Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS,
Third Regular Session

3423

Introduced by HON. MARIA LEONOR G. ROBREDO

House Bill

EXPLANATORY NOTE

‘The first rail tracks in the Philippines were laid in 1891. The tracks trailed from Manila
to Dagupan and were extended to more places in central and northern Luzon.

On September 13, 1931, the first train to Bicol was put into operation. From then, our
trains served as bridge in bringing central government services to Bicol’s grassroots.

Known presently as the Bicol Express, the Philippine National Railways’ (PNR) Bicol-
bound trains have been vital in the Region’s economic growth and development. It has
been a necessity indispensable to maintain and improve Bicol’s competitiveness with the
more progressive regions in the country.

For reasons of continuing Bicol’s development, this measure seeks that the PNR’s
charter be extended for another 50 years. Aside from intentions of progress, PNR is the
only franchisee in the country that holds 750km of continuous right of way into the
Region’s territory.

‘The proposed legislation also aims to open PNR operations to joint ventures with the
private sector.

The private sector being involved in government transactions has proven to be
beneficial for effective governance. It is a way of fostering greater participation from the
public. Opening the PNR’s operations for partnerships will not only provide the needed
checks and balances but it will more importantly allow the experts from the private
sector to share their knowledge and capabilities in improving the institution’s system
and services.

An efficient railway system is an essential ingredient in any country’s development. It is
the viaduct that channels every kind of service into the different parts and areas of a
nation. Our trains have brought development to our country’s grassroots for more than
a century. It is on this note that the immediate passage of this bill is sincerely sought.

)R GERONA-ROBREDO



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

‘ 9
House Bill No, 3421 _

Introduced by REP. MARIA LEONOR GERONA ~ ROBREDO

AN ACT AMENDING REPUBLIC ACT NO. 4156, ENTITLED "AN
ACT CREATING THE PHILIPPINE NATIONAL RAILWAYS,
PRESCRIBING ITS POWERS, FUNCTIONS AND DUTIES, AND
PROVIDING FOR THE NECESSARY FUNDS FOR ITS
OPERATIONS," AS AMENDED BY REPUBLIC ACT NO. 6366 AND
PRESIDENTIAL DECREE NO. 741

Be it enacted by the Senate and the House of Representatives of the Philippines
‘on Congress assembled:

Section 1. Section 1 of Republic Act 4156, as amended, is hereby amended as
follows:

‘Term Extension, As a declared national policy, the Philippine National
Railways, being a factor for socio-economie development growth, shall (a)
remain in and under the majority ownership of government with a share of at
least 51 percent during its corporate existence to ensure the primacy of the
public interest in a nationwide railway system; (b) become open to joint
ventures with the private sector with proven experience in rail operations and
other relevant qualifications up to a maximum share of 49 percent subject to
public bidding and applicable laws in order to bring private sector efficiency
and business expertise into the organization; (c) be administered with the view
of maximizing the value of its franchise and assets in order to support its train
service and operations including entering into commercial and other business
ventures with the private sector subject to public bidding and applicable laws
procurement law; and its corporate life is hereby extended for another 50 years.

Section 2. Section 3 of Republic Act 4156, as amended, is hereby amended
as follows:

Authorized Capital Stock of the Philippine National Railways.
The authorized capital stock of the Philippine National Railways shall be One
Hundred Billion Pesos (P100,000,000.000.00) divided into Five Hundred
Million (500,000,000) common shares all with par value at Two Hundred
Pesos (P200.00), which shall include the present authorized capitalization of


One Billion Five Hundred Million Pesos (P1,500,000,000.00); Provided, that
the increase in the authorized capital shall be subscribed up to at least 51% by
the National Government and other government institutions, corporations,
instrumentalities, and agencies, whether national or local, within the
framework of their respective charters, with the remaining 49% to be opened to
subscription and investment by the private sector in accordance with Section 1
above; Provided further, that all the obligations of the Philippine National
Railways to the National Government and its instrumentalities, including, but
not limited to, the Bureau of Internal Revenue and the Government Service
Insurance System, as of the date of the approval of this Act, as recommended
by the Board of Directors of the Philippine National Railways and determined
and agreed upon by the Department of Transportation and Communications,
shall be converted into capital stocks of the Philippine National Railways and
made a part of the subscription; Provided further that the authorized capital
can be increased from time to time as may be needed, as recommended by the
Board of Directors of the Philippine National Railways and determined and
agreed upon by the Department of Transportation and Communications and
approved by the President of the Republic of the Philippines, to be placed on
behalf of the National Government under the name of a government entity, as
may be legally practicable, such as, but not limited to, the Bureau of Treasury.

Whatever balance remaining of the authorized capital of the Philippine
National Railways shall be paid using a continuing annual appropriation of any
funds in the National Treasury, to be programmed and released by the
Department of Budget and Management in accordance with the schedule of
cash requirements to be prepared and submitted by the Philippine National
Railways specially insofar as capital expenditures are concerned, such as, but
not limited to, maintenance and rehabilitation of railways, to improve and/or
increase its track lines; Provided, that this continuing annual appropriation
shall remain in force until the authorized capital stock subscribed by the
Government shall have been paid in full.

Section 3. Section 12 of Republic Act 4156, as amended, is hereby amended as
follows:

Exemption from taxes, duties and port charges or dues, customs
bonds and port charges. All revenues and assets of the government-owned
shares of the Philippine National Railways used directly and indirectly by it in
relation to its principal purpose of providing a nation-wide railroad and
transportation system shall be exempt from taxes. The Philippine National
Railways shall also be exempt from all import duties on all railway materials,
rolling stocks, spare parts, supplies and equipment imported in the Philippines
for and/or by the Philippine National Railways in order to reduce the cost of
maintaining and improving train service and operations for the benefit of the
public.

Section 4. Separability Clause, — If any provision of this Act or the application
thereof to any person or circumstance is held to be void, or unconstitutional,
any other provision not affected thereby shall remain in full force and effect.


Section 5. Repealing Clause. All laws or parts thereof, which are inconsistent
with the provisions of this Act are hereby repealed or modified accordingly,
except Republic Act No. 10149, otherwise known as the "GOCC Governance Act
of 2011",

Section 6. Effectivity. This Act shalll take effect upon approval.
Approved.