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PRESIDENTIAL DECREE NO. 217
PRESIDENTIAL DECREE NO. 217 -
BLISHING BASIC POLICIES FOR THE TELEPHONE INDUSTRY, AMENDING FOR THE
PURPOSE THE PERTINENT PROVISIONS OF COMMONWEALTH ACT NO. 146, AS
AMENDED, OTHERWISE KNOWN AS THE PUBLIC SERVICE ACT, THE FRANCHISE OF
THE PHILIPPINE LONG DISTANCE TELEPHONE COMPANY UNDER ACT NO. 3436, AS
AMENDED, AND ALL INCONSISTENT LEGISLATIVE AND MUNICIPAL FRANCHISES
INCLUDING OTHER EXISTING LAWS
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WHEREAS,
telephone service is a crucial element in the conduct of business
activity, the availability of which on a regular and uninterrupted
basis is essential for the smooth and efficient functioning of industry;chanroblesvirtualawlibrary
WHEREAS, efficient telephone service contribute directly to national
development by facilitating trade and commerce;chanroblesvirtualawlibrary
WHEREAS, the telephone industry is one of the most highly capital
intensive industries; chanroblesvirtualawlibrary
WHEREAS, the telephone industry has fundamentally different financing
characteristics from other utilities in that capital requirements per
telephone unit installed increase as the number of customers serviced
also increases instead of decreasing in cost per unit as in power and
water utilities;chanroblesvirtualawlibrary
WHEREAS, continued reliance on the traditional sources of capital funds
through foreign and domestic borrowing and through public ownership of
common capital stock will result in a high cost of capital, heavy cash
requirements for amortization and thus eventually in higher effective
cost of telephone service to subscribers;chanroblesvirtualawlibrary
WHEREAS, the subscribers to telephone service tend to be among the
residents of urban areas and among the relatively higher income segment
of the population;chanroblesvirtualawlibrary
WHEREAS, it is in the interest of the national economy to encourage
savings and to place these savings in productive enterprises;chanroblesvirtualawlibrary
WHEREAS, it is announced policy of the government to encourage the
spreading out of ownership in public utilities;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution as
Commander-in-Chief of all Armed Forces of the Philippines, and pursuant
to Proclamation No. 1081 dated September 21, 1972, and General Order
No. 1 dated September 22, 1972, as amended, do hereby decree and adopt,
as part of the law of the land the following:cralaw:red
Section 1. It is declared that in the interest of the
social, economic and general well-being of the people, the state hereby
adopts the following basic policies of the telephone industry: chanroblesvirtualawlibrary
1. The attainment of efficient telephone service for
as wide an area as possible at the lowest reasonable cost to the
subscriber;chanroblesvirtualawlibrary
2. The expansion of telephone service shall be
financed through an optimal combination of domestic and foreign sources
of financing and an optimal combination of debt and equity funds so as
to minimize the aggregate cost of capital of telephone utilities;chanroblesvirtualawlibrary
3. Consistent with the declared policy of the State
to attain widespread ownership of public utilities, the capital
requirements of telephone utilities obtained from ownership funds shall
be raised from a broad base of investors, involving as large a number
of individual investors as may be possible; chanroblesvirtualawlibrary
4. In line with the objective of spreading ownership
among a wide base of the people, the concept of telephone subscriber
self-financing is hereby adopted whereby a telephone subscriber
finances part of the capital investments in telephone installations
through the purchase of stocks, whether common or preferred stock, of
the telephone company;chanroblesvirtualawlibrary
5. As part of any subscriber self-financing plan,
when the issuance of preferred capital stock is contemplated, it is
required that the subscriber be assured, in all cases of a fixed annual
income from his investment and that these preferred capital stocks be
convertible into common shares, after a reasonable period and under
reasonable terms, at the option of the preferred stockholder; and
6. In any subscriber self-financing plan, the amount
of subscriber self-financing will, in no case, exceed fifty per centum
(50%) of the cost of the installed telephone line, as may be determined
from time to time by the regulatory bodies of the State. chanroblesvirtualawlibrary
Section 2. The Department of Public Works,
Transportation and Communications through its Board of Communications
and/or appropriate agency shall see to it that the herein declared
policies for the telephone industry are immediately implemented and for
this purpose pertinent rules and regulations may be promulgated.
Section 3. The pertinent provisions of the Public
Service Act, as amended, the franchise of the Philippine Long Distance
and Telephone Company under Act 3436, as amended, all existing
legislative and/or municipal franchises and other laws, executive
orders, proclamations, rules and regulations or parts thereof, as are
in conflict with the provisions of this Decree are hereby repealed or
modified accordingly. chanroblesvirtualawlibrary
Section 4. This Decree shall take effect immediately.
Done in the City of Manila,
this 16th day of June, in the year of Our Lord, nineteen hundred and
seventy-three.
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Since 19.07.98
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