QuestionsQuestions (Republic Act No. 7354)
RA No. 7354 is titled the “Postal Service Act of 1992.” It creates the Philippine Postal Corporation, defines its powers, functions, and responsibilities, provides for regulation of the postal delivery industry, and covers other related purposes.
A “letter” is a written message in any language or code, intended for delivery to a person or entity, contained in a sealed or unsealed envelope or not in an envelope, within physical dimensions and weights allowed by the Corporation or the Government. “Mail” or “mail matters” are all matters authorized by the Government to be delivered through the postal service, including letters, parcels, printed materials, and money orders. A “parcel” is a rectangular box with specified dimensions and weight containing goods or transportable property intended for delivery to an addressee.
The law recognizes postal delivery as a basic and strategic public utility and sets objectives such as economical and speedy transfer of mail with privacy/confidentiality, promoting international interchange through unhampered exchange of postal matters, providing a wide range of postal services (including philately, transfer of monies and valuables, etc.), and ensuring sufficient revenues to finance service provision and upgrading of standards.
The Philippine Postal Corporation is attached to the Department of Transportation and Communications (DOTC) for purposes of policy coordination. It is created as a corporate body.
These include collecting, handling, transporting, delivering, forwarding, returning, and holding mails/parcel materials throughout the Philippines and with foreign countries pursuant to agreements; determining and disposing confiscated or non-available mail matters, prohibited articles, dead letters, and undelivered mails (with a notable exception regarding sale of prohibited drugs/dangerous materials and other banned articles as defined by law); and planning, developing, promoting, and operating a nationwide postal system with service available at least for ordinary mail to any settlement in the country.
It may (1) charge fees and prescribe payment/collection methods; (2) establish and maintain post offices, stations, collection points, and facilities; (3) issue and sell postage stamps and other stamped paper/cards/envelopes; (4) issue money orders or checks for transmittal and authorize replacements in cases of loss/stolen/stale/destroyed instruments; (5) offer various postal services other than ordinary mail/parcels that are non-compulsory and not discriminatory or unfairly competitive with private enterprises (e.g., money order, parcel, postal savings bank, philatelic services); and (6) adopt rules and regulations to improve the postal system and implement the Act.
The Board has seven (7) members elected by shareholders at the annual business meeting. Initially and to organize the Corporation, the President appoints all members, with the Postmaster General as one member representing government shareholdings.
The appointment or election shall be done in accordance with the Corporation Law; the Secretary of Transportation and Communications exercises the right to vote the government shares of stocks.
The Board meets regularly once a month and may hold special meetings upon call by the Chairman or any three (3) members. A majority constitutes quorum, and the vote of at least a majority of members present at a meeting with quorum is valid as a corporate act.
No Board member may have financial/pecuniary interest directly or indirectly in any business contract/transaction with the Corporation or in any privilege granted by it. No member may also have any interest (financial or otherwise) in an undertaking/business with an inherent conflict of interest with the Corporation.
Authorized capital stock is P10,000,000,000 divided into 45 million Class “A” shares and 55 million Class “B” shares, each voting with par value of P100. Class “A” shares are fully subscribed by the Government/instrumentalities and may only be owned/held by government entities. Class “B” shares may be owned by private entities and sold through tenders, public offerings, or the stock market as authorized by the Board in accordance with the Corporation Law.
Outstanding liabilities and obligations (foreign and domestic) must not exceed 50% of its net worth at any time. Foreign indebtedness requires concurrence of the Department of Finance (or terms set by the Central Bank). Annual amortizations on principal and interest must not exceed 20% of prior year’s gross revenues. Long-term bond/notes issuance needs prior approval or must comply with National Treasurer rules. Also, obligations are sole liability of the Corporation unless the Republic of the Philippines guarantees them through the Secretary of Finance.
Importation of equipment, machinery, spare parts, accessories, materials, supplies, and services used directly in postal operations not obtainable locally on favorable terms is exempt from direct/indirect taxes, customs duties, fees, import/tariff duties, compensating taxes, wharfage fees, and other charges/restrictions. The Corporation’s obligations and income derived therefrom (including principal/interest from private international banking institutions) are exempt from taxes on principal and interest. It is also exempt from capital gains tax and local government imposts/fees after Dec. 31, 1997 (with an offset mechanism for capital investments not funded by the National Government against income tax due for the same period).
The exclusive regulatory power is vested in the DOTC (and may be delegated to the National Telecommunications Commission). It is responsible for investigating and prosecuting postal offenses of postal service establishments (civil or criminal), and instituting necessary action/proceedings. It may also search, issue search warrants (for non-dwellings), arrest and seize with law enforcers, and offer/pay rewards for information in connection with postal law violations.
The regulatory authority must register and prequalify persons (natural or juridical) engaged in letter/parcel messengerial services, door-to-door delivery, or similar services (except freight forwarders). For the Corporation’s ordinary mail rates, the law provides that the regulatory authority must approve the rates upon petition and public hearing.
They are prohibited from conducting strikes, work slowdowns, or stoppages, and other acts that may disrupt the timely delivery of mail matters. However, they may form unions or employee associations in accordance with Civil Service rules to secure changes or improvements in terms and conditions of employment.
Unless otherwise declared and mutually agreed upon at the time of posting, its liability is limited to the amounts or values provided for by the Universal Postal Union and by international or bilateral agreements to which the Philippines is a signatory.