REVISED GUIDELINES ON THE IMPOSITION OF INTEREST AND PENALTY CHARGES

1.1    Section 6(a)(iii) of Presidential Decree No. 857
1.2    Section 22 of Presidential Decree No. 857

2.         COVERAGE – This guideline shall cover
all trade transactions of the Authority. It shall likewise be applicable
to transactions covered by contract, agreement, undertaking or the like
unless the manner and rate of interest and penalty charged are
specifically provided otherwise.

3.         DEFINITION OF TERMS

3.1    Cash and Carry System is a collection system in which
payment is made by the party primarily liable (the Shipping Line, the
Shipper or the Consignee) in cash, manger’s/cashier’s check or PPA
pre-approved company check prior to withdrawal of cargoes from the
port/loading of cargoes unto vessel for charges against cargoes or
before issuance of departure clearance for charges against vessel.

3.2    Cash and Carry System with Cash Revolving Deposit is a
variant of the cash and carry system where the party primarily liable
(the Shipping Line, the Shipper or the Consignee) maintains a cash
revolving deposit with PPA equivalent to its/his one month transaction
volume and replenished any time the remaining balance is no longer
sufficient to cover the amount of transaction in process.

3.3    Centralized Collection System for Oil Companies is
prescribed specifically for this industry where the oil company
maintains a cash revolving deposit with PPA and payment for both loading
and unloading wharfage dues are paid at the loading port and due on the
10th and 25 of the month for companies with 15-day cash revolving
deposit or every 25th day of the month for the companies with 30-day
cash revolving deposit.

3.4    Modified Cash and Carry System is an alternative collection
system where the party availing (party acting as representative of its
client-shippers/consignees) has complied with the posting of fixed cash
deposit equivalent to 3-day transaction volume and other requirements of
the system and given the privilege to pay one a per vessel per voyage
basis within a period of three (3) working days from date of vessel
departure.

4.         RATE AND RECKONING DATE OF INTEREST CHARGES

4.1    An interest charge at the rate of Twelve Percent (12%) per
annum shall be imposed reckoned from the day specified hereunder:

4.1.1  For port charges and cargo handling charges collected on
cash and carry system, the reckoning date shall be upon
withdrawal/loading of cargoes or departure clearance of the vessel.

4.1.2  For port charges and cargo handling charges collected on
cash and carry system with cash revolving deposit, the reckoning date
shall be upon withdrawal/loading of cargoes or departure of the vessel
based on the amount not covered by the remaining balance of the cash
revolving deposit.

4.1.3  For port charges and cargo handling charges collected
under the modified cash and carry system, the reckoning date shall be
three (3) working days after the date of departure of the vessel.

4.1.4  For wharfage dues collectible from the oil companies, the
reckoning date shall be the due date as provided in Sec. 3.3 hereof
based on the amount covered by the remaining balance of the cash
revolving deposit.

4.1.5  For rental charges, fixed and variable fees or percentage
government share under the remittance system, other fees, charges and
claims which are covered by a contract, agreement or undertaking, the
reckoning date shall be the due date as provided in those documents.

4.2    Formula:

5.         RATE AND RECKONING DATE OF PENALTY CHARGES

5.1    A penalty charge shall be imposed at the rate specified below
and reckoned from the day the account becomes due and payable as
provided in Sections 4.1.1 to 4.1.5 hereof.

5.1.1  A flat rate of 25% for an account which remains unpaid for one (1) up to thirty (30) calendar days

Formula: Penalty Charge = Principal x 25%

5.1.2  Additional penalty of 50% per annum if the account still remains unpaid after thirty (30) calendar days

6.         IMPOSITIONS ON OLD ACCOUNTS/ASSESSMENTS –
All receivables or assessments which are outstanding or unpaid as of
the effectivity date of this Administrative Order shall be charged
interest of 12% per annum and penalty charges at the old rate of 12% per
annum until fully paid.

7.         AUDIT ASSESSMENTS – The reckoning date
for the imposition of interest and penalty charges on all accounts under
audit shall be as provided in the preceding sections.

8.         BOOKING OF INTEREST AND PENALTY CHARGES

8.1    Unlike the basic charge which is recorded on accrual basis,
interest and penalty charges shall be recorded in the books of accounts
upon collection thereof, retroactively computed in accordance with
Sections 4, 5 and 6 hereof.

8.2    To ensure total awareness by the port user of this
imposition, all Computation Sheets, Bill of Charges, assessment notices
and the like shall bear a bold printed notation which reads as follows:

“Subject to 12% p.a. interest charge plus 25% + 50% p.a. penalty charge”

8.3    The Statement of Account periodically issued for unpaid
accounts shall include the computation of estimated interest and penalty
charges as of the end of that month.

9.         SEPARABILITY CLAUSE – If, for any
reason, any section or provision of this Order is declared to be
invalid, the other sections or provisions which are not affected shall
continue to be in full force and effect.

10.       REPEALING CLAUSE – This Administrative Order revokes the following orders:

10.1  PP Administrative Order No. 02, Series of 1982 – Guidelines on the Imposition of Uniform Interest & Penalty Charges on Late Payment of Port Dues and Other Charges

10.2  PPA Administrative Order No. 02, Series of 1984 – Amendment to PPA Admin. Order No. 02-82

10.3  PPA Administrative Order No. 01, Series of 1987 – Amendment to PPA Admin. Order No. 02-84

10.4  PPA Administrative Order No. 01, Series of 1991 – Addendum to Guidelines on the Imposition of Interest & Penalty Charges under PPA Admin. Order No. 08-82

It likewise repeals, amends or modifies all orders, regulations,
circulars and other issuances which are inconsistent herewith.

11.           EFFECTIVITY – This Administrative
Order shall take effect 60 days after publication in the Official
Gazette and in a newspaper of general circulation.

Within this 60-day period, the PDOs and PMOs shall meet and/or
delivery copy of this Administrative Order directly to their regular
port users, the shipping lines, liner representatives, harbor pilots,
cargo handling operators, contractors, lessees and others.

For strict compliance.

Adopted: 25 Sept. 2000

(SGD.) JUNA O. PEÑA
General Manager