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CONGRESS OF THE REPUBLIC OF THE|PHILIPPIN

FIRST REGULAR SESSION
PTASTOATON UNIT
S aNG Nk SERVICE

House of Representatives,
HOUSE BILLNO. . 18b

INTRODUCED BY HONORABLE TEODORO G. MONTORO

EXPLANATORY NOTE

The growing number of commuting populace is faced with everyday woes of atrocious traffic and
outrageous insufficient public transportation. This tegislation seeks to promote the revitalization,
rehabilitation and modernization of the Philippine National Railways to address the seemingly inadequate
‘mass transport system

PNR officially began operations on November 24, 1892
Spanish colo d, and during th seriod, the Manila Railroad Company (MRR).
By virtue of Republic Act No. 4156 it became the Philippine National Railways on June 20, 1964. The
PNR is an attached ayency under the Departnent of Transportation and Con

the Ferrocarril de Manila-Dagupan, during the

an colon

munications.

PNK used to operate over 797 km (495 miles) of route trom La Union down to Bicol. However,
continued neglect and damage from natural calamities in past decades reduced PNR's efficiency and
railroad coverage.

The National Statistics Office (NSO) Philippine Yearbook 2010 reported under Philippine Railway
statistics that train operations of the PNR include passenger, commuter, freight, and express services
Commuter service caters primarily to Metro Manila riders, whiie passenger service shuttles travelers
bound for the provinces. PNR's services stretched along 22 stations and served 1.82 million passengers in
2009. This was an increase of 59.6 percent from 1.14 million passengers in 2008. A total of PhP1S.99
‘million in revenues was raised in 2009 or an inerease of PhP6.96 million or 77.2 percent.

Transportation needless to say, is vital in the economic growth of the country. The Philippine
Constitution Article II Declaration of Principles and State Policies Section 5 states “The maintenance of
Peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are
essential for the enjoyment by all the people of the blessings of democracy”,

Hence, passage of this legislation is caesty sought

—

REPRESENTATIVE, AASENSO PARTY LIST

NYATIVES



17" CONGRESS OF

E REPUBLIC OF THE PHILIPPIN'

FIRST REGULAR SESSION
House of Representatives
HOUSE BILL NO. _ 1867

INTRODUCED BY HONORABLE TEODORO G. MONTORO

AN ACT
PROMOTING THE REVITALIZATION, REHABILITATION AND MODE ZATION
OF THE PHILIPPINE NATIONAL RAILWAYS, AMENDING FOR THE PURPO:
CERTAIN PROVISIONS OF R.A. NO. 4156 ENTITLED “AN ACT CREATING THE
PHILIPPINE NATIONAL RAILWAYS, PRESCRIBIN POWERS, FUNCTIO!
AND DUT AND PROVIDING FOR THE NECESSARY FUNDS FOR ITS
OPERATIOD

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled.

. as
and Presidential Decree Seven

SECTION 1. Section 3 of Republic Act Four thousand One Hundred Fifty §
amended by Republic Act Six Thousand Six Hundred Sixty Six
Hundred Forty One is hereby replaced to read as follow

"SEC. 3. AUTHORIZED CAPITAL STOCK OF THE PHILIPPINE
NATIONAL RAILWAYS. THE AUTHORIZED CAPITAL STOCK OF THE
PHILIPPINE NATIONAL RAILWAYS SHALL BE FIFTY BILLION PESOS
DIVIDED INTO THREE MILLION ONE HUNDRED THIRTEEN THOUSAND
COMMON SHARES ALL WITH PAR VALUE OF TWO HUNDRED PESOS EACH,
WHICH SHALL INCLUDE THE PRESENT AUTHORIZED CAPITALIZATION OF
THE PHILIPPINE NATIONAL RAILWAYS: PROVIDED, THAT THE INCREASE
IN THE AUTHORIZED CAPITAL SHALL BE FULLY SUBSCRIBED BY THE
GOVERNMENT: PROVIDED FURTHER, THAT ALL EXISTING LONG TERM
OBLIGATIONS OF THE PHILIPPINE NATIONAL RAILWAYS TO THE
GOVERNMENT OF THE PHILIPPINES INCLUDING ITS AGENCIES OR
INSTRUMENTALITIES AS WELL AS ITS TAX OBLIGATION TO ANY LOCAL
GOVERNMENT UNIT SHALL BE CONVERTED INTO CAPITAL STOCKS OF
THE PHILIPPINE NATIONAL RAILWAYS AND MADE A PART OF THE



SUBSCRIPTION: PROVIDED, STILL FURTHER, THAT THE INCREASE IN
AUTHORIZED CAPITAL STOCK HEREIN PROVIDED IS DISTINCT AND
SHALL NOT PREJUDICE THE ANNUAL APPROPRIATION PROVIDED IN THE
YEARLY GAA. THE AMOUNT RAISE BY VIRTUE OF THE INCREASE IN THE
AUTHORIZED CAPITAL STOCK, IN ADDITION TO THE EXISTING SINKING
FUND OF THE PNR ESTABLISHED FROM ITS EXISTENCE, SHALL BE USED
FOR THE CONSTRUCTION OF NEW RAILROAD LINE AND WHENEVER
ECONOMICALLY AND TECHNICALLY FEASIBLE, THE REHABILITATION
AND/OR MODERNIZATION OF MOST OF THE ENTIRE RAILWAY SYSTEM OF
PNR THROUGHOUT THE COUNTRY.

SECTION 2. A new subsection, Section 2-E, shall be inserted to read as follows:

“SEC. 2-E. THE PHILIPPINE NATIONAL RAILWAYS SHALL BE
ALLOWED TO ENTER INTO A JOINT VENTURE WITH A QUALIFIED
TOR PARTNER, PARTICULARLY AND EXCLUSIVELY FOR THE
OF OPERATIONS AND MAINTENANCE SUBJECT TO THE
APPROVAL OF THE BOARD, WITH Al LEAST TWO-THIRDS (2/3) VOTE, IN A
MEETING CALLED FOR THE PURPOSE, PROVIDED, THAT SUCH PLANS
AND/PROGRAMS OF ENTERING TO A JOINT VENTURE WERE CONSISTENT
WITH THE OVERALL OBJECTIVES OF THE CORPORATION AS
RECOMMENDED BY THE GENERAL MANAGER, PROVIDED FINALLY, THAT
THE PROCUREMENT PROCEDURE SHALL COMPLY WITH THE EXISTING
GOVERNMENT PROCUREMENT LAW. IN ANY EVENT THAT INCREASE IN
FARE RESULTED BY REASON OF THE PRIVATIZATION OF PNR’S
OPERATIONS AND MAINTENANCE, THE INCREMENTAL INCREASE IN
VALUE BETWEEN THE REAL FARE AND NOMINAL FARE SHALL BE
SUBSIDIZED AND PAID FOR BY THE PHILIPPINE GOVERNMENT AND
SHALL BE COVERED BY YEARLY AUTOMATIC APPROPRIATIONS PROVIDED
IN THE GENERAL APPROPRIATIONS ACT.”

SECTION 3. A new subsection, Section 2-F, shall be inserted to read as follows:

TO DEPUTIZE AND/OR OBLIGATE LGU’S TO ENFORCE AND
IMPLEMENT, IN COLLABORATION WITH THE GOVERNMENT CORPORATE
COUNCIL (GCC), THE RESTORATION OF PNR’S RIGHT-OF-WAY SO AS TO
RETURN THE LAND AROUND THE STATIONS AND RESTORATION OF PNR’S

LIZI FOR THEIR REFUSAL OR INABILITY TO
IMPLEMENT THE RESTORATION OF PNR’S RIGHTFUL USE AND
POSSESSION OF LAND ON THE RIGHT-OF-WAY AND AROUND STATIONS
SHALL BE THE BASIC POLICY FOR ENFORCEMENT. “



SECTION 4. A new subsection, Section 2-G, shall be inserted to read as follows:

“SEC 2-G. TO PENALIZE CRIMINALLY AND/OR CIVILLY ANY
PERSON(S)’ INTERFERENCE WITH THE FREE FLOW, UNHAMPERED USE,
AND PASSAGE OF PNR TRAINS ALONG THEIR LEGAL RIGHT OF WAY
(TRACKS, BRIDGES, TURNOUTS, INTERCONNECTIONS, AND ALL
ASSOCIATED LINKAGES), SUCH AS DISREGARDING SIGNALS AND TRAIN
CROSSINGS DANGEROUSLY ON THE PATH OF ONCOMING TRAINS,
PLACING DEAD BODIES ALONG OR ON TOP OF THE TRACKS AND ITS
LINKAGES, WHETHER AS A CONSEQUENCE OF A CRIME OR NOT,
SLEEPING, PLAYING ON, IDLING ON RAILROAD TRACKS AND ITS
LINKAGES, PLACING BOULDERS OR OBJECTS THAT OBSTRUCT,
THROWING OBJECTS AT PASSING TRAINS, AND SIMILAR ACTS OF
DESTRUCTION AND OBSTRUCTION. COMMITTING OR ATTEMPTING TO
COMMIT SUICIDE ALONG THE RAILROAD TRACKS AND ITS LINKAGES,
BUILDING STRUCTURES-PERMANENT OR OTHERWISE ALONG THE PNR
LEGAL RIGHT-OF-WAY AND/OR REFUSING TO VACATE THE SAME UPON
DEMAND.

IF SUCH ACT(S) CAUSES OR HAS POTENTIAL TO CAUSE, OR RESULT
IN DEATH OR INJURY TO PERSONS AND/OR DAMAGE TO PROPERTY/AES
SUCH PARTYAES WHO, WITH INTENT TO CAUSE, OR ACTUALLY CAUSED
SUCH INTERFERENCE, OBSTRUCTION, WHETHER OR NOT RESULTING IN
INJURY OR DEATH, DAMAGE TO PNR TRAINS, TRACKS, LINKAGES, AND/OR
PNR PROPERTY, SHALL BE HELD CRIMINALLY AND CIVILLY LIABLE BY
PNR. DEVOID OF ANY EVIDENCE TO THE CONTRARY, PNR IS
PRESUMPTIVELY ABSOLVED FROM CRIMINAL AND CIVIL LIABILITY.”

CTION 5. Section 3-A of Republic Act Four thousand One hundred Fifty Six, as
amended is hereby amended to read as follows:

Sec. 3-A. Foreign Loans. The PHILIPPINE NATIONAL RAILWAYS (Corporation| is
hereby authorized to contract loans, credits and indebtedness IN DOMESTIC CURRENCY OR
in any convertible foreign currency, or capital goods from foreign governments, their agencies
instrumentalities or financial institutions, or any governmental national or international financial
titutions or firms extending supplier's credit, deferred payment arrangements or other funds
sources, or to issue bonds, [the total outstanding amounts of which, exclusive of interests, shall
not exceed two hundred million United States dollars or the equivalent thereof and other
J on such terms and conditions as it shall deem appropriate for the accomplishment of
s and to enter into and execute agreements and other documents specifying such terms
and conditions.



The President of the Philippines, through the Secretary of Finance, is hereby authorized
to guarantee, absolutely and unconditionally, as primary obligor and not as surety merely, in the
name and on behalf of the Republic of the Philippines, the payment of the loans, credits,
indebtedness and bonds issued [up to the amount herein authorized,] which shall be over and
above the amount which the President of the Philippines is authorized to guarantee under
Republic Act Numbered Sixty-One Hundred and Forty-Two as amended, as well as the
performance of all or any of the obligations undertaken by the Corporation in the territory of the
Republic of the Philippines pursuant to loan agreements entered into with foreign governments
or any international financial institutions or fund sources.

The loans, credits and indebtedness contracted under this subsection and the payment of
the principal, interest and other charges thereon, as well as the importation of machinery,
equipment, materials, supplies and services, by the Corporation, paid from the proceeds of any
loan, credit or indebtedness incurred under this Act, shall also be exempted from all charges and
restrictions previously and presently imposed, and to be imposed by the Republic of the
Philippines, or any of its agencies and political subdivisions.

SECTION 6. Section 9 of Republic Act Numbered Four thousand One Hundred and
Fifty-Six as amended by Republic Act Numbered Sixty-Three Hundred and Sixty-Six and PD
741 is hereby amended to read as follows:

"Sec. 9. Managing Head. The Management of the Corporation shall be vested in the
General Manager who shall be appointed by the President of the Philippines. He shall
possess technical competence in management preferably in railroad transport
management, have demonstrated executive ability, and be of good moral character. He
shall hold office for a term of SIX (6) [eight (8)] years.

In the performance of his functions, he shall be assisted by Assistant General Managers
who shall be appointed by him with the approval of the Board of Directors and the
President.

SECTION 7. Section 12 of Republic Act Four thousand One hundred Fifty Six, as amended is
hereby amended to read as follows:

Sec. 12. Exemption from taxes, duties, [and] port charges or dues AND customs
bonds [and port charges}. The PHILIPPINE NATIONAL RAILWAYS {Corporation| is
hereby exempt from payment of all taxes of any kind [every name] and nature.
INCLUDING THOSE IMPOSED BY municipal, city, provincial or national upon its
capital stock, franchise, right of way, earnings, and all property owned or operated by it
and all import duties on all railway materials, rolling stocks, spare parts, supplies and
equipment imported in the Philippines for and/or by the said corporation, and this
exemption shall extend to wharfage dues, storage charges, arrastre, and shipside charges,
and special duties on such importations, and other port charges upon the carrying vessels
whose entire cargo consists of materials for the construction of its projects and


‘The President of the Philippines, through the Secretary of Finance, is hereby authorized
to guarantee, absolutely and unconditionally, as primary obligor and not as surety merely, in the
name and on behalf of the Republic of the Philippines, the payment of the loans, credits.
indebtedness and bonds issued [up to the amount herein authorized] which shall be over and
above the amount which the President of the Philippines is authorized to guarantee under
Republic Act Numbered Sixty-One Hundred and Forty-Two as amended, as well as the
performance of all or any of the obligations undertaken by the Corporation in the territory of the
Republic of the Philippines pursuant to loan agreements entered into with foreign governments
or any international financial institutions or fund sources.

The loans, credits and indebtedness contracted under this subsection and the payment of
the principal, interest and other charges thereon, as well as the importation of machinery,
equipment, materials, supplies and services, by the Corporation, paid from the proceeds of any
loan, credit or indebtedness incurred under this Act, shall also be exempted from all charges and
restrictions previously and presently imposed, and to be imposed by the Republic of the
Philippines, or any of its agencies and political subdivisions.

SECTION 6. Section 9 of Republic Act Numbered Four thousand One Hundred and
ix as amended by Republic Act Numbered Sixty-Three Hundred and Sixty-Six and PD
hereby amended to read as follows:

Fifty-!

"Sec. 9. Managing Head. The Management of the Corporation shall be vested in the
General Manager who shall be appointed by the President of the Philippines. He shall
possess technical competence in management preferably in railroad transport
management, have demonstrated executive ability, and be of good moral character. He
shall hold office for a term of SIX (6) [eight (8)] years.

In the performance of his functions, he shall be assisted by Assistant General Managers
who shall be appointed by him with the approval of the Board of Directors and the
President.

SECTION 7. Section 12 of Republic Act Four thousand One hundred Fifty Six, as amended is
hereby amended to read as follows:

Sec. 12. Exemption from taxes, duties, [and] port charges or dues AND customs
bonds [and port charges]. The PHILIPPINE NATIONAL RAILWAYS [Corporation] is
hereby exempt from payment of all taxes of any kind [every name] and nature.
INCLUDING THOSE IMPOSED BY municipal, city, provincial or national upon its
capital stock, franchise, right of way, earnings, and all property owned or operated by it
and all import duties on all railway materials, rolling stocks, spare parts, supplies and
equipment imported in the Philippines for and/or by the said corporation, and this
exemption shall extend to wharfage dues, storage charges, arrastre, and shipside charges,
and special duties on such importations, and other port charges upon the carrying vessels
whose entire cargo consists of materials for the construction of its projects and



rehabilitation of its lines, facilities and to such proportion of the prescribed port charges
‘on other vessels as the tonnage of materials for such constructions or equipment may bear
to the tonnage of the entire cargo of the vessel; and such exemption shall further extend
to the filing of general importer's and general documentary bonds and warehouse bonds
for the operation of its warehouses, whether general bonded warehouses or general order
store

NOTWITHSTANDING THE PROVISIONS OF ANY OTHER LAWS TO THE
CONTRARY, THE EXEMPTION FROM TAXES, DUTIES AND PORT CHARGES
OR DUES, CUSTOMS BONDS PORT CHARGES ENJOYED BY THE PHILIPPINE
NATIONAL RAILWAYS AS PROVIDED FOR IN SECTION 12 OF REPUBLIC ACT
FOUR THOUSAND ONE HUNDRED FIFTY SIX AS AMENDED BY RA 6366 AND
PD 741 IS HEREBY REAFFIRMED

SECTION 8. Separability Clause. ~ If any portion or provision of this Act is declared
titutional or invalid, the other provisions hereof not affected thereby shall remain valid

CTION 9. Repealing Clause. ~ All laws, executive orders, presidential decrees,

presidential proclamations, rules and regulations or parts thereof inconsistent with the provisions
of this Act are hereby repealed or modified accordingly

SECTION 10. Effectivity. — This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of geteral circulation,

Approved,