PPA Guidelines on Port Management Transfer to LGUs

The Philippine Ports Authority (PPA) is mandated to manage and develop ports within its jurisdiction.
Management may be temporarily transferred to Local Government Units (LGUs) or Government Corporations (GCs) in special cases, subject to stated provisions.

Applies to ports managed by PPA that primarily serve domestic vessels and cargo.
Excludes ports categorized as vital, priority, or those slated for international standard development.

To update and clarify Memorandum of Agreement (MOA) guidelines between PPA and LGU/GC.
To detail procedures for temporary transfer of port management to qualified LGU or GC.
To encourage LGU participation without compromising PPA’s statutory responsibilities.
To harmonize LGU empowerment under existing laws with PPA jurisdiction.

GC: Government-owned or controlled corporation created by LGU for economic development.
Government Ports: Public ports under national government and PPA jurisdiction.
LGU: Municipal or City Government Unit.
Supervision Fee: 10% fee on LGU/GC collections from domestic wharfage, storage, and usage fees payable to PPA.
MOA: Agreement between PPA and LGU or GC for transfer of port management.
Port Charges: Fees for usage, wharfage, and storage related to domestic trade.
PPA Port System: Network of ports administered by PPA considered vital for development and transport.
PPA Takeover: PPA resumption of port management for public interest protection.

Preference given to LGU over GC for port management unless GC endorsed by LGU.
Transfer applications require complete documents and Sangguniang Resolution approval.
MOA term fixed at three years.
Cargo handling contracts with third parties by LGU/GC must have PPA approval.
LGU/GC assumes primary responsibility for port development and maintenance.
Development plans of LGU/GC require prior PPA approval.
Port zones must be delineated via approved resolution.

Ports catering solely to domestic vessels with cargo throughput under 50,000 metric tons over 3 years.
Ports within the municipality and jurisdiction of the requesting LGU.

Minimum capitalization from Php250,000 to Php500,000; working capital Php50,000 to Php100,000.
Possession of necessary cargo handling equipment and qualified personnel.
Management officers require at least 3 years relevant experience.
Must have a dedicated Port Operation Section.

Allowed to operate cargo handling and port-related economic activities.
Authorized to collect prescribed domestic port charges; revenues accrue to LGU/GC.
Must pay quarterly Supervision Fee (10% of domestic port charge revenues) to PPA.
Required to post Performance Security of Php100,000 from GSIS or reputable surety.

Grounds include non-remittance of fees, failure of port maintenance or development, unauthorized sale/control changes, engagement in illegal activities, refusal to provide accounts, unlawful additional fees, violation of DILG circulars, breach of MOA or guidelines, and subcontractor violations.

LGU/GC submits letter of intent and documentation to Port Management Office (PMO).
PMO and Port District Office (PDO) review and recommend transfer.
Formation of Transition Committee (TC) to facilitate training, data compilation, and readiness assessment.
TC submits evaluation and draft MOA for approval.
Formal turnover ceremony upon MOA approval.

Only PPA-prescribed tariffs apply.
PPA retains authority over port charges.
LGU/GC must comply with DILG Memorandum prohibiting extra fees on inter-province transport.
PPA prescribes tariffs if none exist before transfer.

LGU/GC to use prescribed letterheads and post standard signboards on port premises.

LGU/GC must comply with all applicable laws, policies, guidelines, and PPA regulations during MOA term.

PPA shall periodically audit performance per PPA standards.
LGU/GC must make all port records available to PPA and Commission on Audit (COA).

LGU/GC responsible for organizing port manpower.
Port personnel must undergo PPA training at LGU/GC expense before takeover.
Organizational structure must comply with required positions for operations, engineering, and billing.

Disputes arising from MOA to be resolved by arbitration under Republic Act No. 9285 (Alternative Dispute Resolution Act of 2004) before Department of Justice.
Venue of arbitration is Metro Manila.

PPA reserves right to cancel MOA and reclaim port if national government priorities change or grounds under Section 10 occur.

Order effective 15 days after publication in a newspaper of general circulation.