Question & AnswerQ&A (Republic Act No. 4147)
The main purpose of Republic Act No. 4147 is to grant a franchise to Filipinas Orient Airways, Incorporated to establish, operate, and maintain air transport services in the Philippines and between the Philippines and other countries.
The grantee is authorized to establish, operate, and maintain transport services for the carriage of passengers, mail, industrial flights, and cargo by air in and between any points throughout the Philippines and other countries.
Except in cases of force majeure and whenever weather conditions permit, the grantee must maintain scheduled or non-scheduled air transport services at frequencies as traffic needs require.
The rates fixed by the grantee must be just, reasonable, and uniform, subject to regulations and approval by the Civil Aeronautics Board or any other government regulatory agency designated for that purpose.
All aircraft and flight crew must be licensed by the Philippine government, and the aircraft must be equipped with radio communications, safety, and other equipment. The grantee's equipment and operations are subject to inspection and regulations by the Civil Aeronautics Administration or equivalent regulatory bodies.
The grantee may use government-maintained landing and replenishment facilities on land or water within the Philippines, except those restricted due to military or naval considerations. The Philippine Government reciprocally has the right to use facilities maintained or owned by the grantee.
In case of war, insurrection, domestic trouble, public calamity, or national emergency, the Philippine Government upon order of the President, has the right to take over and operate the grantee's equipment, with payment for its use or damages.
The grantee shall pay a tax of two percent of the gross revenue or gross earnings derived from its operations under this franchise. This tax is payable quarterly and is in lieu of other municipal, provincial, or national taxes, except for real property tax which must be paid according to existing law.
The grantee must be a corporation 60% of whose capital stock is owned by bona fide citizens of the Philippines. This percentage must be maintained, or else the franchise may be cancelled.
No. The grantee cannot lease, transfer, grant usufruct, sell, assign, or merge the franchise or its rights without prior approval from the Congress of the Philippines. Any permitted transferee or merged entity is subject to the same conditions and restrictions.
The grantee shall forfeit all its privileges, franchises, and grants to engage in business in the Philippines, and may be fined up to twenty thousand pesos following an action initiated by government officers or any Philippine citizen according to prescribed procedures.
The franchise is granted for a term of fifty years from the date of acceptance of the Act by the grantee.
The grantee must keep accurate accounts of gross receipts and revenues and submit quarterly reports to the Commissioner of Internal Revenue. The books must be kept in the Philippines and are subject to inspection. The audit decision by the Commissioner is final except for an appeal to the courts.
No. The franchise is granted with the understanding that it is not an exclusive grant of the privileges provided.
All public land and property and the right to use them revert to the Philippine Government upon termination by repeal, forfeiture, annulment, or expiration of the franchise. Additionally, real property not disposed of within two years also reverts to the government.