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1.    AUTHORITY

1.1     Article IV, Section 6, b (iv), (ix) of P.D. No. 587
1.2     Article VII, Sections 19 and 20 of PD 857
1.3     Board Resolution No. 2675 dated January 29, 2018

2.    SCOPE

This Administrative Order shall cover requests for adjustment in CH tariff.

3.    OBJECTIVES

3.1     To prescribe a standard and uniform formula as well as procedures in CH tariff adjustment.
3.2     To adopt a real time assessment of the adjustment of CH tariff.
3.3     To ensure  integrity  and accuracy  in the application  of adjustment  of CH tariff.
3.4    To define explicit roles of concerned parties in the evaluation of CH tariff adjustment.
3.5     To establish time line in processing the petitions for CH tariff adjustment.
3.6     To   ensure   transparency   and   comprehensive   deliberation   during   the conduct of public hearing for adjustment in CH tariff.
3.7     To  encourage  active  participation  of  port  users  and  other  government agencies concerned during public hearings.
3.8     To   provide   the   PPA   Board   of   Directors   with   complete   report   and appropriate recommendation on requests for adjustment in CH tariff.

4.    HEARING PANEL

A Hearing panel is hereby created which shall be composed of the Technical Assistants  of  the  Members  of  the  PPA  Board  of  Directors  representing NEDA,  DOTr,  DTI,  DOF,  MARINA,  DPWH,  DENR,  OGCC  and  the  Private Sector.

5.    PROCEDURE

5.1     The  CH/Terminal  Operator  may  opt  to apply  for  a CH  tariff  adjustment provided that the CPI has increased by at least five percent (5%) within a three (3) year period.

5.2     To be eligible  for adjustment  in CH tariff,  the following  shall have  been fulfilled by the CH/Terminal Operator:

5.2.1  Full compliance of contractual commitments;

5.2.2  No outstanding obligation due to the Authority;

5.2.3  Full compliance of the CH Compliance Report; and

5.2.4  Complete and timely submission of the engineering, operational and audited financial reports as required in the contract.

The required  audited  financial  reports  shall cover only the subject port where adjustment in CH tariff is requested.

5.3     The service provider who applies for adjustment  in CH tariff shall file the petition to the Port Management Office (PMO). Each application must be supported with basis and justification.

5.4     The PMO after validating the petition shall set the date for the conduct of the public hearing and convene the Hearing Panel.

5.5     The PMO shall create the Secretariat who will:

5.5.1  Prepare the Notices of Invitation
5.5.2  Record all deliberations  of the hearings and prepare and certify the Minutes thereto.

5.6     No public hearing for CH tariff adjustment  shall be conducted without the proper   Notice   sent  by  the  PMO  Secretariat   concerned   at  least  10 calendar days prior to the scheduled hearing. The Notice shall be accompanied  by  an  agenda  covering  the  subject  matter  of  said  public hearing together with a copy of the Application for CH Tariff or Adjustment duly certified by the Port Manager concerned as complete.

5.7     The  Notice  of Invitation  shall  be  served  by  the  PMO  Secretariat  on  all affected sectors, such as the shipper's council, port users, stakeholders, relevant  industry  sectors  and association,  passenger  groups,  local government  units,  non-governmental  units,  and  other  interested  parties. The PMO may invite other affected sectors not mentioned herein.

5.8     Notices   shall  be  delivered   directly   to  all  concerned   who  shall  duly acknowledge receipt of the same.

5.9     The Port Manager of the port where the application for CH tariff adjustment has been filed shall act as the Moderator during the conduct of the public hearings. In the absence of the Port Manager, the Port Services Division Manager shall act as the Moderator.

5.10   When necessary, the participants shall be allowed to submit their position in writing within 10 calendar days to the proponent copy furnished the concerned PMO after the public hearing. Position papers received after the prescribed period shall not be included in the evaluation.

5.11   The proponent shall reply to the position of the concerned participant copy furnished the PMO within three (3) calendar days upon receipt of the position paper.

5.12   Upon request in writing, the participants may ask for copies of the Minutes of the Public Hearing(s).

5.13   All  concerned   PMOs   shall  submit   the  Minutes   of  public   hearing(s), attendance  sheet,  and  agreement  by  the  stakeholders  to  the  Hearing Panel thru OCBS within five (5) calendar days

5.14   The  Hearing  Panel  upon  receipt  of  the  documents,  shall  evaluate  the request  and  submit  a report  to include  its  recommendation  to the  PPA Board of Directors thru the OCBS within seven (7) calendar days.

5.15   Approval on the adjustment  of CH tariff is vested with the PPA Board of
Directors.

6.     CONDUCT OF PUBLIC HEARING

6.1     Where the application for CH tariff adjustment is limited to a particular port or area, the Public Hearing shall be conducted only at the port where the application for tariff adjustment is filed.

6.2     There is quorum  when there are five (5) members  of the Hearing  Panel present.

6.3     The Moderator shall:

6.3.1 Acknowledge the presence of the participants and mention the company/association  they represent.
6.3.2  Inform the body of the purpose of the public hearing.
6.3.3  Mention/present proof of Notice/Invitation to invitees.
6.3.4 Ask the proponent to present their request including justification, background on the business condition and causes of the cost increment.

6.4     The attendees shall be allowed to freely express their opinions, comments and recommendations without prejudice to the submission of the written comments/position paper within the period prescribed herein.

7.     FORMULA ON CH TARIFF ADJUSTMENT

In the determination of appropriate adjustment in CH tariff, the formula to be used is the Consumer Price Index (CPI) Adjustment Factor, as follows:

New Approved Tariff = Existing Tariff x CPI (All Items ) Philippines NEW
                                                                      CPI (All Items) Philippines OLD

Where:

CPI (All Items) Philippines NEW = the CPI of the immediately preceding year at the time the petition for adjustment of CH tariff is filed.

CPI (All Items) Philippines  OLD = the latest CPI considered  in the grant of the last increase.

8.    DETERMINATION OF BASE YEAR

For purposes of setting a uniform base year on future application of the simplified formula  under this Administrative  Order,  all affected  CH rates will be adjusted based on CPI as of 2017.

9.    FREQUENCY OF CH TARIFF ADJUSTMENT

Adjustment   of   CH   tariff   shall   be   every   three   (3)   years,   provided,   the requirements mentioned in Items 5.1 and 5.2 of this Administrative Order are complied with.

10. COSTS OF PUBLIC HEARING

10.1   Any honoraria  which may be authorized  for the members  of the Hearing Panel shall comply with the existing policies or regulations.

10.2   Necessary and incidental expenses for public hearings conducted outside of Manila shall be shouldered by PPA subject to accounting rules and regulations.

11. PUBLICATION

Approved  CH  tariff  adjustment  shall  be  published  in  a newspaper  of local  or general circulation where applicable and shall be effective 30 days after the publication.

12. REPEALING CLAUSE

All conditions pertaining to rate adjustments  mentioned in the existing contracts of the CH/Terminal Operators shall be amended by items 5.1 and 5.2 of this Administrative Order.

Further,  all PPA  orders,  rules  and regulations,  policies,  guidelines  or circulars which are inconsistent herewith are hereby deemed repealed or amended accordingly.

13. EFFECTIVITY

This  Administrative   Order  shall  take  effect  15  days  after  publication   in  a newspaper of general circulation.