Background and Legislative Extensions
- PLDT was originally granted a 50-year franchise starting November 28, 1928, under Act No. 3436, which included a 1% franchise tax on gross receipts.
- Republic Act No. 6146, enacted on November 9, 1970, extended this franchise for an additional 25 years beyond the original expiration date.
Government Policy on Tax Rationalization
- The decree aligns with the government’s policy to rationalize taxes on private corporations, aiming for consistency in tax rates among similar entities.
- The average franchise tax for telephone corporations and power companies was noted to be 2%, thus motivating the increase for PLDT.
PLDT's Service Improvement and Expansion Program
- PLDT committed to a major modernization and expansion program costing approximately P4.6 billion through 1982.
- Key components include:
- Installation of an additional 225,000 telephone units.
- Introduction of 200,000 lines of electronic switching equipment, phasing out obsolete equipment.
- Implementation of new operational systems for maintenance efficiency.
- Introduction of new subscriber services including electronic PABXs and new types of subscriber equipment.
- Expansion of telephone service to 47 rural areas, integrated into the national system.
- Upgrade of party line services with a shift to main line services in electronic switching offices.
- Introduction of subscriber metering and Direct Distance Dialing for various subscribers.
- Capacity increase for the Microwave backbone facility from 600 to 1200 channels and expansion of geographical coverage.
- Expansion of international and domestic toll switching systems.
- Provision of terrestrial links for Domstat earth stations and interconnection with other telephone companies and toll stations.
- Introduction of automatic mobile telephone service.
- Replacement of outmoded toll facilities and rehabilitation of existing outside plant facilities for improved service quality and restoration speed.
Tax Payment Obligations
- PLDT, along with its successors and assigns, is mandated to pay the increased franchise tax rate.
- Aside from the increased tax rate, all other existing terms, conditions, and tax obligations relating to real estate, buildings, and personal property remain unchanged.
Effectivity and Repeal of Conflicting Provisions
- The decree takes effect immediately upon its publication.
- Any laws, decrees, orders, rules, or regulations inconsistent with the provisions of this decree are repealed or modified accordingly to resolve conflicts.
Presidential Authority
- The decree is issued under the constitutional powers vested in the President of the Philippines.
- It is formalized and signed by President Ferdinand E. Marcos and his presidential executive assistant.