TH,IRTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
INTRODUCED BY SENATOR MANUEL B. VILLAR, JR. 
EXPLANATORY NOTE 
In 1974, the Philippine Ports Authority (PPA) was created by virtue of Presidential 
Decree (PD) 857, as amended, to implement an integrated ‘program for the planning, 
development, financing and operation of piers or port districts for the entire country. However, 
twenty-five years later, PPA established a highly centralized port system consisting of roughly 
1 15 major and minor ports scattered throughout the archipelago. 
Through the years, the port users (e.g., domestic shippers, exporters and importers) have 
complained of low service levels, inefficient port operations and ever-increasing port charges. 
As such, the high cost of transport serves as an effective barrier to increased trade (both local and 
foreign) and undermines the country’s export competitiveness. 
The failure of the PPA to accomplish its objectives is an indication of a need to reform the 
country’s ports administration policy by introducing further amendments to certain provisions of 
the PPA Charter with the aim of: 1) promoting inter-port and intra-port competition as a means 
of encouraging port operators to provide higher levels of service; 2) increasing private sector 
participation in port policy formulation by increasing representation in the PPA Board; 3) 
promoting greater private sector participation in the development and operation of the port itself 
and; 4) separating the port development and regulatory fiinctions of the PPA by removing its 
rat e-set t i n g fLmct i on. 


THIRTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
SENATE 
INTRODUCED BY SENATOR MANUEL B. VILLAR, JR. 
AN ACT PROVIDING FOR THE OMNIBUS AMENDMENTS TO PRESIDENTIAL 
DECREE NO. 857, OTHERWISE KNOWN AS THE REVISED CHARTER OF THE 
PHILIPPINE PORTS AUTHOFUTY (PPA), AS AMENDED, TO RATIONALIZE THE 
FUNCTIONS OF THE PPA, AND FOR OTHER PURPOSES 
Be it eiiactecl by the Senate and the House of Repvesentatives of the Philippines in Congress 
assein bled: 
Section 1. Section 2, Article I1 on Declaration of Policies is hereby amended by adding 
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paragraphs (9) and (h) to read as follows: 
FOSTER VIABLE COMPETITION AMONG AND WITHIN PORTS AND ENSURE 
EFFTCIENT PROVISION OF PORT SERVICES TAKING INTO CONSIDERATION THE 
PHYSICAL CONFIGURATION OR CONSTRAINTS OF THE PORTS, VESSEL AND 
CARGO TRAFFIC AND SUCH OTHER RELEVANT FACTORS; AND 
TO ENCOURAGE GREATER PRIVATE SECTOR PARTICIPATION IN THE 
DEVELOPMENT, MANAGEMENT AND OPERATIONS OF PORTS THRU THE BOT 
SCHEME OR ITS VARIANTS, JOINT VENTURES OR SUCH OTHER SCHEMES 
AUTHORIZED BY THIS ACT OR OTHER LAWS AND EXISTING POLICIES, 
PROVIDED THAT PORT PRIVATIZATION SHALL NOT INCLUDE THE SALE OR 
TRANSFER OF OWNERSHIP OF PORT ASSETS OR FACILITIES. 
Section 2. Section 3, Article I1 on Definitions, is hereby amended to include paragraphs (v), 
(w) and (x), the definitions of Joint Venture, Port System and PPA Subsidiary, respectively, as 
fo 11 0 w s : 
(V) “JOINT VENTURE” OF THE AUTHORITY AND THE PRIVATE SECTOR REFERS TO 
CORPORATION OR ENTITY ORGANIZED UNDER EXISTING LAWS, WITH THE 
AUTHORITY AS THE MINORITY STOCKHOLDER AND THE PRIVATE SECTOR AS 
THE MAJORITY STOCKHOLDER, AND/OR PRIVATE CORPORATION WHERE THE 
MAJORITY STOCICE-IOLDER IS A NATURAL FILIPINO CITIZEN AND NOT MORE 
THAN FORTY PERCENT (40%) FOREIGN STOCKHOLDER TO DEVELOP, 
MAINTAIN, MANAGE AND OPERATE PORTS OR PORT SERVICES AS 
COMMERCIAL ENTERPRISES. 
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(W) 
“PORT SYSTEM’ INCLUDES GOVERNMENT PORTS, WHICH, AS DETERMINED 
BY THE AUTHORITY ON THE BASIS OF CARGO, VESSELS AND PASSENGER 
TRAFFIC, STRATEGIC LOCATION AND DEVELOPMENT POTENTIALS, CAN 
PROVIDE, EFFECTIVE AND ECONOMICAL TRANSPORT FOR GOODS AND 
PASSENGERS.. 
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(X) “SUBSIDIARY” REFERS TO CORPORATION ORGANIZED BY THE AUTHORITY IN 
ACCORDANCE WITH THE CORPORATION LAW TO DEVELOP, MAINTAIN, 
MANAGE AND OPERATE PORTS AND PORT SERVICES AS A FINANCIALLY 
AUTONOMOUS ENTITY. 
Section 3. Subsection (ix) of Section 6 (b), Article 4 on Corporate Powers of the Authority, 
is hereby amended to read as follows: 
(IX) To levy dues, rates or charges for the use of the premises, works, appliances, facilities, or 
for services provided by or belonging to the Authority or any other organization concerned with 
port operations, SUBJECT TO THE DETERMINATION BY AN INDEPENDENT 
REGULATORY COMMISSION AFTER DUE PROCESS AND PUBLIC HEARINGS 
CONDUCTED BY SAID COMMISSION 
r, 
Section 4. Section 7 (a), Article 7 on Board of Directors, is hereby amended by the 
redesignation of sub-paragraph (ix) as sub-paragraph (x) and inserting a new sub-paragraph (ix) 
to read as follows: 
I 
(IX) 
THE MINISTER (NOW SECRETARY) OF AGRICULTURE; 
(X) SEVEN (7) OTHER PERSONS WHO SHALL BE APPOINTED BY THE PRESIDENT 
REPRESENTING: 1) THE BUSINESS SECTOR OR THE LOCAL CHAMBER OF 
COMMERCE AND INDUSTRY; 2) A MAJOR SHIPPERS ASSOCIATION; 3) 
EXPORT AND IMPORT SECTOR; 4) DOMESTIC SHIPPING COMPANIES; 5 )  
AND; 7) LABOR, WHO BY REASON OF THEIR KNOWLEDGE AND 
EXPERIENCE ARE COMPETENT TO BE MEMBERS OF THE BOARD OF 
DIRECTORS. Provided, That in the absence of the Director appointed in subsections 
(iii) to (x) the Director concerned shall designate the officer next in rank to him in 111s 
department of office to act on his behalf as Director. 
I 
OF THE PHILIPPINES AND NOMINATED BY THEIR RESPECTIVE SECTORS 
1 
INTERNATIONAL SHIPPING COMPANIES; 6) CARGO-HANDLING COMPANIES 
Section 5. Section (19), Article VI1 on Dues and Rates, is hereby amended to read as 
follows: 
I ,  
(1 9) The President of the Philippines ON ITS OWN OPTION OR upon recommendation of the 
INDEPENDENT REGULATORY COMMISSION may increase or decrease such dues, 
collectible by the Authority to protect tlie interest of the Government AND MOST 
ESPECIALLY OF THE GENERAL PUBLIC, and to provide a satisfactory reasonable 
return on the Authority’s assets, and may adjust the schedule of such dues so as to reflect 
the costs of providing the services WHICH IS COST-BASED OR BASED ON ACTUAL 
SERVICES RENDERED. Provided, however, that the rates of dues on all the ports of the 
Philippines upon the coining into operation of this ACT shall be those now provided under 
Parts 1, 2, 3 and 6 of Title VI1 of Book I1 of tlie Tariff and Customs Code, until such time 
that the President upon recorninendation of the Board may order that the adjusted schedule 
of dues are in effect. 
Section 6. Section 20, Article VI1 on Dues and Rates, is hereby amended to read as 
follows: 
(A) THE CHARGES OR FEES FOR THE USE OF PORT PREMISES, WORKS, 
APPLIANCES OR EQUIPMENT BELONGING TO THE AUTHORITY AND PORT 
FACILITIES PROVIDED, AND FOR SERVICES RENDERED BY THE AUTHORITY 
OR BY ANY PRIVATE ORGANIZATION WITHIN A PORT DISTRICT SHALL BE 


RATIONALIZED TO ELIMINATE ANY DOUBLE CHARGES TO THE SHIPPER, 
CARGO OWNERS AND/OR THE GENERAL PUBLIC. 
THE CHARGES FOR PORT SERVICES OR PORT-RELATED SERVICES SHALL BE 
COST-BASED (OR BASED 
ON ACTUAL 
SERVICES 
RENDERED) AND 
DETERMINATION OF SUCH CHARGES OR RATES SHALL BE MADE BY AN 
INDEPENDENT REGULATORY COMMISSION UNDER THE JURISDICTION OF 
DOTC. 
THE COMMISSION SHALL BE COMPOSED OF A CHAIRMAN AND FOUR 
MEMBERS TO BE APPOINTED BY THE PRESIDENT OF THE PHILIPPINES. THE 
BORN CITIZENS AND RESIDENTS OF THE PHILIPPINES, PERSONS OF GOOD 
RECOGNIZED COMPETENCE IN ANY OF THE FOLLOWING FIELDS: MARITIME 
TRANSPORT, LAW, ECONOMICS, FINANCE, COMMERCE OR ENGINEERING, 
WITH AT LEAST THREE (3) YEARS OF ACTUAL AND DISTINGUISHED 
EXPERIENCE IN THEIR RESPECTIVE FIELDS OF EXPERTISE. PROVIDED, THAT 
OUT OF THE FOUR (4) MEMBERS OF THE COMMISSION, AT LEAST ONE SHALL 
BE A MEMBER OF THE PHILIPPINE BAR WITH AT LEAST TEN (10) YEARS 
EXPERIENCE IN THE ACTIVE PRACTICE OF LAW, AND ONE (1) SHALL BE A 
CERTIFIED PUBLIC ACCOUNTANT WITH AT LEAST TEN (10) UEARS 
EXPERIENCE IN ACTIVE PRACTICE. 
CHAIRMAN AND THE MEMBERS OF THE COMMISSION SHALL BE NATURAL- 
MORAL CHARACTER, AT LEAST THIRTY-FIVE (35) YEARS OF AGE, AND OF 
THE COMMISSION WILL CONDUCT PUBLIC HEARINGS FOR ANY PETITION 
FOR RATE INCREASES (FOR WHICH SEPARATE GUIDELINES WILL BE 
DEVELOPED). 
THE AUTHORITY SHALL IMPLEMENT THE RATES, CHARGES, OR FEES FOR 
THE USE OF PORT PREMISES, WORKS; APPLIANCES OR EQUIPMENT 
BELONGING TO THE AUTHORITY AND PORT FACILITIES PROVIDED AND FOR 
SERVICES AS APPROVED BY THE SAID REGULATORY COMMISSION. 
THE PPA SHALL HAVE NOT JURISDICTION TO CONDUCT NOR PARTICIPATE 
IN ANY PUBLIC HEARING FOR THE PETITION FOR AN INCREASE IN CARGO 
HANDLING RATES ON THE GROUND OF “CONFLICT OF INTEREST” DUE TO 
PPA’S TEN PERCENT (10%) SHARE FROM 
THE CARGO HANDLING 
OPERATIONS GROSS REVENUE GENERATED OR COLLECTED THEREFROM. 
The government share froin all cargo-handling contractors and port-related service 
operators sliall be at a rate not less than 10% talcen from their gross income earned froin 
such services. HOWEVER, THE PRESIDENT MAY REDUCE THE SAME AS IT MAY 
AS DEEMED NECESSARY AND PROPER FOR REASON OF PUBLIC INTEREST. 
Section 7. Repealing Clause- All laws, decrees, executive orders, rules and regulations, 
policies, programs, or parts thereof, inconsistent with or contrary to any of the provisions of this 
Act are hereby repealed or modified accordingly. 
Section 8. Separability Clause- If, for any reason, any section or provision of this Act is 
declared to be unconstitutional or invalid, the other sections or provisions of this Act which are 
not affected thereby shall continue to be in ftill force and effect. 
! 
Section 9. Effectivity Clause- This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or a newspaper of general circulation. 
Approved,