WHEREAS, all air carriers with valid operating permits are required under existing rules to submit periodic reports under pain of penalty assessed in direct proportion to the length of time that the violation subsists;

WHEREAS, the Economic Planning and Research Division (EPRD) and the Air Carrier Accounts and Field Audit Division (ACASFAD) of the CAB have issued penalty assessments on air carriers which have violated the CAB's reportorial requirements;

WHEREAS, the CAB has no currently existing program that effectively monitors compliance with its reportorial requirements resulting in the pile up of penalties through the years;

WHEREAS, it is to the interest of both the CAB and its stakeholders if an Amnesty and Discount Program is put in place to clean up existing accountabilities and encourage prompt payment of penalties under reasonable terms pursuant to Paragraph 17, Section 32 of R.A. 776 that authorizes the CAB to "enter into compromise with respect to any penalty or fine imposed by virtue of the provisions of said Act";

NOW, THEREFORE, the Board, RESOLVED, as it hereby RESOLVES, to approve and implement an Amnesty and Discount Program under the following guidelines:

1. First Time Offenders (as of July 31, 2005)

a. Non-operating firms with poor financial capability will be allowed to discharge their penalty accountabilities with the CAB upon payment of a sum equal to ten percent (10%) of their total penalty accountabilities or a reduction of ninety percent (90%) discount of their total penalties due;

b. Firms with ability to pay who have failed to pay penalties due from them on account of their and CAB's fault will be allowed to discharge their penalty accountabilities to CAB upon payment of a sum equal to fifty percent (50%) of their total penalty accountabilities to CAB upon payment of a sum equal to fifty percent (50%) of their total penalty accountabilities

c. Firms which have repeatedly failed to comply with demands by CAB that they pay penalties due from them or firms which have been previously made to pay penalties to CAB on account of failure to submit required reports shall be deemed to have discharged their penalty accountabilities only upon full payment of those accountabilities.

The amnesty and discount program will allow payments of the amounts found due from firms with penalty accountabilities over a period of no more than five (5) years, with firms belonging to class (a) being allowed to pay at the rate of no less than Php 10,000.00 per year, and firms belonging to classes (b) and (c) being allowed to pay at a rate of no less than Php 20,000.00 a year.

2. Effective after July 31, 2005, all stakeholders will be assessed within 30 days from the end of the month in which a report was to have been submitted. The regular monthly penalties without the reductions offered under the amnesty and discount program shall be charged. However, a 20% discount for payments made within 15 days from assessment

and 10% if paid within 30 days from assessment shall be granted to them in order to encourage prompt payment.

Further, RESOLVED, as it hereby resolves to delegate to the Executive Director and the Deputy Executive Director the authority to determine the classification of the delinquent client. However, this shall be limited to the authority to grant amnesty/discount in accordance with the guidelines mentioned herein.

Adopted: 25 Aug. 2005

Approved by:

(SGD.) ASST. SEC. NILO C. JATICO
Vice Chairman

(SGD.) ATTY. FLORENTINO M. HERRERA, III
Member

CONCURRING:

(SGD.) MR. RENATO C. VALENCIA
Member

Attested:

(SGD.) CARMELO L. ARCILLA
Deputy Executive Director
(Acting Board Secretary)