Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. a

Introduced by HON. JOY MYRA S. TAMBUNTING

EXPLANATORY NOTE

An affective and systematic mass transportation program provides a significant
positive economic impact. It creates transit investment on jobs and business revenues
and affirms a variety of broader indirect benefits.

On June 20 1964, Republic act No. 4156 entitled, "An Act creating the Philippine
National Railways, prescribing its powers, functions and duties, and providing for the
necessary funds for its operation" was approved. The said law described PNR as a
corporation to serve as the instrumentality of the Government of the Philippines in
providing a nation-wide railroad and transportation system.

This bill seeks to amend certain provisions of Republic Act No. 4156 in order to
adopt with the country's present circumstances by institutionalizing the revitalization,
rehabilitation and modernization of the Philippines National Railways.

Republic Act 10638 was approved, the law provides for the extension of PNR's
corporate existence for another 50 years.

However, despite of the abovementioned grant of extension on its corporate
life, the PNR is said to run a “loss leader” operation, which means, the more trips the
train runs, the more losses it incur. This condition can be charged to its purely manual
operations as well as its aged and obsolete train system equipment and facilities
resulting to a poor operating potentials and high leakage rate.

Having said that, by continuing the operation of the PNR, without its charter
being amended, so as to adopt with the present condition of the economy, would
probably result to an end of PNR, which is believed to be one of the country's viable
solutions to curtail massive congestion economic in the country.

In view of the foregoing passage of the bill is earnestly sought.

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. Sita

Introduced by HON. JOY MYRA S. TAMBUNTING

AN ACT
PROMOTING THE REVITALIZATION, REHABIITATION AND
MODERNIZATION OF THE PHILIPPINE NATIONAL RAILWAYS, AMENDING
FOR THE PURPOSE CERTAIN PROVISIONS OF R.A. NO. 4156 ENTITLED "AN
ACT CREATING THE PHILIPPINE NATIONAL RAILWAYS, PRESCRIBING ITS
POWERS, FUNCTIONS AND DUTIES, AND PROVIDING FOR THE NECESSARY
FUNDS FOR ITS OPERATION”

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

SECTION 1. Section 3 of Republic Act Four Thousand One Hundred Fifty Six, as
amended by Republic Act Six Thousand Six Hundred Sixty Six and Presidential Decree
Seven Hundred Forty One is hereby replaced to read as follow:

"SEC. 3. AUTHIRIZED CAPITAL STOCK OF THE PHILIPPINE NATIONAL
RAILWAYS. THE AUTHORIZED CAPITAL STOCK OF THE PHILIPPINE
NATIONAL RAILWAYS SHALL BE FIFTY BILLION PESOS DIVIDED INTO
THREE MILLION ONE HUNDRED THIRTEEN THOUSAND COMMON SHARES
ALL WITH PAR VALUE OF TWO HUNDRED PESOS EACH, WHICH SHALL
INCLUDE THE PRESENT AUTHORIZED CAPITALIZATION OF THE
PHILIPPINE NATIONAL RAILWAYS: PROVIDED, THAT THE INCREASE IN
THE AUTHORIZED CAPITAL SHALL BE FULLY SUBSCRIBED BY THE
GOVERNMENT: PROVIDED FURTHER, THAT ALL EXISTING LONG TERM
OBLIGATIONS OF THE PHILIPPINE NATIONAL RAILWAYS TO THE
GOVERNMENT OF THE PHILIPPINES INCLUDING ITS AGENCIES OR
INSTRUMENTALITIES AS WELL AS ITS TAX OBLIGATION TO ANY LOCAL
GOVERNMENT UNIT SHALL BE CONVERTED INTO CAPITAL STOCKS OF
THE PHILIPPINE NATIONAL RAILWAYS AND MADE PART OF THE
SUBSCRIPTION: PROVIDED, STILL FURTHER, THAT THE INCREASE IN
AUTHORIZED CAPITAL STOCK HEREIN PROVIDED IS DISTINCT AND
SHALL NOT PREJUDICE THE ANNUAL APPROPRIATION PROVIDED IN THE.
YEARLY GAA. THE AMOUNT RAISE BY VIRTUE OF THE INCREASE IN THE
AUTHORIZED CAPITAL STOCK, IN ADDITION TO THE EXISTING SINKING
FUND OF THE PNR ESTABLISHED FROM ITS EXISTENCE, SHALL BE USED
FOR THE CONSTRUCTION OF NEW RAILROAD LINE AND WHENEVER


ECONOMICALLY AND TECHNICALLY FEASIBLE, THE REHABILITATION
AND/OR MODERNALIZATION OF MOST OF THE ENTIRE RAILWAY SYSTEM
OF PNR THROUGHOUT THE COUNTRY.

SECTION 2. A new subsection, Section 2-E, shalll be inserted to read as follows:

"SEC. 2-E. THE PHILIPPINE NATIONAL RAILWAYS SHALL BE ALLOWED TO
ENTER INTO A JOINT VENTURE WITH A QUALIFIED PRIVATE SECTOR
PARTNER, PARTICULARLY AND EXCLUSIVELY FOR THE PURPOSE OF
OPERATIONS AND MAINTENANCE SUBJECT TO THE APPROVAL OF THE
BOARD, WITH AT LEAST TWO-THIRDS. (2/3) VOTE, IN A MEETING CALLED
FOR THE PURPOSE. PROVIDED, THAT SUCH PLANS AND/PROGRAMS OF
ENTERING TO A JOINT VENTURE WERE CONSISTENT WITH THE OVERALL
OBJECTIVES OF THE CORPORATION AS ROCOMMENDED BY THE GENERAL
MANAGER, PROVIDED FINALLY, THAT THE PROCUREMENT PROCEDURE
SHALL COMPLY WITH THE EXISTING GOVERNMENT PROCUREMENT LAW.
IN ANY EVENT THAT THE INCREASE IN FARE RESULTED BY REASON OF
THE PRIVATIZATION OF PNR'S OPERATIONS AND MAINTENANCE, THE
INCREMENTAL INCREASE IN VALUE BETWEEN THE REAL FARE AND
NOMINAL FARE SHALL BE SUBSIDIZED AND PAID FOR BY THE PHILIPPINE
GOVERNMENT AND SHALL BE COVERED BY YEARLY AUTOMATIC
APPROPRIATIONS PROVIDED IN THE GENERAL APPROPRIATIONS ACT."

SECTION 3. A new subsection, Section 2-F, shall be inserted to read as follows:

"SEC. 2-F. TO DEPUTIZE AND/OR OBLIGATE LGU'S TO ENFORCE AND
IMPLEMENT, IN COLLABORATION WITH THE GOVERNMENT CORPORATE
COUNCIL (GCC), THE RESTORATION OF PNR'S RIGHT-OF-WAY SO AS TO
RETURN THE LAND AROUND THE STATIONS AND RESTORATION OF PNR'S
RIGHTS TO USE. IN PROCESS, REWARDING THE LGU'S FOR THEIR EFFORT
AND PENALIZING LGU'S FOR THEIR REFUSAL OR INABILITY TO
IMPLEMENT THE RESTORATION OF PNR'S RIGHTFUL USE AND
POSSESSION OF LAND ON THE RIGHT-OF-WAY AND AROUND STATTIONS
SHALL BE THE BASIC POLICY FOR ENFORCEMENT.

SECTION 4. A new subsection, Section 2-G, shall be inserted to read as follows:

"SEC. 2-G. TO PENALIZE CRIMINALLY AND/OR CIVILLY ANY PERSON(S)’
INTERFERENCE WITH THE FREE FLOW, UNHAMPERED USE, AND PASSAGE
OF PNR TRAINS ALONG THEIR LEGAL RIGHT OF WAY (TRACKS, BRIDGES,
TURNOUTS, INTERCONNECTIONS, AND ALL ASSOCIATED LINKAGES).
SUCH AS DISREGARDING SIGNALS AND TRAIN CROSSINGS
DANGEROUSLY ON THE PATH OF ONCOMING TRAINS, PLACING DEAD
BODIES ALONG OR ON TOP OF THE TRACKS AND ITS LINKAGES,
WHETHER AS A CONSEQUENCE OF A CRIME OR NOT, SLEEPING, PLAYING
ON, IDLING ON RAILROAD TRACKS AND ITS LINKAGES, PLACING
BOULDERS OR OBJECTS THAT OBSTRUCT, THROWING OBJECTS AT
PASSING TAINS, AND SIMILAR ACTS OF DESTRUCTION AND
OBSTRUCTION. COMMITING OR ATTEMPTING TO COMMIT SUISIDE


ALONG THE RAILROAD TRACKS AND ITS LINKAGES, BUILDING
STRUCTURES-PERMANENT OR OTHERWISE ALONG THE PNR LEGAL
RIGHT-OF-WAY AND/OR REFUSING TO VACATE THE SAME UPON
DEMAND. :

IF SUCH ACT(S) CAUSES OR HAS POTENTIAL TO CAUSE, OR RESULT IN
DEATH OR INJURY TO PERSONS AND/OR DAMAGE TO PROPERTY/IES
SUCH PARTY/IES WHO, WITH INTENT TO CAUSE, OR ACTUALLY CAUSED
SUCH INTERFERENCE, OBSTRUCTION, WHETHER OR NOT RESULTING IN
INJURY OR DEATH, DAMAGE TO PNR TRAINS, TRACKS, LINKAGES,
AND/OR PNR PROPERTY, SHALL BE HELD CRIMINALLY AND CIVILLY
UABLE BY PNR. DEVOID OF ANY EVIDENCE TO THE CONTRARY, PNR IS
PRESUMPTIVELY ABSOLVED FROM CRIMINAL AND CIVIL LIABILITY."

SECTION 5. Section 3-A of Republic Act Four Thousand One Hundred Fifty Six, as
amended is hereby amended to read as follows:

Sec. 3-A. Foreign Loans. The Philippine National Railways
[Corporation] is hereby authorized to contract loans, credits and
indebtedness IN DOMESTIC CURRENCY OR in any convertible foreign
Currency, or capital goods from foreign governments, their agencies
instrumentalities of financial institutions or any goveramental national or
international financial institutions or firms extending supplier's credit,
deferred payment arrangements or other funds ‘sources, or to issue bonds,
[the total outstanding amounts of which, exclusive of interests, shall not
exceed two hundred million United States dollars or the equivalent thereof
and other currencies,] on such terms and conditions as it deem appropriate
for the accomplishment of its purposes and to enter into and execute
agreements and other documents specifying such terms and conditions.

The President of the Philippines, through the Secretary of Finance, is hereby
authorized to guarantee, absolutely and unconditionally, as primary obligor
and not as surety merely, in the name and no behalf of the Republic of the
Philippines, the payment of the loans, credits, indebtedness and bonds
issued [up to the amount herein authorized,] which shall be over and above
the amount which the President of the Philippines is authorized to guarantee
under Republic Act Numbered Sixty-One Hundred and Forty-Two as
amended, as well as the performance of all or any of the obligations
undertaken by the Corporation in the territory of the Republic of the
Philippines pursuant to loan agreements entered into with foreign
governments or any international financial institutions or fund sources.

The loans, credits and indebtedness contracted under this subsection and
the payment of the principal, interest and other charges thereon, as well as
the importation of machinery, equipment, materials, supplies, by the
Corporation, paid from the proceeds of any loan, credit or indebtedness
incurred under this Act, shall also be exempted from all charges and
restrictions previously and presently imposed, and to be imposed by the
Republic of the Philippines, or any of its agencies and political subdivisions.


SECTION 6. Section 9 of Republic Act Numbered Four Thousand One Hundred and
Fifty-six as amended by Republic Act Numbered Sixty-Three Hundred and Sixty-Six
and PD 741 is hereby amended to read as follows:

"Sec. 9. Managing Head. The Management of the Corporation shall be
vested in the General Manager who shall be appointed by the President of
the Philippines. He shall posses technical competence in management
preferably in railroad transport management, have demonstrated executive
ability, and be of good moral character. He shall hold office for term of SIX
(6) [eight (8)] years.

In the performance of his functions, he shall be assisted by Assistant
General Managers who shall be appointed by him with the approval of the
Board of Directors and the President.

SECTION 7. Section 12 of Republic Act Four Thousand One Hundred Fifty Six, as
amended is hereby amended to read as follows:

Sec. 12. Exemption from taxes, duties, [and] port charges or duties AND
customs bonds [and port charges]. The PHILIPPINE NATIONAL RAILWAYS.
[Corporation] is hereby exempt from payment of all taxes of any kind [every
name] and nature. INCLUDING THOSE IMPOSED BY municipal, city,
provincial or national upon its capital stock, franchise, right of way,
earnings, and all property owned or operated by it and all import duties on
all railway materials, rolling stocks, spare parts, supplies and equipment
imported in the Philippines for and/or by the said corporation, and this
exemption shall extend to wharfage dues, storage charges,, arrastre, and
shipside charges, and special duties on such importations, and other port
charges upon the carrying vessels whose entire cargo consists of materials
for the construction of its projects and rehabilitation of its lines, facilities
and to proportion of the prescribed port charges on other vessels as the
tonnage of materials for such constructions or equipment may bear to the
tonnage of the filing of general importer's and general decumentary bonds
and warehouse bonds for the operation of its warehouses, whether general
bonded warehouses or genera order store.

NOTWITHSTANDING THE PROVISIONS OF ANY OTHER LAWS TO THE
CONTRARY, THE EXEMPTION FROM TAXES, DUTIES AND PORT CHARGES.
OR DUES, CUSTOMS BONDS PORT CHARGES ENJOYED BY THE PHILIPPINE
NATIONAL RAILWAYS AS PROVIDED FOR IN SECTION 12 OF REPUBLIC
(ACT FOUR THOUSAND ONE HUNDRED FIFTY SIX AS AMENDED BY RA 6366
AND 741 IS HEREBY REAFFIRMED

SECTION 8. Separability Clause. — If any portion or provision of this Act is declared
unconstitutional or invalid, the other provisions hereof not affected thereby shall
remain valid and effective.


SECTION 9. Repealing Clause. - All laws, ‘executive orders, presidential decrees,
presidential proclamations, rules and regulations or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SECTION 10. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette and in a newspaper of general circulation.

Approved,