I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution as Commander-in-Chief of the 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 order and decree:

SECTION 1. Sub-paragraph (a) of Section six of the Revised Philippine Highway Act, adopted and decreed as part of the law of the land under Presidential Decree No. 17, is hereby amended to read as follows:

"(a) Administrative expenses. — So much as may be required but not to exceed six per centum of all money accruing to the Highway Special Fund, shall be deducted from the Highway Special Fund and made available until expended, for administering the provisions of this Act as the Secretary of Public Works and Communications may deem necessary, of which, four per centum shall be allotted for administrative management and two per centum shall be allotted for engineering management. These allocations shall be used exclusively to pay the salaries and other operational expenses of officials and employees of the Bureau of Public Highways engaged in administrative management and engineering management, as defined in this Act. Services rendered in the auditing of these funds by the general auditing office shall not be chargeable against the Highway Special Fund."

SEC. 2. Sub-paragraph (f) of Section seven of the same Act is hereby amended to read as follows:

"(f) A portion of the total maintenance fund, not to exceed seven per centum, shall be allocated to pay for maintenance engineering as defined in this Act."

SEC. 3. Sub-paragraph (a) of Section eight of the same Act is hereby amended to read as follows: "(a) Provinces shall receive twenty-five per centum of the current basic cost of maintenance per equivalent maintenance kilometer of national road, referred to in Subsection (b) of the preceding section, for each kilometer of the actual physical length of provincial road whose existence is recommended by the provincial governor and accepted by the Commissioner of Public Highways."

SEC. 4. Section nine of the same Act is hereby amended to read as follows:

"SEC. 9. Fund for rehabilitation, betterment, and improvement. — The balance of the Highway Special Fund after deducting the amounts allocated in the preceding sections shall be allocated for the rehabilitation, betterment, and improvement of national highways, provincial, city and municipal roads.

(a) Forty per centum of this amount shall be programmed for all national roads within the country in accordance with the following priorities. First priority shall be given to rehabilitation. If betterment works are required on a road section identified as needing rehabilitation, both shall be programmed simultaneously with equal priorities; Second priority shall be given to replacement of temporary bridges; Third priority shall be given to betterment of existing roads where rehabilitation is not required; and Fourth priority shall be given to the improvement of existing roads to a higher class.
(b) Thirty per centum of this amount shall be allocated among the regional engineering divisions to be programmed using the same priorities as specified in subsection (a) above. In the event two or more projects are of the same priority, the regional director, in the exercise of his discretion, shall determine which of these projects should be given first priority.
(c) An amount not exceeding fourteen per centum of the sums allotted in the preceding Subsections (a) and (b) shall be allotted for final design engineering and engineering supervision associated with work paid for from this fund.
(d) Thirty per centum of this amount shall be programmed for all national aid, provincial or city roads or provincial, city and municipal roads funded partly or wholly by national funds within the country in accordance with the same priority as specified in subsection (a) above. For this purpose, every provincial engineer/city engineer shall from time to time submit programs for rehabilitation, betterment and improvement to the Commissioner of Public Highways for approval."

SEC. 5. Section ten of the same Act is hereby amended to read as follows:

"SEC. 10. Designation of existing and unabandoned provincial, city or municipal roads. — Within one hundred twenty days after the passage of this Act and periodically as may be required by regulations to be promulgated by the Commissioner of Public Highways, the provincial board, city or Municipal Council concerned shall designate the existing and unabandoned provincial, city or municipal roads actually serving motor vehicular traffic upon which maintenance aid shall be expended and shall cause their respective provincial or city engineers to prepare a maintenance program and estimates thereon. Upon approval of the road lengths, program and estimates by the Commissioner of Public Highways, the provincial board or city council concerned shall provide in their annual road and bridge budget an appropriation in accordance with the amount required under the formula stated in subparagraphs (d) and (e) of Section eight of this Act. Upon receipt by the Commissioner of Public Highways of this certificate of availability of local funds, he shall release the national aid provided in subparagraphs. (d) and (e) of Section eight hereof."

SEC. 6. Section eleven of the same Act is hereby amended to read as follows:

"SEC. 11. Supervision and control of projects financed by the Highway Special Fund. — The provisions of any existing law, rule or regulation to the contrary notwithstanding, all work projects financed by Highway Special Fund shall be under the direct control and supervision of the Bureau of Public Highways, subject to such laws, rules and regulations governing the prosecution of public works projects: Provided, however, That local projects financed by Highway Special Fund, whether for maintenance, rehabilitation, betterment or for improvement, shall be under the direct control and supervision of local governments; but the Bureau of Public Highways shall have the authority to set maintenance standards, planning requirements and control procedures governing the approval and release of funds as necessary to carry out the requirements of Section eight of this act, and for this purpose, to inspect the financial accounts, works records and maintenance works of local authorities."

SEC. 7. These amendments are hereby adopted and approved, and made part of the Revised Philippine Highway Act.

SEC. 8. All acts, decrees, orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

SEC. 9. This Decree shall take effect July 1, 1973.

Done in the City of Manila, this 15th day of February, in the year of Our Lord, nineteen hundred and seventy-three.