SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
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Introduced by Senator Ralph G. Recto 
Explanatory Note 
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The Philippine Development Plan 2011-2016 recognizes the need to interconnect our regions 
through good transport and communication networks. It gives higher priority to asset preservation or 
maintenance and rehabilitation of the existing transport infrastructure network rather than new 
construction or development particularly on the quality of the existing railroad tracks and services. 
This will open up new economic opportunities, reduce transportation and transaction costs of 
business and increase access to social services particularly the marginalized sectors. [II. 
This bill allocates five percent (5%) of annual value-added tax (V AT) collections to 
reconstruct and rehabilitate the existing 479-kilometer stretch of Philippine National Railways (PNR) 
lines from San Fernando, La Union to Legazpi City, Albay. 
A review of the National Economic Development Authority (NEDA) Comprehensive 
Integrated Infrastructure Projects for 2009-2013 shows that only P 1.5 Billion is appropriated for the 
reopening of the line to Bicol. The interconnection of regions in Luzon which accounts for a GDP 
share of 12.6% [21 through a railway network from San Fernando, La Union to Legazpi City will 
decentralize progress and bring development to the countlyside, a major thrust of the PDP. 
At the same time, this bill is consistent with the administration's commitment to provide 
productive employment opportunities through sustainable infrastructure projects. The reconstruction 
and rehabilitation of this railway network will provide thousands of jobs to Filipinos who can provide 
hard labor to build, restore and rehabilitate roads, bridges and other structures. 
Also, this project is a climate-change adaptation measure. It addresses certain environmental 
concerns, particularly, the mitigation of greenhouse effect which contributes significantly to global 
warming. Train, in all studies, has a lower greenhouse gas emission rate than any motorized modes 
of transportation which rely heavily on fossil fuel for their operation. 
This bill further responds to a need for sustainable planning of infrastructure investments. A 
train moving passengers and goods from La Union to Bicol will accelerate trade and encourage 
migration in those areas. It will also meet one of our toughest development challenges and that is the 
decentralization of progress by decongesting our crowded cities and urban areas to provide our 
people in the frontiers better access to social services. 
In this light, the immediate passage ofthis bill is earnestly sought. 
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1 NEDA. "Philippine Development Plan 2011-2016, Chapter 5: Accelerating Infrastructure.Development" 
http://www.neda.gov.phlPDP/2011-2016/CHAPTER%205.pdf 
2 Department of Budget and Management, "Budget of Expenditures and Sources of Financing (Tables): Fiscal Yea! 2013" 
(Projected GDP for FY 2013 using low assumptions adopted by the Development Budget Coordination Committee on June 26, 
2012) 


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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
t~«j;r "f I~. ,;i!>m.I .. 
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First Regular Session 
) 
SENATE 
S.No. 625 
Introduced by Senator Ralph G. Recto 
AN ACT 
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TO RECONSTRUCT AND 
REHABILITATE THE EXISTING 479-KILOMETER 
PHILIPPINE NATIONAL RAILWAYS LINE FROM SAN FERNANDO, LA UNION TO 
LEGAZPI CITY, ALBAY, PROVIDING FUNDS FROM THE ANNUAL VALUE-ADDED 
TAX COLLECTIONS, AMENDING FOR THE PURPOSE THE NATIONAL INTERNAL 
REVENUE CODE OF 1997, AS AMENDED 
Be it enacted by the Senate and the House of Representative of the Philippines in Congress 
assembled: 
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SECTION 1. A new section, to be numbered two hundred eighty-seven (287), sHall be added to 
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Chapter II, Title XI of the National Internal Revenue Code, as amended to read as follows: 
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"SEC. 287. DISPOSITION OF PROCEEDS OF VALUE-ADDED TAX. -
A.) 
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TWO AND A HALF PERCENT (2.5%) OF THE VALUE-ADDED TAX COLLECTED 
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UNDER TITLE IV OF THIS ACT, AS AMENDED, SHALL BE ALLOCATED TO 
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RECONSTRUCT 
AND 
REHABILITATE 
THE 
EXISTING 
479-KILOMETER 
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PHILIPPINE NATIONAL RAILWAYS LINE FROM SAN FERNANDO, LA UNION 
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TO LEGAZPI CITY, ALBA Y; 
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B.) TWO AND A HALF PERCENT (2.5%) OF THE VALUE-ADDED TAX 
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COLLECTED UNDER TITLE IV OF THIS ACT, AS AMENDED, SHALL BE 
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ALLOCATED FOR THE ACQUISITION OF ROAD RIGHT OF WAY NEEDED TO 
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IMPLEMENT THE PROJECT MENTIONED IN THE PRECEDING PARAGRAPH. 
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THE ALLOCATION SHALL BE ADMINISTERED BY THE DEPARTMENT OF 
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TRANSPORTATION AND COMMUNICATION (DOTC), THROUGH ITS ATTACHED 
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AGENCY PHILIPPINE NATIONAL RAILWAY (PNR). 
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SEC. 2. The succeeding Sections of the National Internal Revenue Code, as amended are hereby 
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renumbered accordingly. 
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SEC. 3. Implementing Rules and Regulations. - The Department of Budget and Management, 
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Bureau of Internal Revenue, DOTC and PNR shall within thirty (30) days from the effectivity of this 
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Act issue the necessary rules and regulation for its effective implementation. 
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SEC. 4. Repealing Clause. - All laws, decrees, executive orders, rules and regulations, or parts 
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thereof which are inconsistent with this Act are hereby repealed, amended or modified accordingly. 
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SEC. 5. Effectivity. - This Act shall take effect fifteen (15) days after its publication either in the 
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Official Gazette or in at least two (2) newspapers of general circulation. 
Approved,