RepublicoftriePhilippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRHSS
First Regular Session
HouseBillNo.8055
Introduced by Representative Midy N. Cua
Lone District, Qulrino
AN ACT SEPARATING THE REGULATORY AND COMMBRCIAL FUNCTIONS OF THE
PHILIPPINF PORTS AUTHORITY (PPA) BY CONVERTING IT INTO PHILIPPIN IE
PORTS CORPORATION FOR DEVELOPMENT, MANAGEMENT AND OPERATION 0F
PUBLIC PORTS WITHIN ITS SYSTEM AND TRANSFERRING THE REGULATOR.Y
FUNCTIONS T0 THE MARITIME INDUSTRY AUTHORITY (MARINA)
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).
In view of the foregoing, approval of this measure is earnestly sought.


Republicoft~riePhilippines
HOUSE 0F REPRHSENTATIVHS
Quezon City, Metro Manila
NINETEENTH CONGRESS
First Regular Session
HouseBiiiNo.8055
Introduced by Repi.esentative Midy N. Cue
Lone District, Quirino
AN ACT SEPARATING THE RHGULATORY AND COMMERCIAL FUNCTIONS 0F THE
PHILIPPINE PORTS AUTHORITY (PPA) BY CONVERTING IT INTO PHILIPPINE
poRTs CoRpoRATloN FOR DEvnLoPMENT, MANAGEMENT AND opHRATloN oF
PUI}LIC PORTS WITHIN ITS SYSTEM ANI) TRANSFERRING THE REGULATORY
FUNCTIONS TO THE MARITIME INDUSTRY AUTHORITY (MARINA)
Be it enacted by the Senate and House Of Represematives Of the Philippines in Congress assembled:
I        SECTION  I.  I;.r/e.  -This Act shall be  knoun as the "Philippine ports colporation (PHILPORTS)
2       Act."
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
SFC. 2. Dec/crrafl.ow o/Po/z.cjes cz#d Ofjcc/z.veg - It is hereby declared to be the policy o.f 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. It is in this regard that this Act separates the regulatory and development functions of
the  Philippine  Ports  Authority  (PPA)  by  converting it into  a coiporation  solely  for commercial  and
development purl)oses and transferring its regulatory functions and powers to the Maritime Industry
Authority (MARINA).
SEC. 3. The Philippine Ports Colporation  -
a)    The   PPA   shall   be   converted   into   Philippine   Pons   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 priority  and  importance to
public service delivery and promotion of public interest over commercial/financial profit.
d)   PHILPORTS  shall  be  governed  by  a  Board  with  fifteen  (15)  members  composed  of
repra.5entatives from government agencies and industry associations:
2


COVERNRENT
1.    Secretary of Transport (DOTr) as chairman of the Board;
2.    Secretary of Trade and Industry (DTI);
3.    Secretary of Agriculture (DA);
4.    Socio-Economic planning secretary (NEDA);
5.    Secretary ofpub]ic works and Highways (DPWH);
6.    Secretary of Tourism (DOT);
7.    Secretary of Environment and Natural Resources (DENR);
8.    President ofpHILPORTS;
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  IIANDLERS:  Philippine  Chamber  of Arrastre  and  Stevedoring  Operators
(PCASO)
e)    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  infrastmcture  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).
I)    The Board shall fomulate 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.
3


g)   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
(ii)         Share from any revenue generated by private commercial ports.
h)   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 modemization.
i)     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 -
(i)          Objectives of state ownership;
(ii)         Role of national government in the governance of coccs;
(iii)        Modes ofimplementation of the ownership policy;
(iv)        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;
(v)         The   roles,   relationships   and   responsibilities   of  the   State,   the   Government
Agencies to which the GOCC is attached, and the GOCC;
(vi)        Disclosure  and  transparency  requirements  vii.  Code  of Ethics  of Directors  and
Officers;
(vii)       Creation of board committees and similar oversight bodies;
(viii)      Integrated corporate reporting system;
(ix)        Statement of the social responsibilities of the GOCC; and
(x)         Such other matters  as  the  GCG  may  deem  proper to  include  in  the  ownership
policy.
j)    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).
k)    PHILPORTS shall likewise
4


1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
]7
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
(i)          establish performance evaluation  systems including performance scorecards and
conduet   periodic    study,    examination,    evaluation    and    assessment   of   its
performance
(ii)         conduct  compensation  studies  and  develop  a  competitive  compensation  and
remuneration  system  which  shall  attract  and  retain  talent,  at  the  same  time
allowing the COCC to be financially sound and sustainable
(iii)        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,
(I)   local and foreign borrowings,
(g)  performance scorecards and strategy maps,
(h)  government subsidies and net lending among others.
I)    PHILPORTS, with approval from the Board, may issue bonds and incur indebtedness, if
necessary,  to  cany out  its  Programs.  It  may  also  enter  into joint venture  arrangements
with the private sector in the development and operation of its ports.
in)  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.
37
38       SEC.  4. /"p/em67#/i.#g Jiw/es one Jiegt¢/clz].o#S.  -Within ninety (90) days from the effectivity of this
39       Act, the government agencies that will serve as members of the Board shall promulgate the necessary
40       rules and regulations to implement this Act.
41
42        SEC.  5. Repecz/i.#g cr7®cJ Sepcgrabj./I.fy C/cz#ses.  -PD  505, PD 8579  LOI  1005-A, and all  laws, decrees,
43        orders, rules and regulations, policies, programs or parts thereof, which are inconsistent with any of the
44       provisions of this Decree, are hereby repealed or modified accordingly.
45
46
47
48
49
SEC.  6. RepecI/jug C/czase.  -PD 505,  857,  LOI  1005-A  and all  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.
50        SHC. 7. Sepclrab!./jty c/crwse. -If, for any reason, any section or provision of this Act is declared to be
51        unconstitutional or invalid, the other sections or provisions of this Act which are not affected thereby
52       shall continue to be in full force and effect.
53
5


SEC. 8. E#ecfz.vj.ty. -This Act shall take effect flfteen (15) days after its publication in the Official
Gazette or a newspaper of general circulation.
4                     Approved ,
6