FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
It is essential to facilitate transportation for both people and goods within the three 
major islands of the country to ensure the growth and development of the Philippine 
economy. An adequate and efficient national railway system will successfully provide this 
means of transportation. 
Building a national railway system is an ambitious project, the magnitude of which 
poses many challenges, but every sensible Filipino citizen should desire its completion. To 
invest money and time in the railway would be risky beyond anything ever before attempted, 
but when, and if, it is completed, it would link the country, forever changing the nature of the 
nation's politics and economy, while bringing great profits to the people who build and own 
the railway and develop collateral properties along its tracks. 
Essential railway transportation in the Philippines is supposed to be operated over 
railroad properties which were acquired for public use, but which have been permitted to 
deteriorate, thus requiring extensive rehabilitation and modernization. There is a need to 
revive railway transportation in the country as it offers economic and environmental 
advantages with respect to optimal land use, pollution reduction, energy efficiency and 
conservation, resource allocation, safety, and cost to such extent that the development of 
an adequate and efficient railway transportation system is of national interest. 
This bill proposes to lay the foundation that will spur the necessary reforms in railway 
transportation by a new institutional structure and regulatory framework. These reforms will 
foster a climate that encourages more local government and private sector participation in 
the development of a national railway transportation system. - 
/----- 
RICHARD J. GORDON 
/ 
Senator -96 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
) 
SENATE 
S. No. 1.420 
Introduced by Senator Richard J. Gordon 
AN ACT CONSOLIDATING THE PHILIPPINE NATIONAL RAILWAYS AND THE LIGHT 
RAIL TRANSIT AUTHORITY INTO THE NATIONAL RAILWAY AUTHORITY TO 
INTEGRATE AND REVITALIZE RAILWAY TRANSPORTATION IN THE PHILIPPINES, 
AUTHORIZING THE ISSUANCE OF BONDS THEREFOR TO BUILD AN ADEQUATE 
AND EFFICIENT NATIONAL RAILWAY TRANSPORTATION SYSTEM, AND FOR 
OTHER PURPOSES 
Be if enacted by the Senafe and fhe House of Represenfafives of fhe Philippines in 
Congress assembled: 
SECTION 1. Short W e .  - This Act shall be known as the "National Railway Act." 
Sec. 2. Policy. - It is hereby declared the policy of the State to promote and develop 
a national railway transportation system that will provide and maintain an adequate and 
efficient railway transportation system to the people for the social and economic 
development of the Philippines. 
Sec. 3. Purposes. -This Act shall have the following purposes: 
(1) To consolidate the Philippine National Railways and Light Rail Transit Authority 
into the National Railway Authority; 
(2) To integrate and revitalize railway transportation in the Philippines in order to 
provide energy-efficient, ecologically compatible railway transportation with greater 
efficiency, effectiveness and economy; 
(3) To provide the means to rehabilitate and maintain the physical facilities, improve 
the operation and structure, and restore the financial stability of railway transportation in the 
Philippines through greater local government and private sector participation; and 
(4) To provide an adequate and efficient national railway transportation system to 
meet the needs and service requirements of the people. 
Sec. 4. National Railway Authority. - There is hereby created a corporate body to 
18 
be known as the National Railway Authority, which shall be primarily responsible for the 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
integration, revitalization, planning, prioritization, development and regulation of railway 
transportation in the Philippines. 
Sec. 5. Powers and Functions. - The National Railway Authority shall have the 
following powers and functions: 
(1) To formulate, adopt and implement a comprehensive development plan for a 
(2) To promote and encourage the participation of the local government and the 
private sector in the development and implementation of a comprehensive development 
plan for a national railway system; 
(3) To develop, construct, operate and maintain by itself or by delegation to another, 
railway facilities, including but not limited to stations, terminals and warehouses; 
(4) To prescribe, fix and regulate the schedule, frequency, routing and pricing of 
national railway system; 
railway transportation fees and other service fees; 
(5) To enter into any obligation, assign or accept the assignment of, and rescind any 
agreement or contract; 
(6) To contract loans, indebtedness and credit accommodations, in any local or 
convertible foreign currency, from any international financial institution, foreign government 
entities and foreign or local private commercial banks or similar institutions under terms and 
conditions prescribed by law; 
(7) To issue commercial papers and bonds; 
(8) To exercise the powers set out in the Corporation Code; 
(9) To invest its funds and other assets; 
(IO) To enter into management contracts; 
(11) To create Executive Committees; 
(12) To construct, own, lease, operate and maintain by itself or by delegation to 
another, public utilities and infrastructure facilities and such auxiliary support services 
needed for a national railway transportation system; 
(13) To design, construct, operate and maintain by itself or by delegation to another 
through contract such auxiliary infrastructure support facilities such as, but not limited to, 
parking structures above or below ground, including the means of access; 
(14) To receive donations, grants, bequests and assistance of all kinds and to utilize 
the same; 
(15) To exercise the right of eminent domain; 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
(16) To form, establish, organize and maintain subsidiary corporations or joint 
ventures to encourage local government and private sector participation in the development 
of the national railway transportation system; 
(17) To encourage private investment in the railway and privatize any part or all of 
the national railway transportation system in accordance with law; and 
(18) To promulgate rules and regulations and perform such other powers and 
functions as may be necessary, appropriate or incidental to this Act. 
Sec. 6. Comprehensive Study and Survey. - The National Railway Authority shall 
undertake a comprehensive study and survey of the rehabilitation and construction of 
railway lines in the Philippines to provide an adequate and efficient national railway 
transportation system. 
Sec. 7. Right of Way. - The right of way through the lands where the railway lines 
shall pass based on its comprehensive study and survey shall be granted to the National 
Railway Authority for the construction of the national railway system. The right to acquire 
the lands adjacent to the railway lines shall also be granted to the National Railway 
Authority, including but not limited to the necessary areas for stations, terminals, 
warehouses, parking structures and other facilities. 
The National Railway Authority, 
together with the assistance and cooperation of other national and local government units, 
shall promptly remove all squatters, nuisances and obstructions in the national railway 
system. To aid in the construction of the railway and secure the safe and speedy 
transportation of people and goods, alternate sections of land on each side of the railway on 
the line thereof shall also be secured. 
Sec. 8. Tax Exemption. - All properties, whether real or personal, actually, directly, 
and exclusively used in the national railway transportation system shall be exempt from 
taxation for a period of ten (IO) years from the effectivity of this Act. 
Sec. 9. Board of Directors. - The Board of Directors shall be composed of seven 
(7) members to be appointed by the President of the Republic of the Philippines to serve for 
a term of six (6) years, to wit: 
(1) One (1) representative from the Department of Transportation and 
Communications; 
(2) One (1) representative from the Department of Finance; 
(3) One (1) representative from the Department of Interior and Local Government; 
33 
(4) One (1) representative from the National Economic Development Authority; and 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
I4 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
(5) Three (3) representatives from the private sector who shall be Filipino citizens, of 
good moral character, and of proven competence in transport planning, engineering, 
management and economics, finance, law, public utility or other transport related fields. 
Sec. 10. Powers and Functions of the Board of Directors. - All powers and 
functions of the National Railway Authority shall be vested in and exercised by the Board of 
Directors. The Board of Directors shall also have the following powers and functions: 
(1) To formulate the comprehensive development plan, policies and programs of the 
(2) To direct the management, operation and administration of the National Railway 
(3) To create offices or positions necessary for the effective and efficient operation of 
the National Railway Authority, to appoint subordinate officers and personnel of the National 
Railway Authority and fix their remuneration and other emoluments, and to remove or 
otherwise discipline such officers and personnel; 
National Railway Authority; 
Authority; 
(4) To establish performance targets as basis for evaluating and monitoring 
performance; 
(5) To authorize expenditures as are in the interest of the effective and efficient 
operation of the National Railway Authority; and 
(6) To exercise such other powers as may be necessary to accomplish the purposes 
Sec. 11. President. - The National Railway Authority shall be headed by a 
President who shall be primarily responsible for carrying out the comprehensive 
development plan of the National Railway Authority and the policies and programs of the 
Board of Directors. The President shall be a Filipino citizen, of good moral character, a 
person of proven competence and leadership capability, and possessed with at least ten 
(IO) years experience and background in management or public administration from a 
reputable institution. The President of the National Railway Authority shall be appointed by 
the President of the Republic of the Philippines and shall have a term of six (6) years. 
for which the National Railway Authority was organized. 
Sec. 12. Duties and Responsibilities of the President. - The President of the 
National Railway Authority shall have the following duties and responsibilities: 
(1) To execute, administer and implement the comprehensive development plan, 
policies and programs of the Board of Directors: 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
(2) To direct and supervise the operations and administration of the National Railway 
(3) To direct and supervise the preparation of the agenda for the meetings of the 
Board of Directors, and to submit for the consideration of the Board of Directors such 
measures as may be necessary to carry out the purposes of this Act; 
Authority; 
(4) To represent the National Railway Authority in all its dealings; and 
(5) To exercise such other powers and functions as the Board of Directors may 
Sec. 13. Consolidation of the Philippine National Railways and the Light Rail 
Transit Authority info the National Railway Authority. - The Philippine National 
Railways and the Light Rail Transit Authority are hereby consolidated into the National 
Railway Authority. The National Railway Authority shall possess all the rights, privileges, 
immunities and franchises of the Philippine National Railways and the Light Rail Transit 
Authority; and all property, real or personal, and all receivables due on whatever account, 
including subscriptions to shares and other choses in action, and all and every other interest 
of, or belonging to, or due to the Philippine National Railways and the Light Rail Transit 
Authority, shall be deemed transferred to and vested in the National Railway Authority. The 
National Railway Authority shall be responsible for all the liabilities and obligations of the 
Philippine National Railways and the Light Rail Transit Authority in the same manner as if it 
had itself incurred such liabilities or obligations; and any pending claim, action or proceeding 
brought by or against any of the Philippine National Railways and the Light Rail Transit 
Authority may be prosecuted by or against the National Railway Authority. The rights of 
creditors or liens upon the property of any of the Philippine National Railways and the Light 
Rail Transit Authority shall not be impaired by the consolidation. 
assign or authorize. 
Sec. 14. Subsidiaries. - The National Railway Authority shall have the power to 
form, establish, organize and maintain subsidiaries to implement the provisions of this Act. 
Such subsidiaries shall be formed in accordance with Philippine law. 
Sec. 15. Bonds. - The National Railway Authority is authorized to issue bonds, 
which bonds may be sold to obtain funds to build the national railway system. Such bonds 
shall be in such forms and denominations, shall mature within such periods of not more than 
fifty (50) years from the date of their issue, may be redeemable at the option of the National 
32 
Railway Authority before maturity in such manner as may be stipulated therein, and shall be 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
subject to such terms and conditions, issued in such manner and amount, and sold at such 
prices as may be prescribed by the National Railway Authority. 
Sec. 16. Injunction and Restraining Order. -The implementation of the provisions 
of this Act is of national interest and shall not be restrained or enjoined except by an order 
issued by the Supreme Court of the Philippines. 
Sec. 17. No Strike. - Railway transportation is an indispensable service of national 
interest and employees engaged in its operation shall not have the right strike. 
Sec. 18. Appropriation. - The amount of one hundred million pesos 
(PhP100,000,000) or such amount as may be necessary to carry out this Act is hereby 
authorized to be appropriated. 
Sec. 19. Transitory Provision. - The consolidation of the Philippine National 
Railways and the Light Rail Transit Authority into the National Railway Authority shall be 
undertaken immediately and completed within three (3) months from the effectivity of this 
Act. 
All employees of the Philippine National Railways and the Light Rail Transit Authority 
who voluntarily retire or are separated from the service and whose retirement or separation 
has been approved shall be paid retirement or separation benefits and other entitlements 
granted under existing laws. 
Sec. 20. Repealing Clause. - All laws, decrees, orders, rules and regulations or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
Sec. 21. Separability Clause. - If any portion or provision of this Act is declared 
unconstitutional, the remainder of this Act or other provisions not affected thereby shall 
remain in force and effect. 
Sec. 22. Effectivity. - This Act shall take effect after fifteen (15) days following the 
completion of its publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines. 
Approved,