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

Sixteenth Congress
First Regular Session

HOUSE BILL No._1874

Introduced by Honorable Mylene J. Garcia-Albano
EXPLANATORY NOTE

This bill seeks the creation of the Davao International Airport Authority.

Davao City is the largest city in Mindanao and one of the most progressive
cities in the Philippines. It serves as the center for trade, industries, education and
tourism in Mindanao. Its airport, the Francisco Bangoy International Airport
(FBIA) located in Davao City is one of the busiest airports in the Philippines. It
also serves as the gateway to the sub-regional trade block known as East Asean
Growth Area which is the center of economic cooperation in Southeast Asia that
aims to accelerate trade, tourism and investment among its participating member
countries like the Philippines, Malaysia, Brunei and Indonesia.

The FBIA plays a crucial role in the economic growth and development of
the cities and province Its efficient and effective administration will promote
tourism and hasten trade and industrial relations not only within the country but
also with other countries.

With the current adoption of the “open sky policy” of the Aquino
government, it is the best time to enhance the quality of services and
competitiveness of FBIA by creating a body that will principally undertake the
control, management and supervision of the FBIA, and such other airports that
may be established in Davao City and the provinces of Davao. A centralized body
clothed with corporate personality will focus on adopting policies to exploit the
potential of the FBIA to be a first class international airport. It will also


implement new technologies and efficient methodologies to improve its
competitiveness so as to provide a safe and more efficient air transport service
which is an essential element of any growing economy.

The creation of the Davao International Airport Authority will have a
positive effect on the economic development of Davao City and the Davao Region.
It will substantially contribute to the quest of the region to emerge as the premier
socio-economic tourism center not only in the Philippines but also in the Asia~
Pacific Region. Furthermore, it will also spur further economic growth of the
surrounding provinces in Mindanao.

In view of the foregoing, approval of this bill is highly recommended.

ae He

MYLENE J. GARCIA-ALBANO.


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

Sixteenth Congress
First Regular Session

~ 1871
HOUSE BILL NO.

Introduced by Honorable Mylene J. Garcia-Albano

AN ACT

CREATING THE DAVAO INTERNATIONAL AIRPORT AUTHORITY
TO ADMINISTER AND OPERATE THE FRANCISCO BANGOY
INTERNATIONAL AIRPORT AND APPROPRIATING — FUNDS
THEREFOR

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

SECTION 1. Short Title. — This Act shall be known and cited as the
“Charter of the Davao International Airport Authority.”

SEC. 2. Davao International Airport Authority. — There is hereby
established a body corporate to be known as the Davao International Airport
Authority, hereinafter referred to as “Authority,” which shall be attached to the
Department of Transportation and Communications. The principal office of the
Authority shall be located at the Francisco Bangoy International Airport in Davao
City.

The Authority may have such branches, agencies or subsidiaries as it may

deem proper and necessary.


SEC. 3. Objectives. — The Authority shall principally undertake the
economical, efficient and effective control, management and supervision of the
Francisco Bangoy International Airport in Davao City and such other airports as
may be established in any of the provinces of Davao del Sur, Davao del Norte,
Compostela Valley and Davao Oriental.

In addition, the Authority shall have the following objectives:

A) Encourage, promote and develop international and domestic air
traffic in Davao Region as a means of making the region a center of international
trade and tourism, and accelerating the development of the means of transportation
and communications in the country; and

b) Upgrade the services and facilities of the Francisco Bangoy
International Airport and formulate internationally acceptable standards of airport
accommodation and service.

SEC. 4. Duties and Functions. — The Authority shall exercise the
following duties and functions:

BY Formulate a comprehensive and integrated development policy
and program for the Francisco Bangoy International Airport and implement,
review and update such policy and program periodically;

b) Control, supervise, construct, maintain, operate and provide
such facilities or services as shall be necessary for the efficient functioning of the

Francisco Bangoy International Airport;


° Promulgate rules and regulations governing the planning,
development, maintenance, operation and improvement of the Francisco Bangoy
International Airport, and control and supervise the construction of any structure
or the rendition of any service within the Francisco Bangoy International Airport;

d) Exercise all the powers of a corporation under Batas Pambansa
Blg. 68, otherwise known as the “Corporation Code of the Philippines,” insofar as
those powers are not inconsistent with the provisions of this Act;

°) Acquire, purchase, own, administer, lease, mortgage, sell or
otherwise dispose of any land, building, airport facility, or property of whatever
kind and nature, whether movable or immovable, or any interest therein:
Provided, That any asset located in the Francisco Bangoy International Airport
important to national security shall not be subject to alienation or mortgage by the
Authority nor to transfer to any entity other than the National Government;

f) Exercise the power of eminent domain in the pursuit of its
purposes and objectives;

2) Levy and collect dues, charges, fees or assessments for the use
of airport premises, works, appliances, facilities or concessions, or for any service
provided by the Authority;

h) Retain and appropriate dues, fees, and charges collected by the
Authority relative to the use of airport premises for such measures as may be
necessary to make the Authority more effective and efficient in the discharge of its

assigned tasks;


i) Invest its idle funds, as it may deem proper, in government
securities and other evidences of indebtedness; and

dD Provide services, whether on its own or otherwise, within the
Francisco Bangoy International Airport and the approaches thereof as may be
necessary or in connection with the maintenance and operation of the Francisco
Bangoy International Airport and their respective facilities.

SEC. 5. Police Authority. — The Authority shall have the power to exercise

such police authority as may be necessary within its premises or areas of operation

to carry out its functions and attain its purposes and objectives: Provided, That the
Authority may request the assistance of law enforcement agencies, including
request for deputization as may be required. Such police authority shall be
exercised in connection with the following, among others:

(a) Maintenance of security to passengers, cargoes, aircraft, airport

equipment, structures, facilities, personnel, funds and documents;

(b) Regulation of the entry to, exits from and movement within the
airports;
(c) Maintenance of peace and order within the premises of the

Francisco Bangoy International Airport;

(a) Regulation and supervision of private security agencies
operating in the Francisco Bangoy International Airport;

(e) Enforcement of rules and regulations promulgated by the

Authority pursuant to law: and


(09) In case of emergencies or imminent danger involving national
security within the airport premises, the Philippine Air Force Security Command
shall take charge.

SEC. 6. Board of Directors. ~ The corporate powers of the Authority shall
be exercised by and vested in the Board of Directors which shall be composed of a
Chairman, a Vice-Chairman and nine (9) members. The Secretary of
Transportation and Communications and the General Manager of the Authority
shall be the ex officio Chairman and Vice-Chairman of the Board, respectively.

The Assistant Secretary of the Air Transportation Office and the Secretaries
of the following executive departments or any Undersecretary or Assistant
Secretary designated by the respective Secretaries shall be ex officio members, to
wit: Department of Finance, Department of Justice and Department of Tourism.
In addition, four (4) members from the private sector who are residents of Davao
City or the Province of Davao shall be appointed by the President of the
Philippines for a term of four (4) years. The governor of the Province of Davao or
his duly authorized representative shall be the ninth member.

The Board shall promulgate its rules relative to meetings, quorum
requirements and compensation or allowances of the members of the Board.

SEC. 7. Functions of the Board. — The Board shall exercise the following

functions:


a) Define and approve the programs, plans, policies, procedures
and guidelines of the Authority for the development and operation of the Francisco
Bangoy International Airport;

b) Appoint the General Manager of the Authority who shall be the
chief executive officer of the Authority;

c) Approve the Authority’s organizational and administrative
structure, staffing pattern, operating and capital expenditures, and financial
budgets, upon recommendation of the General Manager, subject to existing laws,
rules and regulations;

d) Approve salary ranges, benefits and other terms and conditions
of service for all officers and employees of the Authority, upon recommendation
of the General Manager, which shall, as far as possible, be competitive with those
offered in the private sector, subject to existing laws, rules and regulations.

e) Fix the rate of dues, charges, fees, or assessments for the use of
airport premises, works, appliances, facilities, concessions, services and other fees
and charges related to the activities of the airports, upon recommendation of the
General Manager; and

f) Exercise all the functions and powers necessary or incidental to
attain the purposes and objectives of this Act.

SEC. 8. Duties of the General Manager. ~ The General Manager shall be

directly responsible to the Board and exercise the following duties:


a) Direct and supervise the day-to-day management, operation
and administration of the Francisco Bangoy International Airport;

b) Implement and enforce decisions, orders, rules and regulations
issued, prescribed or adopted by the Board;

°) Undertake researches, studies, investigations and other
activities related to the present operations and future improvement of the Francisco
Bangoy International Airport, and submit comprehensive reports and appropriate
recommendations to the Board for proper action;

d) Appoint, transfer, suspend, remove or otherwise discipline any
subordinate officer or employee of the Authority, subject to the approval of the
Board and in accordance with the existing rules and regulations of the Civil
Service Commission;

e) Within the limits of the authority delegated to him by the
Board, execute contracts, incur obligations, acquire and dispose of assets, and
deliver documents on behalf of the Authority;

f) Grant permits or concessions to do business within the airports
in accordance with such rules and regulations to be promulgated by the Authority
for the purpose; and

2) Perform such other duties as the Board may delegate or assign,
and such acts as may be necessary and proper to implement this Act.

SEC. 9. Authorized Capital. — The Authority shall have an authorized

capital stock equal to:


a) The value of fixed assets, including airport facilities, runways
and equipment and such other properties, movable and immovable, currently
administered by or belonging to the Francisco Bangoy International Airport as
valued on the date of the effectivity of this Act;

b) The value of such real estate owned or admi

istered by the
Francisco Bangoy International Airport; and

©) Government contribution in such amount as may be deemed an
appropriate initial balance. Such initial amount, as approved by the President of
the Philippines, which shall be more or less equivalent to six (6) months working
capital requirement of the Authority, is hereby authorized to be appropriated in the
annual General Appropriations Act of the year following the effectivity of this Act.

Thereafter, the government contribution to the capital of the Authority shall
be provided for in the annual General Appropriations Act.

SEC. 10. Resident Auditor. — The Commission on Audit shall appoint a
representative who shall be the auditor of the Authority, together with the
necessary personnel to assist said representative in the performance of his duties.
The number and salaries of the auditor and said personnel shall be determined by
the chairman of the Commission on Audit, subject to the rules and regulations of
the Commission on Audit.

‘The auditor shall as soon as practicable, but not later than three (3) months

after the accounts have been submitted for audit, send an annual report to the


Board. The auditor may also submit such periodic or special reports as the Board
may deem necessary.

SEC. 11. Annual Report. — An annual report of the activities and
operations of the Authority, together with the audit report shall be submitted by the
Board to the President of the Philippines and both Houses of Congress of the
Philippines through the Department of Transportation and Communications.

SEC. 12. Applicability of Civil Service Laws. ~ The Authority and its
officials and employees shall be subject to the existing civil service laws and its
rules and regulations.

SEC. 13. Borrowing Power. — The Authority may, in accordance with
Section 21, Article XII of the Constitution and other existing laws, rules and
regulations on local or foreign borrowing, raise funds, either from local or
international sources, by way of loans, credit or securities, and other financing
instruments with the power to create pledges, mortgages and other voluntary liens
or encumbrances on any of its assets or properties, subject to the prior approval of
the President of the Philippines.

All loans contracted by the Authority under this section, together with all
interests and other sums payable in respect thereof, shall constitute a charge upon.
all the revenues and assets of the Authority and shall rank equally with one
another, but shall have priority over any other claim or charge on the revenue and
assets of the Authority: Provided, That this provision shall not be construed as a

prohibition or restriction on the power of the Authority to create pledges,


mortgages and other voluntary liens or encumbrances on any asset or property of
the Authority.

The payment of the loans or other indebtedness of the Authority may be
guaranteed by the National Government subject to the approval of the President of
the Philippines.

SEC. 14. Tax Exemptions. — The Authority shall be exempt from realty
taxes imposed by the National Government or any of its political subdivisions,
agencies and instrumentalities: Provided, That no tax exemption herein granted
shall extend to any subsidiary which may be organized by the Authority.

SEC. 15. Transfer of Existing Facilities and Intangible Assets. — All
existing public airport facilities, runways, lands, buildings and other properties,
movable or immovable, belonging to or presently administered by the Francisco
Bangoy International Airport, and all assets, powers, rights, interests and
privileges relating to airport works or air operations, including all equipment
which are necessary for the operation of air navigation, aerodrome control towers,
crash, fire, and rescue facilities are hereby transferred to the Authority: Provided,
however, That the operational control of all equipment necessary for the operation
of radio aids to air navigation, airways communication, the approach control
office, and the area control center shall be retained by the Air Transportation
Office. No equipment, however, shall be removed by the Air Transportation

Office from Francisco Bangoy International Airport without the concurrence of the


Authority. The Authority may assist in the maintenance of the Air Transportation
Office equipment.

SEC. 16. Projects in Progress. — All ongoing projects relating to the
construction of Francisco Bangoy International Airport facilities and supply of
equipment shall be administered and undertaken by the Authority.

SEC. 17. Transfer of Liabilities and Debts. — Upon the transfer to and
acceptance by the Authority of the existing physical facilities, intangible assets and
completed projects referred to in the preceding sections, all debts, liabilities, and
obligations of government agencies or entities concerned in respect of such
physical facilities, tangible assets and completed projects within the Francisco
Bangoy International Airport shall likewise be assumed by the Authority.

SEC. 18. Transitory Provision. — The General Manager of the Francisco
Bangoy International Airport shall continue in office and shall perform all powers.
and functions of the Authority until such time as the General Manager is appointed
in accordance with the provisions of this Act. Officials and employees whose
services are terminated shall, if not eligible for retirement, be given gratuities
equivalent to one (1) month salary for every year of continuous satisfactory service
on the basis of the highest salary received in addition to other benefits accorded to
them by existing laws.

SEC. 19. Repealing Clause. — All laws, executive orders, letters of
instruction, rules and regulations, or provisions thereof which are inconsistent with

the provisions of this Act are hereby repealed, amended or modified accordingly.


SEC. 20. Separability Clause. — If any provision or part of this Act is
declared invalid or unconstitutional, such parts or provisions not affected thereby
shall remain in full force and effect.

SEC. 21. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,