Law Summary
Performance Bond Requirements
- Establishes a tiered schedule of performance bond amounts based on the CHO's reported annual gross revenues.
- Performance bonds start at PHP 6.5 million for revenues just above PHP 300 million and increase incrementally.
- The bond amounts increase in steps of PHP 500,000 per revenue bracket of PHP 25 million.
- This schedule continues up to PHP 16 million for revenues between PHP 775 million and PHP 800 million.
Uniform Performance Bond for Highest Revenue Bracket
- For CHOs with gross revenues exceeding PHP 800 million, a fixed performance bond amount of PHP 20 million applies.
- This performance bond must be secured from the Government Service Insurance System (GSIS).
- No additional approval from the PPA Board is required for this category.
Legal Effectivity
- The Order shall take effect 15 days after its publication in a newspaper of general circulation.
Administrative Implementation
- Issued by the General Manager, Atty. Oscar M. Sevilla, on 26 October 2007.
- Intended to guide and ensure strict compliance by CHOs in securing appropriate performance bonds tied to their financial scale.
Key Legal Concepts
- Performance Bonds serve as a financial guarantee ensuring the fulfillment of contractual obligations by CHOs.
- Bonds are scaled to match the financial risk related to the contractor’s gross revenue, reflecting their operational capacity and exposure.
- Security through GSIS provides a reliable fiscal backing, enhancing the enforceability and credibility of the bond.
- Streamlining approval processes for the highest revenue bracket improves administrative efficiency.
This structured framework promotes accountability and financial security in the cargo handling industry under the Philippine Ports Authority's regulatory oversight.