SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENAi'i' 0 
S. No. 
. 
J. 
,;y 
}.: 
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Introduced by Senator Miriam Defensor Santiago 
EXPLANA TORY NOTE 
The series of oil price hikes led to public clamor for the review of Republic Act No. 
8479, otherwise known as the Downstream Oil Industly Deregulation Law of 1998. Upon the 
directive of then President Arroyo, the Department of Energy created an Independent Review 
Committee (IRC) consisting of professionals from the private sector to review and assess 
whether the Oil Deregulation Law had been effective and whether it had attained its goals under 
the prevailing economic circumstances and conditions in the country. 
Among the findings of the IRC was that effective enforcement of the law was the key 
issue. The reported malpractices and illegal activities, such as substandard service stations and 
petroleum product smuggling demoralized legitimate investors. 
Deregulation of the oil industry does not necessarily mean absence of any form of 
government intervention. It is consistent with the govemment's mandate to supervise the 
industry and regulate those aspects where market forces may not operate satisfactorily and thus 
more active intervention may be justified to ensure a truly competitive market llllder a regime of 
fair prices and adequate and continuous supply of enviromnentally clean and high-quality 
petroleum products. 
The IRC found that jurisdiction over the oil industJy was spread out to many government 
agencies under Executive Order No. 377 (Providing the Institutional Framework for the 
Administration of the Deregulated Downstream Oil Industry), which made coordination and 
enforcement very difficult, with each agency trying to protect one's turf. 
Thus, enforcement of laws, rules and regulations was one of the critical issues in 
monitoring the downstream sector particularly in the retailing of LPG and liquid fuels. Removing 


certain powers Ii-om the DOE, under Republic Act No. 8479 led to the proliferation of illegal, 
unsafe, unfair practices in the LPG and liquid fuel ("botebote") sectors of the oil industry, 
especially in the retailing sector. 
Most of the players favored reinstatement and even strengthening of the DOE's authority 
to register and issue certifications for qualified industry participants so that the DOE could 
effectively enforce compliance with rules and regulations on product quality, facility standards, 
and safety. 
This bill, therefore, seeks to provide definitive rules and regulations to restore the DOE's 
authority and police power to suspend operations and revoke licenses of violators and erring 
players in the industry in the context of a deregulated environment.' 
4,- 4f
vlw-. )f~ 
MIRIAM DEF NSOR SANTIfGO 
QJ!{ 
• As a reslIlt of a public hearing and consultations during the 13th Congress, this was the DOE-proposed substitute 
bill to amend Republic Act No. 8479. This bill was originally filed during the Fourteenth Congress, First Regular 
Session. 
2 


2 
3 
,. 
, 
~T'1p~';\lr" 
SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
I~~lbr( d i !:I~ '-: 'f, r-bf\J. 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
JlJL 25 
n?':0 () 
SENATE 
S. No. 
11.1~O~~~ __ 
I!lU~'>_· ~--,-,--;.;'\': . .f-
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
AMENDING REPUBLIC ACT NO. 8679, OTHERWISE KNOWN AS THE 
"DOWNSTREAM OIL INDUSTRY DEREGULATION ACT OF 1998" 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
4 
SECTION 1. Section 5 o[ Republic Act No. 8479 is hereby amended to read as follows: 
5 
Section 5. Liberalization of the Industry. -
Any law to the contrary 
6 
notwithstanding, any person or entity may import or purchase any qnantity of crude oil 
7 
and petroleum products from a foreign or domestic source, lease or own and operate 
8 
refineries and other downstream oil facilities and market such crude oil and petroleum 
9 
products either in a generic name or his or its own trade name, or use the same for his or 
10 
its own requirement: Provided, That any person [who shall] ENGAGED OR 
II 
INTENDING TO engage in any such activity shall give prior notice thereof to the DOE 
12 
[or monitoring purposes AND SHALL FIRST SECURE A CERTIFICATE OF 
13 
COMPLIANCE (COC) OR, FOR LPG RELATED ACTIVITIES, A STANDARD 
14 
COMPLIANCE CERTIFICATE (SCC) FROM THE DOE: Provided,further, That [such 
15 
notice] THE ISSUANCE OF SAID COC/SCC shall NOT exempt such person or entity 
16 
from securing certificates of quality, health and safety and environmental clearance from 
17 
the proper governmental agencies: Provided, furthermore, That such person or entity 
18 
shall, for monitoring purposes, report to the DOE his or its every importation/exportation: 
19 
Provided, .finally, That all oil importations shall be in accordance with the Basel 
20 
Convention. 
I 


SECTION 2. Section 14 of Republic Act No. 8479 is hereby amended to read as follows: 
2 
Section 14. MONITORING AND ENFORCEMENT MECHANISMS.-
3 
(A) 
CERTIFICATE 
OF 
COMPLIANCE/STANDARD 
COMPLIANCE 
4 
CERTIFICATE - THE COC/SCC PROVIDED UNDER SECTION 5 HEREOF SHALL 
5 
BE A MANDATORY REQUIREMENT FOR THE GRANT OR'RENEWAL OF ANY 
6 
LOCAL GOVERNMENT LICENSE OR PERMIT (I.E. 
BUSINESS/MAYOR'S 
7 
PERMIT) TO ENGAGE IN ANY ACTIVITY IN THE DOWNSTREAM OIL 
8 
INDUSTRY. NO BUSINESS PERMIT SHALL BE ISSUED OR RENEWED 
9 
WITHOUT FIRST SECURING COC/SCC FROM THE DOE. THE COC/SCC SHALL 
10 
INDiCA TE THAT THE PERSONENTITY APPLYING THEREFOR HAS COMPLIED 
11 
WITH THE SUBMISSION OF ALL INFORMATION REQUIRED UNDER 
12 
PERTINENT DOE CIRCULARS AND GUIDELINES AND SHALL STATE THAT 
13 
THE FACILITIES OF SAID PERSON/ENTITY WAS SUBJECTED TO AND PASSED 
14 
THE INSPECTION, BACKGROUND INVESTIGATION AND EVALUATION OF 
15 
EQUIPMENT, PRODUCTS AND FACILITIES TO ENSURE COMPLIANCE WITH 
16 
STANDARDS ON QUALITY, HEALTH, SAFETY AND ENVIRONMENTAL 
17 
PROTECTION. THE SCC FOR PERSON/ENTITY INVOLVED IN THE RETAILING 
18 
OF LPG SHALL INCLUDE THE SPECIFIC BRANDIS A RETAILER IS ALLOWED 
19 
TO SELL AS PROVIDED FOR IN THE CERTIFICATION SUBMITTED BY THE 
20 
BRAND OWNERS TO THE DOE. 
21 
THE DOE SHALL NOT ISSUE OR RENEW ANY COC/SCC IF, BASED ON 
22 
ITS RECORDS, THE APPLICANT IS SUBJECT OF A COMPLAINT OR CASE 
23 
fILED FOR NON-COMPLIANCE OF THE PROVISIONS OF THIS ACT AND 
24 
RULES AND REGULATIONS ISSUED BY THE DOE IN RELATION THERETO, 
25 
UNLESS 
SUCI-I 
COMPLAINT 
OR 
CASE 
HAS 
BEEN 
DISMISSED 
OF 
26 
COMPLETEL Y 
RESOLVED 
THROUGH 
THE 
PAYMENT 
OF 
THE 
27 
. CORRESPONDING 
ADMINISTRATIVE 
FINES 
OR 
PENALTIES, 
AMONG 
28 
OTHERS, PROVIDED, FURTHER, THAT THE DOE SHALL REVOKE A COC/SCC 
2 


AND DISQUALIFY FOR ISSUANCE OF NEW COC/SCC ANY PERSON/ENTITY 
2 
FOUND TO HAVE COMMITTED THE SAME VIOLATION AT LEAST THREE (3) 
3 
TIMES WITHIN A PERIOD OF TWELVE (12) SUCCEEDING MONTHS, 
4 
REGARDLESS 
OF 
THE 
PAYMENT 
OF 
THE 
CORRESPONDING 
5 
ADMINISTRATIVE FINE OR PENALTY FOR EACH VIOLATION. 
6 
THE COC SHALL BE VALID FOR FIVE (5) YEARS AND THE SCC SHALL 
7 
BE VALID FOR ONE (1) YEAR FROM THE DATE OF ISSUANCE THEREOF, 
8 
UNLESS SOONER REVOKED OR SUSPENDED. THE REVOCATION OR 
9 
SUSPENSION OF A COC/SCC SHALL BE A GROUND FOR THE REVOCATION 
10 
AND/OR SUSPENSION BY THE LGU CONCERNED OF THE PERMIT AND 
11 
OPERATION OF ERRING PERSON/ENTITY. 
12 
(B) MONITORING AND STANDARDS COMPLIANCE INSPECTION - THE 
13 
DOE, 
BY 
ITSELF OR IN 
PARTNERSHIP WITH 
OTHER CONCERNED 
14 
GOVERNMENT AGENCIES, SHALL CONDUCT REGULAR MONITORING AND 
15 
INSPECTION OF PERSON/ENTITY INVOLVED IN THE DOWNSTREAM OIL 
16 
ACTIVITIES TO ENSURE THAT CLEAN, ENVIRONMENT ALL Y -SAFE AND 
17 
WORKER-BENIGN 
TECI-INOLOGIES 
ARE 
APPLIED 
AND 
TO 
ENSURE 
18 
CONFORMITY WITH QUALITY AND SAFETY STANDARDS AND OTHER 
19 
MANDATORY REQUIREMENTS OF THE LAW. THE DOE SHALL NOT ISSUE 
20 
COC/SCC UNLESS IT IS SHOWN UPON PROPER CONDUCT OF STANDARD 
21 
COMPLIANCE INSPECTION, THAT THE PERSON/ENTITY ENGAGED IN THE 
22 
DOWNSTREAM OIL ACTIVITIES HAS COMPLIED WITH THE PROVISIONS OF 
23 
THIS ACT, THE PNS ON PETROLEUM PRODUCTS AND FACILITIES AND SUCH 
24 
OTHER RULES AND REGULATIONS AS MAY BE PRESCRIBED BY THE DOE. 
25 
SPECIFIC TO THE LPG SECTOR, THE DOE SHALL CONFISCATE 
26 
CYLINDERS FOUND TO BE IN VIOLATION OF RULES AND REGULATIONS ON 
27 
SAFETY, MEASUREMENT OR VOLUME STANDARDS, MARKINGS AND 
28 
RELATED MATTERS (I.E. UNDERFILLED, UNBRANDED, POSSESSION OF 
29 
TAMPERED, ALTERED OR MODIFIED LPG CYLINDERS, AND THE LIKE) AND 
3 


SHALL FILE NECESSARY ADMINISTRATIVE AND/OR CRIMINAL CHARGES IN 
2 
COOPERATION WITH CONCERNED GOVERNMENT AGENCIES. TI-IE DOE 
3 
SHALL 
FORMULATE 
RULES, 
IN 
CONSULTATION 
WITH 
INDUSTRY 
4 
PARTICIPANTS, FOR THE DISPOSITION or CONFISCATED, SEIZED AND 
5 
IMPOUNDED LPG CYLINDERS. 
6 
TI-IE DOE SHALL REQUIRE PERSON/ENTITY ENGAGED IN THE 
7 
DOWNSTREAM OIL ACTIVITIES TO REGULARLY SUBMIT INFORMATION 
8 
SUCH AS, BUT NOT LIMITED TO, NATURE OF BUSINESS, TRADE 
9 
NAME/BRAND NAME OWNERS, LIST AND ADDRESS OR LOCATION OF 
10 
FACILITIES AND EQUIPMENT AND SUCH OTHER RELEVANT INFORMATION 
I I 
AS MAYBE DETERMINED BY THE DOE. THE DOE SHALL ESTABLISH A 
12 
CENTRAL DATABASE WITH ONE (1) YEAR FROM EFFECTIVITY OF THIS ACT. 
13 
THE DOE SHALL MAINTAIN Tl-IE DATABASE AND UPDATE THE SAME ON A 
14 
QUARTERLY BASIS. THE DATABASE SHALL BE MADE AVAILABLE TO TI-IE 
15 
PUBLIC UPON REQUEST, SUBJECT TO THE LIMITATIONS PROVIDED IN 
16 
SECTION IS (G) OF THIS ACT AND THE APPROVAL OF THE DOE. 
17 
(C) REPORTS AND DISCLOSURE TO DOE - THE DOE SHALL HAVE THE 
18 
AUTHORITY TO REQUIRE ANY PERSON/ENTITY ENGAGED IN 
THE 
19 
DOWNSTREAM OIL ACTIVITIES TO SUBMIT WRITTEN, ELECTRONIC OR 
20 
OTHER FORM OF REPORTS OR DISCLOSURES, AS MAY DEEM REASONABLE 
21 
AND NECESSARY TO EFFECTIVELY PERFORM THEIR FUNCTIONS UNDER 
22 
THIS ACT. ANY PERSON/ENTITY WHO FAILS TO SUBMIT ANY SUCH REPORT 
23 
OR DISCLOSURE WITHIN THE PERIOD AND IN THE MANNER PRESCRIBED 
24 
BY THE DOE SHALL BE PENALIZED UNDER TI-IIS ACT. 
25 
(D) MONITORING OF DOWNSTREAM OIL INDUSTRY ACTIVITY-
26 
(I) [(all The DOE shall monitor and publish daily international crude oil prices, as 
27 
well as follow the movements of domestic oil prices. FOR THIS PURPOSE, THE 
28 
GENERAL APPROPRIATIONS ACT (GAA) SHALL PROVIDE FOR THE DOE 
29 
SUCH FUNDS, BUDGET OR ALLOCATION FOR THE DOE'S SUBSCRIPTION TO 
4 


INTERNATIONAL OIL PRlCE WIRE SERVICES. It shall likewise monitor the quality 
2 
of petroleum products and stop the operation of businesses involved in the sale of 
3 
petroleum products which do not comply with the national standards of quality that are 
4 
aligned with the international standards/protocols of quality. The Bureau of Product 
5 
Standards of the DTI, together with the Department of Environment and Natural 
6 
Resources (DENR), the DOE, the Depm1ment of Science and Technology (DOST), 
7 
representatives of the fuel and automotive industries and the consumers, shall set the 
8 
specifications for all types of fuel and fuel-related products to improve fuel composition 
9 
for increased efficiency and reduced emissions. The BPS shall also specify the allowable 
10 
eontentof additives in all types offuels and fuel-related products. 
II 
(II) [(b)] The DOE shall monitor the refining and manufacturing processes of 
12 
local petroleum products to ensure that clean and safe (environment and worker-benign) 
13 
technologies axe applied. This shall also apply to the process of marketing local and 
14 
imported petroleum products. FOR THIS PURPOSE, THE GAA SHALL FURTHER 
15 
PROVIDE FOR ADDITIONAL BUDGETARY SUPPORT TO THE DOE FOR THE 
16 
ACQUISITION AND MAINTENANCE OF THE APPROPRIATE MOBILE TESTING 
17 
FACILITIES AND EQUIPMENT. 
18 
(III) [(c)] The DOE shall maintain a periodic schedule of present and future total 
19 
industry inventory of petroleum products for the purpose of determining the level of 
20 
supply. To implement this, the importers, refiners, and marketers are hereby required to 
21 
submit monthly to the DOE their actual importations, local purchases, sales and/or 
22 
consumption, and inventory on a per crude/product basis. 
23 
(IV) [(d)] Any report from any person of an unreasonable rise in the prices of 
24 
petroleum products shall be immediately acted upon. For this purpose, the creation of the 
25 
DOE-DO] Task Force is hereby mandated to determine within thirty (30) days the merits 
26 
of the report and initiate the necessary action warranted under the circumstance: 
27 
PrOVided, That nothing herein shall prevent the said task force from investigating and/or 
28 
filing the necessary complaint with the proper court or agency motu propio. 
5 


Upon the effectivity of this Act, the Secretaries of Energy and Justice shall jointly 
2 
appoint the members of a committee who shall be tasked with the drafting of the rules 
3 
and guidelines to be adopted by the Task Force in the performance of its duly. These 
4 
guidelines shall ensure the efficiency, promptness, and effectiveness in the handling of its 
5 
cases. The Task Force shall be organized and its members appointed within one (I) 
6 
mouth from the effectivity of this Act. 
7 
(V) [(e)] In times of national emergency, when the public interest so requires, the 
8 
DOE may, during the emergency and under reasonable terms prescribed by it, 
9 
temporarily take over or direct the operation of any person or entity engaged in the 
10 
Industry. 
11 
SECTION 3. Section 15 of Republic Act No. 8479 is hereby amended to read as follows: 
12 
Section IS. Additional Powers of the DOE Secretary. ~ In connection with the 
13 
enforcement of this Act, the DOE Secretary shall have the following powers: 
14 
(a) To gather and compile appropriate information concerning, and to investigate 
15 
from time to time the organization, business, conduct, practices, and management of any 
16 
person or entity in the Industry; 
17 
(b) To require, by general or special orders, persons or entities engaged in a 
18 
particular activity of the industry: (i) to file an annual or special report, or both in such 
19 
form as the Secretary may prescribe, or (ii) to answer specific qnestions in writing, 
20 
furnishing to the Secretary such information as he may require as to the organization, 
21 
business, conduct, practices, management, and relation to other corporations, 
22 
partnerships, and individuals of the respective persons or entities filing such reports or 
23 
answer. Such reports and or answer shall be filed with the Secretary under oath and 
24 
within such reasonable time as the Secretary may prescribe; 
25 
(c) Upon the direction of the President or either House of Congress, to investigate 
26 
and report the facts relating to any alleged violation of this Act by any person or 
27 
corporation; 
6 


(d) Upon the application of the Secretary of Justice, to investigate and make 
2 
recommendations for the readjustment of the business of any person or entity alleged to 
3 
be violating this Act in order that such person or entity may thereafter maintain his or its 
4 
organization, management, and conduct of business in accordance with law; 
5 
(e) [To recommend to the proper government agency the suspension or revocation 
6 
and termination of the business permit of an offender;] FOR ANY VIOLATION OR 
7 
NON-COMPLIANCE WITH THIS ACT OR SUCH RULES AND REGULATIONS 
8 
ISSUED BY THE DOE IN RELATION THERETO, TO IMPOSE AND COLLECT 
9 
ADMINISTRATIVE FINES AND PENALTIES WHICH SHALL RANGE FROM A 
10 
MINIMUM OF TEN THOUSAND PESOS (PHP 10,000.00) TO A MAXIMUM OF 
11 
FIVE HUNDRED THOUSAND PESOS (PHP 500,000.00) FOR EACH VIOLATION 
12 
OR NON-COMPLIANCE, REVOKE/SUSPEND 
A 
COC/SCC AND 
CAUSE 
13 
CORRESPONDING ACTION BY LGU ON THE SUSPENSION OR REVOCATION 
14 
AND TERMINATION OF THE BUSINESS PERMIT OR LICENSE OF AN 
15 
OFFENDER, PROVIDED THAT, THE ADMINISTRATIVE FINE OR PENALTY 
16 
THAT MAY BE IMPOSED BY THE DOE SHALL BE WITI-IOUT PREJUDICE TO 
17 
THE FILING OF ANY CRIMINAL ACTION, IF WARRANTED UNDER THE 
18 
CIRCUMSTANCES; 
19 
(f) Concomitant with the policy of ensuring a continuous, adequate and economic 
20 
supply of energy to exercise his powers and functions provided under Section 5 ( c) of 
21 
Republic Act No. 7638; 
22 
(g) To make public from time to time such portions of the information obtained 
23 
by him hereunder as are in the public interest; and to make annual and special reports to 
24 
Congress and to submit therewith recommendations for additional legislation; and to 
25 
provide for the publication of his reports and decisions in such form and manner as may 
26 
be best adapted for public information and use: Provided, That the Secretary shall have 
27 
any authority to make public any trade secret or any commercial or financial information 
28 
which is obtained fr0111 any person or entity which is privileged or confidential, except 
29 
that the Secretary may disclose such information to officers and employees of appropriate 
7 


1 
law enforcement agencies or to any officer or employee of any such law enforcement 
2 
agency upon the prior certification by an ofticer of auy such law cnforcement agency that 
3 
such information will be maintained in confidence and will be used only for official law 
4 
enforcement purposes; [and] 
5 
(h) Whenever a final order has been entered against any defendant in any suit 
6 
brought by the government to prevent and restrain any violation of the antitrust 
7 
provisions of this Act to make investigation, upon his initiative, of the manner in which 
8 
the decree has been or is being carried out, and upon the application of the Secretary of 
9 
Justice, it shall be his duty to make such investigation. He shall transmit to the Secretary 
10 
of Justice a report embodying his findings and recommendations as a result of any such 
II 
investigation, and the report shall be made public at the discretion of the Secretary; AND 
12 
(I) PERFORM SUCH OTHER POWERS AND FUNCTIONS AS MAYBE 
13 
NECESSARY IN FURTHERANCE OF THE OBJECTIVES OF THIS ACT. 
14 
SECTION 4. Separability Clause. - If any provision of this Act is held invalid or 
15 
unconstitutional, the remainder of the Act or the provision not otherwise affected shall remain 
16 
valid and subsisting. 
17 
SECTION 5. Repealing Clause. - Any law, presidential decree or issuance, executive 
18 
order, letter of instruction, or administrative rule or regulation contrary to or inconsistent with the 
19 
provision of this Act is hereby repealed, modified, or amended accordingly. 
20 
SECTION 6. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
21 
publication in at least two (2) newspapers of.general circulation. 
Approved, 
8