EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
“S' 
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*19 
DEC 19 
P5 :22
SENATE
Introduced by SENATOR IMEE R. MARCOS
AN ACT
FURTHER AM ENDING  COMMONW EALTH ACT NO. 146, OTHERW ISE KNOWN 
AS THE PUBLIC SERVICE ACT, AS AMENDED, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Article XII Section 11 of the 1987 Constitution states th a tssno franchise, certificate, 
o r any other form o f authorization for the operation o f a public utility shall be granted 
except to citizens o f the Philippines or to corporations or associations organized under 
the laws o f the Philippines a t least sixty per centum o f whose capita! Is owned by such 
citizens, nor shall such franchise, certificate, or authorization be exclusive in character or 
fo ra  longer period than fifty years." In the absence of law defining what public utilities 
are, Commonwealth Act 146, also known as the Public Service Act (PSA), was used as 
the basis for the definition of public utilities, which is considered as a subset of public 
services. This ambiguity has resulted in the need for the Supreme Court to decide on 
whether on whether a public service is a public utility or not.
This biil seeks to amend the PSA by clarifying the definition of public services and 
public utilities. Doing so will remove the process of defining public utilities from the 
Supreme Court, addressing the ambiguity associated with public utilities while facilitating 
investment in public services by removing them from the restrictions of the Constitution. 
The increase in foreign investment, competition, and participation in public services will 
lead to improvements in both price and quality of service.


The bill also recognizes the transfer of the functions of the Public Service 
Commission to the relevant administrative agencies. It also enhances the regulation of 
the relevant government agencies in the operation of public utilities. The bill institutes 
the rate-fixing mechanism to be followed by public utilities and public services. This is 
important as most public services are natural monopolies which must be regulated by 
law.
Lastly, the bill increases the applicable fines and penalties for violations of the law. 
Given the potential for abuse in the regulation, management, and operation of public 
services, there is a need to increase the penalties in the law in order to deter possible 
violations of the law.
Given the abovementioned circumstances, the immediate passage of this bill is 
necessary.
^
 fi.
IMEE R. MARCOS


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES )
P irc*+' 
C o c c ^ ir^ n
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<1 
I 
I C 4 I  
•
SENATE
S.B. No. 
1257
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P5:23
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Introduced by SENATOR IMEE R. MARCOS
AN ACT
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KNOWN AS THE PUBLIC SERVICE ACT, AS AMENDED, AND FOR OTHER
PURPOSES
Be it enacted by the Senate and the House o f Representatives o f the Philippines in 
Congress assembled.
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SECTION 1. Short Tide. -This Act shall be known as "The New Public Service
2 
Law of the Philippines."
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Section 2. Declaration o f Policy. - It is a Constitutionally enshrined policy of the
5 
State to recognize the role of the private sector as the main engine for national growth
6 
and development. It is hereby declared the policy of the State to encourage private
7 
enterprise and expand the base of investment in the country, with the goal of
8 
providing efficient, reliable and affordable basic services to all. The State recognizes
9 
that economic liberalization promotes the free flow of capital, efficiently allocates
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scarce resources, allows the transfer of advanced technology and facilitates market
11 
competition, for the benefit of the consumers who are given the right to choose
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between sen/ice providers. The State recognizes that public utilities are necessary to
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the public and are natural monopolies that must be regulated as required by public
14 
interest.
15
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Section 3. Definition o f Terms. - For the purposes o f this Act, the following
17 
terms shall mean:
18 
(a) Administrative Agency - refers to existing agencies to which the powers and duties
19 
o f the Public Service Commission were transferred;


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(b) Common Carrier- refers to persons, corporations, firms or associations engaged in
2 
the business of carrying or transporting passengers or goods or both, by land, water,
3 
or air, for compensation, offering their services to the public, as defined by Article
4 
1732 of Republic Act No. 386, as amended;
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(c) Cost-of-Living Adjustment - refers to the percentage by which the Philippine
6 
Statistics Authority (PSA) Consumer Price Index for the month of June of the calendar
7 
year preceding the adjustment exceeds the PSA Consumer Price Index for the month
8 
o f June of the calendar year in which the maximum amount of the fine was last set or
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adjusted pursuant to law;
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(d) Disgorgement of Profits - refers to the giving up or recapturing o f profits traceable
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to a certain transaction or wrongdoing upon demand or by legal compulsion;
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(e) Distribution of Electricity - refers to the conveyance of electric power by a
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distribution utility through its distribution system as defined by Section 4 (n) of
14 
Republic Act No. 9136;
15 
(f) Philippine National - refers to citizens, partnerships, associations, and corporations
16 
defined by Section 3(a) of Republic Act No. 7042, as amended;
17 
(g) Telecommunications - refers to any process which enables a telecommunications
18 
entity to relay and receive voice, data, electronic messages, written or printed matter,
19 
fixed or moving pictures, words, music or visible or audible signals or any control
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signals of any design and for any purpose by wire, radio or other electromagnetic,
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spectral, optical or technological means, as defined by Section 3(a) of Republic Act
22 
No. 7925, as amended
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(h) Transmission of Electricity - refers to the conveyance of electricity through the
24 
high voltage backbone system, as defined by Section 4 (ccc) o f Republic Act No. 9136;
25 
(i) Treble Damages - refers to an additional sum, depending on the discretion of the
26 
agency or court involved, which is thrice the amount of the monetary award granted;
27 
and
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0) Water Pipeline Distribution Systems and Sewerage Pipeline Systems - refers to the
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operation and maintenance of water pipeline distribution systems to ensure an
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uninterrupted and adequate supply and distribution of potable water for domestic and
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other purposes and the operation and maintenance of sewerage pipeline systems to


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ensure public health and safety, as regulated by Republic Act No. 6234, as amended, 
and Presidential Decree No. 198, as amended.
Section 4. Recognition o f Previous Transfer o f Jurisdiction to Various 
Administrative Agencies. - All references to the Public Service Commission in 
Commonwealth Act No. 146, as amended, shall mean any administrative agency to 
which the powers and duties of the Public Service Commission were transferred in 
accordance with their respective charters and related statutes.
Section 5. Public Utility. Section 13 of the Commonwealth Act of 1946, as 
amended, is hereby further amended to read as follows:
"Section 13. x x x
"(b ) The term 'public service' includes every person that now or hereafter may own, 
operate, manage, or control in the Philippines, for hire or compensation, with general 
or limited clientele, whether permanent, occasional, or accidental, and done for 
general business purpose, x x x canal, PUBLIC MARKET, irrigation system x x x. 
"xxx
"(D ) PUBLIC U T ILIT Y  -  REFERS TO A PERSON THAT OPERATES, MANAGES 
AN D  CONTROLS FOR PUBLIC USE ANY OF THE FOLLOW ING:
1 ) D IS TR IB U TIO N  OF ELECTRICITY (AS DEFINED BY SECTION 4 (N ) OF 
REPUBLIC ACT NO. 9 1 36 , OTHERW ISE KNOW N AS THE ELECTRIC POWER 
IN D U STR Y REFORM ACT OF 2 0 0 1 );
2 ) IK A N S M lS b iU N  OF tL h C I K lC lT Y  (AS U tF lN h U  BY S tC l IO N 4(CCC) OF 
REPUBLIC ACT NO. 9 1 3 6 ) SYSTEM; AND
3 ) WATER PIPELINE D IS TR IB U TIO N  SYSTEM OR SEWERAGE PIPELINE 
SYSTEM. (AS DEFINED BY REPUBLIC ACT NO. 6234, ENTITLED 'AN ACT 
CREATING THE METROPOLITAN W ATERW ORKS AND SEWERAGE SYSTEM


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AN D  
DISSO LVING  
THE 
N ATIO NAL 
WATERW ORKS 
AND 
SEWERAGE 
AU TH O R ITY; 
AND 
FOR 
OTHER 
PURPOSES', 
AS 
AMENDED, 
AND 
PRESIDENTIAL 
DECREE 
NO. 
198, 
KNOWN 
AND 
REFERRED 
TO 
AS 
'P R O V IN C IA L 
W ATER 
U T ILIT IE S  
ACT 
OF 
1973', 
AS 
AMENDED).
NO OTHER PERSON SHALL BE DEEMED A PUBLIC U T ILIT Y  UNLESS 
SUBSEQUENTLY PROVIDED BY LAW. THE NATIO NAL ECONOMIC AND 
DEVELOPMENT 
AUTHO RITY 
(N EDA), 
THROUGH 
ITS  
BOARD, 
IN  
CONSULTATION W IT H  THE 
P H ILIP P IN E  CO M PETITIO N 
CO M M ISSIO N 
(PCC) 
AND 
THE 
CONCERNED 
A D M IN IS TR A TIV E  
AGENCIES, 
SHALL 
RECOMMEND TO CONGRESS THE CLASSIFICATIO N OF A PUBLIC SERVICE 
AS A  PUBLIC U T ILIT Y  ON THE BASIS OF THE FOLLOW ING C RITERIA:
1) THE PERSON OR JU R ID IC A L ENTITY REGULARLY SUPPLIES AND 
DIRECTLY TRANSM ITS AND DISTRIBUTES TO THE PUBLIC THROUGH 
A NETWORK, A CO M M O DITY OR SERVICE OF PUBLIC CONSEQUENCE;
2) THE COM M ODITY OR SERVICE IS  NECESSARY TO THE PUBLIC AND
IS  A NATURAL MONOPOLY THAT NEEDS TO BE REGULATED WHEN 
THE 
COMMON 
GOOD 
SO 
REQUIRES;
3 ) 
THE 
CO M M O DITY 
OR 
SERVICE 
IS  
NECESSARY 
FOR 
THE 
MAINTENANCE OF THE LIFE AND OCCUPATION OF RESIDENTS; AND
4 ) THE CO M M O DITY OR SERVICE IS  OBLIGATED TO PROVIDE 
ADEQUATE SERVICE TO THE PUBLIC ON DEMAND.
Section 6. Authority to Operate. -
The first paragraph o f Section 15 of Commonwealth Act No. 146, as amended, is 
hereby amended to read as follows:
"W ith the exception of 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 
A U TH O R IZA TIO N  FOR THE OPERATION OF A PUBLIC SERVICE [from the 
Public Service Commission known as certificate of public convenience," or "certificate


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o f public convenience and necessity'T as the case may be, FROM THE CONGRESS, 
THE SECURITIES AND EXCHANGE CO M M ISSIO N A N D /O R  THE PROPER 
A D M IN IS T R A T IV E  AGENCY to the effect that the operation o f said service and the 
authorization to do business will promote the public interest in a proper and suitable 
manner."
"The [Gemmission] A D M IN IS TR A TIV E  AGENCY may prescribe a condition for the 
issuance of the certificate provided in the preceding paragraph that the service can 
be acquired by the Republic of the Philippines or any instrumentality thereof upon a 
payment of the cost price of its CAPITAL STOCK OR useful equipment, less 
reasonable depreciation; and likewise, that the certificate shall be valid only for a 
definite period of time; and that the violation of any of these conditions shall produce 
the immediate cancellation of the certificate without the necessity of any express 
action 
on 
the 
part 
of 
the 
[Gommission] 
A D M IN IS TR A TIV E  
AGENCY.
X X X
Section 7. Proceedings o f the Administrative Agency. - Section 16 paragraphs 
(a) and (c) of Commonwealth Act No. 146, as amended, is hereby further amended 
to  read as foiiows:
"Section 16. Proceedings of the [CommisGion] A D M IN IS TR A TIV E  AGENCY, upon 
notice and hearing. - The [CommiGSion] A D M IN IS TR A TIV E  AGENCY shall have 
THE power, upon proper notice and hearing in accordance with the rules and 
provisions of this Act, [subject to the limita tions and cxccptionG mentioned and 
saving provisions to the contrary] :
(a) To issue certificates
o f public
convenience,] authorizing the operation of public service within the 
Philippines whenever the [ Commission] A D M IN IS TR A TIV E  AGENCY finds 
that the operation of the public service proposed and the authorization to do 
business will promote the public interest in a proper and suitable manner.


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[Providcd- That thereafter, ccrtificatcG o f certificate of public convonicncc, or
2 
CGrtificatG o f public convoniGncG and nocoGGity will be granted only to  citiz e n
3 
of the PhilippinGG or of the United States or to corporations co-partnerships,
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asGoclatkfflG of jo int stock companieG conGtituted and organized under the
5 
laws of the Philippines; Provided, That sixty per centum of the stock or paid-
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up capita l of any such corporations/ co-partnership, asGociation or jo int stock
8 
States: Provided, further. That no such certificates shall tx} issued for a peried
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of more than fifty years-.]
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XXX XXXXXXX
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(c) To fix and determine THE M AXIM U M  individual or joint rates, tolls, charges,
14 
classifications, REVENUES or schedules thereof, as well as commutation, mileage,
15 
kilometrage, and other special rates which shall be imposed, observed, and followed
16 
thereafter by any public service WHEN THE PUBLIC INTEREST SO REQUIRES:
17 
Provided, That the [Commission] A D M IN IS TR A TIV E  AGENCY may, in its discretion.
18 
approve rates proposed by public services provisionally and without necessity of any
19 
hearing; but it shall call a hearing thereon within thirty days, thereafter, upon
20 
publication and notice to the concerns operating in the territory affected, TO RATIFY
21 
IT S  PRIOR PRO VISIO NAL APPROVAL OR CHANGE, M O DIFY OR ALTER THE
22 
APPROVED RATE BASED ON PUBLIC INTEREST: Provided, further. That in case
23 
the public service equipment of an operator is used principally or secondarily for the
24 
promotion o f a private business, the net profits of said private business shall be
25 
considered in relation with the public service of such operator for the purpose of fixing
26 
the rates. IN  THE PUBLIC INTEREST, THE A D M IN IS TR A TIV E  AGENCY MAY
27 
ESTABLISH AND ENFORCE A METHODOLOGY FOR SETTING RATES, TAKING
28 
IN T O  ACCOUNT ALL 
RELEVANT CONSIDERATIONS, 
IN C LU D IN G  THE
29 
EFFICIENCY OF THE REGULATED PUBLIC SERVICE. THE RATES MUST BE
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SUCH AS TO ALLOW  THE RECOVERY OF JUST AND REASONABLE COSTS AND
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A  REASONABLE RATE OF RETURN. INCOME TAX SHALL BE ALLOWED AS A
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CASH OUTFLOW FOR RATE-DETERM INATIO N PURPOSES. T H IS  PROVISION


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SHALL NOT BAR THE APPLIC ATIO N  OF PERFORMANCE-BASED RATE 
REGULATION SHOULD THE A D M IN IS TR A TIV E  AGENCY REGULATING SUCH 
PUBLIC SERVICE DEEM IT  EFFICIENT AND IN  THE PUBLIC INTEREST.
THE P H ILIP P IN E  COM PETITIO N C O M M ISSIO N IS  HEREBY MANDATED TO 
CONDUCT 
REGULAR 
STUDIES 
ON 
WHETHER 
DEREGULATION 
IS  
W ARRANTED IN  A SECTOR AND SHALL SU BM IT ITS  RECOMMENDATION TO 
CONGRESS.
Section 8. Reasonable Costs. - Section 17 (b) of Commonwealth Act No. 146, 
as amended, is amended to read as follows;
"(b) To require any public service to pay the actual expenses incurred by the [ 
Commission] A D M IN IS i K A i TVE AGENCY in any investigation if it shall be found In 
the same that any rate, toll, charge, schedule, regulation, practice, act or service 
thereof is in violation of any provision of this Act or any certificate, order, rule, 
regulation 
or 
requirement 
issued 
or 
established 
by 
the 
[Commission] 
A D M IN IS TR A TIV E  AGENCY. The [Commission] A D M IN IS TR A TIV E  AGENCY 
may also assess against any public service REASONABLE costs [not to exceed 
tw enty-five pesos] with reference to such investigation."
Section 9. Acts Requiring Approval. - Section 20 (i) of Commonwealth Act No. 
146, as amended is further amended to read as follows:
"(i) To sell, alienate or in any manner transfer shares o f its capital stock to any alien 
if the result of that sale, alienation, or transfer in itself or in 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, MANAGEMENT, AND 
CONTROL OF A PUBLIC U T ILIT Y  AS REQUIRED BY THE CO NSTITUTIO N. Such 
sale, alienation or transfer shall be void and of no effect and shall be sufficient cause 
fo r ordering the cancellation of the certificate."


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"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 shall be 
subject to DISGORGEMENT OF PROFITS, TREBLE DAMAGES, a fine 
exceeding tw o l>undre 4 ^pesos per-day -fo r-every day ] OF UP TO TEN 
M ILLIO N  
PESOS per day for every day during which such default or violation continues, 
DIVESTMENT, OR ALL OE ANY CO M BIN ATIO N  THEREOF; and the [Gemmission] 
A D M IN IS TR A TIV E  AGENCY is hereby authorized and empowered to impose such 
fine, after due notice and hearing.
The PENALTIES AND fines so imposed shall be paid to the Government of the 
Philippines through the [Com misston] A D M IN IS TR A TIV E  AGENCY, and failure to 
pay the PENALTY OR fine in any case within the same specified in the order or 
decision of the [Commissiee ] A D M IN IS TR A TIV E  AGENCY shall be deemed good 
and sufficient reason for the suspension of the certificate of said public service until 
payment [shall be] IS  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."
Section 11. Prohibition to Corporations. - 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 snail negiea, fail or omit to do or perform any a a  or thing 
herein to be done or performed, shall be punished by a fine not [exceeding twenty- 
ftve thousand pesos] LOWER THAN FIVE M ILLIO N  PESOS (P H P 5 ,0 00 ,00 0 .0 0 ), 
or by imprisonment [ not exceeding five years] OF NOT LOWER THAN S IX  (6  ) 
YEARS AND NOT HIGHER THAN TWELVE (1 2 ) YEARS, or both, in the discretion 
o f the court."
Section 10. Treble Damages. - Section 21 o f Commonwealth No. 146 or the
Public Service Act, as amended, is hereby amended to read as follows:


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"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 advice, solicit, persuade, or knowingly and 
willfully instruct, direct, or order any officer, agent, or employee o f 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] 
LOWER THAN FIVE M ILLIO N  PESOS (PH P5/0 0 0 /0 0 0 .0 0 ), or imprisonment [not 
exceeding two years] OF NOT LOWER THAN S IX  (6 ) YEARS AND NOT HIGHER 
THAN TWELVE (1 2 ) YEARS, or both, in the discretion of the court [Provided; 
however, that for operating a privatchpassengcr automobilc as a public service without 
having a certificate of public convenience for the same the offender shall be subject 
to  the penalt ies provided for in section sixty seven (j) of Act numbered thirty nine 
hundred and ninety-tw o]."
Section 13. Neglect o f Duty. 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 om it 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 om it 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 om it to do any act or thing required to be done by this Act, shall be 
published by a fine not [exceeding two thousand pesos] LOWER THAN FIVE 
M ILLIO N  PESOS (PHP 5 ,0 0 0 ,0 0 0 .0 0 ) or by imprisonment [not exceeding two 
year=s] OF NOT LOWER THAN S IX  (6 ) YEARS AND NOT HIG HER THAN TWELVE 
(1 2 ) YEARS, or both, in the discretion of the court."
Section 12. Prohibition to Individuals. Section 24 o f Commonwealth Act No.
146, as amended, is hereby amended to read as follows:


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"Any person who shall destroy, injure, or interfere with any apparatus or appliance 
owned or operated by the [Commission] 
A D M IN IS TR A TIV E  AGENCIES or its 
agents, shall be deemed guilty 
of a misdemeanor and upon conviction shall be 
punished by a fine OF THE AM OUNT EQUIVALENT TO THE ACTUAL MARKET 
VALUE OF THE APPARATUS OR APPLIANCE DESTROYED OR INJURED PLUS 
A FINE NOT EXCEEDING ONE M ILLIO N  PESOS (PHP 1 ,0 0 0 ,0 0 0 .0 0 ) [not 
exceeding one thousand pesos] or imprisonment [net-exceeding six months] OF NOT 
LOWER THAN S IX  (6 ) YEARS AND NOT HIGHER THAN TWELVE (1 2 ) YEARS, 
or both in the discretion of the court. [Any public service permitting the destruction, 
injury to, or interference withr any such apparatus or appliances shall forfeit  a sum 
not exceeding four thousand pesos for each offense.]"
Section 15. Decision o f Administrative Agencies. Section 28 o f Commonwealth 
Act No. 146, as amended, is hereby amended to read as follows:
"Violations 
of the 
orders, 
decisions, 
and 
regulations o f the 
[Commission] 
A U M iN iS i K A I I V t  A G tN C ltS  and of the terms and conditions of any certificate 
issued by the [Commission] A D M IN IS TR A TIV E  AGENCIES [shall prescribe after 
sixty days,] and violations of the provisions of this Act shall [prescribe after one 
hundred and eighty days.] BE IM PRESCRIPTIBLE."
Section 16. Reasonable Fees. - Section 40 of Commonwealth No. 146 of the 
Public Service Act, as amended, is hereby amended to read as follows:
"Section 40. The [Commission] A D M IN IS TR A TIV E  AGENCY is authorized and 
ordered to charge and collect from any public service or applicant, as the case may 
be, [the following] REASONABLE fees as reimbursement of its expenses in the 
authorization, supervision and/or regulation of public services^/ AND TO IMPOSE 
APPROPRIATE PENALTIES AND FINES AS PROVIDED BY LAW.
Section 14. Destruction o f Property. Section 26 o f Commonwealth Act No. 146,
as amended, is hereby amended to read as follows:
10


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[(a) XXX
YYY
(i) XXX
ThiG GGCtion shall not be-appltcabic to the Republic of the PhilippinoG, nor to its 
instrumontalit ics.
AsidG from the appropriations to^ tfteCom m ission under the annual General
under th is section shall be eeastituted receipts automatically appropriated each yeary 
and together w ith any surplus in the standardizing meter laboratory revolving fund 
under Commonwealth Act Numbered Three hundred forty-nine, shall be disbursed 
by the Public Service Commissioner in accordance with special budgets to be 
approved by the Department -ef  j ustice, the Budget Commissien-and the Office of 
the President of the Philippines for additional needed personal-services, maintenance 
and operating expenses, aequisftion of-urgently ncedec^vchides,- furniture and 
equipment, maintenance o f a n adequate reference library, acquisit ion of a lot and 
building for the Commission, and other expenses necessary for efficient 
adm inistration and effective supervision and regulation of public- services.]
Section 17. Adjustment o f Fines. - The maximum amounts of fines imposed 
under Commonwealth Act No. 146 as further amended by this Act, shall be adjusted 
by the head of each administrative agency under Section 4 of this Act by a Cost of 
Living Adjustment on January 1 o f the year immediately following the date of 
enactment of this Act and every fifth calendar year thereafter. Each head of the 
administrative agency shall file copies of the adjustment with the University of the 
Philippines Law Center in accordance with Executive Order No. 292 (1987), as 
amended. Any increase shall apply only to fines, including those whose associated 
violation predated such increase, which are assessed after the date the increase takes 
effect.
Section 18. Non-impairment o f 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


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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 in accordance with the existing terms and conditions 
the parties agreed to thereunder until the expiration or termination thereof.
Section 
19. 
Suppletory Application o f Commonwealth Act No. 
146. - 
Commonwealth Act. No. 146 or the Public Service Act, as amended, shall be 
interpreted to apply suppletorily to existing sector-specific laws governing public 
services and public utilities, unless otherwise expressly provided.
Section 20. Interpretation. This Act shall be subject to and consistent with the 
regulatory powers of the State to promote public interest under Article IX-C, Section 
27 and Article XII, Section 17 o f the Constitution. Unless otherwise included in the 
definition of public utility under this Act, persons classified as public utilities under 
Commonwealth Act No. 146 are hereby considered as public services which shall 
continue to be subject to regulation by relevant administrative agencies under existing 
laws.
Section 21. 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 effectivity of this Act. Copies of the results 
of said survey shall be furnished to the Congress, the NEDA and PCC. The PCC, in 
coordination with NEDA, shall conduct regular studies to determine whether or not 
deregulation in a sector is warranted to improve consumer welfare and shall submit 
its recommendation to Congress.
Section 22. Performance Audit Administrative agencies must ensure the annual 
conduct of performance audit by an independent evaluation team to monitor cost, the 
quality of services provided to the public, the ability of the public service provider to 
immediately and adequately respond to emergency cases. Metrics for various types of 
services must be established to sustain reliability, security, and safety of the public.
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Section 23. Implementing Rules and Regulations. All administrative agencies 
under Section 3 of this Act shall, in coordination with 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.
Section 24. 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. This includes:
(a) Section 2(a) of Kepublic Act no. 6967, as amended, insofar as the clause limiting 
investment in a facility operator where a public utility franchise is required,
(b) Section 3(c) of Republic Act No. 9295, as amended, insofar as the clause limiting 
investment in a Domestic Ship Operator or Domestic Ship Owner; and
(c) Section 44 of Republic Act No. 9497, as amended, insofar as the clause limiting 
registration of aircraft which are owned or leased by non-Philippine nationals.
Section 25. Appropriation Clause. The initial funding to carry out the provisions 
of this Act shall be charged against the current year's appropriation. Tliereafter, such 
sums as may be necessary shall be included in the General Appropriations Act.
Section 26. 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.
Section 27. Effectivity. - This Act shall take effect 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,
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