THIRTEENTH CONGRESS OF THE REPUBLIC 
1 
OF THE PHILIPPINES 
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First Regular Session 
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”04 
30 p5 :sa5 
S E N A T E  
S. No. 
. ‘ 1  
Introduced by Senator S. R. Osmet7a 111 
EXPLANATORY NOTE 
Davao City prides itself as being the premiere city of Mindanao. Next only 
to Puerto Prince‘sa, it is the country’s largest city with a land area of 244,000 
hectares. In the year 1996 alone, its share in the Internal Revenue Allotment 
from the national government amounted to almost P 800 million. This is more 
than enough to sustain a population of 1.2 million. 
The thriving Davao City enjoys an ever increasing income levels from its 
port operations. At least five luxury liners call on its port weekly, aside from 
several inter-island cargo vessels and sea-going ships. 
The crisis of growth sustainability may, however, confront its port 
operations in the future. Poor loading and unloading facilities continue to hamper 
its operations. The lack of passenger terminals is taking its toll on the decreasing 
number of passengers using the port as jump-off point to other parts of the 
island. 
To address this problem, this bill mandates the creation of the Davao Port 
Authority, defining its powers and functions and providing appropriations therefor. 
Its primary functions are: to be integrated and coordinated with the development 
plan of the ‘Davao Provinces and City known as the Davao Gulf Integrated 
Development Plan; to enhance the flow of international and domestic commerce 
utilizing its ports; to promote the safety of passengers of water transportation; 
and to promote regional development. 
The Authority will be governed by a nine-man Davao Port Commission. Its 
membership shall come from all the Provinces and City of the Davao. It will be 
mainly tasked to manage, administer, operate, maintain, improve and develop, 
coordinate and otherwise govern all the activities of all the ports in its territorial 
jurisdiction. 
With the Davao Port Authority, the Constitutional mandate to give all 
regions optimum opportunity for development may be realized in this part of our 
country. The promotion of the establishment and development of autonomous 
regional port bodies to produce an efficient, safe, economical and coordinated 
system of movement of goods and persons through the ports will commence. 


In view of the above, the early consideration of this bill is earnestly 
requested, 
Senator 


"(34 Jliiij 30 ps : 4 ~  
THIRTEENTH CONGRESS OF THE REPUBLl 
OF THE PHILIPPINES 
1 
Firsf Regular Session 
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1 . .  
I, 
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.I\ 
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S. No. 
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Introduced by Senator S. R. OsmeAa Ill 
AN ACT 
CREATING THE DAVAO PORT AUTHORITY, DEFINING ITS POWERS AND 
FUNCTIONS, PROVIDING APPROPRIATIONS THEREFOR, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Tifle. - This Act shall be known and referred to as the 
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"Charter of the Davao Port Authority". 
SEC. 2. Declaration of Policies. - It is declared the policy of the State to 
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promote the establishment and growth of autonomous regional port bodies to 
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produce an efficient, safe, economical and coordinated system of movement of 
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goods and persons through the ports, consistent with the constitutional mandate 
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to give all regions of the country optimum opportunity for development. 
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SEC. 3. Davao Port Authority : Creation. - There is hereby created a 
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public corporation to be known as the Davao Port Authority, hereinafter referred 
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to as the "Authority", under the supervision of the City of Davao. 
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SEC. 3. Definifion of Terms. - For the purpose of this Act, unless the 
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context indicates otherwise, the terms used herein shall mean as follows: 
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a) "Port Facility" - shall include wharves, piers, ships, docks, bullheads, 
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basins, warehouses, cold storage, loading and unloading equipment and 
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passenger terminal and accessories; 


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b) “Transportation Facility” - shall refer to passenger and cargo boats, 
2 ferry boats, lighters, barges scows, harbor crafts of any and all kinds, and any 
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other kind of facility now in use or hereinafter designated for use for the 
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estuaries and inland waterways; 
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transportation or carriage of persons or goods; 
c) “Navigable Waters” - shall mean all navigable portions of the seas, 
d) “Wharf“ - shall mean a continuous structure built parallel to or along 
the margin of the sea or alongside riverbanks, canals or other waterways where 
vessels may lie alongside to receive and discharge cargo or passenger, or lie at 
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rest; 
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areas; 
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e) “Pier” - shall include any stage, landing stage, jetty, floating barge or 
portion, and any bridge or other works connected therewith; 
9 “Duck” - shall include locks, cuts, entrances, graving docks, inclined 
planes, slipways, quays and other works connected thereto; 
g) “Bulkhead” - shall mean any structure serving to divide land and water 
h) “Basin” - shall mean any naturally - or artificially enclosed or nearly 
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enclosed body of water in free communication with the sea; 
i) 
“Warehouse” - shall mean any building for storage or shred for cargo; 
j) “Lighter” - shall mean any large flat-bottomed boat or barge used in 
transporting goods, or in loading or unloading of vessels not lying alongside piers 
or wharves; 
k) “Anchorage” - shall mean any place with sufficient depth of water 
where vessels anchor or may ride at anchor within the harbor; 
I) “Goods” - shall include wares and merchandise of every description; 
m) “Rates” - shall include tolls, fees, dues and rent imposed by the 
authority; 


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n) “Vehicles” - shall include any carriage travelling on its own wheels and 
used or intended to be used for the conveyance or carrying of persons, animals 
or goods; and 
SEC. 
5. 
Purposes and Objectives. - The Authority shall have the 
following purposes and objectives: 
a) To integrate and coordinate with the Davao Gulf Integrated 
Development Plan of the Davao provinces and the City of Davao in the 
Development of the Davao coastal areas and the Davao gulf vicinity for port 
facilities consistent with the needs and requirements of the region; 
b) To enhance the flow of international and domestic commerce passing 
through or utilizing the regional ports; 
c) To promote regional development by providing support services to 
sustain growth of export and other priority industries in the region; and 
d) To promote the safety of passengers and goods by water 
transport at ion. 
SEC. 
6. 
Territorial Jurisdiction. - The territorial jurisdiction of the 
Authority shall include all seas, lakes, rivers and all other navigable inland 
waterways within the Provinces of Davao and the City of Davao, including all 
other highly urbanized cities or towns which may hereafter be created therein. 
SEC. 7. Powers. - The Authority shall have the following powers: 
a) Have perpetual succession under its corporate name until otherwise 
provided by law;. 
b) Prescribe its bylaws, and such rules and regulations as may be found 
necessary to promote or enhance the business of the Authority; 
c) Adopt and use a seal; 
d) Sue and be sued in any court; 
e) Enter into contracts, transactions, and undertakings of whatever 
nature, which are necessary or incidental to its functions and objectives, with any 


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natural or juridical persons or with the government institutions, domestic or 
foreign; 
f) Acquire, own, hire use, operate and dispose of personal property and 
to acquire, own, use, lease, operate and dispose of real property and interest 
therein, and to make improvements on such real property, including the 
reclamation for port purposes, of foreshore and submerged lands within its 
territorial jurisdiction, which reclaimed land shall ipso facto be deemed 
transferred in ownership to the authority; and to enter into contracts with any 
public or private entity for such reclamation under such terms and conditions as it 
may deem to be for the public interest; 
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g) Purchase, hold, alienate, mortgage, pledge or otherwise dispose of the 
shares of the capital stock of, or any bond, security or other evidence of 
indebtedness created by any other corporation or co-partnership of this or any 
other country, and as the owner of the said stock, to exercise all the rights of 
ownership, including the right to vote thereon; 
h) Exercise the right of eminent domain; 
i) Regulate and supervise pilotage, collect shares out of the pilotage 
services, and appoint harbor pilots in consultation with the Davao Pilot 
Association, who shall serve until they shall reach retirement age unless sooner 
revoked for cause; 
j) Determine pilotage fees in consultation with the Chief Pilot, provided 
such fees may exceed but may not be less than those prescribed by existing 
regulations; 
k) Exercise all other powers not contrary to law, which may be necessary 
or incidental to'the effectuation of its purposes or to the exercise of any of the 
foregoing powers, except the power to levy taxes or assessments and, in 
general, to exercise in connection with property within its control, powers which 
may be exercised by natural or juridical person over its property and affairs. 


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I) 
Levy dues and impose rates and charges for the use of the premises, 
works, appliances, facilities , or for services provided by or belonging to the 
Authority, or any organization concerned with the port operations; 
m) Make expenditures in foreign countries, to pay commissions and hire 
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or contract experts and consultants, both foreign and local; 
n) Make expenditures for the promotion of the business affairs of the 
Authority; 
0 )  Exercise all the powers of a corporation under the Corporation Law 
insofar as they are not inconsistent with the provisions of this Act; and 
p) Exercise the power to issue permits for the construction of and 
supervision over private and other ports within its jurisdiction. 
SEC. 8. Governing Body. - The power and functions of the Authority 
Port Commission, hereinafter 
shall be vested in and exercised by the Davao 
referred to as the “Commission”, composed of the following: 
a) A Chairman who shall be appointed by the City Mayor of Davao; and 
b) Eight (8) other Commissioners. 
Of the eight (8) commissioners, four (4) Commissioners shall come from 
the provinces of Davao del Norte, Davao del Sur, Davao Oriental and 
Compostela Valley. The Commissioners shall be appointed by their respective 
Governors. 
The other four (4) Commissioners shall come from the following sectors to 
be appointed by the President of the Philippines, from among a list submitted by 
the respective sectors: 
I) Shipping Firms: 
2) Arrastre or Stevedoring Firms; 
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3) Exporters’ or Importers’ groups; and 
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4) Labor 
Groups, 
Cooperatives, 
Unions 
and 
Non-Government 
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Organizations (NGOs). 


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The Commissioners shall elect among themselves a Vice-chairman and a 
General Manager. 
SEC. 9. Powers and Functions. - The powers and functions of the 
Davao Port Commission shall be as follows: 
a) To manage, administer, operate, maintain, improve and develop, 
coordinate and otherwise govern the activities of all the ports within its territorial 
jurisdiction; 
b) To 
investigate, 
prepare, 
adopt, 
implement 
and 
execute 
a 
comprehensive and orderly plan for the overall development of all ports within its 
territorial jurisdiction, and to update such plans, as may be warranted from time 
to time; 
c) To raise revenue for the Authority through fees, tolls, charges, rentals 
and the like for the use of any other property, equipment or facility owned or 
controlled by it; 
d) To raise and administer together with such revenues as may by law 
accrue from any local or foreign financial institutions to finance its projects; 
e) To determine by survey and establish by engineering design the exact 
location, system and character of any and all port facilities which it may own, 
construct, establish, effectuate, operate or control; 
9 To provide and maintain port facilities including jurisdiction on its own 
or through the private sector; 
g) To prescribe and enforce rules and regulations on the use of wharves, 
piers and anchorage by ships and other watercrafts; 
h) To determine the organization of the Authority and create such 
functional units therein as it may deem necessary in the proper and efficient 
implementation of the functions and purposes of the Authority; including the 
appointment of officials and employees: Provided, That the security of tenure of 
said workers shall be respected consistent with existing laws; 


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i) To define the duties and fix the compensation and benefits of the 
General Manager, Assistant General Manager, Port Manager and other officers 
of the Authority, in accordance with the rules and regulations of the Civil Service 
Commission and the Department of Budget and Management; 
j) To approve the annual budget of the Authority and/or such 
supplemental budgets thereof as may be submitted by the General Manager 
from time to time; and 
k) To perform such other duties as may be necessary and convenient for 
the attainment of the objectives of the Authority. 
SEC. 10. Term of OFfice. - The members of the Davao Port Authority 
shall be appointed for a term of three (3) years: Provided, That any person 
appointed to fill a vacancy shall hold office only for the unexpired term of the 
Commissioner whom he succeeds. 
SEC. 11 .' Quorum, fer Diems and Allowances. - Five (5) members of 
the Commissioner shall constitute a quorum for the transaction of business. 
Unless otherwise fixed by the Commission, the Chairman and all 
members shall receive a per diem of Three thousand pesos (P3,000.00), 
exclusive of travelling expenses, for each day of meeting of the Commission, 
which shall not exceed four (4) meetings a month. 
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SEC. 
12. General Manager. - The management of the day-to-day 
operations of the Authority shall be under the direction and control of the General 
Manager, elected from among members of the Commission. He shall have the 
following powers and duties: 
a) To manage, direct and supervise the operations and internal 
administration of the authority, subject to the control and supervision of the 
Commission; 
b) To prepare all memoranda pertaining to each and every item in the 
agenda for the meetings of the Commission and to submit for the consideration 


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thereof such proposals or recommendation which believes to be necessary to 
carry out effectively and beneficially the business of the Authority; 
c) To implement the policies and administer the measures approved by 
the Commission; 
d) To devise the executive organization pattern of the authority, submit 
from time to time to the Commission the corresponding organizational and 
functional charts, and enforce the executive elements thereof; 
e) To appoint and employ the services of subordinate officials and 
employees, subject to the confirmation of the Commission; 
f) To prepare and submit to the Commission budget proposals of all 
kinds; and 
g) To perform such other duties and exercise such other powers as may 
be directed or authorized specifically by the Commission. 
SEC. 13. Prohibition Against Conflict of Interest. - No member of the 
Commission shall be financially interested, directly or indirectly , in any contract 
entered into by the Authority or in any special privilege granted by it. Violation of 
this prohibition shall constitute a ground for dismissal without prejudice to the 
institution of a criminal action. 
SEC. 14. Application of Civil Service Laws. - All officers and employees 
of the Authority shall be subject to the Civil Service Commission and the 
Department of Budget and Management rules and regulations, except those 
whose position may, upon recommendation of the Port Commission, be declared 
as policy-determining, primarily confidential, or highly technical in nature. 
SEC. 15. Supplies and Services Other than Personal. - All purchases or 
contracts for services, except for personal services, entered into by the Authority 
shall be done only after public bidding is held: Provided, That such bidding may 
be required when an emergency, as explained and certified to by the General 
Manager, requires immediate delivery of the supplies or performance of the 
services and the unit costs or prices of such emergency procurement do not 


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exceed the latest costs or prices paid by the Authority for the same or similar 
goods or services: 
Provided, further, That the General manager shall report 
under oath to the Commission the details of any such emergency procurement 
within two (2) weeks after its consummation, including a statement of assurance 
that the transaction constitute the best arrangement possible under the 
circumstances. 
SEC. 16. Capitalization. - The Authority shall have an authorized capital 
stock equal to and consisting of: 
a) The value of fixed assets, including port facilities and equipments 
administered by or belonging to the Port of Davao and such other properties, 
movable and immovable, within the territorial jurisdiction of the Authority as 
defined in Section 6 hereof, valued on the date of effectivity of this Act; and 
b) Government contribution in such amount as may be deemed an 
appropriate initial balance. Such initial amount shall be more or less equivalent 
to six (6) months working capital requirement of the Authority. 
SEC. 17. Auditor and Personnel. - The Commission on Audit shall 
appoint a representative who shall be the Auditor of the Authority and the 
necessary personnel to assist said representative in the performance of his 
duties. The operating expenses of the auditing office and the salaries of both 
officials and employees shall be paid by the Authority. 
SEC. 18. Power to lssue Bonds. - The Authority to incur indebtedness 
or to issue bonds to carry out approved capital investment projects, shall be 
approved by the affirmative vote of at least seven (7) of all the members of the 
Commission in a special meeting called for the purposes. 
SEC. 19. Bond Limits. - The bonds that may be issued by the Authority 
shall 
in 
no 
case 
exceed 
the 
total 
amount 
of 
One 
billion 
pesos 
(P1,000,000,000.00): Provided, That no single issue shall be made if at least 
seventy percent (70%) of the immediately preceding issue is not yet sold. 


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The bonds shall be issued only in such amount as will be needed at only 
one (I) 
integral operation not exceeding one (1) year duration, taking into 
account the state.at which said bonds may be absorbed by the buying public and 
the fund requirements of the present ready for execution, and considering further 
a proper balance between productive and nonproductive projects so that inflation 
shall be held to a minimum. 
SEC. 20. Form, Rates of lnteresf of Bonds. - The Secretary of Finance, 
in consultation with the Monetary Board, shall prescribe the form, the rate of 
interest, denominations, maturities, negotiabilities, call and redemption features, 
and all other terms and conditions of issuances, placement, sale servicing, 
redemption and payment of all bonds issued under the provisions of this Act. 
The bonds issued by virtue of this Act shall be made payable both as to 
principal and interest in Philippine Currency and shall be acceptable as security 
in any transaction with the Government in which such security is required. 
SEC. 21. Transfer of Existing Facilities and Intangible Assets. - All 
existing facilities including wharves, piers, slips, docks, bulkheads, basins, cargo 
terminals, warehouses, cold storage, loading and unloading equipments and 
passenger terminals and accessories within the territorial jurisdiction of the 
Authority; other lands, buildings and other properties, movable or immovable, 
belonging to or presently administered by the Philippine Port Authority. 
SEC. 22. Project in Progress. - All ongoing projects relating to the 
rehabilitation and/or construction of port facilities and supply of equipment shall 
be administered and undertaken by the Authority. 
SEC. 23. Transfer of Liabilities and Debts. - Upon the transfer to and 
acceptance by the Authority of the existing physical facilities, intangible assets 
and completed projects referred to in the preceding sections, all debts, liabilities 
and obligations of the Philippine Ports Authority in respect to such physical 
facilities, tangible assets and completed projects within the ports shall likewise be 
assumed by the Authority. 


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SEC. 24. Abolition of the Port Management Office of Davao. - The Port 
Management Office of Davao is hereby abolished as the Port Management Unit 
of the Philippine Port Authority. The General Manager of the Authority shall 
ensure the smooth transfer of responsibility from the abolished entity to the 
Authority as well as the Determination of personnel to be retained: Provided, 
That all officials' and employees whose services are terminated shall, if not 
eligible for retirement, be given gratuities equivalent to one (I) month salary for 
every year of continuous satisfactory service on the basis of the highest salary 
received in addition to other benefits accorded to them by existing laws. 
SEC. 25. Annual Report. - An annual report of the Authority shall be 
submitted to the President of the Philippines within sixty (60) days after the close 
of each fiscal year. 
The original of said report shall be submitted to the President of the 
Philippine and copies thereof to the House of Representatives and the Senate of 
the Philippines. The report shall include a financial statement duly certified by 
the Auditor of the Authority. 
SEC. 26. Appropriations. - The amount necessary to carry out the 
provisions of this Act shall be included in the General Appropriations Act of the 
year following its enactment into law and thereafter. 
SEC. 27. SeparaMty Clause. - If any provision of this Act is declared 
unconstitutional or invalid, such parts or portions not affected thereby shall 
remain in full force and effect. 
SEC. 28. Repealing Clause. - All laws, decrees, executive orders, rules 
and regulations, or parts hereof inconsistent with the provision of this Act are 
hereby repealed, amended or modified accordingly. 
SEC. 29. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazetfe or in at least two (2) newspapers of general 
circulation whichever comes earlier. 
Approved,