Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by HON. GUS S. TAMBUNTING 
AN ACT AMENDING COMMONWEALTH ACT NO.146, OTHERWISE KNOWN AS THE 
PUBLIC SERVICE ACT, AS AMENDED, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
Over the years, consumers have been expressing growing dissatisfaction concerning the delivery of 
basic services such as electricity, water, transportation, and telecommunications. The dissatisfaction 
of consumers over poor quality services at high costs can be rooted in the lack of competition and 
inhibition of foreign investment in the country.  
This bill seeks to amend and update the Public Service Act which was passed in 1936. To date, the 
more than 80-year-old law remains to be the law that governs public services in the Philippines. The 
Public Service Act has since been amended several times already and many of its sections have been 
expressly repealed or impliedly repealed, including the Public Service Commission as per Presidential 
Decree No. 1 in 1972.  
This Representation believes that the Public Service Act with its outdated and restrictive provisions 
no longer serves its true purpose of serving the public. Considering the situation for the past few 
years, wherein technological innovation has swamped the market and has since allowed for 
ingenious and new modes of delivery services, a review of the Public Service Act is needed to realign 
the said law to the realities of the 21st Century. 
This proposed measure allows the New Public Service Law to 1) recognize the transfer of functions 
of the Public Service Commission to various administrative agencies; 2) distinguish and clarify the 
definition of public services from public utilities; 3) institute an appropriate mechanism for fixing 
rates; and 4) increase the penalties for violations. I acknowledge Senate Bill 1754 as reported in 
Senate Committee Report 301 during the 17th Congress upon which this proposal has been based. 
On behalf of the people of Parañaque City’s Second District, and for the common good of the 
Filipino people, the approval of the said measure is earnestly sought. 
REP. GUS S. TAMBUNTING 
2nd District, Parañaque City 
September  14, 2022
8:18 pm
4789


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by HON. GUS S. TAMBUNTING 
AN ACT AMENDING COMMONWEALTH ACT NO.146, OTHERWISE KNOWN AS THE 
PUBLIC SERVICE ACT, AS AMENDED, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress as 
assembled: 
SECTION 1. Short Title. – This Act shall be known as “The New Public Service Law of the 
Philippines.” 
Sec. 2. Declaration of Policy. – It is a Constitutionally enshrined policy of the State to promote a 
just and dynamic social order that will free the people from poverty through measures that promote 
an improved quality of life for all.  
The State recognizes that public utilities are necessary to the public and are natural monopolies that 
must be regulated as required by public interest. It is the policy of the State to ensure that the 
consuming public's satisfaction and quality of life shall be the yardsticks for effective regulation of 
public utility providers without compromising the reasonable rate of return of the latter. It is likewise 
the policy of the State to encourage private enterprise and provide incentives for needed 
investments. 
The above policies are fulfilled by ensuring: (a) effective regulation of public utilities and public 
services; (b) a reasonable rate of return to public utilities and public services; and (c) the lilting of 
foreign equity restrictions by clearly defining what are considered to be public utilities. 
Sec. 3. Definition of Terms. – For this Act, the terms below shall be defined as follows: 
a) Cost-of-Living Adjustment - refers to the percentage by which the Philippine Statistics
Authority (PSA) Consumer Price Index for the month of June of the calendar year preceding
the adjustment exceeds the PSA Consumer Price Index for the month of June of the calendar
year in which the maximum amount of the fine was the last set or adjusted under law;
b) Disgorgement of Profits - refers to the giving up or recapturing of profits traceable to a certain
transaction or wrongdoing upon demand or by legal compulsion;
4789


c) Distribution of Electricity - refers to the conveyance of electric power by a distribution utility 
through its distribution system under the provisions of RA 9136, under Section 4 (n) of said 
law; 
d) Transmission of Electricity - refers to the conveyance of electricity through the high voltage 
backbone system, under Section 4 (ccc) of RA 9136; 
e) Treble Damages - refers to an additional sum, depending on the discretion of the agency or 
court involved, which is thrice the amount of the monetary award granted; and 
f) Water Works and Sewerage Systems - refers to the entire water systems to ensure an 
uninterrupted and adequate supply and distribution of potable water for domestic and other 
purposes and the proper operation and maintenance of sewerage systems as defined and 
referred to in RA 6234, as amended, and PD 198, as amended. 
 
Sec. 4. Recognition of Previous Transfer of Jurisdiction to Various Administrative 
Agencies. – Since the enactment of Commonwealth Act No. 146, the jurisdiction over several public 
services had been transferred to various administrative agencies such as, but not limited to, the 
following: 
 
a) Department of Transportation (DOTr); 
b) Land Transportation Franchising Regulatory Board (LTFRB); 
c) Land Transportation Office (LTO); 
d) Civil Aeronautics Board (CAB); 
e) Civil Aviation Authority of the Philippines (CAAP); 
f) Philippine Ports Authority (PPA); 
g) Maritime Industry Authority (MARINA); 
h) Philippine Coast Guard; 
i) Department of Information and Communications Technology (DICT); 
j) National Telecommunications Commission (NTC); 
k) Department of Energy (DOE); 
l) Energy Regulatory Commission (ERC); 
m) Department of Environment and Natural Resources (DENR); 
n) League of Cities; 
o) National Water Resources Board; 
p) Local Water Utilities Administration; 
q) Philippine Competition Commission (PCC). 
 
For purposes of this act, the term "Administrative Agencies "shall refer to existing agencies with 
which the powers and duties of the Public Service Commission were transferred, and are hereby 
authorized and ordered to charge and collect from any public service or public utility or applicant, as 
the case may be, reasonable fees as reimbursement of its expenses in the exercise of its 
authorization, supervision, and regulation duties, and to impose appropriate penalties and fines as 
provided by law. These Administrative Agencies are governed by their respective charters and related 
statutes.  
 


Sec. 5. Public Utility. – A new Section 13 (d) of Commonwealth Act No. 146, as amended, is 
hereby inserted to read as follows: 
 
"(D) PUBLIC UTILITY. - A SUBSET OF PUBLIC SERVICE, IT REFERS TO THE DIRECT 
TRANSMISSION DISTRIBUTION, AND DELIVERY THROUGH A NETWORK, A 
COMMODITY OR SERVICE OF PUBLIC CONSEQUENCE AND IS A NATURAL MONOPOLY 
THE OPERATION OF WHICH MUST BE RESTRICTED UNDER SECTION 11, ARTICLE XII 
OF THE 1987 CONSTITUTION.  
THE FOLLOWING SHALL BE AN EXCLUSIVE LIST OF PUBLIC UTILITIES: 
 
(1) 
TRANSMISSION OF ELECTRICITY; 
(2) 
DISTRIBUTION OF ELECTRICITY; AND 
(3) 
WATERWORKSORKS AND SEWERAGE SYSTEMS. 
 
NO OTHER BUSINESS OR SERVICE SHALL BE DEEMED A PUBLIC UTILITY OTHER 
THAN THOSE LISTED IN THIS SECTION UNLESS OTHERWISE SUBSEQUENTLY 
PROVIDED BY LAW UPON RECOMMENDATION BY THE NATIONAL ECONOMIC AND 
DEVELOPMENT AUTHORITY (NEDA), THROUGH ITS BOARD, IN CONSULTATION 
WITH THE PHILIPPINE COMPETITION COMMISSION (PCC) AND THE CONCERNED 
ADMINISTRATIVE AGENCIES, TAKING INTO CONSIDERATION SECTIONS 2 AND 4 OF 
THIS ACT AND THE FOLLOWING CRITERIA: 
 
1. 
THE PERSON OR JURIDICAL ENTITY REGULARLY SUPPLIES AND 
DIRECTLY TRANSMITS AND DISTRIBUTES TO THE PUBLIC THROUGH A 
NETWORK A COMMODITY OR SERVICE OF PUBLIC CONSEQUENCE; 
2. 
THE COMMODITY OR SERVICE IS NECESSARY TO THE PUBLIC AND A 
NATURAL MONOPOLY THAT NEEDS TO BE REGULATED WHEN THE 
COMMON GOOD SO REQUIRES; 
3. 
THE COMMODITY OR SERVICE IS NECESSARY FOR THE MAINTENANCE 
OF LIFE AND OCCUPATION OF RESIDENTS; AND 
4. 
THE COMMODITY OR SERVICE IS OBLIGATED TO PROVIDE ADEQUATE 
SERVICE TO THE PUBLIC ON DEMAND." 
 
THIS SECTION AND THIS ACT DO NOT HAVE ANY EFFECT ON THE EXISTING 
REGULATIONS OF PUBLIC SERVICES AND DO NOT, IN ANY WAY, DIMINISH THE 
CONSTITUTIONAL RESTRICTIONS PROVIDED UNDER SECTIONS 11 AND 17, 
ARTICLE XII AND SECTION 4, ARTICLE IX (PART C) OF THE CONSTITUTION. 
NEITHER DOES THIS SECTION NOR THIS ACT REDEFINE "COMMON CARRIERS" AND 
ALTER THE EXISTING HIGH STANDARDS ACCORDED TO IT." 
 
Sec. 6. Authorization to Operate. - The first paragraph of Section 15 of Commonwealth Act No. 
146, as amended, is hereby amended to read as follows: 
 
"Except those enumerated in the preceding section, no public service shall operate in the 
Philippines without possessing a valid and subsisting FRANCHISE, certificate, OR ANY OTHER 
APPROPRIATE FORM OF AUTHORIZATION FOR THE OPERATION OF A PUBLIC SERVICE [from 
the Public Service Commission known as “certificate of public convenience,” or certificate of 
public convenience and necessity,”] as the case may be, as the case may be, FROM THE 


CONGRESS, THE SECURITIES EXCHANGE COMMISSION (SEC) AND/OR THE PROPER 
ADMINISTRATIVE AGENCY to the effect that the operation of said service and the 
authorization to do business will promote the public interest properly and suitably." 
 
Sec. 7. Issuance of Authorizations and Fixing of Rates, Tolls, and the like and the Reasonable 
Rate of Return. - Section 16 (a) and (c) of Commonwealth Act No. 146, as amended, are hereby 
amended to read as follows: 
" (a) To issue certificates [which shall be known as certificates of public convenience,] authorizing 
the operation of public service within the Philippines whenever the [Commission] 
ADMINISTRATIVE AGENCY finds that the operation of the public service proposed and the 
authorization to do business will promote the public interest properly and suitably. [Provided, 
That thereafter, certificates of public convenience and certificates of public convenience and 
necessity will be granted only to citizens of the Philippines or the United States or to corporations, 
co-partnerships, associations, or joint-stock companies constituted and organized under the laws 
of the Philippines; Provided, That sixty per centum of the stock or paid-up capital of any such 
corporation, co-partnership, association or joint-stock company must belong entirely to the 
citizens of the Philippines or of the United States: Provided, further, That no such certificates 
shall be issued for a period of more than fifty years.] 
 
xxx  
 
 
xxx 
    
 
  xxx 
 
(c) To fix and determine THE MAXIMUM CEILING FOR individual or joint rates, tolls, charges, 
classifications, or schedules thereof, as well as commutation, mileage, kilometrage, and other 
special rates which shall be imposed, observed, and followed thereafter by any public service 
WHEN THE PUBLIC INTEREST SO REQUIRES: Provided, That the [Commission] 
ADMINISTRATIVE AGENCY may, in its discretion, approve rates proposed by public services 
provisionally and without necessity of any hearing; but it shall call a hearing thereon within 
[thirty] FIFTEEN days, thereafter, upon publication and notice to the concerns operating in the 
territory affected, TO RATIFY ITS PRIOR PROVISIONAL APPROVAL OR CHANGE, 
MODIFY OR ALTER THE APPROVED RATE BASED ON PUBLIC INTEREST: Provided, 
further, That in case the public service equipment of an operator is used principally or secondarily 
for the promotion of a private business, the net profits of said private business shall be considered 
in relation with the public service of such operator for the purpose of fixing the rates; PROVIDED 
THAT THE MAXIMUM RATE OF RETURN SHALL BE EQUAL TO THE POST-TAX 
WEIGHTED AVERAGE COST OF CAPITAL FOR THE SAME OR COMPARABLE 
BUSINESSES COMPUTED USING ESTABLISHED MODERN AND UP TO DATE 
METHODOLOGIES SUCH AS THE CAPITAL ASSET PRICING MODEL: PROVIDED ALSO, 
THAT INCOME TAX BE ALLOWED AS A CASH EXPENDITURE OR OUTFLOW FOR RATE- 
DETERMINATION PURPOSES: PROVIDED FURTHER, THAT THIS PROVISION SHALL 
NOT BAR THE APPLICATION OF PERFORMANCE-BASED RATE REGULATION SHOULD 
THE ADMINISTRATIVE AGENCY REGULATING SUCH PUBLIC SERVICE DEEM IT 
EFFICIENT AND IN THE PUBLIC INTEREST; PROVIDED FINALLY, THAT THIS SHALL 
NOT BE INTERPRETED AS AMENDING OR REPEALING REGULATIONS PROMULGATED 
BY THESE ADMINISTRATIVE AGENCIES TO DEREGULATE RATES. 
 
Sec. 8. Reasonable Costs  – Section 17 (b) of Commonwealth Act No. 146, as amended, is 
hereby amended to read as follows: 
 


"(b) To require any public service to pay the actual expenses incurred by the [Commission] 
ADMINISTRATIVE AGENCY in any investigation if it shall be found in the same that any rate, 
toll, charge, schedule, regulation, practice, act, or service thereof violates any provision of this 
Act or any certificate, order, rule, regulation or requirement issued or established the 
[Commission] by ADMINISTRATIVE AGENCY.  The [Commission] ADMINISTRATIVE AGENCY 
may also assess against any public service REASONABLE costs [not to exceed twenty-five pesos] 
concerning the such investigation."  
 
Sec. 9. Section 20 (i) of Commonwealth Act No. 146, as amended, is hereby amended to read as 
follows: 
 
"(i) To sell, alienate, or in any manner transfer shares of its capital stock to any alien if the result 
of that sale, alienation, or transfer in itself or connection with another previous sale shall be the 
reduction to less than sixty per centum of the capital stock belonging to Philippine citizens IN 
THE OPERATION OF A PUBLIC UTILITY AS REQUIRED BY THE CONSTITUTION. Such 
sale, alienation, or transfer shall be void and of no effect and shall be sufficient cause for ordering 
the cancellation of the certificate."  
 
Sec. 10. Section 21 of Commonwealth Act No. 146, as amended, is hereby amended to read as 
follows: 
 
"Every public service violating or failing to comply with the terms and conditions of any certificate 
or any orders, decisions or regulations of the [Commission] ADMINISTRATIVE AGENCY shall 
be subject to DISGORGEMENT OF PROFITS, TREBLE DAMAGES, a fine NOT EXCEEDING 
FIVE MILLION PESOS (PHP 5,000,000.00) OR ALL OR ANY COMBINATION THEREOF 
[of not exceeding two hundred pesos] per day for every day during which such default or 
violation continues; and the [Commission] ADMINISTRATIVE AGENCY is hereby authorized 
and empowered to impose such PENALTY OR fine, after due notice and hearing. 
  
The PENALTIES AND fines so imposed shall be paid to the Government of the Philippines 
through the [Commission] ADMINISTRATIVE AGENCY, and failure to pay the PENALTY OR 
fine in any case within the same specified in the order or decision of the [Commission] 
ADMINISTRATIVE AGENCY shall be deemed good and sufficient reason for the suspension 
of the certificate of said public service until payment shall be made. Payment may also be 
enforced by appropriate action brought in a court of competent jurisdiction. The remedy provided 
in this section shall not be a bar to, or affect any other remedy provided in this Act but shall be 
cumulative and additional to such remedy or remedies. “ 
 
Sec. 11. Section 23 of Commonwealth Act No. 146, as amended, is hereby amended to read as 
follows: 
 
"Any public service corporation that shall perform, commit, or do any act or thing forbidden or 
prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be done or 
performed, shall be punished by a fine not exceeding [twenty-five thousand pesos] FIVE 
MILLION PESOS (PHP 5,000,000.00), or by imprisonment [not exceeding five years] OF 
NOT LOWER THAN SIX (6) YEARS AND NOT HIGHER THAN TWELVE (12) YEARS, or 
both, in the discretion of the court.” 
 


Sec. 12. Section 24 of Commonwealth Act No. 146, as amended, is hereby amended to read as 
follows: 
 
"Any person who shall knowingly and willfully perform, commit, or do, or participate in 
performing, committing, or doing, or who shall knowingly and willfully cause, participate, or join 
with others in causing any public service corporation or company to do, perform or commit, or 
who shall advise, solicit, persuade, or knowingly and willfully instruct, direct, or order any officer, 
agent, or employee of any public service corporation or company to perform, commit, or do any 
act or thing forbidden or prohibited by this Act, shall be punished by a fine not exceeding [two 
thousand pesos] FIVE MILLION PESOS (PHP 5,000,000.00), or imprisonment [not 
exceeding two years] OF NOT LOWER THAN SIX (6) YEARS AND NOT HIGHER THAN 
TWELVE (12) YEARS, or both, in the discretion of the court. [: Provided, however, that for 
operating a private passenger automobile as a public service without having a certificate of public 
convenience for the same the offender shall be subject to penalties provided for on section sixty-
seven (j) of Act numbered thirty-nine hundred and ninety-two.]” 
 
Sec. 13. Section 25 of Commonwealth Act No. 146, as amended, is hereby amended to read as 
follows: 
 
"Any person who shall knowingly and willfully neglect, fail, or omit to do or perform, or who shall 
knowingly and willfully cause or join or participate with others in causing any public service 
corporation or company to neglect, fail or omit to do or perform, or who shall advise, solicit, or 
persuade, or knowingly and willfully instruct, direct, or order any officer, agent, or employee of 
any public service corporation or company to neglect, fail, or omit to do any act or thing required 
to be done by this Act, shall be published by a fine not exceeding [two thousand pesos] FIVE 
MILLION PESOS (PHP 5,000,000.00) or by imprisonment [not exceeding two years] OF 
NOT LOWER THAN SIX (6) YEARS AND NOT HIGHER THAN TWELVE (12) YEARS, or 
both, in the discretion of the court." 
 
Sec. 14. Section 26 of Commonwealth Act No. 146, as amended, is hereby amended to read as 
follows: 
 
"Any person who shall destroy, injure, or interfere with any apparatus or appliance owned or 
operated by to in charge of the [Commission] ADMINISTRATIVE AGENCIES or its agents, 
shall be deemed guilty of a misdemeanor and upon conviction shall be punished by a fine OF 
THE AMOUNT EQUIVALENT TO THE ACTUAL MARKET VALUE OF THE APPARATUS OR 
APPLIANCE DESTROYED OR INJURED PLUS A FINE NOT EXCEEDING ONE MILLION 
PESOS ( PH P 1,000,000.00) [not exceeding one thousand pesos] or imprisonment [not 
exceeding six months] OF NOT LOWER THAN SIX (6) YEARS AND NOT HIGHER THAN 
TWELVE (12) YEARS, or both in the discretion of the court. 
 
[Any public service permitting the destruction, injury to, or interference with, any such 
apparatus or appliances shall forfeit a sum not exceeding for thousand pesos for each 
offense.]” 
 
Sec. 15. Section 28 of Commonwealth Act No. 146, as amended, is hereby amended to read as 
follows:  
 


"Violations of the orders, decisions, and regulations of the [Commission] ADMINISTRATIVE 
AGENCIES and of the terms and conditions of any certificate issued by the [Commission] 
ADMINISTRATIVE AGENCIES [shall prescribe after sixty days,] and violations of the 
provisions of this Act shall [prescribe after one hundred and eight days.] BE 
IMPRESCRIPTIBLE." 
 
Sec. 16. Subsequent Adjustment of Fines imposed under this Act. – The maximum amounts 
of fines imposed under this Act, as well those imposed under Commonwealth Act No 146, shall be 
adjusted by the head of each administrative agency under Section 1 of this Act by a Cost-of-Living 
Adjustment on January 1 of the year immediately following the date of enactment of this Act and 
every filth calendar year thereafter. Each head of the administrative agency shall file copies of the 
adjustment with the University of the Philippines Law Center by Executive Order No. 292 (1987), as 
amended.  
 
Any increase shall apply only to fines, including those whose associated violation predated such 
increase, which is assessed alter the date the increase takes effect.  
 
Sec. 17. Interpretation. – This Act shall be subject to and consistent with the regulatory powers 
of the State to promote public interest in Article IX-C, Section 4 and Article XII, Section 17 of the 
Constitution. 
  
No franchise, certificate, or authorization granted by Congress and the appropriate administrative 
agencies under Section 3 of this Act shall be (a) exclusive in character, (b) for a longer period than 
fifty years, and (c) granted except under the condition that it shall be subject to amendment, 
alteration, or repeal by Congress when the public interest so requires.  
 
The power to grant any franchise, certificate, or any other form of authorization for the operation of 
public service still belongs to Congress, unless otherwise provided by law to an administrative 
agency.  
 
Sec. 18. Non-Impairment of Existing Agreements. – The application and implementation of 
the pertinent provisions of this Act shall not impair vested rights or obligations of contracts. Current 
and subsisting concession agreements and other similar contracts of juridical persons with 
government agencies or government-owned-and-controlled-corporations covering activities 
hereunder classified as public utilities shall remain valid and in force, by the existing terms and 
conditions, the parties agreed to thereunder until expiration or termination thereof.  
 
Sec. 19. Suppletory Application of Commonwealth Ad No. 146. – Commonwealth Act No. 
146, as amended, shall be construed as a general law that shall apply suppletorily to special laws or 
existing sector-specific laws governing public services, except for Section 13 (d) of Commonwealth 
Act No. 146, as amended, created by Section 4 of this Act. 
 
Sec. 20. Comprehensive Baseline Survey. – The University of the Philippines Law Center shall 
conduct a comprehensive baseline survey of public services governance within six (6) months from 
the effectiveness of this Act. Copies of the results of said survey shall be furnished to Congress, the 
NEDA, and PCC.  
 


The PCC, in coordination with the NEDA, is mandated to conduct regular studies on whether 
deregulation is warranted in a sector to improve consumer welfare and to submit its recommendation 
to Congress.  
 
Sec. 21. Implementing Rules and Regulations. – All administrative agencies under Section 3 
of this Act shall, in coordination with the NEDA, PCC, and the University of the Philippines Law 
Center, promulgate rules and regulations to implement the provisions of this Act within ninety (90) 
days from the effectivity of this Act, including the criteria for the determination of imposable fines, 
as provided for in this Act, to be based on the capitalization of a public service provider and 
peculiarities of the public service concerned.  
 
Sec. 22. Repealing Clause. – All laws, including Commonwealth Act No. 146, as amended, 
decrees, orders, rules, and regulations, or other issuances or parts thereof inconsistent with the 
provisions of this Act are hereby repealed or modified accordingly.  
 
Sec. 23. Appropriation. – The initial funding to carry out the provisions of this Act shall be charged 
against the current year's appropriation. Thereafter, such sums as may be necessary shall be 
included in the General Appropriations Act.  
 
Sec. 24. Separability Clause. – If any portion or provision of this Act is declared unconstitutional, 
the remainder of this Act or any provision not affected thereby shall remain in force and effect.  
 
Sec. 25. Effectivity. – This Act shall take effect to after fifteen (15) days following the completion 
of its publication either in the Official Gazette or in a newspaper of general circulation in the 
Philippines. 
 
Approved,