ENTATIVES

HOUSE 9F REPR¢

SEVENTEENTH CONGRESS ) RECEIVED
OF THE REPUBLIC OF THE PHILIPPINES — ) DATE:
First Regular Session ) rive, 6:10 Pm

REGISTR ITION UNIT
BILLS AND INDEX SERVICE

Introduced by

BEN P. EVARDONE

Representative, Lone District, Eastern Samar

EXPLANATORY NOTE

s have been found
igned to ensure an

‘Time and again, airline companies operating in the Philippin
violating rules and regulations, conditions and stipulations that are d
efficient, convenient, safe and reliable air transportation services.

Recently, a local airline company! was fined around P52 million pesos” when its erew
and personnel spoiled Christmas by stranding thousands of Filipinos at the airport. especially
the vacationing OF Ws wanting to come home to their families and tourists. This is the biggest
fine paid within the 2012-2016 period, per CAB records,

Looking at the CAB records, particularly on FINES AND PENALTIES, on a quarterly
and annual basis (2012-2016 2" quarter), there seems to be a steady growth in the CAB
collection’ of fines and penalties,

Worse, the CAB has provided a Fines and Penalties Annual Revenue Target for 2016
at P1,623,000*. Yet, the total collection for the first and second quarter of 2016 has already
reached P3,654,450,

‘The carrier had a total of 20 cancelled and 288 delayed flights at the Ninoy Aquino International Airport
Terminal 3 from Dec. 24 to Dec. 26, according to data it earlier submitted to the CAB,

Please read’ Aww bworldonl m hp2section= te&title=cebu-pacific-
ordered-to-pay-p52-million-fine-in-holiday-melee&id=100725

? Reflected in the 2015 1* quarter CAB collection, See footnote 3 below.

» CAB QUARTERLY COLLECTION OF FINES AND | 'S (2012-2016):
Quarters | 2012 2013 | 2014S | 2015 S| OC
7 __ 705,800 | __-946,300 | 360,900 56,050,980 | 1,608,600 |
id 977,133.33 7,514,100 440,400 2,201,370 | 2,045,850

3a 7,507,833.32 2,000,900 398,700 1,796,200
an 2,124,788.00 2,142,100 433,280, 3,264,770 |
‘Please read the link as follows:

htto://www,cab. gov. ph/images/downloads/Transparency%20Seal2016/CAB%20Quarterly%20Report
%200f%20Revenue%20and%20othero20Receipts(As%200f%20the%20Quarter%20Ending%20June
%2030,%202016)%20-%20F AR%20No.%205.pdf



iat is not good, especially considering that the CAB deals with airline companies,
legally considered common carriers,’ mandated to exercise utmost care and diligence® in
providing air transport services to the public,

Indeed, the data on Fines and Penalties could lead one to think that while we apparently
have a more efficient CAB enforcer, we might also have an airline company or companies that
disregard the raison d’ etre for imposing fines and penalties — deterrence.

Apparently, one reason for the almost constant infraction of air transportation rules and
regulations is the low penalty imposable in the form of a fine. The fine seems to be “affordable”
in the sense that when breaking the rule is more profitable than paying the fine, then we can
expect a choice of the former.

Currently, the fine is around PhP5,000 Pesos per violation, with an additional PhP200
Pesos per day of delay in complying with a CAB Order to pay the fine. This was first imposed
39 years ago, when in 1978, then President Ferdinand Marcos amended Section 42 (B) of
Republic Act No. 776 (1952), which imposed a fine of P1,000 for the violation.

Under the bill, the author proposes the increase of fine from the current PhP5,000 to
PhP15,000 per breach. In addition, the penalty of PhP200 for the delay in the compliance
increased to P1,000 per day. Also, the penalty of imprisonment of one (1) year is increased to
five (5) years but as a further or additional penalty and not as an alternative penalty. This
somehow clarifies the rule on enforeing compliance thru the courts.

Furthermore, the author believes that the provision on CAB"s power to compromise
should be looked into and amended to promote transparency and avoid corruption. Thus, the
author proposes that this power to compromise be subject to review by the Office of the
President of the Philippines.

In view of the foregoing, the passage of this bill is urgently sought.

BEN P. EVARDONE

® Republic Act 386, Article 1732. Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air,
for compensation, offering their services to the public.

* Republic Act No. 386, Article 1755, A common carrier is bound to carry the passengers safely as far
as human care and foresight can provide, using the utmost diligence of very cautious persons, with a
due regard for all the circumstances.


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SEVENTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES

anys
House Bill No. 8 541 id

Introduced by
BEN P. EVARDONE

Representative, Lone District, Eastern Samar

FURTHER AMENDING REPUBLIC ACT SEVEN HUNDRED AND SEVE!
AS AMENDED, OTHERWISE KNOWN AS “THE
THE PHILIPPINES”

AN AC

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

SECTION. 1 Section 42 of Republic Act Numbered Seven Hundred and Seventy-Six,
otherwise known as the Civil Aeronautics Act of the Philippines, as amended, is hereby further
amended to read as follows:

“See. 42. Specific penalties. — (A) Any person engaging in air

commerce without a permit

issued by the Board as provided in this Act
shall be punished by a fine [ not exceeding five thousand pesos or by
imprisonment for not more than one year, or both, in the discretion of
the court: Provided, That a person engaging in air commerce on the date
of the approval of this Act may continue so to engage until such time as
the Board shall pass upon an application for a permit for such service,
which application must be filed, as provided in Chapter IV of this Act,
within one hundred and twenty days after the approval of this Act. | OF
FIFTEEN THOUSAND PESOS, WITHOUT PREJUDICE TO
IMPRISONMENT OF FIVE (5) YEARS UPON NATURAL
PERSONS GUILTY OF VIOLATING THIS PROVISION.

(B) Any carrier or person who violates or fails to comply with any

provision of this Act or of the terms, conditions, or limitations in a

TY-SIX,
CIVIL AERONAUTICS ACT OF


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permit or amendment thereto or any orders, rules or regulations issued
by the Board, shall be subject to a fine [ not exceeding Five Thousand
Pesos | OF FIFTEEN THOUSAND PESOS for each violation. In
addition thereto, a fine [ not exceeding ‘Two Hundred Pesos | OF ONE.
THOUSAND PESOS per day for every day during which such default

or violation continues shall likewis

be imposed. The Board is hereby

empowered to impos

such fine, after due notice and hearing.

The fines so imposed shall be paid to the government of the Philippines
through the Board, and failure to pay fines in any case within the time
specified in the order or decision of the Board shall be a ground for the

suspension of the permit of such air carrier until payment shall be made.

Payment may also be enforced by appropriate action brought to a court

of competent jurisdiction,

The other fines as penalty for violation prescribed elsewhere under this

section are amended and/or modified accordingly.

[(©)_ Any air carrier violating any order, rule and regulation issued by
the Board shall be punished by a fine not exceeding one thousand pesos

for each violation. ]

[()] (©) The following acts shall subject any air carrier to a fine |
not exceeding one thousand pesos] OF FIFTEEN THOUSAND
PESOS for each offense:

(1) Discounts or rebates on authorized rates, fares and charges;

(2) Adopting rates, fares and charges which have been found
or determined by the Board to be unjust, unreasonable, unduly
preferential or unjustly discriminatory in a final order; or which have not
been previously approved and authorized by the Board;

@) I

fares or charges for passengers except to the following persons: (a)

uing any free pass, free tickets or free or reduced rates,

officers, agents, employees of the air carrier and their immediate


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into accidents or any legal investigation in which such air carrier is

ilies; (b) witnesses and attorneys attending any legal investigation

interested; (c) persons injured in aircraft accidents and physicians and

nurses attending such persons; (d) members of the Board; (¢) officers
and personnel of the Civil Aeronautics Administration when traveling
on official business upon the exhibition of their credentials; (f) Members
of Congress of the Philippines; and (g) such other persons duly approved
by the Board.

[(2)] (D) Any person who operates any civil aircraft in violation of

any rule, regulation or order issued by the Administrator relating to

aeronautical
pur
imprisonment for not more than one year, or both, in the discretion of
the court. ] OF FIFTEEN THOUSAND PESOS, WITHOUT
PREJUDICE TO IMPRISONMENT OF FIVE (5) YEARS UPON
NATURAL PERSONS GUILTY OF VIOLATING THIS
PROVISION.

standards or practices or procedures shall be

shed by a fine [ not exceeding five thousand pesos or by

{@)] (E) Any person who, without the previous approval of the Civil
Aeronautics Board, effects any consolidation, merger, purchase, lease,
operating contract or acquisition and control between domestic air
carriers, or between domestic air carriers and foreign air carriers, or
between domestic air carriers and any person engaged in any phase of
aeronauties shall be punished by a fine [ of five thousand pesos or by
imprisonment for not more than one year, or both, in the discretion of
the court. | OF FIFTEEN THOUSAND PESOS, WITHOUT
PREJUDICE TO IMPRISONMENT OF FIVE (5) YEARS UPON
NATURAL PERSONS GUILTY OF VIOLATING THIS
PROVISION.

{G)]_ (@) No person shall use an unregistered aircraft eligible for
registration under the provisions of this Act. Any person who operates

such aircraft shall be punished by a fine [not exceeding five thousand


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pesos or by imprisonment for not more than six months, or both, in the
discretion of the court.| OF FIFTEEN THOUSAND PESOS,
WITHOUT PREJUDICE TO IMPRISONMENT OF FIVE (5)
YEARS UPON NATURAL PERSONS GUILTY OF VIOLATING
THIS PROVISION.

{(H) |G) Any person serving in any capacity as an airman in
connection with any civil aircraft without an airman certificate, or in
violation of the terms of any such certificate or in excess of the rating of
such certificate shall be punished by a fine [ not exceeding five thousand
pesos] OF FIFTEEN THOUSAND PESOS. The repetition of this

offense shall be sufficient cause for the revocation of the airman's

certificate.

1G) ] (A) Any person who employs in connection with any civil aircraft
used in air commerce an airman who does not have an airman's
certificate authorizing him to serve in the capacity for which he is
employed, shall be punished by a fine [ not exceeding five thousand
pesos] OF FIFTEEN THOUSAND PESOS. A repetition of the offense

shall be sufficient cause for revocation of the permit.

[1 @) Any person who operates any civil aircraft for which there is
not currently in affect an airworthiness certificate or in violation of the
terms of such certificate shall be punished by a fine | not exceeding five
thousand pesos] OF FIFTEEN THOUSAND PESOS. The repetition

of this offense shall be sufficient cause for the revocation of the permit.

1 (K) |G) Any person who without previous approval and

authoriz

ition of the Board, shall adopt, establish, maintain, change,

revise, abandon, alter, amend, defer, reject, discontinue, suspend, or

restore, any classification, rule or regulation, or practice affecting routes,

itineraries

hedules, cl

ssifications, increase or decrease of frequency
of flights, in any manner whatsoever, shall be punished by a fine | of

five thousand pesos | OF FIFTEEN THOUSAND PESOS. The



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repetition of such offense shall be sufficient cause for revocation of the

permit.

[(L)](K) No person shall interfere, obstruct, hinder, or delay the Civil
Aeronautics Board or any person duly delegated by the Board in the
performance of its duties in the public interest, A fine [ not exceeding
five thousand pesos] OF FIFTEEN THOUSAND PESOS shall be

imposed upon anyone who:

(1) with intent to interfere with the performance of the duties
of the Board or any person duly delegated by the Board, shall knowingly

or willfully alter, falsify, mutilate any report, accounts, records, books,

papers, contracts, agreement and all other documents; or

(2) shall knowingly and willfully fail or refuse: (a) to make
and/or submit the books, contracts, tariffs, papers, agreements, reports
and all other documents required to be submitted by him for
consideration before the Administrator or his duly authorized
representative or before the Board; or (b) to keep or preserve accounts,
records, memoranda, books, reports, papers and all other documents
required by the Administrator or his duly authorized representative, or
by the Civil Acronautics Board; or

(3) _ is guilty of misconduct in the presence of the Board or so
near the same as to obstruct or interrupt the hearing or session or any
proceedings before the Board and/or the Administrator or any
representative duly authorized by them; or shall conduct himself in a
rude or disorderly manner before the Administrator or his duly
authorized representative or any member of the Board engaged in the
discharge of official duty; or shall orally or in writing disrespectfully
offend or insult any of the above-named bodies or persons on the
occasion of or in the performance of their official duty or during any
hearing, session, or investigation held by either the Board or
Administrator or their duly designated representative; or

(4) refuses to be sworn in as a witness or to answer as such
when lawfully required to do so: Provided, That the Board or the

Administrator or their duly authorized representative shall, if necessary,


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be entitled to the assistance of the municipal police for the execution of
any order to compel a witness to be present or to testify; or

(5) without lawful justification or excuse, hinders obstructs, or
delays the Civil Aeronautics Board, the Administrator or their duly
designated representative in the inspection or examination of the books
and/or accounts of an air carrier for the purpose of ascertaining the
correctness in any material particular of any report, papers, documents,
books, contracts, agreements and/or other documents submitted by such
air carrier, or for any other purpose deemed by the Board and/or the Civil
Aeronautics Administration to be in accordance with the public interest;
or

(6) neglects or refuses to attend and/or testify and/or to answer
any lawful inquiry or to produce books, papers, or documents, if in his
power to do so, in obedience to the subpoena or lawful requirement of
the Civil Aeronautics Board or the Civil Aeronautics Administration; or

(7) testifies falsely or makes false affidavits or both before the
Board or Civil Aeronautics Administration or any duly designated

representative of either.

[(M)] (L) No person shall interfere with air navigation. A fine [ not
exceeding five thousand pesos, or imprisonment for not more than one
year, or both, in the discretion of the court, | OF FIFTEEN
THOUSAND PESOS, WITHOUT PREJUDICE TO
IMPRISONMENT OF FIVE (5) YEARS WHICH shall be imposed
upon any person who:

(1) with intent to interfere with air navigation within the

Philippines, exhibits within the Philippines any light or signal at such

place or in such manner that it is likely to be mistaken for a true light or
signal established pursuant to this Act or for a true light or signal in
connection with an airport or other air navigation facility; or

(2) after due warning by the Administrator, continues to
maintain any misleading light or signal; or

(3) knowingly removes, extinguishes, or interferes with the

operation of any true light or signal.


SECTI

{(N)] (M) Any person who shall knowingly and willfully forge,
counterfeit, alter, or falsely make any certificate authorized to be issued
under this Act or knowingly use or attempt to use any fraudulent
certificate shall be punished by a fine [ not exceeding five thousand
pesos or imprisonment for not more than one year, or both, in the
discretion of the court. | OF FIFTEEN THOUSAND PESOS,
WITHOUT PREJUDICE TO IMPRISONMENT OF
YEARS UPON NATURAL PERSONS FOUND GUILTY OF
VIOLATING THIS PROVISION.

[(O)](N)_ For the purpose of carrying out the provisions of this section,
the manager, or general manager or business manager, or person in
charge of the business of the firm or corporation committing an unlawful
act shall be held | personally liable | PERSONALLY AND
SOLIDARILY LIABLE WITH HIS OR HER FELLOW

OFFICIALS AND WITH THE CORPORATION OR FIRM.

[(P) ] (O) The Administrator may file the necessary complaints for the
imposition of the penalties provided by this Act.

(P) FOR PURPOSES OF THIS SECTION, WHEN THE
VIOLATION DIRECTLY AFFECTS A PASSENGER, THE FINE
SHALL BE MULTIPLIED BY THE NUMBER OF PASSENGERS
AFFECTED.

ON 2, Section 43 of the same Act is hereby amended as follows:

43. General penalty. — Any violation of the provisions of this Act, or
any order, rule or regulation issued thereunder, or any term, condition or
limitation of any certificate or permit issued under this Act for which no penalty
is expressly provided shall be punished by a fine not exceeding [ five hundred
pesos ] FIVE THOUSAND PESOS for each violation, SUBJECT TO
SECTION 42 (P) HEREOF.”



SECTION 3. Section 44 of the same Act is hereby amended as follows:

‘ec. 44. Compromise regarding penalty. — The Civil Aeronautics
Board may enter into compromise with respect to any penalty or fine
imposed by virtue of the provisions of this Act (. ], SUBJECT TO
APPROVAL BY THE PRESIDENT OF THE REPUBLIC OF THE
PHILIPPINES.

AFTER SUCH APPROVAL BY THE PRESIDENT OF
THE COMPROMISE AGREEMEN

F] failure to comply with the

order or decision [ of the Board | respecting such compromise shall be

deemed good and sufficient reason for the suspension of the permit or
any certificate until compliance is made. Compliance may also be
enforced by appropriate action brought in a court of competent

jurisdiction.”

SECTION 4. Repealing Clause ~ All laws, decrees, executive orders, rules and
regulations and other issuances or part thereof, which are inconsistent with this Act, are hereby

repealed, amended, or modified accordingly.

SECTION 5. Effectivity ~ Vhis Act shall take fifteen (15) days after its publication in

‘two (2) newspapers of general circulation.

Approved