FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES.

House Bill No. _ 16

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

EXPLANATORY NOTE

This bill seeks to strengthen and streamline the operations of the
Philippine Ports Authority (PPA) amending for the purpose Presidential
Decree (PD) No. 857, otherwise known and cited as “Revised Charter of the
Philippine Ports Authority, as amended

The PPA was organized in 1974 to manage and operate the seaports
all over the country. Despite being government-owned, however, the PPA's
record of accomplishment in port development has been lackluster and at
best, mediocre. At present, our port infrastructure facilities are either
inadequate or unresponsive to the needs of the users. The delivery of port
services is ineffective and inefficient. In addition, the revenue derived from
the cargo handling services is on the decline.

This legislative proposal seeks to amend certain provisions of PD 857
with the aim of enhancing competition and efficiency in port infrastructure
development and services; promoting private sector participation in the
planning and development of seaports in the country; encouraging
decentralization of local port management offices; and decoupling of the
PPA's regulatory and commercial functions.

In the context of a projected growth in cargo and passenger traffic in
the near term, approval of this bill is earnestly sought.

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

4 Bpay)
House Bill No. __ 1867

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

AN ACT
STRENGTHENING AND STREAMLINING THE PHILIPPINE PORTS
AUTHORITY, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE
NO. 857, AS AMENDED, OTHERWISE KNOWN AS THE REVISED
CHARTER OF THE PHILIPPINE PORTS AUTHORITY

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress Assembled:

SECTION 1. Section 2 of Presidential Decree No. 857 is hereby amended by
adding paragraphs (g) and (h) to read as follows:
“Section 2. Declaration of Policies and Objectives. — xxx
a) xx
HX 20K XXX

G) TO FOSTER VIABLE COMPETITION AMONG
PORTS AND ENSURE EFFICIENT PROVISION OF PORT
SERVICES TAKING INTO CONSIDERATION THE PHYSICAL
CONFIGURATION OR CONSTRAINTS OF THE PORTS.
VESSEL AND CARGO TRAFFIC AND SUCH OTHER
RELEVANT FACTORS;

H) TO ENCOURAGE PRIVATIZATION AND EXPAND
THE PARTICIPATION OF THE PRIVATE SECTOR IN THE
DEVELOPMENT, MANAGEMENT AND OPERATIONS OF
PORTS THROUGH THE BUILD, OPERATE AND TRANSFER
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.”

SEC. 2. Section 3 of the same Decree is hereby amended by adding
paragraphs v, w and x to read as follows:

“Sec. 3. Definitions. - xxx


a) xx
Xxx vox v0

V) “PORT SYSTEM” INCLUDES GOVERNMENT PORTS
WHICH, AS DETERMINED BY THE AUTHORITY ON THE
BASIS OF CARGO, VESSEL, AND PASSENGER TRAFFIC,
STRATEGIC LOCATION AND DEVELOPMENT POTENTIALS,
CAN PROVIDE EFFECTIVE AND ECONOMICAL TRANSPORT
FOR GOODS AND PASSENGERS;

W) “SUBSIDIARY” REFERS TO A CORPORATION
ORGANIZED BY THE AUTHORITY IN ACCORDANCE WITH
THE CORPORATION CODE OF THE PHILIPPINES TO
DEVELOP, MAINTAIN, MANAGE AND OPERATE PORTS AND
PORT SERVICES AS A FINANCIALLY AUTONOMOUS ENTITY,

X) “JOINT _ VENTURE” REFERS TO THE
CORPORATION OR ENTITY ORGANIZED UNDER EXISTING
LAWS, WITH THE AUTHORITY AS THE MINORITY
STOCKHOLDER AND THE PRIVATE SECTOR AS THE
MAJORITY STOCKHOLDER, WHICH SHALL DEVELOP,
MAINTAIN, MANAGE AND OPERATE PORT OR PORT
SERVICES AS COMMERCIAL ENTERPRISES.”

SEC. 3. Section 4 of the same Decree is hereby amended by inserting a new
paragraph b and re-designating paragraph (b) as paragraph (c) to read as
follows:
“Sec. 4. Creation of Philippine Ports Authority. — xxx
a) 0%
B) THE AUTHORITY SHALL, IN ADDITION TO ITS
POWERS AND JURISDICTION OVER THE DEVELOPMENT,
MAINTENANCE, MANAGEMENT AND OPERATIONS OF
PORTS, SERVE AS THE NATIONAL PORT PLANNING BODY.
EXCEPT THE MILITARY, OTHER GOVERNMENT AGENCIES
SUCH AS THE PHILIPPINE FISHERIES DEVELOPMENT
AUTHORITY, DEPARTMENT OF TRANSPORTATION AND.
COMMUNICATIONS, DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS, CEBU PORT AUTHORITY, LOCAL
GOVERNMENT UNITS, AND OTHER INDUSTRIAL ESTATES
OR SPECIAL ECONOMIC ZONES INVOLVED IN THE
DEVELOPMENT OR CONSTRUCTION OF PORTS SHALL
COORDINATE WITH THE AUTHORITY ON THEIR PORT
PLANS AND PROGRAMS.”
[b)] C) xxx

‘SEC. 4. Section 5 of the same Decree is hereby amended to read as follows:

“SECTION 5. Port [District] SYSTEM. — {The authority
may from time to time submit to the President, through the
National Economic and Development Authority, application for
the declaration of specific areas as Port Districts. Such
applications shall be accompanied by a survey plan indicating the
geographical location of the area or areas to be declared as Port
Districts with their respective boundaries properly delineated.]


THE AUTHORITY SHALL ESTABLISH AND ADMINISTER A
PORT SYSTEM COMPRISING OF VITAL PORTS CRITICAL
FOR THE TRADE AND TRANSPORT NETWORK OF THE
COUNTRY.

THE NATIONAL PORT SYSTEM SHALL COMPRISE ALL.
PORTS IN THE COUNTRY, WHETHER OWNED BY THE
GOVERNMENT OR UNDER PRIVATE OWNERSHIP AND
WHETHER OPERATED COMMERCIALLY OR FOR A SPECIAL
PURPOSE. THE AUTHORITY SHALL HAVE JURISDICTION ON
ALL PORTS INTENDED OR USED FOR COMMERCIAL
PURPOSE OR THOSE BUILT PRIMARILY FOR RECEIVING
VESSELS FOR THE PURPOSE OF LOADING OR
DISCHARGING PASSENGERS AND CARGOES. PORTS
DEVELOPED OR CONSTRUCTED BY OTHER AGENCIES OF
THE GOVERNMENT SHALL FALL UNDER THE JURISDICTION
OF THE AUTHORITY UPON THEIR FORMAL TURNOVER TO
THE LATTER. A_ PRIVATE PORT THAT CATERS
EXCLUSIVELY FOR THE TRANSPORT NEEDS OF ITS
OWNER OR OPERATOR SHALL LIKEWISE FALL UNDER THE
JURISDICTION OF THE AUTHORITY.

SEC, 5, Sub-paragraphs (i), (vii) and (vili) of Section 6 (a) of the same
Decree are hereby amended, a new sub-paragraph (ix) is added and
sub-paragraphs (ix) and (x) are renumbered as sub-paragraphs (x) and
(xi), respectively, to read as follows

“Sec. 6. Corporate Powers and Duties. -

The corporate powers of the Authority shall be:

(i) To formulate in coordination with the DOTC, National
Economic Development Authority (NEDA) AND DPWH, a
comprehensive [and practicable] NATIONAL Ports Development
Plan (NPDP) [for the state and to program its implementation,
fenew and update the same annually in coordination with other
national agencies] RESPONSIVE TO THE NEEDS OF TRADE
AND REGIONAL ECONOMIC DEVELOPMENT AND
COMPATIBLE WITH THE NATIONAL INTERMODAL AND
MULTIMODAL TRANSPORT NETWORK,

2K 20x xxx

(vii) TO CONTROL OR ADMINISTER ANY FORESHORE
RIGHTS OR LEASES, INCLUDING THE PORT FACILITIES AND
IMPROVEMENTS THEREON WHICH ARE DELINEATED IN
COORDINATION [coordinate] with the Bureau of Lands AND
DECLARED BY THE PRESIDENT AS PORT ZONE [ or any
other government agency or corporation, in the development of
any foreshore area]. EXISTING LEASES ON FORESHORE
AREAS DEVOTED TO PORT DEVELOPMENT AND
OPERATIONS ARE HERESY TRANSFERRED FROM THE
BUREAU OF LAND MANAGEMENT TO THE AUTHORITY

(viii) To control, regulate, and supervise pilotage [ and
the conduct of pilots in any Port District] SERVICES BY:


1. DETERMINING PILOTAGE SERVICES AND

FEES,

2. ACCREDITING QUALIFIED HARBOR PILOTS,

AND PILOTAGE ORGANIZATIONS; AND.

3. IDENTIFYING WHAT PORTS IN THE

COUNTRY SHALL BE UNDER COMPULSORY OR

OPTIONAL PILOTAGE.

(IX) TO ENSURE SAFE AND EFFICIENT NAVIGATION,
THE AUTHORITY SHALL PROVIDE WITHIN THE PORT LIMITS
SUCH NAVIGATIONAL AIDS AND LIGHTHOUSES AND
COMMUNICATION SERVICES AND STRUCTURES WHICH
SHALL BE ALLOCATED AND GRANTED EXCLUSIVE RADIO
FREQUENCY LINE BY THE GOVERNMENT.

{(00] (X) To provide or assist in the provision of training
programs and training facilities for its staff or port operators and
users for the efficient discharge of its functions and duties, and
responsibilities.

[0] (Xl) To perform such acts or provide such services
as may be deemed proper or necessary to carry out and
implement the provisions of this Decree.

SEC. 6. Sub-paragraphs (v), and (x) of Section 6 (b) of the same Decree are
hereby amended, new sub-paragraphs (xv), (xvi), and (xvii) are added and
sub-paragraphs (xv) and (xvi) are hereby renumbered as (xviii) and (xix),
respectively, to read as follows
“(v)_ To create, REORGANIZE OR ABOLISH OFFICES,
DETERMINE STAFFING PATTERN AND NUMBER OF
PERSONNEL AND STAFF THE ORGANIZATION WITH
APPROPRIATE AND QUALIFIED PERSONNEL, [or alter its own
organization or any Port Management Unit, and staff such an
organization or Port Management Unit with appropriate and
qualified personnel] in accordance with what may be deemed
[proper or] necessary to achieve the objectives of the Authority.
ANY OFFICIAL OR EMPLOYEE WHO MAY BE REMOVED BY
REASON OF REORGANIZATION SHALL, IN ADDITION TO THE
BENEFITS UNDER EXISTING RETIREMENT LAWS, BE
GRANTED NOT LESS THAN THREE (3) MONTHS BASIC
SALARY FOR EVERY YEAR OF SERVICE.
(w) sx
(%) To [reclaim,] excavate, enclose or raise any part of the
lands FOR PORT-RELATED PURPOSES, ON ITS OWN OR
THROUGH A PRIVATE DEVELOPER, UNDER SUCH
ARRANGEMENT AS THE AUTHORITY MAY DEEM PROPER
THE AREAS THUS RECLAIMED SHALL BE ELIGIBLE FOR
TITLING IN THE NAME OF THE AUTHORITY OR THE
PRIVATE DEVELOPER [vested in the Authority]
5xK ceed v0
(XV) TO ISSUE PERMIT FOR THE CONSTRUCTION OF
PORT STRUCTURES. IN PARTICULAR, TO ENCOURAGE THE
ESTABLISHMENT AND OPERATION OF PRIVATE PORTS:


PROVIDED, THAT THE OPERATION AND MAINTENANCE
THEREOF SHALL BE DIRECTLY CONNECTED TO AND IS AN
INTEGRAL PART OF THE PRINCIPAL BUSINESS OF THE
PRIVATE PORT OPERATOR.

(XVI) TO UNDERTAKE CONSTRUCTION OF PORT
FACILITIES AND PROVIDE SERVICES. FOR THIS PURPOSE,
ANY RESTRAINING ORDER OR INJUNCTION AGAINST THE
AUTHORITY SHALL BE ISSUED ONLY BY THE SUPREME
COURT, NOT BY LOWER COURTS.

(Xvil)_TO ENSURE AMPLE PROTECTION TO PORT
LABOR FORCE IN CASE OF CHANGE IN THE MANAGEMENT
AND OPERATIONS OF CARGO HANDLING AND PORT
SERVICES, THE LABOR FORCE OF THE OUTGOING CARGO
HANDLING AND PORT SERVICE OPERATOR SHALL, AS FAR
AS PRACTICABLE, BE ENTITLED TO THE FOLLOWING:

1. ABSORPTION FOR EMPLOYMENT BY THE
INCOMING PORT SERVICE OPERATOR;

2. PURCHASE EQUITY STOCK NOT TO EXCEED
TWENTY (20%) PERCENT OF THE AUTHORIZED
CAPITAL STOCK OF THE INCOMING PORT SERVICE
OPERATOR;

3. __ PAYMENT BY THE OUTGOING SERVICE
OPERATOR OF THE BENEFITS WHICH HAVE
ACCRUED TO THE LABOR FORCE UP TO THE TIME
OF THE TRANSFER OR ABSORPTION BY THE NEW
OPERATOR, IN ACCORDANCE WITH LABOR AND
SOCIAL LEGISLATIONS AND OTHER APPLICABLE
LAWS. SAID BENEFITS SHALL CONSTITUTE A LIEN
ON THE ASSETS AND EQUIPMENT OF THE
OUTGOING CARGO HANDLER AND PORT SERVICE
OPERATOR WHICH THE AUTHORITY SHALL TAKE
INTO CUSTODY AND PROPERLY DISPOSE OF TO
SATISFY THE LIEN.

4. CREATE A PORT WORKER AMELIORATION
FUND (PWAF) WHICH SHALL BE ADMINISTERED AND
MAINTAINED BY THE AUTHORITY TOGETHER WITH
REPRESENTATIVES FROM THE CARGO HANDLER’S.
ORGANIZATION OR PORT OPERATOR AND THE
LABOR FORCE.

[Gev)]_ (XVII) s0«x

[xvi] (XIX) 000"

SEC. 7. Sub-paragraph (ix) of Section 7 (a) of the same Decree and Section
7 (c) are hereby further amended to read as follows:
“Sec. 7. Board of Directors. -
a) xx
peed 2K xxx
(o) THREE (3) [One (1)] PRIVATE SECTOR
REPRESENTATIVES [other person] who shall be
appointed by the President of the Philippines:


[representing the private sector] ONE (1) FROM THE
SECTOR OF SHIPOWNERS, ONE (1) FROM THE
CHAMBER OF COMMERCE AND ONE (1) FROM
INDUSTRY SECTOR, who by reason of [his] THEIR
knowledge [or] AND experience [is] ARE COMPETENT
TO BE MEMBERS OF THE BOARD OF DIRECTORS, [in
the opinion of the President, fit and proper person to be
Director of the Board]: PROVIDED, That, in the absence
of the Director appointed in sub-sections (iii) to (viii) the
Director concerned shall designate the officer next in rank
to him in his department or office to act on his behalf as
Director.

2X. v0 20x.

(c) The members of the Board or their respective alternates
shail receive a per diem AND REPRESENTATION ALLOWANCE
as [it] THE BOARD may approve for each [Board] meeting actually
attended by them: Provided, [That, such per diems shall not
exceed one thousand pesos during any month for each member:
Provided further: That no other allowances or any form of
compensation shall be paid them except actual expenses in
traveling to or from their residence to attend Board meetings]
THAT THE AMOUNT OF SUCH PER DIEM AND ALLOWANCE
SHALL BE COMPARABLE TO THOSE ALLOWED BY OTHER
BOARDS OF OTHER GOVERNMENT CORPORATIONS OF THE
SAME SIZE AND INCOME AS THAT OF THE AUTHORITY.”

SEC. 8. Section 8 (c) of the same Decree is hereby amended, a new
paragraph (d) is added and paragraphs (d), (e) and (f) are hereby designated
as (e), (f) and (g), respectively, to read as follows:
“Sec. 8. Management and Staff. —
a) 1K
eed 200K 20x
©). The general manager shall, subject to the approval of
the Board, determine the ORGANIZATIONAL STRUCTURE AND
staffing pattern [and the number of personnel] of the Authority [,]
AND define their duties and responsibilities, [and] AS WELL AS
fix their COMPENSATION [salaries] and OTHER emoluments.
[For professional and technical positions, the General Manager
shall recommend salaries and emoluments that are comparable
to those of similar positions in other government-owned
corporations, the provisions of existing rules and regulations on
wage and position classification notwithstanding] ALL
POSITIONS IN THE AUTHORITY SHALL BE GOVERNED BY A
SALARY STANDARDIZATION APPROVED BY THE BOARD
BASED ON A COMPREHENSIVE JOB ANALYSIS AND AUDIT
OF ACTUAL DUTIES AND RESPONSIBILITIES OF THE
EMPLOYEES. THE COMPENSATION PLAN SHALL BE
COMPARABLE WITH PREVAILING COMPENSATION PLANS
IN THE PRIVATE SECTOR AND SHALL BE SUBJECT TO
REVIEW, WITHOUT PREJUDICE TO YEARLY MERIT


INCREASE BASED ON PRODUCTIVITY AND PROFITABILITY.
THE AUTHORITY SHALL BE EXEMPTED FROM REPUBLIC
ACT NO. 6758, OTHERWISE KNOWN AS “THE
COMPENSATION AND POSITION CLASSIFICATION ACT OF
1989° OR ANY FUTURE SALARY STANDARDIZATION LAW
OR ATTRITION LAW WHICH MAY HEREINAFTER BE
ENACTED.

D) THE PERSONNEL OF THE AUTHORITY WHO ARE
AFFECTED BY THE CREATION OF A SUBSIDIARY, JOINT
VENTURE OR TRANSFER OF THE MANAGEMENT,
DEVELOPMENT, MAINTENANCE AND OPERATIONS
FUNCTIONS OF THE PORTS OR PORT SERVICES TO THE
PRIVATE SECTOR SHALL BE ENTITLED TO THE SAME
BENEFITS AS THOSE AFFECTED BY THE REORGANIZATION
AND SHALL BE ABSORBED BY THE PORT OPERATING
FIRMS AND ENTITLED TO OR GUARANTEED WITH
SECURITY OF TENURE FOR NOT LESS THAN FIVE (5)
YEARS.”

(a)] E) xx

[e)] F)xxx

()] G) xxx"

SEC. 9. Section 9-A of the same Decree is hereby amended to read as
follows:

“SEC. 9-A, [National] Port Advisory Councils. - There [is
hereby created a National] SHALL BE ESTABLISHED Port
Advisory Councils AT THE PORT DISTRICT OFFICES AND
PORT MANAGEMENT OFFICES to be composed of [the General
Manager of the Philippine Ports Authority as Chairman and a
fepresentative each from the Department of Labor and
Employment, the Bureau of Customs, chambers of commerce
and industry, import and export associations, the local shipping
companies, the foreign shipping companies, arrastre and
stevedoring companies, consumer group, shippers council and
Such other aggrupation as the Authority may deem expedient as
members, which shall act as an advisory body to assist the
Authority in the formulation of its policies.] REPRESENTATIVES
FROM PPA AS CHAIRMAN, AND DOTC, LOCAL
GOVERNMENT UNITS (LGUS) MARITIME INDUSTRY
AUTHORITY (MARINA), PHILIPPINE COAST GUARD (PCG)
AND NON-GOVERNMENTAL ORGANIZATIONS CONCERNED
WITH PORT AND MARITIME SECTORS, AS MEMBERS, TO
ASSIST THE AUTHORITY IN THE FORMULATION OF PORT
DEVELOPMENT PLANS AND OPERATIONAL POLICIES AND
RESOLUTIONS.”

SEC. 10. Section 13 (a) of the same Decree is hereby amended to read as
follows:

“Sec. 13. Borrowing Powers.- xxx


a) The Authority may, after consultation with the [central
bank] BANGKO SENTRAL NG PILIPINAS and the Department of
Finance, and with the approval of the President of the Philippines
raise funds, either from local or international sources by way of
loans, credits or securities, AS WELL AS THE FLOTATION OF
BONDS and borrowing instruments, including the power to create
pledges, mortgages and other voluntary liens or encumbrances on
any of its assets or properties.”
2x peed XXX

SEC. 11. Section 22 of the same Decree is hereby amended to read as
follows:

“Sec. 22. Remedies for Non-payment. — If the master,
owner, or agent of any vessel! refuses or neglects to pay on
demand any dues, rates, or charges made under this Decree or
any part thereof OR ANY DAMAGE TO PORT FACILITIES, the
Authority may, in addition to any other remedy provided by law,
detain or arrest on its own authority such vessel and tackle,
apparel or furniture belonging to the vessel, and detain the same
until the amount or amounts due have been paid.”

SEC. 12, Section 30 of the same Decree is hereby amended by adding
paragraphs es and (c), to read as follows
‘Sec. 30. Transfer of Existing and Completed Physical
Facilities. -

a) In accordance with the transitory provisions of this
Decree, there shall be transferred to the Authority all existing and
completed public port facilities, quays, wharves, docks, land
buildings and other property, movable or immovable, belonging to
those ports declared as Port Districts for purposes of this Decree.

B) THE ADMINISTRATION, REVENUE COLLECTION,
MANAGEMENT, OPERATION AND DEVELOPMENT OF
GOVERNMENT PORTS WHICH ARE NOT EMBRACED OR
INCLUDED IN THE PORT SYSTEMS ESTABLISHED BY THE
AUTHORITY MAY, UPON THE CONCURRENCE OF THE
AUTHORITY, BE DEVOLVED TO THE LOCAL GOVERNMENT
UNITS.

©) PRIOR TO ANY DEVOLUTION, THE AUTHORITY
SHALL ENSURE THAT THE LGU SHALL HAVE THE PROPER
TRAINING TO OPERATE AND MANAGE THE DEVOLVED
PORTS. DOTC AND OTHER AGENCIES WHICH HAVE
FINANCED AND CONSTRUCTED PORTS ON THEIR OWN
MAY TURN THEM OVER TO THE AUTHORITY FOR
OPERATION. THE SAME PORTS MAY ALSO BE DEVOLVED
BY THE AUTHORITY TO THE LOCAL GOVERNMENT UNITS.”

SEC. 13. Implementing Rules and Regulations. - The Chairman of the
Authority shall, within sixty (60) days from the approval of this Act, promulgate

the rules and regulations as may be necessary for the effective
implementation of this Act.


SEC. 14. Separability Clause. — If for any reason, a 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 full
force and effect.

SEC. 15. Repealing Clause. — All laws, decrees, orders, rules and regulations
or parts thereof inconsistent with this Act are hereby repealed or amended
accordingly.

SEC. 16. Effectivity. — This Act shall take effect fifteen (15) days following its
Publication in at least two (2) national newspapers of general circulation

Approved

10