Republic of the Philippines
House of Representatives
Quezon City

EIGHTEENTH
CONGRESS
FIRST REGULAR SESSION

4317

House Bill No.

INTRODUCED BY REPRESENTATIVE BERNADETTE HERRERA-DY

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.

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. They claim that the high cost of transport serves as.
an effective barrier to increased trade (both local and foreign) and undermines the
country's overall competitiveness.

There is an urgent need to reform the country's ports administration by separating
the regulatory and development functions of the Philippine Ports Authority (PPA)
by converting it into a Philippine Ports Corporation and transferring its regulatory
functions to the Maritime Industry Authority (MARINA).

BERN, eTTE HERRERA-DY


Republic of the Philippines
House of Representatives
Quezon City

EIGHTEENTH
CONGRESS
FIRST REGULAR SESSION

House Bill No. 4317

INTRODUCED BY REPRESENTATIVE BERNADETTE HERRERA-DY

AN ACT SEPARATING THE REGULATORY AND COMMERCIAL FUNCTIONS
OF THE PHILIPPINE PORTS AUTHORITY (PPA) BY CONVERTING IT INTO.
PHILIPPINE PORTS CORPORATION FOR DEVELOPMENT, MANAGEMENT

AND OPERATION OF PUBLIC PORTS WITHIN ITS SYSTEM AND
TRANSFERRING THE REGULATORY FUNCTIONS TO THE MARITIME
INDUSTRY AUTHORITY (MARINA)

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

Section 1. Title. This Act shall be known as the Philippine Ports Corporation
(PHILPORTS) Act.

Section 2. Declaration of Policies and Objectives. It is hereby declared to be the
policy of the State to avoid conflict of interest arising from regulatory agencies
vested with both regulatory and development or commercial functions. Under no
circumstance should a regulatory agency benefit from its own regulation and/or
Use its regulatory powers to protect itself from competition at the expense of public
interest. Its in this regard that this Act separates the regulatory and development
functions of the Philippine Ports Authority (PPA) by converting it into a corporation
solely for commercial and development purposes and transferring its regulatory
functions and powers to the Maritime Industry Authority (MARINA).

Section 3. The Philippine Ports Corporation —

(a) The PPA shall be converted into Philippine Ports Corporation (PHILPORTS),
a government-owned and controlled corporation (GOCC) attached to the
Department of Transport (DOTr) and mandated to own, develop, manage
and operate public ports within the port system of the old PPA.

(b) All regulatory powers and functions of the defunct PPA shall be transferred
to the MARINA.

(c) While PHILPORTS is a public enterprise, it is not primarily a revenue-
generating entity but a service provider. As such, it shall always give utmost


()

(e)

(9)

priority and importance to public service delivery and promotion of public
interest over commercial/financial profit.

PHILPORTS shall be governed by a Board with fifteen (15) members
composed of representatives from government agencies and industry
associations:

GOVERNMENT

1. Secretary of Transport (DOTr) as Chairman of the Board;
2. Secretary of Trade and Industry (DT!);

3. Secretary of Agriculture (DA);

4, Socio-Economic Planning Secretary (NEDA);

5. Secretary of Public Works and Highways (DPWH);

6. Secretary of Tourism (DOT);

7. Secretary of Environment and Natural Resources (DENR);
8. President of PHILPORTS;

PRIVATE SECTOR

9. BUSINESS: Representative from the Philippine Chamber of Commerce
and Industry (PCCI);

10. LOGISTICS: Representative from the Supply Chain Management
Association of the Philippines (SCMAP);

11.PORT USERS: Representative from the Port Users Confederation
(PUC);

12.EXPORTERS: Representative from the Philippine Exporters
Confederation (PHILEXPORT);

13. TOURISM: Representative from the National Tourism Congress;

14. SHIPPING: Representative from the shipping industry (PISA); and

15. CARGO HANDLERS: Philippine Chamber of Arrastre and Stevedoring
Operators (PCASO)

PHILPORTS shall prepare a long-term port system development plan —
taking into consideration the needs and requirements of manufacturing,
agro-fisheries, tourism, transport, and logistics sectors — that will be
integrated into the overall transport plan of the DOTr and the road
infrastructure development plan of the Department of Public Works and
Highways (DPWH) to promote and ensure inter-modal seamless
connectivity. The Plan shall likewise take into account the regional
development thrusts of the National Economic and Development Authority
(NEDA).

The Board shall formulate the necessary policies and guidelines for the
implementation of the Port System Development Plan. These policies must
be geared towards the enhancement of the country’s overall
competitiveness. Moreover, port operations and performance standards
must be developed and used in the development, operations and
maintenance of its ports.

PHILPORTS shall collect only the port fees and dues duly approved by the
MARINA. PHILPORTS shall not -

i. Share from cargo handling revenues and/or any service providers
contracted by PHILPORTS; or


(h)

0)

@

(k)

Share from any revenue generated by private commercial ports.

The revenues collected by PHILPORTS shall be used for the development,
modemization, expansion, operation and maintenance of its ports.
PHILPORTS shall be exempt from declaring corporate dividends to the
National Treasury in order to provide adequate resources for port
development and modernization.

Within one hundred and eighty (180) days from its constitution, in compliance
with RA 10149 (GOCC Governance Act of 2011) and the rules and
regulations of the Governance Commission for GOCCs (GCG), PHILPORTS
shall adopt an ownership and operations manual and the government
corporate standards governing GOCCs. The manual shall be consistent with
the Medium-Term Philippine Development Plan issued by the National
Economic and Development Authority (NEDA) and shall include —

7,

ii,
iii,
iv.

vi.
vii.
viii.

xi.

Objectives of State ownership
Role of national government in the governance of GOCCs

Modes of implementation of the ownership policy

Guidelines on the monitoring of the operations of all GOCCs including
their Related Corporations. These shall include Strategy Maps, Charter
Statements, Performance Commitments and such other mechanisms;
The roles, relationships and responsibilities of the State, the
Government Agencies to which the GOCC is attached, and the GOCC
Disclosure and transparency requirements

Code of Ethics of Directors and Officers

Creation of board committees and similar oversight bodies

Integrated corporate reporting system

Statement of the social responsibilities of the GOCC, and

Such other matters as the GCG may deem proper to include in the
ownership policy

The Board of Directors as well as key officers of PHILPORTS shall be
governed by the “fit and proper rule” guidelines stipulated by the Governance
Commission for GOCCs (GCG).

PHILPORTS shall likewise

ill,

establish performance evaluation systems including performance
scorecards and conduct periodic study, examination, evaluation and
assessment of its performance

conduct compensation studies and develop a competitive
compensation and remuneration system which shall attract and retain
talent, at the same time allowing the GOCC to be financially sound and
sustainable

maintain a website and post therein for unrestricted public access, in
compliance with GCG's full disclosure requirements, PHILPORTS' (a)
annual audited financial statements for the last 5 years, (b)
performance report, (c) quarterly, annual reports and trial balance, (d)
current corporate operating budget, (e) complete compensation
package of all the board members and officers, including travel,


representation, transportation and any other form of expenses or
allowances, (f) local and foreign borrowings, (g) performance
scorecards and strategy maps, (h) government subsidies and net
lending among others.

(1) PHILPORTS, with approval from the Board, may issue bonds and incur
indebtedness, if necessary, to carry out its Programs. It may also enter into
joint venture arrangements with the private sector in the development and
operation of its ports.

(m) PHILPORTS shall develop a port privatization program in keeping with the
principles of New Public Management that posits greater private sector
participation in the delivery of public services.

Section4. Implementing Rules and Regulations. Within ninety (90) days from
the effectivity of this Act, the government agencies that will serve as members of
the Board shall promulgate the necessary rules and regulations to implement this
Act.

Section 5. Repealing and Separability Clauses. PD 505, PD 857, LOI 1005-A, and
all laws, decrees, orders, rules and regulations, policies, programs or parts thereof,
which are inconsistent with any of the provisions of this Decree, are hereby
repealed or modified accordingly.

If for any reason any section or provision of this Law is declared to be
unconstitutional or invalid, the other sections or provisions hereof, which are not
affected thereby, shall continue in full force and effect.

Section 6. Repealing Clause. PD 505, 857, LOI 1005-A and alll laws, decrees,
Letter of Instruction, 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 7. 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 full force and effect.

Section 8. Effectivity Clause. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or a newspaper of general circulation.

Approved,