Policy and declared purpose
- The decree authorizes toll fees as an alternative source of financing for desirable infrastructure projects that complement national development.
- The decree directs that the private sector’s resources be tapped to support infrastructure through reduced reliance on additional domestic and foreign borrowings and through the utilization of government guarantee or security.
- The decree authorizes toll collection and toll facility operation by the private sector under loose supervision and regulation in the public interest so that investors can obtain a reasonable rate of return.
Toll Regulatory Board creation
- Section 2 creates the Toll Regulatory Board (“Board”).
- The Board is composed of:
- the Minister of Transportation and Communications as Chairman;
- the Deputy Director-General for Program and Projects of the National Economic and Development Authority;
- the Deputy Minister of Public Highways;
- the Deputy Minister of Finance;
- a representative from the private sector, preferably a lawyer or an economist with adequate experience in public utilities regulation, to be appointed by the President.
- The Board is the central body with powers and duties to regulate the toll system through contracts, certificates, and toll rate rules.
Board powers and duties
Section 3 grants the Board specific powers and duties in addition to its general powers of administration.
Section 3(a) authorizes the Board, subject to the approval of the President, to enter into contracts for the construction, operation, and maintenance of toll facilities, including national highways, roads, bridges, and public thoroughfares.
Section 3(a) provides that such contracts are open to:
- citizens of the Philippines, and/or
- corporations or associations qualified under the Constitution and authorized by law to engage in toll operations.
Section 3(b) requires the Board to determine and decide the kind, type, and nature of public improvements that will be constructed and/or operated as toll facilities.
Section 3(c) authorizes the Board to condemn private property for public use, subject to the provisions of existing law.
Section 3(d) directs the Board to issue and manage toll rate rules and toll rate adjustments:
- The Board issues, modifies, and promulgates rates of toll to be charged the direct users of toll facilities.
- The Board, with notice and hearing, approves or disapproves petitions for the increase of toll rates.
- Board decisions on petitions for toll-rate increases are appealable to the Office of the President within ten (10) days from promulgation.
- The appeal does not suspend the imposition of the new rates.
- Pending resolution of the appeal, the petitioner for increased rates must deposit in a trust fund amounts necessary to reimburse toll payers affected in case of reversal of the Board’s decision.
Section 3(e) authorizes the Board to grant authority to operate toll facilities and issue a “Toll Operation Certificate”:
- The grant is subject to conditions imposed by the Board, including the listed conditions below.
Conditions in Toll Operation Certificates (Section 3(e)):
- (1) Operators must desist from collecting toll upon the expiration of the Toll Operation Certificate.
- (2) The entire facility operated as a toll system, including all operation and maintenance equipment directly related thereto, must be turned over to the government immediately upon expiration of the Toll Operation Certificate.
- (3) Operators must not:
- lease, transfer, grant the usufruct of, sell, or assign the rights or privileges under the Toll Operation Certificate to any person or entity; or
- merge with any other company or corporation organized for the same purpose,
without prior approval of the President. - If a valid transfer occurs, the transferee is subject to the same conditions, terms, restrictions, and limitations as if the certificate had been granted to the original holder.
- (4) In times of war, rebellion, public peril, emergency, calamity, disaster, or disturbance of peace and order, the President may:
- cause total or partial closing of the toll facility, or
- order the government takeover of the toll facility,
without prejudice to payment of just compensation.
- (5) No government agency or government-owned or controlled corporation may issue any guarantee, Certificate of Indebtedness, collateral, securities, or bonds for any financing program of the toll operator connected with the undertaking under the Toll Operation Certificate.
- (6) The Toll Operation Certificate may be amended, modified, or revoked whenever the public interest so requires.
Section 3(f) requires the Board to promulgate rules and regulations governing procedures for granting Toll Certificates, and provides that the rights and privileges of a certificate grantee are defined by the Board.
Section 3(g) authorizes the Board to issue rules and regulations to carry out the purposes of the decree.
Technical staff and compensation
- Section 4 authorizes the Board to create a Technical Staff, including administrative or support staff necessary to assist the Board.
- Section 4 authorizes the Board to grant honoraria, allowances, or overtime pay in amounts the Board fixes.
- Section 4 directs that such compensation authority applies notwithstanding any provision of law, rules, or regulations to the contrary.
Publication and exemptions
Section 5 provides that no new toll rates may be collected unless they are published in a newspaper of general publication:
- at least once a week for three (3) consecutive weeks.
Section 6 exempts government vehicles on official business from the payment of toll fees.
Section 6 limits the exemption to procedures and circumstances that the Board will promulgate.
Appropriation for Board operations
- Section 7 sets aside PHP 300,000.00 each year for the first three (3) years from fees or other obligations due from toll operators of existing toll facilities to defray operational expenses of the Board.
- Section 7 provides that thereafter, operational expenses of the Board for succeeding fiscal years must be included in the Annual General Appropriations Decree.
Repeal, separability, and effectivity
- Section 8 repeals and/or modifies all laws, decrees, and orders inconsistent with the decree’s provisions.
- Section 9 establishes that the decree takes effect immediately.