) “Foreign air operator” refers to any operator, not being a Philippines 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. 
tt) “General aviation operation” refers to an aircraft operation of a civil 
aircraft for other than a commercial air transport operation or aerial work 
operation. 
uu) “ICAO” refers to the International Civil Aviation Organization. 
vv) “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 or more countries. 
ww) “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. 
xx) “Navigation of aircraft” refers to a function that includes the piloting of 
aircraft. 
yy)“Operator” refers to a person, organization or enterprise engaged in or 
offering to engage in an aircraft operation. Any person who causes or 
authorizes the operation of aircraft, whether with or without the control (in 
the capacity of owner, lessee, or otherwise) of the aircraft, shall be deemed 
to be engaged in the operation of aircraft within the meaning of this Act. 
zz) “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. 
aaa) “Philippine air carrier” refers to an air carrier who is a Citizen of the 
Philippines 
bbb) “Philippine aircraft” refers to an aircraft registered in the Philippines 
in accordance with the requirements of this Act. 
7 


ccc) ‘cPropeZZer’y refers to an inclusive term for all parts, appurtenances, and 
accessories of a propeller. 
ddd) “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. 
eee) “Rules of the Air” refers to 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: 
(eee.a) 
Lights and signals to be shown by aircraft; 
(eee.b) 
General, visual and instrument flight rules; 
(eee.c) 
Airport Traffic rules; and 
(eee.d) 
Airport signals and markings 
fff) “Spare parts” refers to any parts, appurtenances, and accessories of 
aircraft (other then aircraft engines and propellers), of aircraft engines 
(other than propellers), of propellers, and of 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. 
ggg) “Special aircraft jurisdiction of the Philippines”. This includes: 
(ggg.a) Civil aircraft of the Philippines; and 
(ggg.b) 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. 
hhh)“Validation” refers 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. 
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iii) “Landing fees” refer to all charges for the use of any landing strip or 
runway by any aircraft landing or taking off at an aerodrome. 
jjj) “Terminal fees” refer to charges for parking at or near the ramp, 
terminal area, or building, for purposes of loading or unloading passengers 
and/or cargo. 
kkk)“Royalties” refer to all charges based on gross business or sales, or gross 
or net profit. 
111) “Supplies” include any and all items of whatever nature or description 
which may be necessary for, or incidental to, the operation of an aircraft. 
SECTION 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 the Republic Act 776 as amended is hereby abolished. 
a) ESTABLISHMENT OF AUTHORITY HEADED BY A DIRECTOR 
GENERAL. The Authority shall be headed by a Director General of Civil 
Aviation, referred to in this Act as the “Director”, 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 
shall be appointed based on the qualifications herein provided and shall 
have a tenure of office for a period of three (3) years. His appointment may 
be extended for another non-extendible term of three (3) years and shall 
only be removed for cause in accordance with the rules and regulations 
prescribed by the Civil Service Commission. 
b) RESPONSIBILITY OF DIRECTOR. The Director 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. 
SECTION 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: 
9 


a) The Secretary of the Department of Transportation and Communications 
shall act as Chairman ex-officio; 
b) The Director General of Civil Aviation (DGCA) who 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 Interior and Local Government 
g) A representative, from private sector, with at least five (5) years significant 
experience in the national civil aviation industry, who must be a Filipino 
citizen, of good moral character, unquestionable integrity and who shall be 
appointed by the President of the Philippines to hold office for a period of 
three (3) years. 
The Directors listed under subsections (a) to (fj shall be ex-officio members of 
the Board of Directors. Provided, that, in the absence of the Director appointed in 
subsections (c) to (f), 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. 
SECTION 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 Authority for cause as well as 
administrative, civil or criminal prosecution under applicable laws. 
10 


SECTION 7. Limitation of Subsequent Employment. No member of the 
Board or any employee of the Authority shall accept employment or enter into a 
contract of service with an entity regulated by the Authority, until the expiry of one 
(1) year from the termination of his appointment whether by resignation or 
revocation or otherwise. 
SECTION 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. 
SECTION 9. Qualifications of Director General. No person shall be 
appointed or designated as a 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. 
SECTION 10. Board of Directors. The powers and functions of the 
Authority shall be vested in and exercised by, a Board of Directors, which are as 
follows: 
a) Provide comprehensive policy guidance for the promotion and development 
of the aviation industry as provided in this Act; 
b) Formulate the objectives, strategies, and policies to be followed by the 
Authority; 
c) Ensure that the Authority performs its functions in a proper, efficient, and 
effective manner; 
d) Determine the organizational structure of the Authority, establish a human 
resources management system based on merit and fitness, and adopt a 
rational compensation and benefits scheme; 
e) Approve the annual and supplementary budget; 
f) Submit an annual report to the President of the Philippines and the 
Congress. 


SECTION 11. 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 any four (4) members. Internal rules of procedure in the conduct of 
Board meetings shall be as prescribed by the Board. 
SECTION 12. 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. 
SECTION 13. Personnel. Qualified existing personnel of AT0 shall be given 
preference in the filling up of plantilla positions created in the Authority, subject to 
existing civil service rules and regulations. 
SECTION 14. 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. 
SECTION 15. Capitalization. The Authority shall have an authorized 
capital stock of Fifty Billion Pesos (P50,000,000,000.00) and 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 Air Transportation Office (ATO); 
b) The values of the existing assets of the Air Transportation Office (ATO), 
which shall be determined by an independent and qualified appraiser or 
appraisers within six (6) months from the effectivity of this Act; 
c) Any surplus income accruing to the Authority upon its organization into a 
corporate body and its assumption of the assets and liabilities of the Air 
Transportation Office (ATO); and 
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d) Such amount 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. The initial operating capital for the 
Authority in the amount of One Billion Six Hundred Seventy Nine Million 
Three Hundred Two Thousand Pesos (P1,679,302,000.00) is 
hereby 
authorized to he appropriated out of the National Treasury. Not otherwise 
appropriated which shall be covered by preferred shares of the Authority 
and which may be retired within five (5) years. 
SECTION 16. 
Fiscal Au.tonomy. 
The Authority shall enjoy fiscal 
autonomy. All moneys earned by the Authority from the collectionllevy of any and 
all such fess, 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. 
SECTION 17. Exemption from Taxes, Customs and Tariff Duties. 
(a) The importation of equipment, machineries, spare parts, accessories, and 
other materials, including supplies and services used 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. 
(h). 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 on both principal and interest. 
The Authority is also exempt from the payment of capital gains tax, documentary 
stamp tax, real propertylestate tax and all other local government imposed taxes 
and fees. 
SECTION 18. 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 
adopting 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. 
13 


SECTION 19. Compensation and Other Emoluments of Authority 
Personnel. The compensation and other emoluments for the Director General and 
the Authority’s personnel shall be exempted from the coverage of Republic Act No. 
6758 other wise known as the “Salary Standardization Act”. Within six (6) months 
from effectivity of this Act, the Board shall determine the new schedule of salaries 
of the employees of the Authority subject to compliance with the existing and 
applicable guidelines of the Commission on Audit. 
SECTION 20. Transfer of Properties. The funds and appropriations, 
records, equipment, and property of AT0 is hereby transferred to the Authority. 
SECTION 21. Annual Report. The Authority shall prepare and submit an 
annual report to the President of the Philippines, copy furnished to the Congress, on 
its accomplishments at the close of each calendar year. 
SECTION 22. Powers and Functions. The Authority shall have such 
powers as are granted to the Board and the Director under the provisions of this 
Act. 
SECTION 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 By-Laws; 
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 
14 


other international financial institutions under terms and conditions 
prescribed by law, rules, and regulations; provided that: 
(d.a) The Authority’s outstanding liabilities and obligations, foreign and 
domestic, shall not exceed, at any time, fifty percent (50%) of its net 
worth; 
(d.b) The annual amortization on principal and interest shall not be more 
than twenty percent (20%) of the prior year’s gross revenues; 
(dx) Where appropriate, obligations incurred from private sources of capital 
may be secured by suitable assets or backed by priority claims 
against property of the Authority; 
(d.d) Obligations shall be considered the sole ,liability of the Authority, 
unless otherwise guaranteed by the Republic of the Philippines upon 
approval of the President with the prior concurrence of the Monetary 
Board; and 
(d.e) Issuance of bonds or long term notes shall be with prior approval of or 
in accordance with the rules issued by the National Treasurer. 
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 lands, and its improvements, property 
rights, and interest 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. 
15 


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; 
k) To perform such other acts, as are necessary or convenient in connection with the performance 
of its functions, to carry the purposes of this Act. 
SECTION 24. Powers of the Board. The Board shall have the following 
general powers: 
a) Exercise general supervision over all offices and employees of the Authority. 
b) Provide comprehensive policy guidance for the promotion and development 
of the Philippine aviation industry, as provided for in this Act. 
c) Ensure that the Authority performs its functions in a proper, efficient and 
effective manner. 
d) Decide the objectives, strategies, and policies of the Authority in accordance 
with the provisions of this Act. 
e) 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 rationale compensation and 
benefits scheme. 
f, Exercise appellate powers on any decisions, findings and rulings of the 
Director, 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. 
g) 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. 
16 


h) To 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. 
i) 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 . 
j) To 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. 
k) To 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 licensing of operating and mechanical personnel, type certificate 
for aircraft, aircraft engines, propellers and appliances, airworthiness 
certificate, air carrier operating certificate, air agency certificate, 
navigation facility and aerodrome certificate; air traffic routes; radio and 
aeronautical telecommunications and air navigation aids; aircraft accident 
inquiry; aerodromes, both public and private owned; construction of 
obstructions to aerodromes; height of buildings; antennae and other 
edifices; registration of aircraft; search and rescue; facilitation of air 
transport; operations of aircraft, 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 aircraft; identification of aircraft; rules for safe altitudes of flight; and 
such other rules, and regulations, standards, governing other practices, 
methods, procedures as the Director may find necessary and appropriate to 
provide adequately for safety regularity and efficiency in air commerce and 
air navigation. 
17 


1) To 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 instructions, aircraft repair stations, and aircraft radio 
and aeronautical telecommunications stations. 
m) To fix the reasonable charges to be imposed in the use of privately owned 
air navigation facilities and aerodromes. 
n) To adopt a system for registration of aircraft as hereinafter provided. 
0) To 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. 
p) Approve the annual and supplementary budget plan for utilization of 
retained revenue. 
q) Exercise the corporate powers granted to the Authority. 
r) The Board, upon its own initiative or recommendation of the Director or an 
application of a private person, may 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. 
s) The Board shall 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 Standard or Annexes to the Chicago 
Convention 
t) The Board in coordination with the appropriate government agency tasked 
to provide airport security shall 
(La) prescribe reasonable regulation requiring that all passengers and all 
property intended to be carried in the aircraft cabin in commercial air 
transport be screened by weapon detecting procedure or facilities 
employed or operated by employees or agents of the air operator or 
foreign air operator prior to boarding the aircraft for such 
transportation; 
(t.b) prescribe such other reasonable rules and regulations requiring such 
parties, methods, and procedures as the Director may find necessary to 
18 


protect persons and property aboard aircraft operating in commercial 
air transport against acts of criminal violence and aircraft piracy. 
(tx) 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. 
SECTION 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 in accordance with the 
requirements of the Administrative Code of the Philippines or any amendment or 
successor thereto. Pending the promulgation of such new rules and regulations, the 
current rules and regulations of AT0 shall continue to apply. 
SECTION 26. Setting of Charges and Fees. The Board, in consultation 
with the Director 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 AT0 shall 
continue to apply. 
SECTION 27. Issuance of Rules of Procedure and Practice. The Board 
may authorize the Director to issue or amend rules of practice and procedures as 
may be required to be issued pursuant to the provisions of this Act or issue and 
adapt 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 AT0 shall continue to apply 
19 


SECTION 28. Original Powers. Upon written petition by an interested 
party, the Board may, in the exercise of original powers, hear cases of national 
importance at the first instance. The Board shall, by regulation, set-forth such 
cases which may be brought directly before the Board. 
SECTION 29. Appellate Powers. The Board, on an appeal property taken 
by an interested party from a decision, judgment or order of a Director, shall have 
the power to: 
a) Review, confirm, modify, revise, amend, or reverse, as the case may be, 
decisions, judgments and/or orders of the Director. 
b) Confirm, remit, mitigate, increase, or compromise, as the case may be, 
fines imposed by the Director pursuant with the provisions of this Act. 
c) Review, confirm, modify, revise, amend or reverse, as the case may be, 
impositions by the Director 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 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 
can be modified or reversed. 
SECTION 30. Power to Administer Oaths. The members of the Board, 
the Director 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. 
20 


SECTION 31. Annual Budget. The Board shall adopt an annual Budget to 
fund the operations of the Authority. Unless the Authority shall require subsidy 
and/or a guarantee of its liability from the National Treasury, the Authority’s 
budget for the year need not be submitted to Congress for approval and inclusion 
in the General Appropriations Act. Supplementary estimates may be prepared or 
adopted in any of the Board meetings called for that purpose. 
SECTION 32. Delegation of Functions. 
a) Delegation to Officers, Employees, and Administrative Units of 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, 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 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. 
SECTION 33 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 property 
falls within the authority, jurisdiction, powers or functions of a Director. 
SECTION 34. Organizational Structure of the Authority. Within 
fifteen (15) days from the appointment of and acceptance by all members of the 
Board and the Director Generals of their respective appointment, 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 coming into 
effect of this Act. 
21 


In addition to the offices created under Sections 37 and 41 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 
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 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. 
SECTION 35. Training Schools. 
a) Authority to Operate. 
The Director 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 also may 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 is hereby authorized, where 
appropriate, to require payment of appropriate consideration to offset the 
costs of training provided by such school or schools. 
SECTION 36. Powers and Functions of the Director General. The 
Director General shall be the Chief Executive and Operating Officer of the 
Authority. He shall have the following powers, duties and responsibilities: 
a) To carry out the purposes and policies established in this Act; to enforce the 
provisions of, the rules and regulations issued in pursuance to said Act; and 
he shall primarily be vested with authority to take charge of the technical 
and operational phase of civil aviation matters. 
22 


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 spec&ing 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 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. 
fj To issue type certificate for aircraft, aircraft engine, propellers and 
appliances. 
g) To inspect, classify and rate any air navigation facilities and aerodromes 
available for the use of aircraft as to its suitability for such use and to issue 
a certificate for such air navigation facility and aerodrome; and to 
determine the suitability of foreign aerodromes, air navigation facilities as 
well as air routes to be used prior to the operation of Philippine registered 
aircraft in foreign air transportation and from time to time thereafter as 
may be required in the interest of safety in air commerce. 
h) To issue certificates of persons or civil aviation schools giving instruction in 
flying, repair stations, and other air agencies and provide for the 
examination and rating thereof. 
i) To provide for the enforcement of the rules and regulations issued under 
the provisions of this Act and to conduct investigation for violations thereto. 


In undertaking such investigation, to require by subpoena ad testificandum 
or subpoena duces tecum, the attendance and testimony of witness, 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 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. 
1) 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 andlor 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. 
0) 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. 
24 


r) To designate such prohibited and danger areas, in consonance with the 
requirements of the international aeronautical agencies and national 
security. 
s) To issue, deny, suspend, cancel or revoke any certificate, license pertaining 
to aircraft, airmen, and air agencies: Provided, that any order denying, 
suspending, canceling, revoking the certificate, or license may be appealed 
to the Board, whose decisions shall be final, within fifteen days from date of 
notification of such denial, cancellation, or revocation. 
t) To grant authorization to civil aircraft or persons to carry instruments or 
photographic device to be used for aerial photography or taking of pictures 
by photograph or sketching of any part of the Philippines. 
u) Pursuant to a Board Resolution, the Director shall have the authority to 
enter into, make and execute contracts of any kind with any person, firm, or 
public or private corporation. 
SECTION 37. The Office of Enforcement & Legal Service. 
To effectively implement the civil aviation regulatory, supervisory and 
administrative mandates of the Director under this Act, there be created a 
permanent office known as, the Enforcement and Legal Service, to be composed of 
in-house counsels of the Authority and necessary support staff. 
This Office shall provide adequate legal assistance and support to the 
Director 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 to issue subpoena, ad 
testificandum, subpoena duces tecum and the imposition of any administrative 
sanction shall be within the exclusive determination and recommendation of the 
Enforcement and Legal Service. 
SECTION 38. Orders. 
a) Effectiveness of Orders. 
Except in emergency situations, all orders, 
rules and regulations of the Director shall take effect within such 
reasonable times as the Director 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. 
25 


b) Emergencies. 
Whenever the Director is of the opinion that an 
emergency requiring immediate action exists with respect to safety in civil 
aviation, the Director shall have the power, either upon complaint or the 
Director’s initiative without complaint, at once, if the Director 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 shall immediately thereafter initiate 
proceedings relating to the matter giving rise to any such order, rule, or 
regulation. 
c) Suspension and Modification of Orders . The Director shall have the power 
to suspend or modify orders upon such notice and in such manner as the 
Director 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 under this Act, affecting such person so 
long as the same shall remain in effect. 
SECTION 39. Right of Access for Inspection. 
a) The Director 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 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 or his authorized shall be authorized access by the Philippine 
Air Operators any place and any time to conduct any tests or inspections in 
their facility or offices in order to determine that those operations are 
26 


conducted in accordance with this Act and applicable regulations and 
directives. 
d) The Director 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. 
SECTION 40. Authority to Prevent Flight. 
a) The Director is authorized to direct the operator or airman of a civil aircraft 
that the aircraft is not to be operated in situations where - 
(a.a) The aircraft may not be airworthy; or 
(a.b) The airman may not be qualified or physically or mentally capable 
for the flight; or 
(ax) The operation would cause imminent danger to persons or property on 
the ground. 
b) The Director may take such steps as are necessary to detain such aircraft or 
airmen. 
SECTION 41. Creation of Flight Standards Inspectorate Service. 
The Board, other than the offices it shall create in furtherance of this Act, 
shall establish a permanent office known as Flight Standards Inspectorate Service 
that will assist the Director in carrying out the responsibilities of his Office for 
certification and on-going inspections of aircraft, airmen and air operators. 
The inspectorate shall perform the following functions: 
a) Airworthiness Inspection 
b) Flight Operations Inspection and Evaluation 
c) Personnel Licensing 
Furthermore, the Board shall create, but not limited, the following offices 
which will provide support to the functions of the Flight Standard Inspectorate 
Service, namely, Aircraft Registration, Aircraft Engineering and Standards, Airmen 
Examination Board, and Office of the Flight Surgeon. 
27 


SECTION 42. Validation. The Director is authorized, in the discharge of 
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 be fulfilling their obligations 
under the Chicago Convention with respect to the issuance and currency of 
these certificates. 
b) For actions applicable to Air Operators, the Director must exercise 
discretion and require supporting documents. The Director 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 
their obligations under the Chicago Convention regarding certification and 
on-going validation of their air operators. 
SECTION 43. 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 
shall organize an aircraft accident investigation and inquiry board to be composed 
of personnel of the Authority specialized in the various disciplines of civil aviation. 
a) REPORTING OF ACCIDENTS. The Board shall promulgate rules and 
regulations governing the notification and reporting of accidents and 
incidents involving aircraft. 
b) GENERAL AUTHORITY TO INVESTIGATE. Except as provided in 
subsection (c) of this Section, the Director shall have- 
(b.a) The power and shall investigate, or arrange by contract or 
otherwise for the investigation of, accidents involving aircraft 
occurring in the Philippines and civil aircraft registered in the 
Philippines 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. 
(b.b) 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, 
28 


convention, agreement, or other arrangement between the 
Philippines and the country in whose territory the accident 
occurred. 
c) ACCIDENT PREVENTION. The Director 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, 
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 Directqr 
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 
liabilitieslaspects of the accident is put into issue. 
SECTION 44. Establishment of Registry. The Authority shall establish 
and maintain a system for the national registration of aircraft in the Philippines. 
SECTION 45. 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 60 per centum 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 pre- 
29 


requisite to any aeronautical activities of such clubs within the Philippine 
airspace. (R.A. 776, P.D. 1278, E.O. 546, 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 ip 
a proceeding where such ownership is, or may be, at issue. 
SECTION 46. Application for Aircraft Registration. Applications for 
certificate of registration shall be made in writing, signed and sworn to by the 
owner of any aircraft eligible for registration. The application shall also state: (1) 
the date and place of filing: (2) the specification, construction, and technical 
description of the aircraft; and (3) such other information as may be required by 
the Authority in such manner and form as the Authority may prescribe by 
regulation. 
SECTION 47. Issuance of Certificate of Registration. Should the 
Director, upon considering the application for registration, find the aircraft 
eligible for registration, such aircraft shall be registered under the provision of 
this Act and the owner thereof shall be issued a certificate of registration. 
SECTION 48. Nationality. An aircraft shall acquire Philippine nationality 
when registered pursuant to this Act. 
SECTION 49., Revocation. Any certificate of registration may be revoked 
by the Authority for any cause which renders the aircraft ineligible for 
registration. 
30 


SECTION 50. 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. 
SECTION 51. Form of Conveyance. No conveyance may be recorded 
under the provisions of this Act unless it complies with the requirements for the 
registration of documents similar land registration process. The conveyance to be 
recorded shall also state: (1) 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 (2) the interest transferred by the conveyance. 
SECTION 52. Establishment of System of Recording. The Authority 
shall establish a national system for recording documents that affect 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. 
SECTION 53. 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; 
31 


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. 
SECTION 54. VaZidity before Filing. Upon establishment of a recording 
system in accordance with the provisions of this Act, no document affecting title to 
or any interest in such registered aircraft, aircraft engines, propellers, appliance?, 
or spare parts shall be valid except as between the parties thereto, unless the 
document is registered in such recording system. 
SECTION 55. 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 shall deem necessary to 
show who have property interests in such aircraft and the nature and extent of such 
interest. 
SECTION 56. General 
a) Promoting Safety. The Director shall have the power and duty to promote 
safety of flight of civil aircraft in civil aviation by prescribing and revising 
from time to time as necessary- 
(a.a) Reasonable rules and regulations implementing, at minimum, all 
standards of the Annexes to the Chicago Convention; 
(ab) Such other reasonable rules, regulations, or minimum standards 
governing other practices, methods, and procedures as the Director 
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 shall take into consideration the obligation of air operators to 
perform their services with the highest possible degree of safety pursuant to 
public interest. 
32 


SECTION 57. 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 
SECTION 58. Authority to Certificate Airmen. The Director is authorized 
to issue airmen certificates specifying the capacity in which the holders thereof are 
authorized to serve as airman in connection with aircraft. 
SECTION 69. Application and Issuance. Any individual may file with the 
Director an application for an airman certificate. If the Director 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 shall issue such certificate. 
SECTION 60. 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. 
SECTION 61. 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 
SECTION 62. Authority to Issue Airworthiness Certificates. The owner 
of any aircraft registered in accordance with this Act may file with the Director an 
application for an airworthiness certificate for such aircraft. 
33 


SECTION 63. Issuance. If it is found that the aircraft conforms to the 
appropriate type 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. 
SECTION 64. Terms and Conditions. The Director shall prescribe in 
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 shall be recorded by it. 
SECTION 65. Airworthiness Approuals. The Director may prescribe the 
terms under which additional airworthiness approvals, for purposes of modification, 
may be made. 
C. Air Operator Certificate 
SECTION 66. Authority to Certificate Carriers and Establish Safety 
Standards. The Director 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. 
SECTION 67. Application and Issuance. Any air carrier who is a citizen 
of the Philippines may file with the Director an application for an air operator 
certificate. If the Director 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 shall issue an air 
operator certificate to such air carrier. Provided, however, that in no event shall the 
Director 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. 
14 


D. Aviation Schools and Approved Maintenance Organizations 
SECTION 68. Examination and Rating. The Director is authorized to 
provide for the examination and rating oE 
a) Civilian schools providing instruction in flying or in the repair, alteration, 
maintenance, and overhaul of aircraft, aircraft engines, propellers, and 
appliances, as to the adequacy of the course of instruction, the suitability 
and airworthiness of the equipment and the competency of the instructors; 
and 
b) Approved maintenance organizations or shops for the repair, alteration, 
maintenance and overhaul of aircraft engines, propellers and appliances, as 
to 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 therein. 
SECTION 69. Air Navigation Facility Safety Standards. 
a) Minimum Safety Standards. The Director 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. 
@.a) The Director 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. 
@.b) Any person desiring to operate an airport that is described in this , 
Section and that is required by the Director, by rule, to be certified 
may file with the Director an application for an airport operating 
certificate. If the Director 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 shall issue an airport operating certificate to such 
person. Each airport operating certificate shall prescribe such 
35 


terms, conditions, and limitations as are reasonably necessary to 
assure safety in commercial air transport. Unless the Director 
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- 
(b.b.1) 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 
(b.b.2) The condition and maintenance of primary and secondary 
runways as the Director determines to be necessary. 
SECTION 70. Duties and Operations of Airmen. It shall be the duty of: 
a) Each air carrier to make or cause to be made, such inspection, maintenance, 
overhaul, and repair of all equipment used in air transport and to ensure that the 
operations conducted are in accordance with the provisions of this Act and the 
rules, regulations, directives and orders issued by virtue of this Act. 
b) Each air carrier holding an Air Operator Certificate to ensure that the 
maintenance of aircraft and operations thereof are conducted in the public 
interest and in accordance with the requirements of this Act and the rules, 
regulations, directives and orders issued by virtue of this Act. 
c) Each holder of an airman certificate to observe and comply with the authority 
and limitations of that certificate, the requirements of this Act and the rules, 
regulations, directives and orders issued by virtue of this Act. 
d) Every person performing duties in air transportation to observe and comply with 
the requirements of this Act and the rules, regulations, directives and orders 
issued by virtue of this Act. 
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 of the Chicago Convention and the ICAO Technical 
Instructions for the Sale Transport of Dangerous Goods by Air. 
36 


SECTION 71. Authority to Inspect. 
a) Authority to Inspect Equipment. The Director shall have the power and 
duty to--- 
(a.a) 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 I 
safe condition for the operation in which they are used; and 
(a.b) Advise each operator in the inspection and maintenance of these 
items. 
b) Unsafe Aircraft, Engines, Propellers and Appliances. When the Director 
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 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 to be in a condition for safe operation. 
SECTION 72. Amendment. Modification, Suspension, and Revocation 
of Certificates. 
a) RE-INSPECTION AND RE-EXAMINATION. The Director may, from 
time to time, for any reason, re-inspect 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. If, as a result of any such re- 
inspection or re-examination, or if, as a result of any other 
investigation made by the Director, the Director determines that 
safety in civil aviation or commercial air transport and the public 
interest requires, the Director may issue an order amending, 
modifying, suspending, or revoking, in whole or in part, any 
airworthiness certificate, airman certificate, air operator certificate, 
or certificate for any airport, school, o r  approved maintenance 
organization issued under this Act. 
3 1  


c) NOTICE TO CERTIFICATE HOLDERS AND OPPORTUNITY TO 
ANSWER. Prior to amending, modifying, suspending, or revoking 
any of the foregoing certificates, the Director shall advise the holder 
thereof as to any charges or reasons relied upon by the Director for 
the proposed action and, except in cases of emergency, shall provide 
the holder of such certificate an 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 under this Section may file his Motion for 
Reconsideration within five (5) days from receipt thereof and in case 
of denial shall, within ten (10) 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’s order except through 
an injunction duly issued by a court of competent jurisdiction. 
SECTION 73. Prohibitions. 
a) It shall be unlawful for any person to- 
(a.a) Operate in civil aviation any civil aircraft which there is not 
currently in effect certificate of airworthiness and registration, or 
in violation of the terms of any such certificates and operation of 
the aircraft in a careless and reckless manner and operational 
aircraft in contravention with its approved operating limitations 
and manual. 
(ab) 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 this certificate, or in violation of any 
order, rule, or regulation issued under this Act; 
38 


(a.c) 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; 
(a.d) Operate as an air operator without a n  air operator certificate, or 
in violation of the terms of any such certificate; 
(a.e) Operate aircraft in civil aviation in violation of any rule, 
regulation, a certificate issued by the Director under this Act; and 
(a.9 While holding a certificate issued to a school or approved. 
maintenance organization as provided in this Act, to violate any 
term, condition, or limitation thereof, to violate any order, rule, or 
regulation made under this Act relating to the holder of such 
certificate. 
b) Considering that the aircraft operation is impressed with public interest, 
the Director may prescribe exemptions of the foregoing provisions for 
foreign aircraft and airmen. 
SECTION. 74 Statutory Line. The Director, 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. 
SECTION 76. Lien on Personal and Real Properties. The Director 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. 
39 


SECTION 76. Police Authority. The Director shall have the power to 
exercise such police authority as may be necessary within the premises of airports 
under its jurisdiction to carry out its functions and attain its purposes and 
objectives. The grant of such powers shall be in conformity with the functions 
exclusively provided by law to be exercised by the Philippine National Police and 
other concerned government agencies, provided that the Authority may request the 
assistance of other law enforcement agencies, including request for deputization as 
may be required. Such police authority shall be exercised in connection with the 
following: 
a) Maintenance of security to passengers, cargoes, aircraft, airport equipment, 
structures, facilities, personnel, funds and documents; 
b) Regulating the entry to, exit from and movement within an airport; 
c) Maintenance of peace and order within the premises of an airport in 
coordination with local police authorities and other authorized peace- 
keeping entities within an airport; 
d) Regulation and supervision of private security agencies operating within an 
airport; and 
e) Enforcement of rules and regulations promulgated by the Board pursuant 
to the authority granted under this Act. 
SECTION 77. 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 tb 
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 International Civil 
Aviation Organization. 
40 


SECTION 78. Authority Respecting the Transportation of Dangerous 
Goods by Air 
The Director shall monitor and enforce compliance of the rules and 
regulation 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. 
SECTION 79. Development of New Airports. 
The Board shall be 
responsible for planning, development, construction, operation, maintenance, or 
expansion of airports shall be the responsibility of the Board. 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. 
0 The Government’s public service obligations, more particularly the 
Government’s duty to ensure the availability of air transport infrastructure 
for remote areas far from major population centers and that are not 
otherwise easily accessible by transportation via land or sea. In such cases, 
the Board shall take reasonable steps to ensure that funding will be 
available for the operation and maintenance of such airports. 
g) ICAO best practices and recommendations concerning the development of 
airports. 
h) Such other considerations as the Board, in the exercise of its reasonable 
discretion, may consider relevant or important. 
41 


SECTION 80. Power of the Authority to Investigate Violations. Correlative 
to the provisions of Section 36 of this Act, the Director at his own volition, or at the 
instance of a private person, or upon initiative of the Board, may conduct 
investigation based on the procedure that the Board may prescribe and using the 
Rules of Court as its suppletory guidelines. 
SECTION 81. Power to Direct an Immediate Halt to an Offending 
Practice. The Director, 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. 
SECTION 82. Penalties. 
a) The Director, after due notice and hearing, is authorized to impose the 
following fines and penalties for each violation of this Act: 
(a.a) Any person who operates any aircraft without the current 
airworthiness certificate, in violation of any rule, regulation or order 
issued by the Director relating to aeronautical safety standards or 
practices or procedures shall be punished by a fine ranging from 
Twenty Thousand Pesos (P20,OOO) to Fifty Thousand Pesos (P50,OOOO) 
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. 
(a.b) 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 (P20,OOO) to Fifty Thousand Pesos (P50,OOOO) for the 1st offense, 
suspension of the license for three (3) months for the 2 n d  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. 
42 


(a.c) 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 
(P50,OOO) to One Hundred Thousand Pesos (PlOO,OOO), as determined 
by the Director 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 operations. 
(a.d) Any person who was issued by the Director relating to air carrier 
operation, aviation school, aircraft maintenance, and other civil 
aviation regulated activity which are being certificated and regulated 
by the Director 
who have been found to have violate 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 (P300,OOO) to Five Hundred Thousand Pesos (P500,000), as 
determined by the Director in the exercise of his reasonable discretion. 
The repetition of this offense shall be sufficient cause for the 
revocation of such person's certificate. 
(a.e) No person shall interfere, obstruct, hinder, or delay the Director or 
any person duly delegated by the Director in the performance of his 
duties in the public interest. A fine ranging from Twenty Thousand 
Pesos (P20,OOO) not exceeding One Hundred Thousand Pesos 
(PlOO,OOO), as determined by the Director in the exercise of his 
reasonable discretion, shall be imposed upon anyone who: 
(a.e.1) With intent to interfere in the performance of the duties of the 
Director or any person duly delegated by the Director, shall 
knowingly or willfully alter, falsify, mutilate any report, 
accounts, records, books, papers, contracts, agreement and all 
other documents: or 
(a.e.2) 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 or his duly authorized representative; or (b) to keep or 
43 


preserve records, reports, papers and all other documents 
required by the Director or his duly authorized representative; 
or 
(a.e.3) Is guilty of misconduct in the presence of the Director 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 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 or his duly authorized representative; or 
(a.e.4)Refuses to be sworn in as a witness or to answer as such 
when lawfully required to do so, provided, that the Director 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 
(a.e.5) Neglects or refuses to attend and/or testify andlor 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 or his 
duly 
authorized 
representative; or 
(a.e.6) Testifies falsely or makes false affidavits or both before the 
Director or his duly authorized representative, 
b.) The following penalties may only be imposed by court of competent 
jurisdiction after the filing of a proper criminal complaint therein by the 
Director and a finding of guilt: 
@.a) 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 relating to aeronautical safety standards or practices or 
procedures shall be punished by imprisonment for not more than 
44 


three (3) years or a fine not exceeding Two Hundred Thousand Pesos 
(PZOO,OOO), or both, in the discretion of the court. 
@.b) 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 of not more than six (6) years or a fine 
in an amount of not less than Five Hundred Thousand Pesos 
(P500,OOO) but not exceeding Five Hundred Thousand Pesos 
(P500,000,000), or both, as determined by the Court in the exercise of 
its reasonable discretion. 
@.c) 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 shall be 
punished by imprisonment of from three (3) to seven (7) years or a 
fine in an amount of not less than One Hundred Thousand Pesos 
(P100,OOO) but not exceeding Five Hundred Thousand Pesos 
(P500,000), or both, as determined by the Court in the exercise of its 
reasonable discretion. 
@.d) Any person found guilty of violating the conditions attendant to the 
issuance of the Airworthiness Certificate of the aircraft shall be 
subjected to imprisonment of from three (3) to seven (7) years or a 
fine in an amount of not less than One Hundred Thousand Pesos 
(P100,OOO) but not exceeding Five Hundred Thousand Pesos 
(P500,000), or both, as determined by the Court in the exercise of its 
reasonable discretion. 
@.e) Any person who destroys or seriously damages the facilities of an 
airport or aircraft not in service located thereon or disrupts the 
services of an airport shall be subjected to imprisonment of from one 
(1) to three (3) years or a fine in an amount of not less than Fifty 
45 


Thousand Pesos (P50,OOO) but not exceeding Five Hundred 
Thousand Pesos (P500,000), or both, as determined by the Court in 
the exercise of its reasonable discretion. 
(b.0 No person shall interfere with air navigation. Imprisonment for not 
more than three (3) years or a fine not exceeding Fifty Thousand 
Pesos (P50,OOO) to Five Hundred Thousand Pesos (P500,OOO) or both, 
as determined by the Court in the exercise of its reasonable 
discretion, shall be imposed upon any person who: 
(b.f.1) With intent to interfere with air navigation within the 
Philippines, exhibits within the Philippines any light or signal 
at such place or in such manner that it is likely to be mistaken. 
for a true light or signal established pursuant to this Act or for 
a true light or signal in connection with an airport or other air 
navigation facility; or 
(b.f.2) After due warning by the Director or his duly authorized 
representative, continues to maintain any misleading light or 
signal; or 
(b.f.3) Knowingly removes, extinguishes, or interferes with the 
operation of any true light or signal. 
(b.8) Any person who destroys or damages air navigation facilities or 
interferes with their operation shall be subjected to imprisonment of 
from one (1) to three (3) years or a fine in an amount of not less than 
Fifty Thousand Pesos (P50,OOO) but not exceeding Five Hundred 
Thousand Pesos (P500,000), or both, as determined by the Court in 
the exercise of its reasonable discretion. If such act endangers the 
safety of air navigation, the court may impose an increased penalty of 
imprisonment of from three (3) years and one (1) day to six (6) years 
or a fine ranging from Five Hundred Thousand Pesos (P500,OOO) to 
One Million Pesos (Pl,OOO,OOO) (Convention for Suppression of 
Unlawful Acts against the Safety of Civil Aviation, signed a1 
Montreal, 23 September 1971, art. l(d)) 
(b.h) Any person who, whether on board or on the ground, communicate 
false information to an aircraft and thereby endangering the safety qf 
an aircraft in flight shall be subjected to imprisonment of from one 
46 


(1) to three (3) years or a fine in an amount of not less than Fifty. 
Thousand Pesos (P50,OOO) but not exceeding Five Hundred Thousand 
Pesos (P500,000), or both, as determined by the Court in the exercise 
of its reasonable discretion. (Convention for Suppression of Unlawful 
Acts against the Safety of Civil Aviation, signed at Montreal, 23 
September 1971, art. l(e)) 
(b.i) 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 of from one (1) to three 
(3) years or a fine in an amount of not less than Fifty Thousand Pesos 
(P50,OOO) but not exceeding Five Hundred Thousand Pesos 
(P500,000), or both, as determined by the Court in the exercise of its 
reasonable discretion. 
(b.j) 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 their person or their 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 their person, or who has 
placed, attempted to place, or attempted to have placed aboard such 
aircraft any bomb or similar explosive or incendiary device, shall be 
subjected to imprisonment of from three (3) to six (6) years or a fine 
in an amount of not less than One Hundred Thousand Pesos 
(P100,OOO) but not exceeding Five Hundred Thousand Pesos 
(P500,000), or both, as determined by the Court in the exercise of its 
reasonable discretion. 
This subsection shall not apply to persons duly authorized by 
the Director to carry deadly or dangerous weapons in commercial air 
transport, nor shall it apply to 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. 
(b.k)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 a n  act which would be a crime prohibited by clauses(8), (9), (10) 
47 


of this section, shall be subjected to imprisonment of from one (1) to 
three (3) years or a fine in an amount of not less than Fifty Thousand 
Pesos (P50,OOO) but not exceeding Five Hundred Thousand Pesos 
(P500,000), or both, as determined by the Court in the exercise of its 
reasonable discretion (Convention for Suppression of Unlawful Acts 
against the Safety of Civil Aviation, signed at Montreal, 23 
September 1971, art. l(e)) 
03.1) 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 of from six (6) 
months to three (3) years or a fine in an amount of not less than Fifty 
Thousand Pesos (P50,OOO) but not exceeding Five Hundred 
Thousand Pesos (P500,000), or both, as determined by the Court in 
the exercise of its reasonable discretion. (Convention on Offenses and 
certain other Acts committed on board Aircraft signed at Tokyo, 14 
September 1963, art. l(b)) 
(b.m)Any person who knowingly and without authority removes, conceals, 
withholds any part of an aircraft involved in an aircraft accident, or 
any property on board such aircraft at the time of the aircraft 
accident shall be subjected to imprisonment of from three (3) to six 
(6) years or a fine in an amount of not less than One Hundred 
Thousand Pesos (P100,OOO) but not exceeding Five Hundred 
Thousand Pesos (P500,000), or both, as determined by the Court in 
the exercise of its reasonable discretion. 
(b.n) 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 of from one (1) to three (3) years or a fine in an 
amount of not less than One Hundred Thousand Pesos (P100,OOO) 
48 


but not exceeding Five Hundred Thousand Pesos (P500,000), or both, 
as determined by the Court in the exercise of its reasonable 
discretion. 
The provisions of this paragraph (b), clauses (b.i), (b.j), (b.k) and (b.1) above * 
shall apply to any aircraft located within the Special Jurisdiction of the 
Philippines. 
Exercise by the Director of the powers granted to him under paragraph (a) 
above shall not act as a bar to a subsequent criminal prosecution in court for the 
same or similar act pursuant to the provisions of paragraph (b). 
SECTION 83. 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 (P20,OOO) to One Hundred Thousand Pesos (P100,OOO) for each violation. 
SECTION 84. Penalty Considerations. In determining the amount of any 
such penalty, the Director 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. 
SECTION 85. Inflation Adjustment to Civil Penalties. The Director shall 
adjust the monetary level of the penalties it is authorized to impose at least once 
every four (4) years, and shall promulgate such revised penalties in accordance with 
the Administrative Code of the Philippines and economic/monetary index provided 
by Monetary Board, including any revision or successor thereto. For the avoidant;, 
of doubt, adjusted penalties shall not come into effect until the requirements of the 
Administrative Code of the Philippines have been complied with. 
SECTION 86. Abolition of the Air Transportation Office. The Air 
Transportation Office (ATO) created under Republic Act 776, a sectoral office of 
Department of Transportation and Communications (DOTC) is hereby abolished. 
49 


All powers, duties, and rights vested by law and exercised by the Air 
Transportation Office (ATO) 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 ATO, 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. 
SECTION 57. Transfer of Personnel of Air Transportation Office. To 
ensure smooth transition into a corporate structure, the incumbent Assistant 
Secretary of the Air Transportation Office shall continue to hold office and assume 
the powers of the Director until his successor shall have been appointed and 
inducted into office in accordance with this Act. However, should the officials opted 
to file their resignation or early retirement, they shall be entitled to gratuity at the 
rate equivalent to two (2) months salary for every year of service rendered or the 
equivalent nearest fraction thereof favorable to them on the basis of the highest 
salary received, in addition to the retirement benefits or pensions under existing 
law. 
SECTION 58. Organization of the Authority. No officerlemployee who 
availed the benefits of the foregoing provisions will not qualify for re-employment to 
the Authority within seven (7) years from date of retirementh-esignation. 
SECTION 89. Appropriations. The amount of One Billion Pesos 
(Pl,OOO,OOO,OOO.OO) is hereby appropriated for the purpose of funding the gratuity 
to be distributed under Section 86 hereof. 
Any unused or excess appropriations shall be added to the initial operating 
budget of the Authority. 
SECTION 90. 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. 
50 


SECTION 91. Lega 1 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. 
SECTION 92. Implementing Rules and Regulations. The Authority shall 
adopt rules and regulations to implement the provisions of this Act within sixty (60) 
days from date of its approval. 
SECTION 93. Separability Clause. If for any part or provision of this Act 
shall be declared unconstitutional, other parts or provisions hereof which are not 
affected thereby, shall continue in full force and effect. 
SECTION 94. Repealing Clause. All laws, decrees, executive orders, rules 
and regulations or parts thereof inconsistent with the provisions of this Act are 
repealed or modified accordingly. 
SECTION 95. Effectivity. This Act shall take effect fifteen (15) days after 
its complete publication in at least two (2) national newspapers of general 
circulation. 
Approved. 
51