CLARIFICATORY GUIDELINES ON PPA MO NO. 02-94, PPA MC NO. 07-94, PPA MC NO. 03-95 AND PPA AO NO. 06-95

1.1.   PPA Memorandum Order No 02-94 entitled Guidelines on the
Intensifications of the Monitoring and Documentation on the Discharge,
Movement, Release/Withdrawal of Imported Cargoes.

1.2    PPA Memorandum Circular No 07-94 entitled 1994 Port Tariff Rates

1.3.   PPA Memorandum Circular No. 03-95 entitled Implementing
Guidelines on the Proper Assessment and Collection of the 1994 PPA Port
Tariff Rates.

1.4.   PPA Administrative Order No. 06-95 otherwise known as the
Liberalized Regulations on Private Ports Construction, Development and
Operation.

1.5.   PPA Board Resolution No. 1812 dated 27 January 2000.

2.         Objectives

2.1    To ensure close monitoring of foreign and coastwise movement of goods passing through the private ports.

2.2.   To prevent the use of private port facilities in the furtherance of illegal activities, specially smuggling.

2.3.   To clarify the applicable PPA port charges in registered
private commercial and non-commercial ports as indicated under Items 2,
3, 4 & 11 of PPA Memorandum Circular No. 07-94 and Section B,
sub-section 3, paragraph 3.1 of PPA Memorandum Circular No. 03-95.

2.4.   To clarify the provisions of Sections 2, 4, 1 and 2, 4, 2 of PPA AO No. 06-95; and

2.5.   To ensure strict compliance with the stipulated terms and
conditions of Certificate of Registration issued to private port
owner/operator.

3.         Scope – This Order shall cover all private ports both registered and not registered with the Authority.

4.         Clarifications

4.1.   Cargo Monitoring – To intensify government’s drive
to prevent illegal activities specially smuggling, the Authority hereby
reiterates strict enforcement of PPA Memorandum Order No. 02-94
entitled Guidelines on the Intensification of the Monitoring and
Documentation on the Discharge, Movement, Release, Withdrawal of
Imported Cargoes, including activities in the private ports, in close
coordination with the Bureau of Customs and other concerned agencies.

4.1.1  All Port Management Offices shall maintain a staff to
monitor movements of cargoes and vessels at private ports as well as to
ensure collection of corresponding port charges.

4.1.2. Vessels seeking berth at private ports shall apply for such
service at the PPA Office which has operational jurisdiction over the
location. As such, documents normally required prior to berthing, such
as the passenger/cargo manifest and vessels information, among others,
shall be submitted to PPA.

4.1.3. Likewise, no vessel shall leave a private port unless
possessed of a valid PPA port clearance issued by, or on behalf of the
Authority, in addition to the requirements of other government agencies.

4.1.4. Any act of smuggling or other illegal activities shall be
reported by the Port Manager concerned to the AGM for Operations within
one (1) day from date of occurrence or discovery of any fraud.

4.1.5. Cargoes suspected to be smuggled, misdeclared or
undervalued shall not be released, delivered or loaded without prior or
formal authorization from the Collector of Customs or his duly
authorized representative. Any release, delivery or loading officer who
does not adhere to these shall be charged for neglect of duty and shall
be penalized in accordance with existing laws and regulations.

4.2.   Actual Use/Purpose of Private Port Facility – The
private port facility registered shall be operated in accordance with
existing PPA rules and regulations and other related laws and issuances.
The grantee shall ensure that the private port facility shall not be
utilized for any illegal activities such as gunrunning and smuggling.

4.3.   Permit to Operate — The discount in port charges as
provided under PPA Memorandum Circular No. 07-94, is due a private port
owner depending on the PERMIT TO OPERATE issued i.e., whether the
facility is officially registered as either commercial or non-commercial
private port.

4.3.1. Registered Private Non-Commercial Port — The permit
to operate a private non-commercial port authorizes the grantee to
operate the same for his own particular use and need. Its use by third
party users is only incidental and conducted on a limited and
non-commercial basis.

They may, however, be allowed to handle third party cargoes under the following instances:

>    due to congestion in the government port
>    due to draft limitation of the government port
>    due to absence of specialized and dedicated cargo handling equipment and gears in the government port.

4.3.2. Registered Private Commercial Port — The permit to operate
private commercial port authorizes the grantee to handle not only his
own cargoes but also third part cargoes.

4.4.   Charges on Vessels/Cargoes Discharged at Private Commercial and Non-Commercial Ports

4.4.1. At Private Commercial Port —Vessels calling at duly
registered private commercial ports shall be charged dockage/usage fee
equivalent to 1/2 of the rate prevailing in the nearby government port.
In like manner, cargoes discharged, whether owned by the private port
owner/operator or third party cargoes shall be charged wharfage
equivalent to 1/2 of the rate in a government port.

4.4.2. At Private Non-Commercial Port — Vessels calling at a
registered non-commercial private port shall be charged dockage/usage
fee equivalent to 1/2 of the rate prevailing in a government port.
Likewise, if cargoes discharged thereat are owned by the registered
private port owner/operator, the same shall be charged 50% wharfage.

Should the private non-commercial port owner/operator cater to third
party cargoes, the vessel shall be charged 100% dockage/usage fee and
the cargoes shall likewise be charged 100% wharfage unless the same has
been authorized by the PPA Port Manager for reasons stated in 4.3.1.
hereof, in which case the charges shall be 50%.

5.           Visitorial Powers — Authorized
personnel of PPA and other concerned government agencies shall be
allowed entry into the private port premises to inspect the facilities
and cargoes, including examination of specific records to determine
compliances with this Order and other pertinent rules, laws and
regulations promulgated or to be promulgated.

6.           Cancellation/Suspension of Permit to Operate —
Any violation of this regulation and other PPA rules committed by the
registered private port owner/operator or its agent shall be sufficient
ground for the cancellation/suspension of the certificate of
registration/permit to operate of the concerned private port.

7.           Repealing Clause — All existing PPA
issuances, rules and regulations or any portion thereof which are
inconsistent with this Order are hereby repealed or modified
accordingly.

8.           Effectivity — This Order shall take effect immediately.

Adopted: 31 Jan. 2000

(SGD.) JUAN O. PEÑA
General Manager