PROVIDING FOR THE REORGANIZATION OF PORT ADMINISTRATION AND OPERATION FUNCTIONS IN THE COUNTRY, CREATING THE PHILIPPINE PORT AUTHORITY, PAVING THE WAY FOR THE ESTABLISHMENT OF INDIVIDUAL, AUTONOMOUS PORT/INDUSTRIAL ZONE AUTHORITIES IN THE DIFFERENT PORT DISTRICTS, AND FOR OTHER PURPOSES.

• Number: Presidential Decree No. 505
• Sections: 16

Preamble

WHEREAS, a port is not only a vital link in the total

transportation and trade system, but a major factor in harnessing the

human and natural resources of a region in the total context of National

Development;

WHEREAS, harbors and the tributary areas have their own

peculiar potentialities to be considered in port development;

WHEREAS, the concept of port administration has in this

country been focused on the traditional functions of revenue collection,

harbor maintenance and cargo handling, to the exclusion of the port’s

fuller utilization and development as a spur for regional growth;

WHEREAS, it is perceived that the broader role of ports

goes beyond the function of serving as the hub of maritime trade but

extends to the wider area of acting as a catalyst that may hasten the

expansion of the economic development of an area;

WHEREAS, there is need to integrate and coordinate port

development at the national level and at the same time promote the

growth of autonomous regional port development bodies responsive to the

needs of their individual localities;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers in me vested by the Constitution,

in order to effect the desired changes and reforms in the social

economic and political structure of our society, do hereby decree and

order that the following be adopted and made part of the laws of the

land;

Section 1 Title.

SECTION 1. Title. — This Decree shall be known as the

Philippine Port Authority Decree of 1974.

Section 2 Declaration of Policies and Objectives.

SEC. 2. Declaration of Policies and Objectives. — It

is hereby declared to be the policy of the State to implement an

integrated program of port development for the entire country in

accordance with the following objectives: (a) to streamline and optimize

the planning, development, construction; maintenance and operation of

ports, port physical plants and facilities, (b) to ensure the smooth

flow of waterborne commerce passing through the country's ports in the

conduct of international and domestic trade, (c) to promote regional

development through the dispersal of industries and commercial activity

throughout the different regions, (d) to foster free enterprise and

sustain the growth of export and other priority industries and, (e) to

redirect port administration beyond its specific and traditional duties

in harbor, cargo and revenue operations to the broader function of total

port district development, including the full and fruitful utilization

of the port's hinterland and tributary areas.

In order to attain these objectives, the Government through the

Philippine Port Authority hereinafter created shall:

Draw up and implement an integrated Philippine Port Development

Program which shall embody the following: the review and reorganization

of the present set-up of port administration, operations, physical

plants and facilities; the classification of the different ports in the

country according to size, importance, potential for growth and the

nature and structure of surrounding areas; determination of the type and

pattern of the local Port Industrial Zone Authorities to be established

in the different ports; and the definition of the broad operational

guidelines to be followed by these individual Authorities;

Encourage and stimulate the establishment of individual

autonomous Port Industrial Zone Authorities in the different port

districts through: (i) the provision and/ or assistance in the

provision of financial support from public and private financing

sources, (ii) technical assistance, (iii) the granting of incentives

particularly during the early years of operation; and (iv) in general,

the maintenance of close cooperation and a smooth working relationship

with the individual Port/Industrial Zone Authorities;

Provide for the effective supervision, regulation and control

of the organizational management, ownership and structure of individual

Port/Industrial Zone Authorities in the given port districts; and (d)

Exercise broad supervisory and regulatory powers over the actual

operations of individual Port/Industrial Zone Authorities in keeping

with their autonomous character.

A. THE PHILIPPINE PORT AUTHORITY

Section 3 The Philippine Port Authority Creation and Organization.

SEC. 3. The Philippine Port Authority Creation and

Organization. — There is hereby created a Philippine Port Authority,

hereinafter referred to as the "Authority". The corporate powers of the

Authority shall be vested in a governing board of directors to be known

as the Philippine Port Authority Council, hereinafter referred to as

the "Council."

The Authority shall have general jurisdiction and

control over all persons, corporations, firms or entities, existing,

proposed or otherwise to be established within the different port

districts in the Philippines and shall supervise, regulate and exercise

its powers in accordance with the provisions of this Decree.

The

principal office of the Authority shall be in the Greater Manila area

but it may establish branches and agencies within the Philippines as may

be deemed necessary by the Council.

Section 4 Philippine Port Development Program.

SEC. 4. Philippine Port Development

Program. — The Authority, in coordination with other national

agencies of the Government, shall prepare and annually update a Ten-Year

Philippine Port Development Program, hereinafter referred to as the

"Program" which shall embody the integrated plan for the development of

the country's ports and harbors. The Program shall be submitted for

approval by the President of the Philippines.

Upon approval of

the Program by the President, all government departments, bureaus,

agencies and instrumentalities shall implement the same within their

respective jurisdictions. The Authority shall ensure that the approved

Program is being effectively implemented by the participating agencies.

No government body or instrumentality shall adopt any policy or take any

course of action contrary to or inconsistent with the Program.

B. PHILIPPINE PORT AUTHORITY COUNCIL

Section 5 Powers and Functions of the Council.

SEC. 5. Powers and Functions of the Council. —

The Philippine Port Authority Council shall have the following powers,

functions and duties, among others:

To provide comprehensive policy guidance for the effective

supervision and regulation of individual Port/Industrial Zone

Authorities to be established in the different port districts;

To formulate a comprehensive and practicable Ten-Year

Philippine Port Development Program and renew and update the same

annually in coordination with other1 national agencies of the

Government;

To promulgate and prescribe a set of rules and regulations,

standards, guidelines and procedures governing the establishment of

individual Port/Industrial Zone Authorities;

To issue specific standards to be met by individual local

Port/Industrial Zone Authorities in the conduct of port operations,

particularly on harbor conservation, maintenance and navigation and in

the collection of port fees and charges; accordingly, these functions

shall be exercised with the Bureau of Public Works and the Bureau of

Customs and a practicable arrangement for the coordination of said

functions shall be worked out with the appropriate agencies;

To recommend to the President whenever the national interest

demands it, that the State, through an agency the Authority may

designate, take over the administration and operation of a specific port

district or portion thereof;

To approve specific applications of any person, firm or entity

to operate, administer and establish an individual Port Industrial Zone

Authority in a particular area;

To exercise the right of eminent domain by expropriating the

surrounding and tributary areas of a harbor or harbors which, in the

opinion of the Authority, are vital to the total port district

development;

To approve the organizational structure, staffing pattern, and

budget of the Authority upon the recommendation of the General Manager;

To appoint, discipline and remove, and determine the

composition of the technical staff of the Authority and other personnel:

Provided, That all positions in the Authority which are

confidential or highly technical in nature shall not be subject to the

Civil Service Law and Rules: Provided, further. That appointments

of personnel in the management below the rank of section chief shall be

made by the General Manager, in accordance with the approved budget and

staffing pattern and shall be noted by the Council: Provided,

furthermore, That the Council or General Manager may engage on

contractual basis or other arrangements for the temporary services, and

fix the compensation of highly qualified professionals, experts,

technical advisers or consulting firms;

To adopt, alter and use a corporate seal which shall be

juridically noticed; approve and make contracts, determine the exact

location of its office and prescribe the rules and regulations to govern

its proceedings;

To recommend to the President, through the National Economic

and Development Authority, the grant of necessary incentives to

individual Port/Industrial Zone Authorities

After 3 July 1974, to exercise over-all supervision over the

port facilities of the large foreign petroleum companies in matters

pertaining to safety, pollution and conservation in the harbors;

To exercise regulatory and supervisory powers over the marine

aspect of the administration and operation of port zones such as the

Bataan Export Processing Zone, the proposed Jolo free port, Zamboanga,

Parang in South Cotabato, and others;

To plan and coordinate the establishment of Port/Industrial

Zone Authorities in specific areas producing the country's main export

products, such as bananas, logs, sugar, coconut products and mineral

ores; and

To perform such acts as may be deemed proper and necessary to

carry out and implement the provisions of this Decree.

Section 6 Composition and Organization.

SEC. 6. Composition and Organization. — The Council

shall be composed of eleven members as follows: The Secretary of

Finance, the Secretary of Trade, the Secretary of Industry, the

Executive Secretary, the Secretary of Public Works, Transportation and

Communications, the Secretary of Public Highways, the Director General

of the NEDA, the, Secretary of National Defense, the General Manager of

the Philippine Port Authority and a representative from the private

sector to be designated by the President. The Chairman of the Council

shall be appointed by the President of the Philippines from among its

members.

The officials next in rank to the regular members shall

serve as permanent alternate members, except that, in the absence of the

Chairman, the Council shall elect a temporary presiding officer. The

alternate members shall attend meetings of the Council and Committees

assigned to their principals and receive the corresponding per diems

whenever their principal is absent or the said position is vacant.

The Council shall meet regularly once a month and at its discretion,

hold special meetings to consider urgent matters upon call of the

Chairman or any three members thereof. A majority shall constitute a

quorum for the transaction of business.

Each member of the

Council shall receive a monthly commutable allowance of five hundred

pesos and per diem of one hundred for every meeting of the Council or

Committee thereof actually attended: Provided, That the total

allowable amount of per diems each month shall not exceed five hundred

pesos.

C. MANAGEMENT

Section 7

SEC. 7.

Management Head. — The management of the Authority shall be vested

in the General Manager who shall be directly assisted by two Assistant

General Managers, one for Planning and the other for Operations.

Section 8 Appointment, Tenure, Qualifications and Compensation.

SEC. 8. Appointment, Tenure, Qualifications and

Compensation. — The General Manager and the two Assistant General

Managers shall be appointed by the President for a term of six years: Provided,

That upon the expiration of their respective terms, they shall continue

to serve until their successor shall have been appointed and qualified:

Provided, further, That no vacancy shall be filled except for

the unexpired portion of the term: Provided, finally, That the

President may remove the General Manager and the Assistant General

Manager from office for cause upon recommendation of the Council.

The General Manager and the Assistant General Managers shall

be citizens of the Philippines, at least thirty-five years old on the

date of their appointment, of good moral character, of recognized

executive ability, and competence in previous public or private

employment, with adequate training and experience in economics, finance,

law, management, technology, public utility or preferably in the phases

and aspects of port administration. Until otherwise fixed by the

Council, their annual salaries and allowances shall be as follows:

General Manager

Annual Salary

P50.000.00

Monthly Commutable Allowance

2,000.00

Assistant General Manager

Annual Salary

P40,000.00

Monthly Commutable Allowance

1,500,00

The General Manager shall be directly responsible to the Council

and shall have powers, functions and duties as provided in this Decree.

The Assistant General Managers shall be directly responsible to the

General Manager, and their respective powers, functions and duties shall

be determined by the Council, upon recommendation of the General

Manager.

Section 9 General Powers and Functions of the General Manager.

SEC. 9. General Powers and Functions of the General

Manager. — Subject to the general supervision and control of the

Council, the General Manager shall have the following general powers,

functions and duties:

To implement, enforce and apply the policies, programs,

standards, guidelines, procedures, decisions and rules and regulations

issued, prescribed or adopted by the Council pursuant to this Decree;

To undertake researches, studies, investigations and other

activities and projects, on his own initiative or upon instructions of

the Council, and to submit comprehensive reports and appropriate

recommendations to the Council for its information and action;

To manage the day to day affairs of the Authority subject to

the provisions of this Decree and applicable laws, orders, rules and

regulations of other appropriate government entities;

To assist approved and prospective Port/Industrial Authorities

in having their papers processed with dispatch by all Government

offices, agencies, instrumentalities and financial and banking

institutions;

To prepare the agenda for the meeting of the Council, the

Authority's annual budget and such other measures and recommendations

which may require the approval of the Council;

To establish the internal organization of the Authority under

such conditions that the Council may prescribe: Provided, That

any major reorganizational changes shall be subject to the approval of

the Council; and

To perform such other duties as the Council may assign and

such acts as may be necessary and proper to implement this Decree.

D. INDIVIDUAL, AUTONOMOUS PORT/INDUSTRIAL ZONE

AUTHORITIES

Section 10 Broad Policy Considerations.

SEC. 10. Broad Policy Considerations. — The

establishment of individual, autonomous Port Authorities and/or

Industrial Zones in the different port districts shall be governed by

the following broad policy considerations:

Individual Port/Industrial Zone Authorities, once established,

shall exercise full autonomy and flexibility in their operations similar

to that of any other business enterprises;

Due attention should be given to the improvement and optimal

utilization of the port's surrounding areas eventually providing for the

gradual and progressive expansion and economic development of the

entire port district;

The individual Port/Industrial Zone Authority may, in

subsequent periods, depending on the success and viability of its

operations, expand its scope and functions to include the management of

utilities, housing, commercial enterprises, goods and services and other

facilities within its territorial jurisdiction. The Authority shall

assist individual Port/Industrial Zone Authorities in the attainment of

their expansion goals;

In such matters where the national interest so requires, the

Government may, through the Philippine Port Authority, intervene in the

operations of individual Port/ Industrial Zone Authorities;

The ownership of corporations, firms or entities operating and

administering a given port shall be controlled by citizens of the

Philippines, in accordance with the citizenship provisions of existing

laws on corporate ownership and partnerships;

Since the establishment and operation of Port/Industrial Zone

Authorities shall require a sizeable amount of capitalization, the entry

of foreign investment shall be given favorable consideration; and

The granting of incentives shall be opened to persons, firms or

entities who may establish a Port/Industrial Zone Authority in a given

port district.

E. REORGANIZATIONAL CHANGES

Section 11 Reorganizational Changes.

SEC. 11. Reorganizational Changes. — In view of

the re-organizational changes rendered necessary and imperative by this

Decree, there is hereby created an inter-agency Committee to study and

recommend measures on reorganization and turnover of responsibilities

relative to the effective implementation of this Decree.

The

composition of the Committee shall be as follows:

The General Manager-Designate Philippine Port Authority —

Chairman

Representative of the Executive Office

— Vice-Chairman

The Commissioner of Customs — Member

The Director of Public Works — Member

The Commandant of the Coast Guard

— Member

Representative of the National Economic and Development Authority

— Member

Representative of the Department of Trade

— Member

Representative of the Department of Industry — Member

Representative of the Conference of Inter island Shipowners and

Operators — Member

The Committee shall submit to the Council its recommended

reorganizational changes not later than sixty days after the

promulgation of this Decree. Upon the approval by the Council, the

reorganizational changes shall form an integral part of this Decree.

More specifically, the recommended reorganizational changes shall

include but not limited to the following:

Delineation of the powers and duties of the Authority, Bureau

of Customs, Bureau of Public Works, and other governmental agencies

directly involved in the administration, operations, constructions, and

maintenance of public ports;

List of offices and positions in the Bureau of Customs and

Bureau of Public Works to be transferred to the Authority;

Procedures and time frame for the gradual turnover of above

powers, duties, offices, and positions from the Bureaus affected by

the reorganization to the Authority, including movable and immovable

properties, accounts and records necessary, useful or incidental to the

discharge of said powers and duties of the Authority or port bodies

falling under its jurisdiction; and

Relationship of the Authority to other governmental agencies

and private firms involved or having interests in the activities of

ports.

The Committee's operational expenses shall be funded from the Pork

Works Special Fund.

F. MISCELLANEOUS PROVISIONS

Section 12 Appropriations.

SEC. 12. Appropriations. — To carry out the

provisions of this Decree, there is hereby appropriated the sum of two

million pesos out of the funds in the National Treasury not otherwise

appropriated. Thereafter, the succeeding appropriations of the Authority

shall be included in the Annual Appropriations Act.

In addition

to the above, the Authority is hereby authorized to retain fifty per

cent of its collections from fees, charges and fines to defray any

deficiency in annual appropriations and to finance its other projects.

Section 13 Power to Issue Bonds and Incur Indebtedness.

SEC. 13. Power to Issue Bonds and Incur Indebtedness. —

The Authority may contract loans, credits and other indebtedness or

issue bonds, notes debentures, securities and other borrowing

instruments, if necessary, to carry out its Programs. The Council shall

promulgate a resolution stating the purpose of the loan and citing the

project study supporting the proposed borrowing. To be valid, the

resolution must carry the affirmative vote of at least five members of

the Council and be approved by the President of the Philippines, upon

the recommendation of the Secretary of Finance, after consultation with

the National Economic and Development Authority and the Monetary Board

of the Central Bank.

The total principal domestic indebtedness of

the Authority payable in Philippine currency shall not at any one time

exceed three hundred million pesos, while the total principal

indebtedness of the Authority payable in foreign currency shall not at

any one time exceed one hundred million United States dollars or the

equivalent thereof in foreign currencies.

Section 14

SEC. 14.

Repealing and Separability Clauses. — All laws, decrees, orders,

rules and regulations, policies, programs or parts thereof, which are

inconsistent with any of the provisions of this Decree, are hereby

repealed or modified accordingly.

If for any reason any section

or provision of this Decree is declared to be unconstitutional or

invalid, the other sections or provisions hereof, which are not affected

thereby, shall continue in full force and effect.

Section 15

SEC. 15.

Effectivity. — This Decree shall take effect upon its

promulgation: Provided, That these portions hereof which may

require a transition period to assure the orderly transfer of powers and

functions shall take effect as stated in the implementing details: Provided,

further, That such implementing details shall be prepared by the

Council, in consultation with the government agency heads concerned, and

submitted to the President for approval within four months after

issuance of this Decree.

Done in the City of Manila, this 11th day of July, in the year

of Our Lord, nineteen hundred and seventy-four.

(Sgd.)

FERDINAND E. MARCOS

President of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary