Coverage of Government Agencies and Officials (Section 1)
- All branches, departments, agencies, instrumentalities, offices, including local governments, and government-owned or controlled corporations must procure international transportation of persons or goods using Philippine flag air carriers or shipping lines.
- Applies to transportation between the Philippines and abroad or between two foreign points, if funded directly or indirectly by the Philippine government.
- Responsible officials and agencies must ensure maximum utilization of Philippine flag carriers where service is available.
Application to Tax-Exempt and Subsidized Entities (Section 2)
- Persons, partnerships, corporations, contractors, subcontractors enjoying tax exemptions, subsidies, incentives, or government loans/guarantees must use Philippine flag carriers for international air or sea transport.
- This includes entities awarded government contracts.
- Use of foreign carriers allowed only if Philippine services are unavailable and must have prior certification from the Civil Aeronautics Board or Board of Transportation.
Financial Controls and Accountability (Section 3)
- The Auditor General must disallow government fund payments for foreign flag carrier transportation without satisfactory proof of necessity.
Penalties for Non-Compliance (Section 4)
- Violation by tax-exempt or subsidized entities leads to withdrawal, revocation, or cancellation of:
- Tax exemptions
- Subsidies
- Incentives
- Loans or loan guarantees
- Government contracts
- Possible acceleration of payment obligations
Repeal and Effectivity (Sections 5 and 6)
- Existing laws, decrees, orders, and regulations inconsistent with this decree are repealed or modified accordingly.
- The decree takes effect immediately upon issuance.