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REPUBLIC ACT NO. 7354 - AN ACT
CREATING THE PHILIPPINE POSTAL CORPORATION, DEFINING ITS POWERS,
FUNCTIONS AND RESPONSIBILITIES, PROVIDING FOR REGULATION OF THE
INDUSTRY AND FOR OTHER PURPOSES CONNECTED THEREWITH
ARTICLE I SECTION 1. Title. — This Act shall be known as the "Postal Service Act of 1992". Sec. 2. Definitions. — As used in this Act: Sec. 3. Policy and Objectives. — The delivery of
letters, parcels, and other mail letters is a basic and strategic
public utility which the State shall provide, directly and indirectly
through, and/or with other duly authorized entities or persons.
Accordingly, the collection, sorting, storage, transporting, and
delivery thereof shall be done with utmost dispatch in the most
economical, reliable and secure manner that available technology will
permit. ARTICLE II Sec. 4. Creation. — There is hereby created a corporate body to be known as the Philippine Postal Corporation, hereafter referred to as the Corporation, which shall be attached to the Department of Transportation and Communications for purposes of policy coordination. Sec. 5. Responsibilities and Functions. — The
Corporation shall have the following functions and
responsibilities; Sec. 6. Powers. — To achieve its objectives and
undertake its functions effectively, the Corporation shall have the
following powers; Sec. 7. Corporate Powers. — The Corporation shall
have all corporate powers defined under the Corporation Code, such as,
but not limited to the following; Sec. 8. Board of Directors. — The powers of the
Corporation shall be vested in and exercised by a Board of Directors of
seven (7) members to be elected by the shareholders of record at the
annual business meeting of the Corporation. Initially and to organize
the Corporation, the President shall appoint all the members, with the
Postmaster General as one of the members to represent the government
shareholdings. When the private shareholdings become sufficient to
elect at least one (1) Director, the appointment or election of
directors shall be done in accordance with the Corporation Law with the
Secretary of Transportation and Communications exercising the right to
vote the government shares of stocks. The Board shall elect a chairman
from among its members. ARTICLE III Sec. 9. Capitalization. — The Corporation shall have an authorized capital stocks of Ten billion pesos (P10,000,000,000.00) divided into forty-five (45) million Class "A" shares and fifty-five (55) million Class "B" shares, each voting and with a par value of One hundred pesos (P100.00). The Class "A" shares shall be fully subscribed by the Government or any of its instrumentalities, and may only be owned, sold to, bought or held by a government entity. The Class "B" shares may be owned by private entities and sold through tenders, public offerings, or the stock market, at such time, price or numbers as may be authorized by the Board in accordance with the Corporation Law. The subscriptions of the National Government in Class "A" shares shall be paid as follows: a) the unexpended balances of appropriations in the current General Appropriations Act, Executive Order No. 182 and other acts in force upon approval hereof, pertaining to, held or used by, or available to the former Bureau of Posts, and its successor Postal Services Office, of the Department of Transportation and Communications; b) the values of all the existing assets of the Bureau of Posts and its successor office, the Postal Services Office, and the various postal facilities throughout the country owned by it, to be determined by an independent appraiser within a year of the effectivity of this Act; c) any surplus income that may be derived from or accrued to the Corporation upon is organization into a corporate body and its assumption of the assets and liabilities of the Postal Services Office; and d) such amount as may be appropriated from time to time from the funds of the National Treasury not otherwise appropriated, including any outlay from the Infrastructure Program of the National Government. SECTION 10. Source of Funds. — The following shall constitute the sources of funds against which the operating expenses of the Corporation may be drawn; a) all revenues from postal and allied services operated or rendered by the Corporation, including remittances from foreign postal administrations; b) proceeds of grants, donations, disposal of assets and sale of non-mailable or confiscated mail matters, loans and other form of indebtedness entered into by the Corporation; c) interest which may be earned on investments or on idle cash of the Corporation; d) drawings upon the capital or surplus of the Corporation. SECTION 11. Management of Funds. — The Corporation may, from time to time, invest any of its funds not immediately required to be expended in meeting its obligations or in the discharge of its functions, in such secured notes, government securities, and other negotiable instruments that satisfy the guidelines prescribed by the Board. All funds of the Corporation shall be deposited in such commercial and universal banks as may be accredited by the National Treasurer as depository of government funds. The board shall designate the official signatories of the Corporation with regards to the deposit or withdrawal of the Corporation's monies in such banks. SECTION 12. Obligations. — The Corporation is authorized to secure or contract domestic or foreign loans, credits and other indebtedness, and to issue bonds, notes, debentures, securities and other instruments of indebtedness as it may deem necessary to carry out the purpose of this Act, provided that; a) the outstanding liabilities, and obligations, foreign and domestic, shall not exceed, at any time, fifty percent (50%) of its net worth; b) the foreign indebtedness can only be contracted with the concurrence of the Department of Finance, or under such terms and conditions established by the Central Bank. c) the annual amortizations on principal and interest shall not be more than twenty percent (20%) of the prior year's gross revenues; d) where appropriate, obligations incurred from private sources of capital may be secured by suitable assets or backed by priority claims against property of the Corporation. e) the obligations shall be considered the sole liability of the Corporation, unless otherwise guaranteed by the Republic of the Philippines through the Secretary of Finance. f) issuance of bonds or long term notes shall be with prior approval of or in accordance with the rules issued by the National Treasurer. SECTION 13. Annual Budget. — The Corporation shall, every year, prepare and adopt estimates of income and expenditures and capital budget of the Corporation for the ensuing year. Unless the Corporation shall require subsidy and/or a guarantee of its liability from the National Treasury, its budget for the year need not to be submitted to Congress for approval and inclusion in the General Appropriations Act. Supplementary estimates may be prepared and adopted at any of the Board meeting called for that purpose. SECTION 14. Exemption from Taxes, Customs, and Tariff Duties. — The importation of equipment, machineries, spare parts, accessories, and other materials, including supplies and services used directly in the operations of the Postal System, not obtainable locally on favorable terms, shall be exempt from all direct and indirect taxes, customs duties, fees, imports, tariff duties, compensating taxes, wharfage fees and other charges and restrictions, the provisions of existing laws to the contrary notwithstanding. All obligations entered into by the Corporation and any income derived therefrom, including those contracted with private international banking and financial institutions, shall be exempt from all taxes on both principal and interest. The Corporation is also exempt from the payment of capital gains tax, local government imposts and fees after December 31, 1997; Provided, that it may offset the full value of the capital investments not otherwise funded by the National Government against any income tax due for the same period. SECTION 15. Annual Accounts. — The Corporation shall maintain such accounts and other records under a commercial system of accounting on a calendar year basis. The Board shall cause the publication of the Corporation's annual statement of income and expenditures, including its balance sheet at the end of the reporting period. The audited annual statement of accounts of the Corporation shall present a true and fair value of the financial position of the Corporation and of the results of the operations during the year to which it relates. For completeness of postal statistics, the Corporation shall likewise record the quantity of official business mails, and the equivalent revenues foregone had the corresponding postage been collected thereto. This shall include "franked mail", or mail matter transmitted without payment or postage under the autographic or facsimile signature of officials to whom this privilege is extended by law, and under such rules promulgated by the Corporation to prevent the unauthorized use thereof. SECTION 16. Auditor. — In consonance with existing laws and regulations, the Commission on Audit shall appoint and assign such personnel as may be necessary to audit the accounts of the Corporation. However, the Board may engage the services of any person or firm duly authorized by law for the audit of accounts of the Corporation for purposes of complying with its international contractual commitments or with the requirements of holders of Class "B" shares. The Board shall determine the remuneration, compensation or reimbursement of expenses that may be reasonable and appropriate under the circumstances, for either or both of the interest and external Auditors mentioned above. SECTION 17. Auditor's Report. — The auditor shall, as soon as practicable, but not later than three (3) months after the accounts have been submitted for audit, send an annual report to the Board. The Auditor may also submit such periodical or special reports to the Board may appear to him necessary, or as requested by the Board. SECTION 18. Annual Report. — The Board shall submit to the appropriate regulatory agencies, as identified in Article V of this Act, and to both Houses of Congress, together with the Auditor's Report on the relevant accounts, an annual report generally dealing with the activities and operations of the Corporation during the preceding year, and containing such other information as may be relevant in assessing its overall corporate performance, particularly statistics about the mails, parcels, and mail matters handled or processed by it, and indicators of productivity relating output with the resources used. ARTICLE IV SECTION 19. Delegation of Authority. — Except for those powers, functions, or duties specifically vested in the Board, the Board may delegate the authority vested in it to the Postmaster General under such terms, conditions and limitations as it may prescribe. The Board may establish committees, with such authority as the Board determines appropriate to carry out its functions and duties. Any power delegated herein shall not relieve the Board of full responsibility for the performance of its duties and functions, and shall be revocable by the Board in its exclusive judgment. Sec. 20. Executive Officers. — The Corporation
shall be managed by a Postmaster General who shall be assisted by as
many Assistant Postmaster Generals as the Board may deem necessary for
postal efficiency. They shall be natural-born citizens of the
Philippines, at least thirty five (35) years old, holders of a college
degree, of good moral character and proven executive ability and
competence. Initially and until such time that issued Class "A" shares
do not fall below sixty percent (60%) of the total voting stocks, the
Postmaster General shall be appointed by the President; thereafter, the
appointment shall be in accordance with the Corporation Law. At least a
majority of the Assistant Postmaster Generals must be career postal
officials who shall be appointed, and may be removed for cause by the
Board, upon recommendation of the Postmaster General. Sec. 21. Powers and Functions of the Postmaster
General. — As the Chief Executive Officer, the Postmaster General shall
have the following powers and functions: Sec. 22. Merit System. — The Corporation shall
establish a human resources management system which shall govern the
selection, hiring, appointment, transfer, promotion, or dismissal of
all personnel. Such system shall aim to establish professionalism and
excellence at all levels of the postal organization in accordance with
sound principles of management. Sec. 23. Applicability of Civil Service Law. — All permanent officers and employees of the Corporation below the rank of Assistant Postmaster General shall be subject to the Civil Service law, rules and regulations so long as the Corporation is majority-owned by the Government. The hiring of temporary workers or casuals to meet peak or seasonal volume or mail matters shall be exempt from the provision of this Section . Sec. 24. Prohibition of Strikes, Work Stoppages
and Slowdowns. — In view of the vital nature or postal services and its
effect on national interests, the officers and employees of the
Corporation are prohibited from conducting strikes, work showdowns or
stoppages, and such other acts that may disrupt the timely delivery of
mail matters. Sec. 25. Exemption from Rules and Regulations of
the Compensation and Position Classification Office. — All personnel
and positions of the Corporation shall be governed by Sec. 22
hereof, and as such shall be exempt from the coverage of the rules and
regulations of the Compensation and Position Classification Office. The
Corporation, however, shall see to it that its own system conforms as
closely as possible with that provided for under Republic Act No.
6758. ARTICLE V Sec. 26. The Regulatory Authority. — The exclusive power and authority to regulate the postal delivery services industry or those engaged in domestic postal commerce, as provided for under Presidential Decree No. 240, shall be vested with the Department of Transportation and Communications (DOTC), and may be delegated by the DOTC Secretary to the National Telecommunications Commission. The regulatory authority shall have the responsibility of investigating and prosecuting postal offenses of postal service establishments, whether civil or criminal, and instituting necessary action or proceedings. Nothing in this Section shall prevent or limit the Corporation's authority to investigate, prosecute or penalize offenses committed by its employees. Sec. 27. Registration of the Postal
Establishments. — The regulatory authority shall: Sec. 28. Postal Offenses. — The Regulatory
Authority shall exercise the following powers if, in its judgment,
postal laws have been, are being, or about to be violated; ARTICLE VI Sec. 29. Abolition of the Postal Services Office. — The Postal Services Office under the Department of Transportation and Communications, is hereby abolished. All powers and duties, rights and choses of actions, vested by law or exercised by the Postal Services Office and its predecessor Bureau of Posts, are hereby transferred to the Corporation. All real and personal properties which upon the effectivity of this Act are vested in, or owned by, the Postal Services Office are transferred to the Corporation without the need of conveyance, transfer or assignment. Likewise, all funds, revenues and properties owned by the defunct Postal Savings Bank, which are not administered by the Philippine National Bank, are transferred to the Corporation, provisions of Presidential Decree No. 241 notwithstanding. The Philippine National Bank is hereby directed to transfer and turn-over to the Corporation all funds, revenues, and properties of the defunct Postal Savings Bank administered by it, after deducting any liability with such assets. All contracts, records, and documents relating to the operation of the Postal Services Office and its postal field offices are hereby transferred to the Corporation. To ensure smooth transition into a corporate structure, the incumbent Assistant Secretary for Postal Services shall continue to hold office and assume the powers and functions of the Postmaster General under Sec. 21 hereof until his successor shall have been duly appointed and inducted into office. Officials and employees of the Postal Services Office shall be absorbed into the Corporation on the basis of merit and fitness: provided, that officers and employees who shall be laid-off during the first two (2) years of the effectivity of this Act and as a result of the organization of the Corporation, shall be entitled to gratuity at the rate equivalent to one and one-fourth (1 1/4) month's salary for every year of continued and satisfactory service rendered or the equivalent nearest fraction thereof favorable to them on the basis of the highest salary received, in addition to the retirement benefits or pensions under existing retirement law. Retirement gratuities of officials and employees who shall not be retained by the Corporation shall be for the account of and reimbursed by the National Government. Any of such officers and employees who may later be reinstated in the Corporation, or who is rehired in any government office or instrumentality, shall refund the unearned portion of gratuity received from the Corporation before he shall be reinstated or rehired. Sec. 30. Appropriations. — To provide for any
extraordinary expenses of the Corporation upon its organization, the
unavailed portion of the excess of actual operating income over the
estimated expenses of the Postal Service Office, if any, at the time of
the passage of this Act is hereby appropriated for purposes that the
Board may approve. This shall be considered as part of the paid-up
capital under paragraph (c) of Sec. 9 hereof. Sec. 31. Savings Clause. — All orders,
determinations, rules, regulations, permits, certificates, licenses and
privileges which have been issued, made, granted or allowed to become
effective by the former Postal Services Office or its predecessor,
shall continue to be in effect according to their terms until modified,
terminated, superseded, set aside, or repealed. ARTICLE VII Sec. 32. Relationships with Other Institutions. — a) In the event the Corporation decides to reactivate or reopen the Postal Savings Bank after ascertaining its financial viability and in response to public clamor, it shall operate such service without, as much as practicable, unduly competing with rural, commercial, or universal banks. The Corporation shall utilize the facilities of such banks whenever convenient and economical, under such terms and conditions as may be agreed between the parties concerned. b) The Corporation shall establish a working arrangement with the Bureau of Customs to facilitate the inspection, release or delivery of foreign parcels of mail matters which may be liable for customs taxes and other import charges. It may organize a special unit or designate specific postal branches for handling such mail matters. In lieu of assigning it own personnel, the Bureau of Customs may appoint the Corporation or delegate its customs and collections powers thereto, subject to some mutually agreed upon terms and conditions, including the reimbursements of cost to the Corporation or the payment for services based on percentage of the amount of tax collected. c) Any local government unit may enter into contract with the Corporation for the use of the former's building, facilities, or land, either gratis or for a consideration, or for the management and operation by the local government unit of a post office or postal branch in its territory. Sec. 33. Limited Liability. — Unless otherwise declared and mutually agreed upon at the time posting, the liability of the Corporation with respect to its contractual obligations to deliver mail matters shall be limited to that amounts or values provided for by the Universal Postal Union and by international or bilateral agreements to which the Philippines is a signatory. Sec. 34. Separability Clause. — If for any reason, any section or provisions of this Act is declared to be unconstitutional or invalid, the other sections or provisions hereof, which are not affected thereby, shall continue in full force and effect. Sec. 35. Repealing Clause. — All acts, decrees,
orders, executive orders, instructions, rules and regulations or parts
thereof inconsistent with the provisions of this Act are repealed or
modified accordingly. Sec. 36. Effectivity. — This Act shall take effect
thirty (30) days after its approval and publication in the Official
Gazette. Approved: April 3, 1992 |
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