THIRTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
SENATE 
S.B. NO. 1040 
Introduced by Sen. Jinggoy Ejercito Estrada 
EXPLANATORY NOTE 
The world famous resort Boracay of the Province of Aklan is one of the top tourist 
destination of the Philippines. Business activities also flourished in the area to cater to 
foreign and local visitors. 
Records show that volume of passenger air traffic plying the Kalibo-Manila- 
Kalibo, Manila-Caticlan-Manila and Kalibo-Cebu-Kalibo routes have steadily grown. 
There are now also a number of airlines operating along these routes. Hence, the need 
to improve, expand and upgrade the facilities in the two airports including night landing 
and all weather airport equipment and system. This bill seeks to achieve this by 
establishing the “Aklan Airport Authority” which shali have the power to administer and 
operate the Kalibo and Caticlan airports in the Province of Aklan. 
The approval of this bill is earnestly sought. 


THIRTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
SENATE 
,I . 
Introduced by Sen. Jinggoy Ejercito Estrada 
AN ACT 
CREATING THE AKLAN AIRPORT AUTHORITY, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Tifle. - This Act shall be known and cited as the “Charter of Aklan 
Airport Authority.” 
SECTION 2. Creation of the Aklan Airporf Aufhority. - There is hereby 
established a body corporate to be known as Aklan Airport Authority which shall be 
attached to the Department of Transportation and Communications. The principal office 
of the Authority shall be located at Kalibo, Province of Aklan. 
The Authority may have such branches] agencies or subsidiaries as it may deem 
proper and necessary. 
SECTION 3. Primary Purposes and Objectives. - The authority shall 
principally undertake the economical, efficient and effective control, management and 
supervision of the Kalibo Airport in the Municipality of Kalibo and the Caticlan Airport in 
the Municipality of Malay, hereinafter collectively referred to as the airports, such as 
either airports as may be established in the Province of Aklan. In addition, it shall have 
the following objectives: 
To encourage] promote and develop international and air traffic in the 
central and western Visayas regions as a means of making the regions. 
centers of international trade and tourism. and acceleratina the 
a) 
u -- - 


development of the means of transportation and communication in the 
country; and 
To upgrade the services and facilities of the airports and to formulate 
internationally acceptable standards of airports accommodation and 
service. 
b) 
SECTION 4. Functions, Powers and Dufies. - The Authority shall have the 
following functions, powers and duties: 
To formulate a comprehensive and integrated development policy and 
programs of the airport and to implement, review and update such policy 
and program periodically; 
To control supervise, construct, maintain, operate and provide such 
facilities or services as shall be necessary for the efficient functioning of 
the airports; 
To promulgate rules and regulations governing the planning, development 
maintenance, operation and improvement of the airports, and to control 
and supervise the construction of any structure of the rendition of any 
service within the airports; 
To exercise all the power of a corporation under the Corporation Code of 
the Philippines, insofar as those powers are not inconsistent with the 
provisions of this Act; 
To acquire, purchase, own, administer, lease, mortgage, sell or otherwise 
dispose of any land, building, airport facility, or property of whatever kind 
and nature, whether movable or immovable, or any interest therein: 
Provided, that any asset located in the Kalibo Airport important to national 
security shall not be subject to alienation or mortgage by the Authority nor 
to transfer to any entity other than the National Government; 
To exercise the power of eminent domain in the pursuit of its purposes 
and objectives; 
To levy and collect dues, charges, fees or assessment of the use of airport 
premises, works, appliances, facilities or concessions, or for any service 
provided by the Authority; 
To retain and appropriate dues, and charges collected by the Authority 
relative to the use of airport premises for such measures as may be 
necessary to make the Authority more effective and efficient in the 
discharge of its assigned tasks; 


i) 
To invest its idle funds, as it may deem proper, in government securities 
and other evidences of indebtedness; and 
To provide services, whether on its own or otherwise, within the airports 
and the approaches thereof as may be necessary or in connection with 
maintenance and operation of the airports and their facilities. 
j) 
SECTION 5. Policy Authority - The Authority shall have the power to exercise 
such police authority as may be necessary within its premises or areas of operation to 
carry out its functions and attain its purposes and objectives: Provided, That the 
Authority may request the assistance of law enforcement agencies, including request for 
deputization as may be required. Such police authority shall be exercise in connection 
with following, among others: 
Maintenance of security to passengers, cargoes, aircraft, airport 
equipment, structures, facilities, personnel, funds and documents; 
Regulating the entry to, exit from and movement with the airports; 
Maintenance of peace and order within the premises of Authority; 
Regulation and supervision of private security agencies operating in the 
airports; 
Enforcement of rules and regulations promulgated by the Authority 
pursuant to law; and 
In case of emergencies or imminent danger involving national security with 
the airport premises, the Philippine Air Force Security Command shall 
take charge. 
SECTION 6. Boards of Directors. - The Corporate powers of the Authority 
shall be exercised by and vested in a 5oard of eleven (11) members, which shall be 
composed of a chairman, a vice-chairman and nine (9) members. The Secretary of 
Transportation and Communications and the General Manager of the Authority shall be 
the ex-officio chairman and vice-chairman of the Board, respectively. The Secretary of 
Finance, the Secretary of Tourism, the Chief of Staff of the Armed Forces of the 
Philippines, The Commissioner of Immigration and Deportation, and the Provincial 
Governor of Aklan, or their duly authorized representatives, shall be ex-officio members, 
together with four (4) members from the private sector who shall be residents of Aklan 
to be appointed by the Board upon recommendation of the Provincial Governor. 


The Board shall promulgate its rules relative to meetings, quorum requirements 
and compensation or allowances of the members of the: 
Provided, That said 
compensation or allowances shall be in accordance with existing rules and regulation. 
SECTION 7. Funcfions, Power, and Duties of the Board. - In addition to the 
powers vested in the Board under the other sections of this Act, the Board shall have 
the following functions, powers and duties; 
To define and approve the programs, plans, policies, procedure and 
guidelines of the Authority who shall be the Chief Executive Officer of the 
Authority; 
To recommend to the President of the Philippines for appointment, a 
general manager of the Authority who shall be the Chief Executive Officer 
of the Authority; 
To approve the Authority’s organizational and administrative structure, 
staffing pattern, operating and capital expenditures, and financial budgets 
upon recommendation of the General Manager; 
To approve salary ranges, benefits and other terms and condition of 
service for all officers and employees of the Authority upon 
recommendation of the General Manager, which shall be subject to 
existing laws, rules and regulation; 
To fix the rates of dues, charges, fees of assessments for the use of 
airport premises, works, appliances, concessions, services and other fees 
and charges related to the activities of the airport, upon recommendation 
of the general manager; and 
Generally, to exercise all the functions and powers necessary or incidental 
to attain the purpose and objectives of this Act. 
SECTION 8. Functions, powers and dufies of the General Manager - The 
General Manager shall be directly responsible to the Board and shall have the following 
functions, power and duties: 
a) 
To direct and supervise the day-to-day management, operation and 
administration of the airports; 
b) 
To implement and enforce decisions, orders, rules and regulations issues, 
prescribed or adopted by the Board; 
To undertake the researches, studies, investigations and other activities 
related to the present operations and future improvements of the airports, 
c) 


and to submit comprehensive reports and appropriate recommendation to 
the Board for proper action; 
To appoint, transfer, suspend, remove or otherwise any subordinate 
officers or employees of the Authority, the approval of the Board; 
Within the limits of the Authority delegated to him by the Board, to execute 
contracts, incur obligations, acquire and dispose of assets, and deliver 
documents, on behalf of the Authority; 
To grant permits or concessions to do business with the airports in 
accordance with such rules and regulations to be promulgated by the 
Authority for the purpose; and 
To perform such other duties as the Board may delegate or assign and 
such acts as may necessary and proper to implement this Act. 
SECTION 9. Capifal. - The Authority shall have an authorized capital stock 
equal to and consisting of: 
a) 
The value of fixed assets (including airport facilities, runways and 
equipment) and such other properties, movable, currently administered by 
or belonging to the airports as valued on the date of the effectivity of this 
Act; 
b) 
The value of such real estate owned andlor administered by the airports; 
c) 
Government contribution in such amount as may be deemed an 
appropriate initial amount, as approved by the President of the Philippines, 
which shall be more or less equivalent to six (6) months working capital 
requirement of the Authority. 
Thereafter the government contribution to the capital of the Authority shall be 
provided for in General Appropriations Act. 
SECTION I O .  Disfribufion of income. - Should the Authority operate in a 
profit, the net income shall be distributed as follows: 
a) 
b) 
c) 
d) 
Thirty Percent (30%), shall be remitted to the National Government; 
Ten Percent (IO%), shall be remitted to the Provincial Government; 
Five Percent (5%), shall be remitted to the Municipal Government of 
Kalibo as her share; 
Fifty Five Percent (55%), shall be retained by the Aklan Airport Authority 
for Capital and other improvement: 


SECTION 11. Audhbr- The Commission on Audit may appoint a representative 
who shall be the auditor of the Authority together with the necessary personnel to assist 
said representative in the performance of his duties the number and salaries of the 
auditor and said personnel shall be determined by the chairman of the Commission on 
Audit in accordance with the revised compensation and position classification system 
The Auditor shall as soon as possible but not later than three (3) months after the 
accounts have been submitted for audit, send and annual report to the Board. The 
Auditor may also submit such periodic and special reports as the Board deem 
necessary. 
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SECTION 12. Annual Report. - The Board shall submit to the President of the 
Philippines through the Department of Transportation and Communications and both 
Houses of Congress of the Philippines, together with the audit report of the relevant 
accounts, an annual report generally dealing with the activities and operations of the 
Authority. 
SECTION 13. Applicability of Civil Service Laws. - The Authority and its 
officials and employees shall be subjected to the Civil Service Laws and its rules and 
regulations. 
SECTION 14. Borrowing Power - The Authority may, in accordance with 
existing laws, rules and regulations on local and foreign borrowing, raise, either from 
local or international sources, by .way of loans, credits or securities, and other borrowing 
instrument with the power to create pledges, mortgages and other voluntary liens or 
encumbrances or any of its assets or properties upon recommendation of the Secretary 
of Transportation and Communications and subject to the prior approval of the 
President of the Philippines. 
All loans contracted by the Authority under this section together with all interests 
and other sums payable in respect thereof shall constitute a charge upon all the 
revenues and assets of the Authority and shall rank equally with one another, but shall 
have priority over any other claim on charge on the revenue and assets of the Authority. 
Provided, That this provision shall not be constructed as a prohibition or restriction on 


the power of the Authority to create pledges, mortgages and other voluntary liens or 
encumbrances on any assets or property of the Authority. 
The payment of the loans or other indebtedness of the Authority may be 
Guaranteed by the National Government subject to the approval of the President of the 
Philippines. 
SECTION 15. Tax Exemptions. - The Authority shaft be exempt from the 
payment of corporate income taxes. The Authority shall likewise be exempt from realty 
taxes imposed by the National Government or any of its political subdivisions, agencies 
and instrumentalities; Provided, That no tax exemption herein granted shall extend to 
any subsidiary which may be organized by the Authority. 
The exemptions enjoyed by the Authority shall be for a period of five (5) years 
from the effectivity of this Act. 
SECTION 16. Transfer of Existing Facilifies and lntangible Assets. - All 
existing public airport facilities, runways, lands, building and other properties movable 
and immovable belonging to or presently administered by the airports, and all assets, 
powers, rights, interest or privileges relating to airport works or air operation, including 
all equipment which are necessary for operation of the air navigation, air traffic control 
and crash fire, and rescue facilities are hereby transferred to the Authority. 
SECTION 17. Projects in Progress. - All ongoing projects relating to the 
construction of airport facilities shall be continued by the agency or agencies involved 
until their completion. Thereafter, such projects shall be transferred to the Authority in 
, accordance with agreement among agencies concerned. Any disagreement relating to 
such transfer shall be submitted to the President of the Philippines for final decision. 
SECTION 18. 
Transfer of Liabilities and Debts. - Upon transfer to and 
acceptance by the Authority of the physical facilities, intangible assets and completed 
projects referred to in the preceding sections, all debts, liabilities and obligations of 
government agencies or entities concerned in respect of such physical facilities, 


tangible assets and completed projects within the airports shall likewise be assumed by 
the Authority. 
SECTION 19. Funding. - The amount necessary to initially pay for the capital 
stock of the Authority shall be included in the General Appropriations Act of the year 
following its approval. Thereafter, subsequent government contribution to the capital of 
the Authority shall be included in the general appropriations act. 
SECTION 20. 
Abolifion of fhe Kalibo Airport as a Division in fhe Air 
Transportation Office. - The Kalibo Airport including the Caticlan Airport as a division 
under the Air Transportation Office is hereby abolished. The Airport General Manager 
of the Kalibo Airport shall continue in ofice and shall perform all powers and functions 
of the Authority until such time as the General Manager is appointed for the smooth 
transfer of responsibility from the abolished entity to the Authority. Provided, That no 
officials and employees shall be terminated, and provided that existing personnel shall 
have the option either to be absorbed by the Authority or remain with the Air 
Transportation Office. 
SECTION 21. 
Repealing Clause. - All laws, executive order, letters of 
instructions, rules and regulations or provisions thereof which are inconsistent with this 
Act are hereby repealed, amended or modified accordingly. 
SECTION 22. Separability Clause. - If any portion hereof shall be held invalid 
or unconstitutional, such invalidity or unconstitutionality shall not effect the other 
provisions which shall remain in full force and effect. 
SECTION 23. Eflecfivify Clause. - This act shall take effect within fifteen (1 5) 
days after its publication in two (2).national newspaper of general circulation. 
Approved,