Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regutar Session

5061

HOUSE BILL NO.

Introduced by Honorable Lucy Marie Torres-Gomez

EXPLANATORY NOTE

The People's Television Network Inc. (PTNI) is the flagship television network
owned by the Philippine Government PTNI began operations in 1974 as Government
Television (GTV-4) and was the broadcast arm of the National Media Production Center
({NMPC), In 1980, GTV-4 evolved into the Maharlika Broadcasting System (MBS).
Following the People Power Revolution in 1986, MBS was renamed Peoples’ Television
{PTV).

In 1992, the network became a government-owned and controlled corporation
known as People’s Network, Inc. (PTBI) by virtue of Republic Act No. 7306 signed by
President Corazon C. Aquino.

On July 16, 2001, PTNI adopted the name Nationat Broadcasting Network (NBN)
as its call name, in recognition of the need to develop a new image in line with its new
programming thrusts.

Since 1992, PTNI has been operating on revenues it generates on its own. It
generates its revenue through airtime sales, commercial spots co-productions, inter-
agency collaborative programs and equipment rental. In July 2001, the Network
stopped airing commercial advertisements, as stipulated in its Charter. To augment its
operational requirements, PTNI has received government subsidies released as needed
based on requests made by the Network from the National Government.

Thus, there is an urgent need to regenerate and improve the information
mechanisms of government. Under its Charter, the Network does not receive annual
appropriation for operations. After 2001, PTNI/NBN by express provision of law,
specifically, section 19 of Title VII of RA 7306, cannot engaged in commercial
advertising which has made it difficult to meet its daily operational expenses. Currently,


PTNI/NBN is under financial rehabilitation and is in serious need of capital infusion to be
able to move towards it being self-sufficient and commercially viable once again.

This bill seeks to amend the PTV Charter to do the following (a) to allow the
network to generate funds from advertising and airtime sales and the same shall be
utilized by PTV solely for its operations and capital expenditure; (b) the government to
approve a capital infusion to jumpstart the rehabilitation of the network; and (c) for the
network to adopt other measures that wilt help restore’ the viability of the network
operations.

In view of the foregoing, approval of this bill is earnestly sought.

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LUCY TORRES-! EZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

508+

Introduced by Honorable Lucy Marie Torres-Gomez

AN ACT
AMENDING REPUBLIC ACT NO. 7306 -
AN ACT PROVIDING FOR THE ESTABLISHMENT OF THE PEOPLE'S TELEVISION
NETWORK, INCORPORATED, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING
FOR ITS SOURCES OF FUNDING AND FOR OTHER PURPOSES

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

TITLE I. — GENERAL PROVISIONS.

SECTION |. Title, — This Act shall be known as the "Amended Charter of the People's:
Television Network, Incorporated”.

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SECTION 2, Declaration of Policies. — In consonance with the Constitutional recognition of
the vital role of communication and information in nation-building, and the important aspect
played by the broadcasting industry, itis hereby declared as the policy of the State to:

a) Fully develop communication structures suitable to the needs and aspirations of the nation
and in accordance with a policy that respects the freedom of speech and of the press;

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b) Give priority to education, science and technology, arts, culture, and sports to foster
patriotism and nationalism, accelerate social peogress, and promote total human liberation and
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11) Develop the broadcasting industry as a medium for the development, promotion and
12 advancement of Filipino nationalism, cutture and values that serve as an instrument in the
13 struggle for Filipino sovereignty, identity, national unity and integration;

14 d)_ Harness the resources of the government and the private sector towards a close, continuous
15 and balanced cooperation in order to take advantage of technological advances in the
16 broadcasting industry;

17) Maintain a broadcast industry system that serves as a vital link for panicipative democracy
18 and effective government information dissemination through developmental communication,
19 free from any political or partisan influence and held acoountable directly to the people:

20 1) Encourage the development and broadcast of balanced programs which feature, among
21 others, educational, wholesome entertainment, cultural, public affairs and sports; and

22. G)__ ENSURE THAT THE GOVERNMENT TELEVISION SHALL NOT UNDULY
23. COMPETE WITH THE PRIVATE TELEVISION SECTOR FOR ADVERTISING AND
24 COMMERCIAL INTEREST AS FAR AS PRACTICABLE;

25° -H) PROVIDE QUALITY ALTERNATIVE PROGRAMS FOR THE BENEFIT AND
26 MORAL UPLIFTMENT OF THE CITIZENRY.


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‘TITLE Il. - CREATION AND DOMICILE

SECTION 3. Creation, — ‘There shall be created a body corporate to be called "The "People's
Television Network, Incorporated,” hereinafter referred to as the "Network," which shall engage
in television broadcasting in the Philippines. The Network shall be government-owned and
controlled corporation under a Board of Directors to be appointed by the President of the
Philippines.

SECTION 4. Corporate Existence. — The legal existence of the Network shall be for a period
of fifty (50) years from the effectivity of RA 7306, NOTHWIHTSTANDING ANY
PROVISION OF LAW TO THE CONTRARY: PROVIDED, HOWEVER, THAT AT THE
END OF THE SAID PERIOD, THE NETWORK SHALL AUTOMATICALLY
CONTINUE TO EXIST FOR ANOTHER FIFTY (50) YEARS, UNLESS OTHERWISE,
PROVIDED BY LAW.

SECTION 5. Domicite. — The Network shall have its principal office and domicile in the
Metropolitan Manila area. 1t may also establish offices, branches and/or stations in any part of
the Philippines as its Board of Dieectors may see fit,

SECTION 5-A. - THE GOVERNMENT OF THE PHILIPPINES, THROUGH THE
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES AND THE
BUREAU OF LANDS, SHALL IDENTIFY AND APPROPRIATE ALIENABLE
GOVERNMENT LAND FOR THE NETWORK TO ESTABLISH AND BUILD ITS.
MAIN BROADCAST CENTER AND MAJOR PROVINCIAL STATIONS.

‘TITLE I — FRANCHISE AND LICENSE TO OPERATE
SECTION 6, Franchise Gramt. — Subject to the provision of the Constitution, laws, orders,
decrees not inconsistent herewith, the network is hereby yranted a franchise to construct,
maintain and operate television broadcasting stations and satellite receiving, and transmitting
facilities in the Philippines for a period co-terminus with the corporate existence of the Network.
SECTION 7. License to Operate. — The National Telecommunications Commission (NTC)
shall forthwith cause the issuance 10 the Network of the corresponding license to operate upon
compliance with all its requirements.

TITLE 1V.— POWERS AND FUNCTIONS

SECTION 8, Powers of the Network. — The Network stall have the following powers:
a) to sue or be sued in its corporate name;
b) tw have continuous succession in its corporate name;

©) to adopt and use a corporate seal;

4) to adopt by-laws not contrary to law, morals, or public policy, and to amend or repeal the
same in accordance with the provisions of existing laws;

€) to ACQUIRE, purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage
and otherwise deal with such real and personal property;

f) twestablish, purchase, install, construct, use and maintain national, regional, provincial and
community stations and facilities for television broadcasting throughout and in any part of the
country;


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8) _to-enter into joint ventures or partnerships with other broadcasting authorities and stations or
international agencies or private organizations for the purpose of promoting its broadcasting

services;

h) to raise, borrow or obtain funds, from any source, private or government, foreign or
domestic and to enter into any financial or credit arrangements in order to support carry out its
objectives and purposes, subject to the pertinent laws governing public debt and expenditure;

i) to receive donations and grants fiom any source whether local or foreign and avail of official
development assistance and cancessional loans provided by foreign governments, foundations or
financial insti

i) to emer into, make, perform and carry out contracts of any kind and description in
furtherance of the corporate purpose with any person, firm, association or corporation;

k) to accept corporate institutional support for developmental programs and to determine the
conditions subject to which the said programs may be accepted for television transmission; and

1) texercise the general powers outlined in the Corporation Code of the Philippines, as well as
such other incidental powers as may be necessary to carry on its activities.

SECTION 9, Functions of the Network, — The Network shall have the following functions:

8) to serve primarily as a vehicle for the State for purposes of education, science and
technology, atts, culture, and sports in onder to foster national pride and idemtity;

b) to serve as a vehicle for bringing the Government closer to the people in order to cnhance
‘their awareness of the programs, policies, thrusts, and directions of the Government;

€) to ensure that the programs broadcast by the Network maintain a high general standard in all
respects, and in particular, in respect to their content and quality and proper balance of
educational, news, public affairs, entertainment, and sports programs;

a) to serve as an effective outlet for alternative programming;

) TO PROVIDE AIRTIME TO LEGITIMATE PEOPLE’S ORGANIZATIONS AND
NGOS IN THE PROMOTION OF THEIR PROGRAMS AND PROJECTS;

f)_ toserve as an effective medium for national unity and political stability by reaching as much
of the Filipino population as possibile through the effective use of modem broadcasting
technology; and

g) to ensure that nothing is included in the programs broadcast by the Network which shall,

1) offend public morals, good taste, or decency;

2) offend any racial group or promote ill-will between different races or different public
groups, prescribing such programs as would promote strictly partisan politics and propaganda;

3) offend the followers of any religious faith, sect, or arder,or
4) outrage public feeling in general
TITLE V. — CORPORATE STRUCTURE

SECTION 10. The Board of Directors. — The corporate powers of the Network shall be
exercised, all its business conducted and all its property controlled and held by the Board of


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Directors. It shall be composed of five (5) members who shall be appointed by the President of

the Philippines. The Board shall be made up of the following:

8) two (2) members from the Government sector;

b) two (2) members from the private sector, one (1) of whom shall have at least ten (10) years
of experience in the broadcast industry; and

©) one (1) member from the educational sector,

SECTION 10-4, The Advisory Board. — THE PRESIDENT OF THE PHILIPPINES
SHALL APPOINT SEVEN (7) SECTORAL MEMBERS WITH WIDE EXPERIENCE,
AND EXPERTISE IN THEIR RESPECTIVE FIELDS OF WORK TO CONSTITUTE.
THE ADVISORY BOARD.

THE MEMBERS OF THE ADVISORY BOARD MAY BE CHOSEN FROM AMONG
NOMINEES OF ASSOCIATIONS AND ORGANIZATIONS REPRESENTING
VARIOUS STAKEHOLDERS IN THE BROADCAST INDUSTRY AND THEY SHALL
SERVE WITH A FIXED TERM OF SIX (6) YEARS.

THE ADVISORY BOARD SHALL SERVE AS THE STRATEGIC AND POLICY-
MAKING BODY THAT WILL FORMULATE POLICIES TO GOVERN THE.
NETWORK. THE CHAIRMAN OF THE BOARD OF DIRECTORS SHALL BE AN RX-
OFFICIO MEMBER OF THE ADVISORY BOARD.

SECTION 11, Qualifications of the Members of the Board. — The members of the Board shall
be of proven and unquestionable probity, integrity, honesty, impartiality, reputation, and
knowledgeable of the broadcast industry. They shall not be, in any way, connected with any
‘other broudeasting corporation or hold any position that may conflict with their functions and
duties as Directors of the Network.

Tf'a member shall be appointed to another government office or runs for any elective position, fie
shall be deemed to have vacated membership in the Board on the day of his appointment or filing,
of his candidacy, as the case may be.

SECTION 12. Term of the Members of Board, —~ ‘the initial appointees of the President of the
Philippines shall have the following terms:

a) Three (3) directors, one from each sector, for two (2) years, and

b) The other two (2) directors, one (1) each from the government and private sector, for four
(4) years.

Subsequent appointees shall serve a term of four (4) years, without reappointment. Appointment
to any vacancy in the Board shall be for the unexpired portion of the term of the predecessor.

THE MEMBERS SHALL ELECT AMONG THEMSELVES ONE WHO WILL SERVE
AS CHAIRMAN OF THE BOARD. THE BOARD SHALL MEET AT LEAST TWICE A.
MONTH TO DISCUSS MATTERS OF POLICY IN ORDER TO EFFECTIVELY
CARRY OUT THE PROVISIONS OF THIS ACT.

SECTION 13, #unctions and Duties of the Board of Directors, — The general functions and
duties of the Board of Directors shall be as follows:

a) to carry out the provisions of this Act,
1b) to exercise the corporate powers, and conduct all business of the Network;
©) to decide matters of policy; and

4) to submit to the President of the Philippines and the Congress a comprehensive annual


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eport on the operation of the Network within the first sixty (60) days of the fiscal year.

SECTION 14. The Network General Manager. — The Network General Manager shall be
elected by the Board, of which he need not be a member. in the latter case, he shall serve as an
cx officio member of the Board. He shall also be the Chief operating Officer of the Necwork,
who shall be responsible for the proper administration and management of the Network in
accordance with the policies laid down by the Board.

If the Network General Manager is absent, or is incapacitated by reason of illness or for any
other cause, is temporarily unable to perform his duties, the Board of Directors may designate an
officer-in-charge to act in his place and stead during such absence from duty.

SECTION 15. Powers and Functions of the Network General Manager. — Subject to the

control and supervision of the Board, the Network General Manager shall have the following
powers and functions:

a) submit policy recommendations and propose measures necessary to carry out the objectives
and functions of the Network for the consideration of the Board;

) recommend to the Board for approval an organizational structure and plantilla for personnel
of the Network, in accordance with existing laws, rules and regulations;

©) execute, administer and implement policies and measures approved by the Board;

4) Submit to the Board an annual budget and such supplemental budgets as may be necessary
for its consideration and approval;

¢c) represent the Network, its dealings with other persons, entities, agencies and institutions,
whether public or private, domestic or foreign, subject to the limitations and conditions herein
provided;

appoint, subject 1o the confirmation by the Board, discipline or remove for cause, officer and
personnel of the Network in accordance with the Civil Servic Law, rules and regulations; and

8) perform such other functions and duties which may be assigned to him by the Board,
TITLE VI. — PROGRAM STANDARDS,

SECTION 16. General Program Standards, — The Board of Directors is mandated to sel up a
Code of Standards, inclusive of the following aspects:

a) Presentations of News

b) Public Affairs Programs and Commentaries

©) Public Service Programs.

d) Educational Programs

©) Children’s Programs ’
£) Agriculture and Livelihood Programs

x) Women and Youth Issues

h) Locally-produced and foreign produced programs.


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SECTION 17. USE OF BLOCKTIMERS, — THE USE OF BLOCKTIMERS SHALL

BE ALLOWED BUT LIMITED TO EDUCATION, SPORTS, QUALITY
ENTERTAINMENT PROGRAMS, AND SUCH PROGRAMS WHICH PROMOTES
NATIONAL INTEREST, SUBJECT TO QUALITY STANDARDS SET BY THE BOARD
OF DIRECTORS. THE NETWORK SHALL ASSUME SOLIDARY LIABILITY WITH
EACH OF THE INDIVIDUAL PRODUCERS, FOR THE CONTENT OF ALL
PROGRAMS SHOWN BY BLOCKTIMERS,

TITLE VE. ~~ FINANCIAL PROVISIONS.

SECTION 18, CAPITALIZATION. — THE ADDITIONAL AUTHORIZED CAPITAL
STOCK OF THE NETWORK SHALL BE SUBJECT TO APPROPRIATION IN THE
GENERAL APPROPRIATIONS ACT.

SECTION 19.REVENUE GENERATION, —THE NETWORK SHALL BE ALLOWED TO.
GENERATE FUNDS FROM ADVERTISING AND AIRTIME SALES LN
ACCORDANCE WITH THE POLICIES AND RATES SET BY THE BOARD OF
DIRECTORS. SUBJECT TO EXISTING LAWS, ALI. FEES OR OTHER REVENUES
COLLECTED OR RECEIVED BY THE NETWORK SHALL BE RETAINED BY IT
AND UTILIZED SOLELY FOR ITS OPERATIONS AND CAPITAL EXPENDITURES,

SECTION 19-A. EXEMPTION FROM RA No, 7656, - THE NETWORK SHALL BE
EXEMPT FROM REMITTING FIFTY PERCENT (50%) OF ITS ANNUAL NET.
EARNINGS AS PROVIDED BY RA No. 7656, SUBJECT TO THE APPROVAL OK THE
DEPARTMENT OF FINANCE, AND PROVIDED, THAT THE ANNUAL NET
EARNINGS BE USED SOLELY FOR ITS OPERATIONS AND CAPITAL
EXPENDITURES.

‘TITLE Vill. — ADMINISTRATIVE PROVISIONS

SECTION 20, Record of Transactions, — The Network shall keep proper accounts and records
of all its transactions and affairs, and shall do all things necessary to ensure that all payments
made out of its moneys are correctly made and properly authorized, and that adequate control is
maintained over the assets of, or in the custody of, the Network and the expenditures incurred by
the Network, The Network shall be subject to audit by the Commission on Audit.

SECTION 20-A. TAX CREDITS FOR AFFILIATE STATIONS. - SUBJECT TO THE
PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, PRIVATE
COMPANIES, WHICH ARE GRANTED A FRANCHISE TO OPERATE A LOCAL.
TELEVISION STATION OR COMMUNITY TELEVISION AND ARE AFFILIATED
WITH THE NETWORK SHALL BE GRANTED COMMENSURATE TAX CREDITS:
PROVIDED, THAT UPON TERMINATION OF THE AFFILIATION WITH THE
NETWORK, THE TAX CREDITS SHALL CEASE TO BE GRANTED.

‘TITLE IX. — TAX EXEMPTIONS

SECTION 21. Tae Exemptions on Importations. — The importations of equipment, apparatus
and materials to be actually, directly and exclusively used in the operation of the Network,
whether purchased from or donated by any foreign government and/or private entity shall be free
from the payment of any and all forms of taxes, license fees and customs duties that may be
levied upon them. Such equipment and apparatus shall include cameras, TV monitors and
recorders, TV transmitters, electronic tubes, editing machines, and all such necessary equipment
required for television broadcasting: provided, that the subsequent importation of the equipment,
apparatus and materials shall be subject to review by the Department of Finance: provided,
further, that in the event the equipment, apparatus and materials are sold to non-tax exempt
persons or entities, the buyers shall be considered the exporteys and who shall then be subject to
tax.


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SECTION 21-A, EXEMPTION FROM REAL PROPERTY TAX. — SUBJECT TO THE
PROVISIONS OF THE LOCAL GOVERNMENT CODE AND THE NATIONAL
INTERNAL REVENUE CODE, THE NETWORK SHALL BE EXEMPT FROM REAL.
PROPERTY TAX PROVIDED THAT SAVINGS FROM REAL PROPERTY TAX
EXEMPTION WILL BE USED TO FUND CAPITAL EXPENDITURES AND
OPERATIONS FOR THE NETWORK.

TIFLE X.— EMPLOYEES OF THE NETWORK,

SECTION 22. Civil Service Law Coverage for Employees. — ‘The hiring, appointment,
employment, promotion, disciplinary control, and other terms and conditions of the service of all
employees of the Network, and such other matter affecting its employees shall be consistent with
the provisions of the Civil Service aw, rules and regulations: PROVIDED, HOWEVER,
THAT POSITIONS CONSIDERED AS CREATIVE AND ARTISTIC IN NATURE
SHALL BE EXEMPTED FROM THE QUALIFICATION STANDARDS AND CIVIL.
SERVICE ELIGIBILITY REQUIREMENTS.

SECTION 23, Salary Scale for Officials and Employees. — The rates of compensation and
classes of positions in the Network shall not be covered by Republic Act 6758 and the
Compensation and Position Classification Board (CPCB).

SECTION 24. GSIS Coverage for Employees. — All employees hired by the Network shall be
deemed members of the Governments Service Insurance System (GSIS) for the purpose of
employee benefits,

TITLE XI. — MISCELT-ANEOUS PROVISIONS

SECTION 25. Transition Clause. — All the powers, functions, assets and liabilities, capital,
accounts, contracts, and facilities pertaining to the People’s Television - 4PTV-4), and all
equipment relating to television broadcasting owned by the government shall be transferred to
the Network. :

SECTION 26. Transitory Provision. — The Network General Manager shall recommend to the
Board of Directors a corporate plan that includes programming direction, budget, organizational
plan and structure, a staffing pattern and compensation plan within ninety (90) days from the
effectivity of this Act, Said corporate structure shall be implemented by the Network General
Manager within thirty (30) days after its approval by the Board of Directors: provided, that the
current and incumbent employees of the People's Television - 4 (PTV-4) shall be absorbed and
accommodated by the Network.

SECTION 26-A. REORGANIZATION OF THE NETWORK. - NINETY (90) DAYS FROM
THE APPROVAL OF THIS ACT, THE BOARD OF DIRECTORS IS HEREBY
EMPOWERED TO REORGANIZE THE NETWORK TO MAKE IT MORE
EFFECTIVE AND INNOVATIVE. FOR THIS PURPOSE, THE BOARD MAY ABOLISH
OR CREATE OFFICES, TRANSFER FUNCTIONS, EQUIPMENT, PROPERTIES,
RECORDS, AND PERSONNEL; INSTITUTE COST-CUTTING AND OTHER
RELATED MEASURES TO CARRY OUT THE SAID OBJECTIVES. PROVIDED,
THAT ANY OFFICIAL OR EMPLOYEE OF THE NETWORK WHO MAY BE
PHASED OUT BY REASON OF THE REORGANIZATION AUTHORIZED HEREIN
SHALL BE ENTITLED TO SUCH BENEFITS AS MAYBE DETERMINED BY
EXISTING LAWS.

SECTION 2¢-B, OBLIGATIONS. THE GOVERNMENT OF THE REPUBLIC OF THE
PHILIPPINES, THROUGH THE DEPARTMENT OF FINANCE SHALL GUARANTEE
ALL PRESENT AND FUTURE FINANCIAL OBLIGATIONS THAT THE NETWORK
MAY ENTER INTO WITH LOCAL AND FOREGIN ENTITIES.


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SECTION 27. Amendments. — The provisions of this Act shall be subject to amendments,
alteration or repeal by (he Congress of the Philippines, when public interest so requires.

SECTION 28. Separabitity Clause. — Many provision or part of this Act is declared invalid or
unconstitutional, the remainder shall not be affected thereby ima shall continue to be in full force
and effect,

SECTION 29. Repealing Clause. — All laws, decrees, executive orders, administrative orders,
rules and regulations, and other issuances or parts thereof inconsistent herewith are hereby
repealed, amended or modified accordingly.

SECTION 30. Effectivity Clause. — This Act shall take effect fifteen (15) days after its
publication in two (2) national newspapers of general circulation.

Approved: