FIFTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
" , 
SENATE 
Introduced by Senator EDGARDO J. ANGARA 
EXPLANATORY NOTE 
Our government places the highest priority on poverty alleviation, particularly in 
the countryside" Rural development' is the necessary strategy to do so and maximum 
private sector participation is ideal to achieve it, The establishment ofa private rural 
airport infrastructure will encourage economic activity in the hinterlands, by serving not 
only as transportation hubs but also as industrial, commercial and service centers which 
will provide countryside employment to uplift the rural standards of living. 
Speedy access between urban and rural areas may be provided only by the 
construction and maintenance of a rural air transport network complemented by the 
rehabilitation and maintenance of former or existing airports in the remote areas of our 
archipelago, Economic development, particularly in the countryside mandates a rural 
airport network as an essential part of the country's overall transport infrastructure" 
National airports in the main urban areas, such as: Manila, Cebu (Mactan), Davap, 
Zamboanga, Iloilo and Bacolod are equipped with adequate guidance, communications, 
security and safety systems" However, most of the so-called missionary routes are 
inadequately equipped, and all the rural routes, are those even more remote than the 
missionary routes, HAVE NO SUPPORT WHATSOEVER. These rural routes are the 
most difficult to access not only due to their remoteness, but also due to no government 
presence at all. 
Many of them are scattered throughout the many islands of our archipelago, 
The development of rural airports will permit speedy access and reasonable costs to 
promote and enhance the following activities for our rural areas: 
a) The transport of personnel and cargo; 
b) The increase in commercial activity through the speedy delivery of products 
and services; 
c) Improvement of domestic and international tourism; 
d) Immediate availability of emergency, rescue, disaster relief services; 
e) Improvement of communications, mail, money transfers and packages to and 
from the rural areas; 
1) Prompt delivery of government services; 
1 


g) Assistance to the Armed Forces of the Philippines in matters of national 
security; 
h) Speedier police responses to problems of banditry and other peace and order 
matters; 
i) Extension of agricultural and envirolU11cntai services, such as: enhanced crop 
productivity through aerial application, rainmaking and drought alleviation 
through aerial seedings, and reforestation and pest control through air broadcast 
technologies; 
j) Enhanced surveillance of our natural resources including forestry, coral reefs 
and animal and marine life. 
The govemment, in tie up with lhe private sector, shall undertake the identification, 
construction, repair, maintenance, modernization a.ncl activation of rural infrastructures . 
• 
The Air Transport Office currently supervises 68 airports. Many of them are ill 
equipped, expensive to maintain in relation to the low traffic, and are obviously a drain on 
the national budget. Yet, so many of our rural areas have no airports at all. If they do, they 
are either inadequately or not maintained at all and ace so difficult to service. To cite: 
a) These rural airpOlis are usually of the "bush" type; they are short, unpaved, 
grass, dirt or merely flattened airstrips, often unattended; some have obstacles 
that aircraft landing and take-off can be made only one way. Only the lightest 
of aircraft can handle them. 
b) These airfields have no air safety personnel or equipment available. 
c) There are no reserve pilots 0[' mechanics. 
d) There are no refueling depots. 
e) There are no repair stations and aircraft rescue during breakdown is difficult. 
i) There are no guidance systems, no communications systems, no security 
systems and no electricity to support aircraft or air terminal operations. 
g) There are only poor or even no access roads, piers or other complementaty 
transport services. 
h) As they are usually located away from towns due to topographical limits, there 
are no board and lodging or storage facilities nearby to serve passengers and 
cargo. 
i) There are often no police or even private security agencies to prevent 
lawlessness and banditry or 10 react them. 
j) In many parts of the Visayas and in practically all of Mindanao outside' the 
larger cities, there are serious peace and order problems. 
' 
The need to develop and/or operate rural airports is particularly needed in the 
island of Mindanao where the countly faces serious insurgency and kidnapping problems. 
It would be ideal to have each town and city in the Philippines have its own rural 
airport or at least easy access to such an airport so that the entire population can be within 
two hours from any major airport or urban area in the Philippines 
But the Air Transportation Office which is the agency tasked with the development 
of airports has limited or no funds not only to supervise the existing airports, but also to 
establish, operate and maintain other airpolis, particularly those in the rural areas. The 
govemment budgetary deficits point to an even bleaker picture for these nlral airports and 
the inability to adequately maiutain the existing ones in the face of rising operating and 
capital expenses. 
2 


The inadequate resources of the Air Transportation Office render it ineffective in 
providing full support for the Rural Air Transport System. The rural airports are 
unattended and the intricacies and peculiarities of a rural air transport system are not 
appreciated. ATO Guidelines normally applicable to more sophisticated aircraft and 
airports as in Manila tend to be applied to the rural airports where conditions are entirely 
different. Unnecessary sanctions have often been applied to rural air transport operators 
that obviously hinder rural growth and development. Needless to say, these cause drains on 
the operators' financial resources that further adversely affect whatever upgrading 
programs may have been in place. An example of how a rural air transport operator was 
treated is cited in an annex to lhis note, authored by a former Secretary of the Department 
of Transportation and Commumcations. 
In reality, the ATO has limited facilities and/or funds to regulate the rural airports. 
Due to these limitations, the A. TO has not been able to help promote rural development 
through a well-planned program intended to develop the rural airport network. 
On the other hand, all air transport, particularly of the rural type, has built-in safety 
mechanisms that for most, If not all, intents and purposes make ATO supervision 
practically superfluous. This natural built-in safety mechanism is the life and livelihood of 
personnel devoted to rural air transport, such as the pilots and the mechanics who maintain 
the aircraft. They will have to see to it that their equipment flies within adequate bounds of 
safety since their lives, limbs and livelihood depend on them. 
In other countries with remote rural areas and large hinterlands, such as Norway 
and Canada, their bush airports are not only government-owned, constructed, supported 
and maintained, but air transp1lrtation to and from these airports is heavily subsidized by 
the state. 
With the exception of airports located in large cities, such as Manila (NAIA) aM 
Cebu (MCIAA), many missionm'y airports and certainly all rural airports are impossible to 
privately or publicly operate at a profit. That is the reason why the private sector has been 
timid in entering this area. For true development (0 take place, the private sector is an 
indispensable catalyst. Indeed, (here can be opportunities for these hubs of commerce to be 
built and to grow on their own on a strictly private basis without any government support. 
It would be ideal for the private sector to undertake these activities strictly on its 
own, without any subsidy from government, only with the proper incentives to do so. Such 
incentives are provided anyway to other spheres of economic activity that government 
wants to encourage. If the proper incentives are not provided to the construction, operation 
and maintenance of rural airport, there will be no downstream domestic activities to 
eventually tax or even regulate. 
Approval, therefore, of the attached bill is earnestly requested 
~/~ 
EDGARDO J. ANGARA 
3 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B. No. 2064 
, 
" 
v .... '~""~t:.;: '..;t 
ti~~;" 
~L',.:'i.>;;\:," 
Introduced by Senator EDGARDO J. ANGARA 
AN ACT 
GRANTING THE RIGHT TO FRANCHISES TO DEVELOP THE RURAL 
AIRPORT INFRASTRUCTURE NETWORK IN THE PHILIPPINES FOR 
COMMERCIAL AND OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Franchisee. - The provisions of this Act shall be available 
to any congressional franchise holder engaged in rural air transport operating any 
type of fixed or rotary wing, land or sea type of aircraft 
SEC. 2. Definition of Term.- Rural Airport. - As used in this Act, a rural 
airport shall mean any runway, take-off and landing area or seaway, at least one 
thousand two hundred (1,200) meters in length and with a suitable aircraft 
movement area which may be accessed by any type of aircraft rated by its 
manufacturers to utilize the facilities. 
Such airports are those which, due to their remoteness, lack the presence 
and continuous operations of any government regulatory body, 
Such an airport shall be so certified as a regular destination by' any 
franchisee, 
SEC. 3. Construction, Mallagement, Operation and Maintenance of 
Rural Airport. - Any Franchisee may construct, manage, operate and/or maintain 
any rural airport in any part of the Philippines in order to eventually make each 
municipality regnlarly accessible within easy reach of the principal and proximate 
urban areas, 
1 


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 
33 
34 
35 
36 
37 
38 
SEC. 4. Use of Private Airports. SUbject to some limitations as the Air 
Transportation Office may prescribe, all existing private airports are hereby 
mandated to accommodate rural aircraft; Provided that said private airports may 
charge reasonable fees for the use of the airport. 
SEC. 5. Use of Natlonal, Provlnclal or Municipal Road. - In cases of 
emergency and in the absel!ce of any private airpoli, any national, provincial or 
municipal road may be used for take-off and landing purposes, provided these are 
delineated and previously approved by the municipal or provincial government 
for such use, provided fiJrther, that the features of the said airports are within the 
specifications and operating limits according to the manufacturers of the aircraft 
employed and provided finally, thM adequate safety standards are followed by the 
franchisee. 
SEC. 6. Development of tlte Surrounding Area of the Airport. - In order 
to encourage industries to be developed within the immediately surrounding area 
of the airport, the Franchisee may establish, manage, lease and operate the 
following activities: aircraft hangar; educational facilities for aircraft mechanics, 
pilot and personnel; warehouses, light industry, commercial and financial 
facilities; hotel guest house and tourism facilities; and telecommunications 
facilities to support activities, provided these facilities are within five hundred-
meter (500 m) radius of the runway of said airports, subject to existing laws of the 
Government. 
SEC. 7. Government Use. - The Franchisee, with the use of its own 
aircraft and airport facilities may provide said services to any branch of the 
Armed Forces of the Philippines or any government agency for compensation 
SEC. 8. Right to Purchase or Lease. - The Franchisee shall have the right 
to purchase andlor lease, whichever is applicable and available, adequate space at 
any government or government agency owned airport, aerodrome, or air terminal 
for purposes of linking the rural air transport system with national and 
international flight and, providing necessary support services. 
SEC. 9. Right to Operate. - The Franchisee shall be allowed to operate 
along the trunk line, to carry and pick up passengers to and from the rural airports. 
SEC. 10. Insurance Coverage. - The Franchisee shall be required to 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
II 
12 
13 
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
cover all passengers and cargo with insurance as specified by the Air Transport 
Office or the Civil Aeronautics Board. Any third party liability of the Franchisee 
shall be limited to the amount ofthe insurance cover so specified. 
SEC. 11. Franchisee as Deputy of ATO. - Whenever the Air Transport 
Office is not present in any airport point of origin or destination within the 
Philippines, the Franchisee shall automatically assume the status as the deputy of 
the Air Transportation Office for air safety purposes. 
In cases of extreme urgency [or necessary repairs, the Franchisee shaH, so 
as not to jeopardize the operations of the airport and/or the aircraft, cause the 
necessary repairs, subject to reimbursement by the Govemment. 
The Franchisee, as well as the airports operated by the Franchisee shall not 
be subject to any restrictive opew(ions by any govemment agency except those 
that pertain to the national interest. Regular reports on all airports operated by the 
Franchisee shall be made by the Franchisee to the A TO. 
SEC. 12. Report to the Office of the Transportation Secretary. - In case. 
of emergencies, the Franchisee is mandated to report any operational hazards or 
imminent danger involving natiollai security within the airport premises to the: 
Office of the Transport Security. 
SEC. 13. Safety Requirement. - All rural aircraft shall comply with the' 
minimum safety requirement prescribed by the Air Transportation Office. 
SEC. 14. Tax Incentives. - The Franchisee as operation of rural airport 
shall be exempt from any and all taxes, including income, capital gains, lease, 
rental, gross, value-added, ad valorem, compensating, import and export duties on 
. 
, 
its aircraft parts and maintenance and overhauling equipment, interest on loans 
and dividends on investment contracted or granted, fuel, oil, and real estate taxes. 
In lieu of said taxes, the Fml1chisee shall, as the Air Transportation Office 
deems necessary, and after going over the financial records of the Franchisee,. 
regularly adjust the airfare rate (0 make it more affordable to passengers as 
compared to the prevailing rates of other commercial airlines. 


1 
2 
3 
4 
S 
6 
7 
8 
9 
10 
11 
12 
13 
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
2S 
SEC. 15. No Disruption Policy. - As the rural airport is vital to the air 
transport system in particular and the economy in general. its operations may not 
be disrupted by any agency unless specifically approved by the President of the 
Philippines and such disruptions shall not exceed thiliy (30) days for anyone 
occasion. 
SEC. 16. Duration of the Privilege. - These powers and privileges herein 
presented to an eligible Franchisee shall be valid for twenty-five (2S) years and 
renewable for another twenty-five (2S) years, unless invalidated by Congress. 
SEC. 17. Penalty. - Violators of this Act shall be subjected to a fine often 
thousand pesos (Php 10,000.00) or imprisonment of six (6) months, or both, for 
any offense against the provisions of this Act. 
SEC. 18. Separability Clause. - If any of the provisions of this Act is 
declared unconstitutional, the other provisions shall remain valid. 
SEC. 19. Repealing Clause. - All other decrees, laws, rules and 
regulations, and other issuances or parts thereof, inconsistent with this Act are 
hereby repealed or modified accordingly. 
SEC. 20. Effectivity. - This Act shall take effect after fifteen (IS) days 
from its publication in at least two (2) newspapers of general circulation. 
Approved, 
4