Law Summary

1. Authority

• Legal Basis: The amendment is grounded in Sections 2(f), 6-a(viii), b(xv), and 20 of Presidential Decree No. 857, as amended by Letter of Instruction No. 1005-A.

2. Objectives

• Preventing Accumulation of Receivables: To avoid the build-up of accounts receivable related to the government’s ten percent (10%) share from pilotage services.
• Collection Integration: To streamline the collection process of the ten percent (10%) share with existing vessel charges.

3. Purpose

• Revision Requirement: The amendment mandates that shipping lines and agents pay the ten percent (10%) government share directly to the Philippine Ports Authority (PPA) for pilotage services rendered, excluding overtime.

4. Amendment Details

• Section 5.3 Changes: This section of PPA Administrative Order No. 15-95 has been modified as follows:
  • 5.3 PPA Revenue:
    • Harbor Pilots/Pilots’ Associations must remit no less than ten percent (10%) of gross income from pilotage services to the PPA.
    • 5.3.1 Payment Collection: The ten percent (10%) government share will be assessed and collected by the PPA from shipping companies/agents on a per vessel basis, alongside vessel charges, prior to the issuance of the vessel's Departure Clearance.
    • 5.3.2 Special Pilotage Services: For income from other special pilotage services, the Pilots’ Associations will receive a billing from the PPA and must pay the ten percent (10%) share within fifteen (15) days of receiving the billing. Late payments incur interest and penalties as per PPA Administrative Order Nos. 08-82 and 01-91.
    • 5.3.3 Income Verification: Pilots’ Associations are required to provide the PPA with copies of their billings to shipping companies/agents for verification purposes.

5. Issuance of Supplementary Regulations

• Local Adaptations: Port District Offices (PDOs) and Port Management Offices (PMOs) may create supplementary regulations tailored to specific port conditions, provided they do not contradict this Order.

6. Repealing Clause

• Modification of Existing Provisions: Any existing rules and regulations of the PPA that conflict with this amendment will be considered amended or modified.

7. Effectivity

• Implementation Timeline: This Order will take effect fifteen (15) days following its publication in a newspaper of general circulation.

Key Takeaways

• The amendment clarifies the obligations of shipping lines and agents regarding the payment of pilotage service fees directly to the PPA.
• A structured collection process is established to prevent delays in revenue collection for the government.
• Timely payment is crucial, with penalties imposed for late compliance, emphasizing the importance of adhering to the new guidelines.
• The PPA retains the authority to adjust local regulations to suit specific port needs while maintaining compliance with the overarching Order.