Volume 17 Number 2 (April to June 2006) - University of the ...

April - June 2006 National Administrative Register 607 

AIR TRANSPORTATION OFFICE 

Date Filed: 07 April 2006 

Memorandum Circular No. 01-06 

Implementation of the Specific Provisions of Aeronautical Engineering Law 

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608 

National Administrative Register Volume 17/2 

BANGKO SENTRAL NG PILIPINAS 


Memorandum 

Primer on the Anti-Money Laundering Act of 2001 (AMLA), as Amended 

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April - June 2006 National Administrative Register 617 

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Circular No. 524, s. 2006 

Implementation of the Delivery by the Seller of Securities 

to the Buyer or to his Designated Third Party Custodian 

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6A#jkR#*&#6(-'*/)&#%1)0'%+%6.'%*0#1*6(/)0'-#-,.88#7)#/.1)#.$.%8.78)#'*#&)9(8.'*&-#+*& 

$)&%+%6.'%*0#(4*0#&)^()-'A 

@*';%',-'.01%09#Y)6'%*0#@*-A#BN#.01#BP


Section 14. Sanctions#: h%',*('#4&)O(1%6)#'*#',)#4)0.8#.01#.1/%0%-'&.'%$)#-.06'%*0- 

4&*$%1)1#+*&#(01)&#-)6'%*0-#PX#.01#PD#PEH@TII2

626 


>(&-(.0'#'*#Y)6'%*0#cE#*+#W)4(78%6#26'#@*A#cDbB


)A#I*.0-#+(88"#-)6(&)1#7"#&).8#)-'.')#%0#.66*&1.06)#;%',#Y)6'%*0#PD#.01#-(7O)6'#'*#',) 

&)^(%&)/)0'-#*+#Y)6'%*0-#Pb#.01#QE#*+#WA2A#@*A#cDbB#.01#',)%&#%/48)/)0'%09#&)9(8.'%*0-M 

.01 

+A#I*.0-#+(88"#-)6(&)1#7"#(06*01%'%*0.8#4."/)0'#9(.&.0'))-#U-(6,#.-#-'.017"#8)'')&-#*+ 

6&)1%'#.01#8)'')&#*+#%01)/0%'"V#%--()1#7"#7.0F-=/(8'%8.')&.8#+%0.06%.8#%0-'%'('%*0-A 

Section 4. Transactions with Directors, Officers, Stockholders and their Related 

Interest (DOSRI)A#3,)#'&(-'))#-,.88#0*'

628 


Memorandum 

Amendments to the Guidelines for the Issuance of 

Unsecured Subordinated Debt Eligible as Tier 2 Capital so as to 

Include Hybrid Tier 1 Capital 

Text Available at Office of the National Administrative Register, 

U.P. Law Complex, Diliman, Quezon City 

21*4')1Z#NP#[.&6,#NEEX 


::*E*:: 

Memorandum 

Administrative Authority of the Bangko Sentral ng Pilipinas (BSP) 

over Non-Stock Savings and Loan Associations (NSSLAs), 

its Trustees and Officers 

3,)#[*0)'.&"#!*.&1#G'*#*&1)&#1%-6*0'%0(.06)#*+#(08.;+(8#6.0#7*',#*&1)&#',)#1%-6*0'%0(.06)#*+#(08.;+(8#*&#(0-*(01#4&.6'%6)-#7" 

.0#@YYI2#.01=*&#%'-#*++%6)&-#.01#48.6)#.0#@YYI2#(01)&#&)6)%$)&-,%4AJ 

7A#BSP can impose on NSSLA, as well as on its erring officers/trustees, 

other administrative sanctions under Section 37 of R.A. No. 7653. 

6A#BSP has jurisdiction to hear and decide administrative complaints 

against trustees and officers of NSSLA for disqualification and removal.


!Y>g-#4*;)&##G'*#%/4*-)#.1/%0%-'&.'%$)#-.06'%*0-#.9.%0-'#@YYI2#*++%6)&- 

.01#'&(-'))-

630 


!.0F-#-,.88#(41.')#-(6,#4(78%6#.1$%-*&%)-#.01#0*'%6)-#;%',#*',)&#%00*$.'%$)#-6,)/)- 

',.'#/."#7)#6*//%'')1#7"#(0-6&(4(8*(-#4)&-*0-#*&#6&%/)#-"01%6.')-#'*#$%6'%/%L)#(0-(-: 

4)6'%09#1)4*-%'*&-A 

3,)#4*-')&-=0*'%6)-#-,.88#8%F);%-)#.1$%-)#',)#9)0)&.8#4(78%6#'*#7)#;.&"#*+#):/.%8


SECTION 2. Y(7-)6'%*0#fXEXAQ#*+#',)#[5W!#%-#,)&)7"#1)8)')1A 

SECTION 3. Effectivity. 3,%-#R%&6(8.&#-,.88#'.F)#)++)6'#+%+'))0#UBCV#1."-#.+')&#4(78%: 

6.'%*0#)%',)&#%0#',)#5++%6%.8#\.L)'')#*&#%0#.#0);-4.4)&#*+#9)0)&.8#6%&6(8.'%*0A 

21*4')1Z#Q##24&%8#NEEX 

Date Filed: 09 May 2006 

_5W#3dH#[5@H32Wk#!52W?Z 

UY\?AV#@HY35W#2A#HY>H@TII2(&-(.0'#'*#',)#[*0)'.&"#!*.&1#W)-*8('%*0#@*A#QEX#1.')1#PE#[.&6,#NEEX

632 


Y(6,#-'.')/)0'-#*+#6*01%'%*0#UY*8*#.01#R*0-*8%1.')1V#-,.88#7)#4(78%-,)1#%0#.#0);-: 

4.4)&#*+#9)0)&.8#6%&6(8.'%*0#%0#',)#6%'"=4&*$%06)#;,)&)#',)#4&%06%4.8#*++%6)



Circular No. 528 

Inclusion as Part of Upper Tier 2 Capital of the Hybrid Tier 1 

Capital Instruments in Excess of the 15% of Tier 1 Capital Limit 

3,)#[*0)'.&"#!*.&1#%0#%'-#W)-*8('%*0#@*A#QCc#1.')1#D#24&%8#NEEX

634 




Amendment to Section 7 of Circular 410 

>(&-(.0'#'*#',)#[*0)'.&"#!*.&1#W)-*8('%*0#@*A#QEP#1.')1#PE#[.&6,#NEEX


2R3TST3THY T@SHY35W 

e! j! 3! W!#######R55> 

>(78%68":######@*' ##>(78%68":######@*'#I%-')1 

8%-')1 ###I%-')1 ####8%-')1 

288%)1#)0')&4&%-)- 

_%0.06%.8#288%)1 

e01)&'.F%09e0%$)&-.8#!.0F- 

BEEi ####Qbi ##BEEi Qbi Qbi Qbi Qbi 

R*//)&6%.8#!.0F- BEEi ####Qbi ##BEEi Qbi Qbi Qbi Qbi 

3,&%+'#!.0F- ########BEEi BEEi Qbi Qbi Qbi 

W(&.8#!.0F- ########BEEi BEEi Qbi Qbi Qbi 

R**4#!.0F- #########@2 #@2 @2 @2 PEi 

T0-(&.06)#R*-A ########BEEi @2 @2 @2 @2 

SRR- ########XEi XEi XEi Qbi Qbi 

5',)&- ########BEEi Qbi QEi QEi QEi 

3*#4&*/*')#6*/4)'%'%$)#6*01%'%*0-

636 


GSection 4. Minimum Technical Standards 

x x x 

GXV#T0#&.'%09#6*&4*&.')#7*&&*;)&-#;%',#'*'.8#.--)'-#*+#/*&)#',.0#>BC#/%88%*0V#',&*(9,#',)#Y(4)&$%-*&"#?.'. 

R)0')&#UY?RV#.01#',)#.44&*4&%.')#Y(4)&$%-%*0#.01#HK./%0.'%*0#?)4.&'/)0'#UYH?V#'* 

1)$)8*4#.#&)6*06%8)1#.01#+%0.8%L)1#/.-')&#8%-'#*+#%'-##)8%9%78)#@>2-A 

_*&#',%-#4(&4*-)2-#%0#',)#+*&/.'#4&)-6&%7)1#(01)&#R%&6(8.&#I)'')&#1.')1#ED#].0(.&"#NEEP#U2''.6,: 

/)0'-#B:B#'*#B:X`VA#508"#@>2-#%068(1)1#%0#',)#/.-')&#8%-'#',.'#/))'#',)#1)+%0%'%*0#*+#@>2< 

@>I#.01#W).8#.01#5',)&#>&*4)&'%)-#5;0)1#*&#26^(%&)1#UW5>52V#(01)&#WA2A#@*A#bBcN 

/."#^(.8%+"#+*&#',)#R5HA#3,)#7.0F-=@!a!-#-,.88#7)#4&*$%1)1#.#6*4"#*+#',)%&#&)6*06%8)1 

.01#+%0.8%L)1#/.-')&#8%-'#+*&#',)%&#9(%1.06)A 




508"#7.0F-=@!a!-#;,%6,#,.$)#0*'#")'#-(7/%'')1##',)%&#/.-')&#8%-'#*+#@>2-#.01 

%0')01#'*#.$.%8#*+#',)#%06)0'%$)-#.01#+))#4&%$%8)9)-#*+#',)#Y>S#26'#N01#>,.-)#%/48)/)0'.: 

'%*0#.&)#.88*;)1#'*#-(7/%'#.#6*/48)')#%0$)0'*&"#*+#',)%&#@>2-#%0#',)#+*&/.'#4&)-6&%7)1 

(01)&#R%&6(8.&#I)'')&#1.')1#D#].0(.&"#NEEPA#!.0F-=@!a!-#;,%6,#,.$)#.8&).1"#-(7/%': 

')1#'*#!Y>#.#/.-')&#8%-'#*+#@>2-#.-#*+##PE#](0)#NEEN#%0#',)#B-'#>,.-)#%/48)/)0'.'%*0#*+ 

',)#Y>S#26'#;%88#0*'#7)#.88*;)1#'*#-(7/%'#.#0);=./)01)1#/.-')&#8%-'A 

NA#20#.448%6.'%*0#+*&#)8%9%7%8%'"#*+#-4)6%+%6#@>2-#-,.88#7)#+%8)1#%0#;&%'%09#U,.&1#6*4"V#7"#',) 

-)88%09#7.0F=@!a!#;%',#',)#!Y>#',&*(9,#',)#.44&*4&%.')#YH?#+*&#).6,#4&*4*-)1#'&.0-+)& 

*+#.--)'=-A#28',*(9,#0*#-4)6%+%6#+*&/#%-#4&)-6&%7)1I-#.01#W5>52-#U2': 

'.6,/)0'-#N:B#'*#N:Q`V#'*#',)#.44&*4&%.')#YH?#*+#',)#.448%6.0'#7.0F=@!_T#.'#',)#+*88*;%09 

.11&)--)-Z 

YH?T:Y>So#7-4A9*$A4, 

YH?TT:Y>So7-4A9*$A4, 

YH?TTT:Y>So7-4A9*$A4, 

YH?TS:Y>So7-4A9*$A4, 

_*&#.448%6.'%*0-#%0$*8$%09#')0#UBEV#@>2#.66*(0'-#*&#8)--2-#',.'#%0$*8$)#*0)#UBV#4&*/%--*&"#0*')#.01=*&#*0)#UBV#.--)'#%')/#4)&#.66*(0'A 

QA#3,)#.448%6.'%*0#-,.88#7)#.66*/4.0%)1#7"#.#;&%'')0#6)&'%+%6.'%*0#-%90)1#7"#.#-)0%*& 

*++%6)&#;%',#.#&.0F#*+#.'#8).-'#Y)0%*&#S%6)#>&)-%1)0'#*&#)^(%$.8)0'2-#%-#(01)&#.#'&()#-.8)M 

6A#',)#0*'%+%6.'%*0#&)^(%&)/)0'#'*#',)#7*&&*;)&-#,.-#7))0#6*/48%)1#;%',M#.01 

1A#',)#/.K%/(/#bE:1."#4)&%*1#+*&#&)0)9*'%.'%*0#.01#&)-'&(6'(&%09#,.-#7))0 

6*/48%)1#;%',A 

T')/-#6#.01#1#.7*$)#-,.88#0*'#.448"#%+#',)#@>I#,.-#7)6*/)#.#W5>52#.+')&#PE#](0)#NEENA 

CA#T0#',)#6.-)#*+#dacion en pago 7"#',)#7*&&*;)&#*&#.#',%&1#4.&'"#'*#.#7.0F=@!a!

638 


)K)6(')1#7"#',)#7*&&*;)&I-# .01# W5>52- 

4&*4*-)1#'*#7)#'&.0-+)&&)1=-*81A#2+')&#',)#*0:-%')#&)$%);2-#'&.0-+)&&)1#*&#',)#'&.0-+)&#4&%6)< 

;,%6,)$)&#%-#,%9,)&NC#-,.88#+%8)#.0#.448%6.'%*0#+*&#-(6,#'&.0-+)&=-.8)#;%',#',) 

Y)6(&%'%)-#.01#HK6,.09)#R*//%--%*0#UYHRV#;,%6,#-,.88#%--()#',)#6*&&)-4*01%09#R5H 

7.-)1#*0#',)#1.'.#7.-)#*+#R5H-#/.%0'.%0)1#.'#',)#!Y>A 

20#%01%$%1(.8#;,*#%0')01-#'*#'&.0-+)&=-)88#.0#@>2#',.'##%0$*8$)-#.#-%098)#+./%8"#&)-%: 

1)0'%.8#(0%'#,)#,.1#.6^(%&)1#',.'#%-#6*$)&)1#7"#.#R5H#-,.88#+%8)#.0#.448%6.'%*0#+*&#.0*',)& 

R5H# ;%',# ',)# !Y># ',&*(9,# ',)# 7.0F=@!a!# +&*/# ;,%6,# ',)# @>2# ;.-# .6^(%&)1A#3,) 

%01%$%1(.8#-,.88#%01%6.')#%0#,%-#.448%6.'%*0#',)#4&)$%*(-#R5H#%--()1#+*&#',)#@>2#,)#,.1 

.6^(%&)1#.01#',)#0./)


>(&-(.0'#'*#[*0)'.&"#!*.&1#W)-*8('%*0#@*A#XBc#1.')1#BB#[."#NEEX

640 


Date Filed: 21 June 2006 

Memorandum 

Certification of Independent Director 

(Corrected Copy) As of May 31, 2006 

H++)6'%$)#%//)1%.')8"


_*&#6*/48%.06)A 

21*4')1Z#EN#Y)4'A#NEEC 

BOARD OF INVESTMENTS 


UY\?AV##@HY35W#2A#HY>H@TII2&*$%1)1#+(&',)&

642 


WHY5ISH?


Memorandum Order No. 13, s. 2006 

Temporary Ban on the Importation of Domestic and Wild Birds and 

Their Products Including Poultry Meat, Day Old Chicks, Eggs and Semen 

Originating from Albania, Cameroon, Denmark, Myanmar, Serbia and 

Montenegro, Poland and Switzerland 



21*4')1Z#NE#[.&6,#NEEX 


::*E*:: 




Originating from Afghanistan, Georgia, Hungary, Iran, Israel, Niger, 

Slovakia and Sweden 



21*4')1Z#NQ#[.&6,#NEEX 


::*E*:: 




Originating from the United Kingdom 



21*4')1Z#BE#24&%8##NEEX 


::*E*::

644 


Memorandum Order No. 17, s. 2006 

Lifting the Temporary Ban on the Importation of Meat and Meat Products 

Derived from Cattle from Austria, Denmark, Finland, Italy and Luxembourg 



21*4')1Z#Bb#24&%8##NEEX 


::*E*:: 


Temporary Ban on the Importation of Domestic and Wild Birds 

and Their Products Including Poultry Meat, Day-Old Chicks, Eggs and 

Semen Originating From the Cote DíIvoire 

21*4')1Z#EN#[."#NEEX 




::*E*:: 


Temporary Ban on the Importation of FMD-Susceptible Animals, Their 

Products and By-Products Originating From Argentina 



21*4')1Z#P#[.&6,#NEEX 


::*E*:: 


Lifting the Temporary Ban on the Importation of Domestic 

and Wild Birds and Their Products Including Poultry Meat, Day Old Chicks, 

Eggs and Semen Originating from British Columbia, Canada 

hdHWH2Y


hdHWH2Y

646 


',)#3.&%++#.01#R(-'*/-#R*1)#*+#',)#>,%8%44%0)-#U3RR>V


7A#R*01(6'#.0#%0$)0'*&"#*+#',)#+*&)%90#.&'%68)-#%+

648 


BA#_*&#9**1-#;,)&)#h.&&.0'#*+#Y)%L(&)#.01#?)')0'%*0#,.-#0*'#7))0#%--()1#*0#.66*(0'#*+ 

',)#*++)&#*+#',)#*;0)&#'*#4."#1('%)-#.01#'.K)-#',)&)*0


BA#508"#.(',*&%L)1#6(-'*/-#*++%6)&-#-,.88#4.&'%6%4.')#*&#7)#.88*;)1#'*#4.&'%6%4.')#%0#',) 

%/48)/)0'.'%*0#.01=*&#)K)6('%*0#*+#',)#$%-%'*&%.8#4*;)&M 

NA#T0#',)#%/48)/)0'.'%*0#*+#',)#I52#.01#-.$)#%0#6.-)-#;,)0#$%*8)06)#%-#6*//%'')1 

.9.%0-'#',)#4)&-*0-#.01#4&*4)&'"#*+#',)#8.;#)0+*&6)&-

650 


1%-4*-%'%*0#*+#.88#9**1-=.&'%68)-#',.'#,.$)#0*;#7)6*/)#4&*4)&'%)-#*+#',)#9*$)&0/)0'#-,.88 

7)#1%-4*-)1#*+#*08"#7"#',)#?)4('"#R*//%--%*0)&#+*&#T0')&0.8#21/%0%-'&.'%*0#\&*(4#%0 

.66*&1.06)#;%',#',)#9)0)&.8#&(8)-#*0#1%-4*-%'%*0#*+#4&*4)&'%)-


_*&#-'&%6'#6*/48%.06)A 

21*4')1Z#BB#24&%8#NEEX 


UY\?AV#@2>5IH5@#IA#[5W2IHY 

Acting Commissioner 

::*E*:: 

Customs Memorandum Order No. 14-2006 

Payment of Duties and Taxes to Authorized Agent Banks (ABB) 

3*#)0-(&)#4&*4)&#6*88)6'%*0#*+#6.-,#4."/)0'-."/)0'#.88*;)1#l#_*&#4(&4*-)-#*+#-.'%-+.6'%*0#*+#1('%)-#.01#'.K)-#*08"#',) 

+*88*;%09#F%01-#*+#4."/)0'#.&)#.88*;)1Z 

.A >."/)0'-#/.1)#%0#6.-,#*&#[.0.9)&-#R,)6F-#4.".78)#'*#',)#!(&).(#*+ 

R(-'*/-#-,.88#7)#,*0*&)1#7"#.88#2(',*&%L)1#29)0'#!.0F-#U22!-VA#R.-,#4.": 

/)0'-#/."#7)#*$)&#',)#6*(0')&#*&#1)7%'#'&.0-.6'%*0-#+&*/#)K%-'%09#7.0F#.6: 

6*(0'- 

7A _*&#4(&4*-)-#*+#21$.06)#?('%)-#%0#',)#T/4*&'#H0'&"#?)68.&.'%*0#UTH?V< 

4."/)0'#7"#',)#%/4*&')&#-,.88#7)#/.1)#+*&#',)#+(88#./*(0'#%0#',)#TH?#)%',)&#%0 

6.-,#*&#[.0.9)&-#R,)6F-A 

PA 3.K#R&)1%'#R)&'%+%6.')-#l#3.K#R&)1%'#R)&'%+%6.')-#U3RR-V#%--()1#)%',)&#7"#',)#!(&).(#*+ 

R(-'*/-#*&#',)#?)4.&'/)0'#*+#_%0.06)#-,.88#0*'#7)#$.8%1#+*&#7.0F#'&.0-.6'%*0-

652 


CA H++)6'%$%'"#l#3,%-#5&1)&#'.F)-#)++)6'#.+')&#BC#1."-#*+#6*/48)')#4(78%6.'%*0#%0#.#0);-4.: 

4)&#*+#9)0)&.8#6%&6(8.'%*0A 

21*4')1Z#NE#24&%8#NEEX 

UY\?AV#@2>5IH5@#IA#[5W2IHY 

Acting Commissioner 

BUREAU OF INTERNAL REVENUE 


Revenue Memorandum Circular No. 8-2006 

Clarifying Certain Issues Relating to the Implementation of the Increase 

in the VAT Rate from 10% to 12% pursuant to Republic Act No. 9337 

I. Tax Treatment of Services Rendered Prior to Feb. 1, 2006 Payment of 

which was Received on or after Feb. 1, 2006# -#2/*(0'-#1()#*0#-.8)#*+#-)&$%6)- 

&)01)&)1#*0#*&#7)+*&)#].0(.&"#PB


T+#',)#'.K4.")&#%-#(0.78)#'*#%--()#/.0(.8#%0$*%6)-=*++%6%.8#&)6)%4'-#'*#&)+8)6'#',) 

BNi#*('4('#S23#.01#',)&)+*&)#%/4)&.'%$)8"#*&#*4'%*0.88"#6*0'%0()##'*#(-)#',)#RW[=>5Y 

Y"-')/#;%',#4&*9&./#+*&#S23#&.')#.'#-'%88#BEi#*('4('#S23

654 


'.K)-


266*&1%098"

656 


'*/)&#&)+8)6'%09#',)&)%0#',)#0./)#*+#',)#',%&1#4.&'"#-)&$%6)#4&*$%1)&#.-#',)#%--()&#*+#',) 

*++%6%.8#&)6)%4'


>)01%09#&)-*8('%*0#*+#',)#%--()-#4)&'.%0%09#'*#',)#4)&'%0)0'#4&*$%-%*0-#*+#W)$)0() 

W)9(8.'%*0-#@*A#P:NEEX#1.')1#].0(.&"#P

658 


A2. T0#',)#6*/4('.'%*0#*+#',)#'.K.78)#%06*/)KK 

BN 

########3.K.78)#T06*/)#K#@*A#*+##/*0',-#6*$)&)1#7"#PCi###K#PCi#n######KK 

BN 

3532I#32f#?eH#>HW##T3W >#KKK 

Q3. 2#6*&4*&.'%*0#,.-#.0#%06*/)#+*&#6.8)01.&#").&#NEEC#*+#>NEENEECPNEE



Revenue Memorandum Circular No. 17-2006 

Clarifying Certain Provision of Revenue Regulations No. 16-2005, 

Particularly on the 70% Cap or Limitation on the Deductible 

Input Tax for VAT Purposes. 

3,%-#W)$)0()#[)/*&.01(/#R%&6(8.&#UW[RV#%-#%--()1#%0#*&1)&#'*#68.&%+"#6)&'.%0 

%--()-#&)9.&1%09#',)#.448%6.'%*0#*+#',)#DEi#6.4#*&#8%/%'.'%*0#*0#',)#1)1(6'%78)#%04('#'.K 

+*&#S23#4(&4*-)-A 

Q-1. ##T0#6.-)#',)#*('4('#'.K#+*&#.0"#9%$)0#'.K.78)#^(.&')&#)K6))1-#',)#%04('#'.K

660 



Revenue Regulations No. 4-2006 

Implementing the Tax Privileges Provisions of Republic Act No. 9257, 

otherwise known as the ìExpanded Senior Citizens Act of 2003î, 

and Prescribing the Guidelines for the Availment Thereof 

SECTION 1. Scope - >(&-(.0'#'*#Y)6'%*0#NQQ#*+#',)#3.K#R*1)#*+#BbbD


OA# Annual taxable income of resident senior citizen - -,.88#&)+)&#'*#',)#.00(.8#9&*-- 

6*/4)0-.'%*0

662 


NA#d)#/(-'#+%8)#.0#200(.8#T0+*&/.'%*0#W)'(&0#%01%6.'%09#',.'#,%-#.00(.8#'.K.78)#%06*/) 

1*)-#0*'#)K6))1#',)#4*$)&'"#8)$)8#.-#1)')&/%0)1#7"#',)#@H?2#',&(#',)#@YR!#',&*(9,#. 

+*&/.8#;&%'')0#1*6(/)0'#-)0'#'*#',)#R*//%--%*0)&#*+##T0')&0.8#W)$)0()#+*&#',%-#").&#.01 

)$)&"#").&#',)&).+')&M#.01 

PA#T+#^(.8%+%)1


%01%$%1(.8#%0#',)#0)'#%06*/)#.+')&#'.K#*+#.0#.--*6%.'%*0

664 


.#/.&&%)1#%01%$%1(.8#*&#,).1#*+#+./%8"#with qualified dependent child/children #(01)& 

Y)6'%*0#PC#U!V#*+#',)#3.K#R*1)A 

SEC. 8. Availment by Establishments of Sales Discounts as Deduction from 

Gross Income - H-'.78%-,/)0'-#)0(/)&.')1#%0#-(7:4.&.9&.4,#UXV#,)&)(01)&#9&.0'%09 

-.8)-#1%-6*(0'-#'*#-)0%*&#6%'%L)0-#*0#',)#-.8)#*+#9**1-#.01=*&#-)&$%6)-#-4)6%+%)1#',)&)(0: 

1)&#.&)#)0'%'8)1#'*#1)1(6'#',)#-.%1#1%-6*(0'#+&*/#9&*--#%06*/)#-(7O)6'#'*#',)#+*88*;%09 

6*01%'%*0-Z 

BA##508"#',.'#4*&'%*0#*+#',)#9&*--#-.8)-#HfRIeYTSHIk#eYH?


.01#'&.$)8)&-#+*)88%09#*0#.#/*&)#*&#8)--#8*09:')&/#7.-%-#.01#*++)&%09#7.-%6 

-)&$%6)-#'*#%'-##')0.0'-

666 


+A#Medical and dental services in private facilities - 3,)#1%-6*(0'#-,.88#7)#*0 

/)1%6.8#.01#1)0'.8#-)&$%6)-#.01#1%.90*-'%6#.01#8.7*&.'*&"#+))-


NA#3,)#.00(.8#'.K.78)#%06*/)#*+#',)#-)0%*&#6%'%L)0#1*)-#0*'#)K6))1#',)#4*$)&'"#8)$)8#.- 

/."#7)#1)')&/%0)1#7"#',)#@H?2#',&(#',)#@YR!A#_*&#',%-#4(&4*-)C

668 



Revenue Regulations No. 5-2006 

Implementation of Revenue Regulations No. 17-2005 

SECTION 1. Objective - >(&-(.0'#'*#',)#4&*$%-%*0-#*+#Y)6'%*0#NQQ&*O)6'AJ 

3,)-)#W)9(8.'%*0-#-(4)&-)1)#W)$)0()#W)9(8.'%*0-#Bb:NEEC#1.')1#@*$)/7)&#D


Foreign Currency#%-#.#6(&&)06"#;,%6,#%-#*',)&#',.0#',)#+(06'%*0.8#6(&&)06"#*+#',) 

^(.8%+%)1#)0'%'"A##_*&#4(&4*-)-#*+#',)-)#W)9(8.'%*0-,%8%44%0)#4)-*#7)6*/)-#.#&)^(%&)/)0'=%-#4)&/%'')1#(01)&#',)#>,%8%44%0):.1*4')1 

\)0)&.88"#266)4')1#266*(0'%09#>&%06%48)-

670 


SEC. 5. Notification Requirements:#2#6*&4*&.')#'.K:+%8)&#)8)6'%09#'*#(-)#.-#+(06: 

'%*0.8#6(&&)06"#+*&#+%0.06%.8#&)4*&'%09#4(&4*-)-#.#6(&&)06"#*',)&#',.0#',)#>,%8%44%0)#4)-* 

/(-'#-(7/%'#'*#',)#W)$)0()#?%-'&%6'#5++%6)#UW?5V#*&#I.&9)#3.K4.")&-#?%-'&%6'#5++%6) 

UI3?5V#*&##I.&9)#3.K4.")&-#Y)&$%6)#UI3YV?YVA##3,)#'*'.8#'&.0-8.')1 

./*(0'-#4)&#/*0',#-,.88#7)#.11)1#'*#.&&%$)#.'#',)#%06*/)#.01#)K4)0-)-#%0#>,%8%44%0) 

4)-*-#+*&#',)#^(.&')&=").&


&)'(&0-#*',)&#',.0#%06*/)#'.KA#3,)#&)6*06%8%.'%*0#*+#',)#+%9(&)-#-,.88#7)#1*0)#.'#',)#)01#*+ 

',)#").&#.01#',)#&)6*06%8%09#%')/-#-,.88#7)#&)+8)6')1#%0#',)#.00(.8#*&#+%0.8#.1O(-'/)0' 

%06*/)#'.K#&)'(&0A#3,(-

672 


T0#',)#'&.0-%'%*0#'*#+(06'%*0.8#6(&&)06"#&)4*&'%09#*&#%0#',)#'&.0-8.'%*0#*+#>,%8%44%0) 

4)-*#+%0.06%.8#-'.')/)0'-#.'#',)#-'.&'#*+#',)#%0%'%.8#").&#;,)0#+(06'%*0.8#6(&&)06"#%-#.1*4')1< 

',)#^(.8%+%)1#)0'%'"#-,.88#'&.0-8.')#%'-#>,%8%44%0)##4)-*#7.8.06)-#'*#%'-#+(06'%*0.8#6(&&)06" 

+%0.06%.8#-'.')/)0'-#.-#+*88*;-Z 

.A _(06'%*0.8#6(&&)06"#./*(0'-#U+*&#7*',#7.8.06)#-,))'#.01#%06*/)#-'.')/)0'#%')/-< 

%068(1%09#6.4%'.8#.66*(0'-V#-,*(81#7)#-4)6%+%6.88"#%1)0'%+%)1#.01#6.&&%)1#*$)&#'*#',)#+(06: 

'%*0.8#6(&&)06"#+%0.06%.8#-'.')/)0'-#%0#',)%&#*&%9%0.8#+(06'%*0.8#6(&&)06"#./*(0'-


4%0)#>)-*?Y#&.')-A 

SEC. 12. Treatment of Gain or Loss on Sale of Investment under Functional 

Currency. l#20#%0$)-'*&#;,%6,#%0$)-'-#%0#+(06'%*0.8#6(&&)06"#U*',)&#',.0#>,%8%44%0)#4)-*V 

-)6(&%'%)-#6.0#6*/4(')#%'-#9.%0#*&#8*--#+&*/#',)#-.8)#*+#-.%1#%0$)-'/)0'#(-%09#',)#+(06: 

'%*0.8#6(&&)06"A 

_*&#)K./48),%8%44%0)#4)-*#6*-'#.01 

>,%8%44%0)#4)-*#-)88%09#4&%6)A 

SEC. 13. Availment of NOLCO and Excess MCIT - 3,)# @)'# 54)&.'%09# I*-- 

R.&&":*$)&#U@5IR5V#.01#)K6)--##[%0%/(/#R*&4*&.')#T06*/)#3.K#U[RT3V#6.0#-'%88#7) 

6.&&%)1#+*&;.&1#%0#',)#%06*/)#'.K#6*/4('.'%*0#*+#',)#'.K4.")&#',.'#,.-#-;%'6,)1#'*#. 

+(06'%*0.8#6(&&)06"#*',)&#',.0#',)#>,%8%44%0)#4)-*

674 


SEC. 14. Payment of Taxes in Functional Currency ñ#3.K4.")&-#+%8%09#'.K#&)'(&0- 

%0#',)#>,%8%44%0)#4)-*#/."#4."#',)#'.K#%0#+(06'%*0.8#6(&&)06"#6*/4(')1#(-%09#',)#+(06: 

'%*0.8#6(&&)06"#7("%09#&.')#*+#',)#6*88)6'%09#7.0F#$%-:t:$%-#',)#>,%8%44%0)#4)-*#.'#',)#'%/) 

*+#4."/)0'A#3,)#6*88)6'%09#7.0F#-,.88


SECTION 1. Scope - >(&-(.0'#'*#Y)6'%*0#NQQ#*+#',)#@.'%*0.8#T0')&0.8#W)$)0() 

R*1)#*+#BbbD#%0#&)8.'%*0#'*#H5#Pbb#.-#./)01)1#7"#H5#QNN#>.&'%6%4.'%*0#_*&/A 

SECTION 2. Deadline for Filing - Y)6'%*0#b#*+#WW#X:NEEC

676 



Revenue Memorandum Circular No. 22-2006 

Clarifying Certain Issues Relating to the Implementation of the 

Increase in the VAT Rate from 10% to 12% on the Sale of Goods 

Pursuant to Republic Act No. 9337 

TA##Tax Treatment of Sale of Goods#:#_*&#',)#-.8)#*+#9**1-


SECTION 1. Policy Statements and Guiding Principles - 3,)#?)4.&'/)0'#*+#29&%: 

6(8'(&)#U?2V#-,.88#+.6%8%'.')#',)#.$.%8.7%8%'"#*+#,%9,#^(.8%'"#-))1-#.01#48.0'%09#/.')&%.8- 

',&*(9,#.6'%$)#6*88.7*&.'%*0#;%',#',)#I*6.8#\*$)&0/)0'#e0%'-#UI\e-V&*1(6)&-#U>\=>-V#.01#*',)&#-'.F),*81)&-#.- 

;)88#.-#)-'.78%-,#8%0F.9)-#;%',#(-)&-=7(")&-#+*&#-(-'.%0.78)#1)$)8*4/)0'A#3*;.&1-#',%- 

)01&%$.')#-))1#9&*;)&-=4&*1(6)&-=6*/4.0%)-,%8%44%0)-A 

SECTION 2. Objectives - 3,)#/.%0#*7O)6'%$)#*+#',)-)#\(%1)8%0)-#%-#'*#.--(&)#',) 

-'.78)#.01#6*0'%0(*(-#-(448"#*+#,%9,#^(.8%'"#-))1-#.01#48.0'%09#/.')&%.8-#;,%6,#.&) 

.++*&1.78)#.01#.66)--%78)#'*#+.&/)&-

678 


SECTION 3. Scope and Coverage - 3,)-)#9(%1)8%0)-#-,.88#6*$)&#',)#4&*1(6'%*0< 

1%-'&%7('%*0T 

R)0')&-#-,.88#7)#',)#-*(&6)#*+#-))1-#.01#7(1-'%6F#-6%*0#+*&#1%-'&%7('%*0#'*#.66&)1%')1 

-))1#9&*;)&-&*6)1(&)-#:#?2#',&*(9,#!>T#-,.88#.66&)1%'#^(.8%+%)1#-))1#9&*;)&-= 

4&*1(6)&-=-))1#6*/4.0%)-#.01#48.0'#0(&-)&"#*4)&.'*&-


#NA#R)&'%+%6.'%*0#Y"-')/#:#?2#',&*(9,#',)#!>T

680 


SECTION 8. Distribution Procedures - 3,)#1%-'&%7('%*0#*+#-))1-#.01#48.0'%09#/.'): 

&%.8-#-,.88#7)#%0#.66*&1.06)#;%',#?2#25#@*A#C8.0'#[.')&%.8-#R*0'.%0)1#%0#21/%0%-'&.'%$)#5&1)&#@*A#X#-)&%)-#*+##BbbDVA 

SECTION 9. Monitoring and Evaluation - h%',#',)#&.'%*0.8%L.'%*0#48.00)(/.'%6#3%&)- 

CA#PNS 07-2005 - >*&'8.01#R)/)0' 

*Specifications of the Listed Mandatory Philippine National Standards (PNS) are Available 

at Office of the National Administrative Register, U.P. Law Complex, Diliman, 

Quezon City.


BUREAU OF QUARANTINE 


Administrative Order No. 2006-0010 

ìRevision of Fees and Charges Imposed by the Bureau of Quarantine 

in Accordance with RA 9271, Repealing Such Orders Inconsistent 

Therewith, and for Other Such Purposes.î 

I 

Rationale 

2-#4.&'#*+#',)#*$)&.88#)++*&'#'*#&)$%);#*',)&#+))-#.01#6,.&9)-#;,%6,#;.-#8.-'#(41.')1 

%0#NEEE

682 


3,)#%06&).-)#%0#',)#-6,)1(8)#*+#+))-#.01#6,.&9)-#-,.88#.448"#'*#.88#'&.$)8)&-,4##CEAEE >,4BEEAEE 

NAC#W*('%0)#e&%0.8"-%- >,4##CEAEE >,4BEEAEE 

NAX#R)&'%+%6.'%*0#+*&#!*.&1#*+#T0$)-'/)0' >,4BEEAEE >,4CEEAEE 

PA#Fees for Stewards/Food Handlers (Local) 

PAB#>,"-%6.8#HK./%0.'%*0#v 

?*6(/)0'.'%*0#_)) >,4NEEAEE 

PAN#R,)-'#f:&." >,4BEEAEE >,4BCEAEE 

PAP#Y)&*8*9%6#3)-'#US?WI=W>WV >,4##CEAEE >,4BCEAEE 

PAQ#W*('%0)#_)6.8"-%- >,4##NEAEE >,4##XEAEE 

PAC#W*('%0)#e&%0.8"-%- >,4##NEAEE >,4##XEAEE 

PAX#Y)/%0.&#_)) >,4##CEAEE >,4#NEEAEE 

PAD#d).8',#Y.0%'.'%*0#R)&'%+%6.')#U_**1 

Y)&$%6)#H-'.78%-,/)0'V >,4BEEAEE >,4NCEAEE 

QA#Deratting Certificates Fees for Foreign 

Registered Vessel 

QAB#?)&.''%09#R)&'%+%6.') >,4NCEAEE >,4B,4XEEAEE >,4N,4B,4P,4B,4Q,4NCEAEE >,4B


CAN#?)&.''%09#HK')0-%*0#R)&'%+%6.') >,4QEEAEE >,4###XEEAEE 

CAP#?)&.''%09#HK)/4'%*0#R)&'%+%6.') 

S)--)8#BEEE#'*0-#*&#8)-- >,4QEEAEE >,4B,4B,4N,4B,4P,4NCEAEE >,4B,4##DCEAEE 

XAP#d.L.&1#20.8"-%-#R&%'%6.8#R*0'&*8#>*%0' 

Ud2RR>V#2(1%' ##########>,4BC,4BC,4BEEAEE >,4NEEAEE 

DAN#21/%--%*0#*+#-,%4/)0'#*+#5_h#d(/.0 

W)/.%0- >,4BEEAEE >,4NEEAEE 

DAP#21/%--%*0#*+#-,%4/)0'#*+#0*0:5_h 

d(/.0#W)/.%0- >,4BEEAEE >,4CEEAEE 

DAQ#_*&)%90#-,%4/)0'#*+#d(/.0#W)/.%0- >,4BEEAEE >,4CEEAEE 

DAC#_*&)%90#-,%4/)0'#*+#Y4)6%/)0#+*& 

-'(1"=)K./%0.'%*0 >,4BEEAEE >,4CEEAEE 

cA#Other Fees 

cAB#R)&'%+%6.'%*0#*+#?*6(/)0'- 

:#[)1%6.8#h.%$)&- 

:#I*--#1*6(/)0'-

684 


CAGAYAN ECONOMIC ZONE AUTHORITY 


Resolution No. 11-004-05 

Rules and Regulations of the Cagayan Economic Zone Authority 

(CEZA) Gaming and Control Board 

h)


UY\?AV#]5YH#[2WT#!A#>5@RH UY\?AV#2@35@T5#RA#R2W2\ 

+*&#]e2@#!A#Y2@35Y Director 

Chairman 

UY\?AV#j23WT@2#>5@RH#H@WTIH:j5RdHW UY\?AV#TY[2HI#SA#3e[2WeI2@ 

############Director Director 

UY\?AV#H?\2W#RA#ek UY\?AV#]5YH#SA#dT>5IT35 

Director Director 


######UY\?AV#\eTIIHW[5#WA#_2Re@?5 

Director 

2'')-'Z 

UY\?AV#STR35WT2#[A#>HWHp 

Corporate Board Secretary 

::*E*:: 

Resolution No. 11-002-05 

Rules Implementing the Cagayan Special Economic Zone Act of 1995 

h)

686 


hdHWH2YJV


2'')-'Z 

UY\?AV#STR35WT2#[A#>HWHp 

Corporate Board Secretary 

CAREER EXECUTIVE SERVICE BOARD 



Allowing Career Service Executive Eligibles (CSEEs) to 

Participate in the Training Programs and other Human Resource 

Development Interventions Offered by the Career Executive Service Board 

3,)#R.&))&#HK)6('%$)#Y)&$%6)#!*.&1#URHY!V

688 




Supplemental Guidelines on the Grant of Salary 

Adjustment Equivalent to Salary Grade 25 to Graduates of 

the National Defense College of the Philippines (NDCP) 

3,)#R.&))&#HK)6('%$)#Y)&$%6)#!*.&1#URHY!V#,.-#7))0#&)6)%$%09#-)$)&.8#&)^()-'- 

+*&#68.&%+%6.'%*0#&)9.&1%09#',)#)0'%'8)/)0'#*+#',)#9&.1(.')-#+&*/#',)#@.'%*0.8##?)+)0-) 

R*88)9)#*+#',)#>,%8%44%0)-#U@?R>V#'*#',)#-.8.&"#)^(%$.8)0'#'*#Y.8.&"#\&.1)#NC#.88*;)1 

(01)&#'*#RYR#W)-*8('%*0#@*A#bQ:CcQE#9&.1(.')-Z 

BA#@?R>#9&.1(.')-#/(-'#7)#*66(4"%09#4*-%'%*0-#%0#',)#6.&))&#-)&$%6)#.-#1)+%0)1#%0#!**F 

S#9&.1(.')-#;,*#*66(4"#6.&))&#4*-%'%*0-#%0#',)#8*6.8#9*$)&0/)0'#(0%'-#UI\e-V 

.&)#0*'#)0'%'8)1#'*#',)#-.8.&"#.1O(-'/)0'#)^(%$.8)0'#'*#Y.8.&"#\&.1)#NCM 

PA#@?R>#9&.1(.')-#/(-'#7)#*66(4"%09#.'#8).-'#.#1%$%-%*0#6,%)+#8)$)8#4*-%'%*0#;%',#Y\#NQ 

'*#7)#)0'%'8)1#'*#Y.8.&"#\&.1)#NCM 

QA#@*#-(7*&1%0.')#*++%6%.8#-,.88#7)#.1O(-')1#'*#.#-.8.&"#&.')#7)"*01#*0)#-.8.&"#9&.1)#8*;)& 

',.0##,%-=,)&#%//)1%.')#-(4)&$%-*&A 

CA#T0#6.-)#*+#&)%0-'.')/)0'=&))/48*"/)0'


COMMISSION ON AUDIT 


2'')-')1#7"Z 

UY\?AV#2W3eW5#[A#I2RdTR2

690 


#NAP#3,)#d).1#*+#',)#266*(0'%09#e0%'#-,.88#6)&'%+"#',)#*78%9.'%*0#*+#.88*'/)0'#.01#6*/: 

48)')0)--#*+#-(44*&'%09#1*6(/)0'-#%0#',)#?SA 

NAQ#3,)#3&).-(&)&#-,.88#6)&'%+"#',)#.$.%8.7%8%'"#*+#+(01-#%0#',)#?S#.-#4&*$%1)1#%0#',)#I*6.8 

\*$)&0/)0'#R*1)A 

NAC#3,)#3&).-(&)&#-,.88#4&)4.&)#',)#?.%8"#R.-,#>*-%'%*0#W)4*&'#:#200)K#R#'*#7)#-(7/%'')1 

'*#',)#I*6.8#R,%)+#HK)6('%$)A 

3.0 

Saving Clause 

R.-)-#0*'#6*$)&)1#%0#',%-#R%&6(8.&#-,.88#7)#&)+)&&)1#'*#',)#\*$)&0/)0'#266*(0: 

'.06"#.01#_%0.06%.8#[.0.9)/)0'#T0+*&/.'%*0#Y"-')/#U\2_[TYV#Y)6'*&


T'#.8-*#4&)-6&%7)-#',)#&)$%-)1#+*&/-#'*#7)#(-)1#%0#&)6*&1%09#*78%9.'%*0-#%06(&&)1< 

7(19)'##('%8%L.'%*0#.01#1%-7(&-)/)0'-A 

2.0 

Policies 

3,)#&)-4*0-%7%8%'%)-#*+#',)#d).1-#*+#',)#W)^()-'%09#e0%'

692 


5.0 

Effectivity 

3,%-#R%&6(8.&#-,.88#'.F)#)++)6'#].0A#PB#NEEX 

21*4')1Z#PB#].0A#NEEX 

UY\?AV#\eTIIHW[5#@A#R2W2\eH 

Chairman 

UY\?AV#H[[2@eHI#[A#?2I[2@ UY\?AV#WHk@2I?5#2A#STII2W 

Commissioner Commissioner 


::*E*:: 

Circular No. 2006-004 

Restatement with Amendments of COA Circular No. 2005-001 on Accounting 

Policies Related to the Budget, Accounting and Disbursement Functions in 

Government Owned and/or Controlled Corporations Under the 

New Government Accounting System (NGAS) 

1.0 

Rationale/Objectives 

Y)6'%*0#N#UNV,%8%44%0)#R*0-'%'('%*0#/.01.')-#',)#R*/: 

/%--%*0#*0#2(1%'#'*#GKKK#4&*/(89.')#.66*(0'%09#.01#.(1%'%09#&(8)-#.01#&)9(8.'%*0-#KKKAJ 

T0#8%0)#;%',#@\2Y#%/48)/)0'.'%*0


NAP#_*&#6*0'&.6'#*&#4(&6,.-)#*&1)&

694 


hdHWH2Y\2YV#%0#200)K#2#.01 

+*&/%09#4.&'#*+#',%-#W)-*8('%*0M 

!H##T3##_eW3dHW#WHY5ISH?#',.'#',)-)#-'.01.&1-#4&*$%1)#',)#7.-)-#+*&#',) 

+*&/(8.'%*0#*+#',)#1)'.%8)1#.66*(0'%09#-'.01.&1-


BAN#@*')-#'*#',)#+%0.06%.8#-'.')/)0'-#-,.88#8%F);%-)#7)#4&)4.&)1#;,)0#0)6)--.&"#'*Z 

U.V#4&*$%1)#%0+*&/.'%*0#.7*('#',)#7.-%-#*+#4&)4.&.'%*0#*+#',)#+%0.06%.8#-'.')/)0'-#.01#',) 

-%90%+%6.0'#.66*(0'%09#4*8%6%)-M 

U7V#1%-68*-)#',)#%0+*&/.'%*0#&)^(%&)1#7"#.448%6.78)#>\2Y#',.'#%-#0*'#4&)-)0')1#)8-);,)&) 

%0#',)#+%0.06%.8#-'.')/)0'-M#.01 

U6V#4&*$%1)#.11%'%*0.8#%0+*&/.'%*0#;,%6,#%-#0*'#4&)-)0')1#*0#',)#+.6)#*+#',)#+%0.06%.8 

-'.')/)0'-#7('#0)6)--.&"#+*&#.#+.%&#4&)-)0'.'%*0A 

BAP#3,)#7**F-#*+#.66*(0'-#-,.88#6*0-%-'#*+Z 

U.V#@.'%*0.8#\*$)&0/)0'#U@\V#7**F-#+*&#&)6*&1%09#+(01-#,)81#+*&#&)/%''.06)#'*#',)#@.: 

'%*0.8#3&).-(&"

696 


Qualitative Characteristics 

U.V#R*/4.&.7%8%'"#:#_%0.06%.8#%0+*&/.'%*0#%-#6*/4.&.78)#;,)0#(-)&-#.&)#.78)#'*#%1)0'%+" 

.01#)$.8(.')#-%/%8.&%'%)-#%0


(01)&-'.')/)0'#*+#.--)'-#*&#&)$)0()-

698 


PGAS 5 - INVENTORIES 

CAB#T0$)0'*&%)-#.&)#.--)'-#.V#,)81#+*&#-.8)


DAB#>&*4)&'">HV#.&)#0*0:6(&&)0'#.--)'-#,)81#7"#.#9*$)&0/)0' 

.9)06"#+*&#(-)#%0#*4)&.'%*0#*&#+*&#8).-)#.01#.&)#)K4)6')1#'*#7)#(-)1#+*&#/*&)#',.0#*0) 

").&A 

DAN#>>H#-,.88#%0%'%.88"#7)#&)6*90%L)1#.'#6*-'#;,%6,#%068(1)-#4(&6,.-)#4&%6)#.01#%06%1)0'.8 

6*-'-#-(6,#.-#%/4*&'#1('%)-H##-,.88#7)#6.&&%)1#.'#%'-#6*-'#8)--#.0" 

.66(/(8.')1#1)4&)6%.'%*0A 

DAC#>>H#',.'#.&)#-'%88#-)&$%6).78)#7('#0*#8*09)&#%0#(-)#-,.88#7)#4&*4)&8"#68.--%+%)1A 

DAX#3,)#-'&.%9,':8%0)#/)',*1#*+#1)4&)6%.'%*0#+*&#>>H#.01#8).-)1#4&*4)&'"#-,.88#7)#(-)1A 

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UY\?AV#\eTIIHW[5#@A#R2W2\eH 

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UY\?AV#WHk@2I?5#2A#STII2W UY\?AV#]e2@T35#\A#HY>T@5WRVM 

1 includes institutional qualifications

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Chairman 

COOPERATIVE DEVELOPMENT AUTHORITY 


Memorandum Circular No. 2006-06 

Revised Guidelines on the Registration of Electric Cooperatives 

(ECs) with the Cooperative Development Authority (CDA) 

Under Republic Act No. 6938


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SECTION 2. Registration Documents to be Submitted: 

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SECTION 3. Nature of Registration of ECs with CDA. 

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712 


DEPARTMENT OF AGRARIAN REFORM 

Date Filed: 17 May 2006 

Administrative Order No. 04, s. 2006 

Revised Guidelines Governing the Turn Over of Lots Allocated for Public 

Use And/Or Actually Utilized for Public Purposes Within DAR Administered 

Landed Estates and Settlement Projects and Lands Acquired Under 

Executive Order No. 448 in Favor of the Government Agencies Concerned 

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716 


SECTION 8. Effectivity - 3,%-#5&1)&#-,.88#'.F)#)++)6'#')0#UBEV#1."-#.+')&#%'-#4(78%6.: 

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21*4')1Z#Bb#24&%8#NEEX 

UY\?AV#@2YYHW#RA#>2@\2@?2[2@ 

OIC-Secretary 

DEPARTMENT OF AGRICULTURE 


Memorandum Circular No. 01, s. 2006 

Procedural Guidelines and Formats for Bt Corn Insect Resistance 

Management (IRM) Monitoring for Industry Technology Developers 



21*4')1Z#Ec#[.&6,#NEEX 


::*E*:: 

Memorandum Circular No. 02, s. 2006 

Guidelines on the Conduct of Field Test of Plants 

Derived from Modern Biotechnology 

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722 


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21*4')1Z#NE#24&%8#NEEX 

UY\?AV#W2>d2HI#>A#[A#I53TII2 

Secretary 

GENERAL TERMS AND CONDITIONS 

FOR THE NGVPPT ACCREDITATION 

Annex 1 

BA#2448%6.0'-#+*&#@\S>>3#.66&)1%'.'%*0#-,.88#+(88"#*7-)&$)#.01#.7%1)#7"#',)#4&*$%-%*0-#*+ 

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::*E*:: 

Department Circular No. DC 2006-04-005 

Implementing the Philippine National Standard Specifications 

for Unleaded Motor Gasoline 

(PNS/DOE QS 001:2005)


hdHWH2Y

726 


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Department Circular No. DC 2006-05-0006 

Adopting Further Amendments to the WESM Rules 

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7. Penalty Provisions 

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use or longer by patients in the management of deformities, diseases, injuries, abnormal 

physical and mental conditions and maternity cases. 

I. PTC - Permit to Construct 

J. Primary Catchment Area - the political subdivision where the proposed hospital will be 

located. 

K. Projected Primary Catchment Population - the NEDA-projected population in the primary 

catchment area in the fifth year following the implementation of the proposed hospital 

project 

L. Secondary Catchment Area - other geographic areas that have access or contiguous 

to the primary catchment area 

M. Projected Secondary Catchment Population - the NEDA-projected population in the 

secondary catchment area in the fifth year following the implementation of the proposed 

hospital project. 

N. Political subdivision - refers to the municipality/urban district for Level 1 Hospitals, the 

rural district/city for Level 2 Hospitals, the province for Level 3 Hospitals, and the region 

for Level 4 Hospitals. 

A. General Guidelines 

V. Policies and Guidelines 

1. The BHFS shall require all applicants for PTC for the establishment of new hospitals to 

secure a Certificate of Need from the CHD. The CHD shall require all applicants to 

accomplish the DOH-prescribed application form for the issuance of Certificate of Need. 

2. Conversion or upgrading of a birthing home into a general hospital, or a special 

hospital into a general hospital, shall also require a Certificate of Need from the CHD as a 

requirement for the application for a PTC. 

3. Each CHD shall create a committee composed of three members coming from CHD 

technical staff that will evaluate the application for a Certificate of Need. This committee 

shall recommend to the CHD Director the approval or disapproval of the application. 

4. The CHD Director shall approve/disapprove the application for a Certificate of Need. If 

approve, the CHD Director shall endorse to the BHFS the Certificate of Need of the 

applicant together with the evaluation report. If disapproved, the CHD shall inform the 

applicant by registered mail the particular reason for the disapproval of the application. 

5. All CHDs shall map all existing hospitals in the region, as well as establish a database of 

all hospitals with corresponding bed capacities and the projected population of all political 

subdivisions within the region. The CHD shall update the regional map of all existing 

hospitals periodically, and shall submit a copy of the map during the first quarter of the 

year to the BHFS.

734 


6. All applicants with a disapproved PTC application that has been inactive for one year 

before the approval of this Order, as well as those applicants with approved PTC applications 

but whose PTC has already lapsed (i.e. construction has not begun within 365 days 

upon approval of the PTC) shall be required to secure a Certificate of Need from the 

CHD. 

7. The CHD shall impose a non-refundable application fee for the issuance of Certificate 

of Need in the amount of two thousand pesos (P2,000.00) and shall be paid to the 

Cashier of the CHD. The application fee shall be updated regularly by the BHFS. 

B. Specific Guidelines and Criteria for Establishment of New General Hospitals 

1. Criteria for the Establishment of a New General Hospital. All of the following 

criteria must be satisfied before a Certificate of Need can be issued to the proponent of a 

new general hospital: 

1.1. Bed to Population Ratio. 

1.1.1 The bed-to-population ratio must not be more than one (1) bed per 

1,000 population (1:1000). 

1.1.2 In a province or region (e.g. NCR) where the bed-to-population ratio 

is already more than 1:100, additional beds may be put up if the average 

occupancy rate for all hospitals for the past two years is more than 85%. The 

number of additional beds that may be put up shall be based on the health 

care needs of the population. 

1.2 Travel Time. The proposed hospital shall be at least one (1) hour away by 

the usual means of transportation during most part of the year from the nearest 

existing hospital. 

1.3 Accessibility. The proposed hospital site must be accessible to patients 

and clients by the usual means of land or sea transportation during most part 

of the year. If the proposed site is in an island municipality, the proposed 

hospital must be strategically located. 

1.4 Integration with local hospital development plan. If there is an existing 

local hospital development plan that has been approved by the DOH, the proposed 

hospital must be integrated with this existing plan. The proponent should 

show proof that it has checked with the local government for any relevant local 

hospital development plan. 

1.5 Track record. If the proponent is currently operating a hospital, that hospital 

must have an acceptable track record in terms of good compliance with 

licensing requirements and a consistent history of few verified complaints. 

2. Computation of Unmet Bed Need. The following steps should be used in determining 

the Unmet Bed Need, which is the maximum number of beds that the proposed 

hospital may be allowed to put up.


2.1 Determine the Projected Primary and Secondary Catchment Population 

(P) of the proposed hospital. 

2.1.1. The Primary Catchment Area is the municipality/urban district for 

Level 1 Hospital; the rural district/city Level 2 Hospital; the province for Level 3 

Hospital; and the region for Level 4 Hospital. 

2.1.2 The Secondary Catchment Area/s is/are other geographic area/s 

that have access or contiguous to the Primary Catchment Area. 

2.2 Determine the Inventory Hospital Beds (IHB), which is the number of 

existing beds being provided by existing government and private general hospitals 

plus the number of beds being proposed by previous applicants for 

license to operate. Hospital beds being provided by special hospitals, hospitals 

under the Department of National Defense, penitentiary hospitals, and 

special research centers (i.e. Research Institute of Tropical Medicines) shall 

be excluded from the Inventory Hospital Beds. 

2.3 Determine the Bed-to-Population Ratio (BPR), or the ratio of Inventory 

Hospital Beds to the Projected Primary and Secondary Catchment Population. 

BPR = IHB/P x 1,000 

2.3.1 If the BPR is more than 1:1,000, the proposed hospital cannot be 

given a Certificate of Need. 

2.3.2 If the BPR is less than 1:1,000, proceed with the computation of the 

Unmet Bed Need. 

2.4 Determine the Projected Bed Need (PBN) or the projected total number 

of hospital beds needed for the primary and secondary catchment population 

by multiplying the Projected Primary and Secondary Catchment Population 

(P) by the bed-to-population ratio of 1:1,000. 

PBN = P x 1/1,000 

2.5 Compute for Unmet Bed Need (UBN) by subtracting the Inventory Hospital 

Bed from the Projected Bed Need, using the formula: 

UBN = PBN - IHB 

3. Additional Criteria for Concurrent Evaluation of More than One Application. 

When there are more than one proposals to establish a hospital in a particular municipality, 

district, province, or region, the CHD shall make use of the following additional criteria 

when deciding on which proponent to grant a Certificate of Need. 

3.1 Total capital investment for the proposed hospital 

3.2 Total lot area of the proposed site

736 


3.3 Strategic location of the proposed site 

3.4 Hospital policies on patient care from admission to discharge that are 

beneficial to low-income and indigent populations. 

3.5 Percentage of charity beds over the proposed total bed capacity 

3.6 Qualifications and experience of the proposed hospital administrative, medical 

and nursing personnel 

3.7 Other criteria that may be set by the CHD in consultation with BHFS 

VI. Appeal 

Any hospital aggrieved by the decision of the CHD on its application may, within 

thirty (30) days after receipt of the notice of the decision, file a notice of appeal with the 

Office of the Secretary and serve a copy thereof to the CHD and the BHFS. Thereupon, 

the CHD shall promptly certify and forward a copy of the decision, including all documents 

and transcript(s) of the hearings/meetings upon which the decision is based, to the 

Office of the Secretary of Health for review. The decision of the Office of the Secretary 

shall be final and executory. 

VII. Separability Clause 

In the event that any provision or part of this Order be declared unauthorized or 

rendered invalid by any court of law or competent authority, those provisions not affected 

by such declaration shall remain valid and effective. 

VIII. Repealing Clause 

This Order shall repeal or supercede all administrative orders and previous issuances 

inconsistent thereof. 

IX. Effectivity 

This Order shall take effect upon approval and publication in the official gazette or 

newspaper of general circulation. 

Adopted: 13 March 2006 


(SGD.) FRANCISCO T. DUQUE III, MD, MSc 

Secretary of Health 

--o0o-- 

Joint Department Administrative Order 

Department Of Health No. 2006-0006 and 

Department of Health Autonomous Region for Muslim Mindanao No. 2006-02 

Implementation Guidelines of the Technical Assistance Packages 

in Support to the ARMM Strategy for Health Improvement (ASHI)


Adopted: 28 Feb. 2006 




Adopted: 28 April 2006 

--o0o-- 


Guidelines in Establishing Governing Boards for 

Augmenting Management Capacity of Public Hospitals 




--o0o-- 


Guidelines on Public-Private Collaboration in Delivery of Health 

Services Including Family Planning for Women of Reproductive Age 

Adopted: 10 May 2006 




--o0o-- 


Guidelines Institutionalizing and Strengthening the 

Essential Drug Price Monitoring System (EDPMS) 

I 

Rationale 

The 1987 Philippine Constitution mandates the right of every Filipino to health. The 

State, under Section II of Article XIII, shall adopt an ìintegrated and comprehensive 

approach to health development which shall endeavor to make essential goods, health 

and other social services acceptable to all the people at affordable costî.

738 


The state policy enunciated in Article II, Section 15 of the 1987 Constitution, that 

ìThe State shall protect and promote the health of the people and instill health consciousness 

among them.î 

Republic Act (RA) No. 6675 known as the ìGenerics Act of 1988î, prescribes that 

it is the policy of the State to ìensure the adequate supply of drugs with generic names at 

the lowest possible costî. 

R.A. No. 7581 also known as the ìPrice Actî and its Implementing Rules and Regulations 

(IRR) explicitly identifies the Department of Health (DOH) as the lead implementing 

agency in identifying essential drugs ìbasic necessitiesî and monitoring their corresponding 

prices. 

R.A. No. 8792 also known as the ìElectronic Commerce Actî was formulated to 

facilitate exchanges and storage of information through the utilization of electronic, 

optical and similar medium, mode, instrumentality and technology, to recognize the authenticity 

and reliability of electronic documents related to such activities and to promote 

the universal use of electronic transaction in the government and general public. 

Department Order No. 238-T s. 2000, and as amended by Department Order No. 

285-H s. 2002, were created in order to provide a system and procedure for the data 

collection on prices of selected essential drugs which is know as the Essential Drug 

Price Monitoring System. 

The DOH recognizes the need to sustain the operations of the EDPMS and at the 

same time adaptively upgrade its specification to suit current and emerging trends in the 

market. 

Also, the DOH recognizes the need for the greater involvement and coordination 

between and among the various units under it, so as to synergize their collective efforts in 

fulfilling the given mandates as reflected in the foregoing. 

II 

Scope 

This Order shall cover all data collection activities and analyses undertaken by all 

Health Facilities, and Units under the Department of Health on the prices of essential 

drugs sold to the general public. 

This Order is formulated in order to: 

1. Provide systems and procedures for: 

III 

Objectives 

a. The identification of essential drugs that will be considered as basic necessities,


b. The identification of firms carrying inventories of the generic drugs considered 

as basic necessities, 

c. The identification of branded medicines considered as basic necessities 

d. Data collection on prices of essential drugs considered as basic necessities 

e. Data collection on the inventory and distribution pathway of essential drugs 

considered as basic necessities 

f. Analyses and interpretation of Essential Drug Price and Monitoring Reports 

2. Identify the roles and responsibilities of various units of the Department of Health, 

which are involved in drug price monitoring. 

IV 

General Guidelines 

1. The Department of Health shall prepare all necessary reports to determine the price 

levels and inventory of essential drug prices classified as basic necessities in accordance 

with the pertinent provision of the Price Act and within the timeframe so prescribed. 

2. The Department of Health shall determine illegal acts of price manipulation on essential 

drugs as defined in Section 5 of the Price Act such as hoarding, profiteering, and cartel. 

3. An Essential Drug Price Monitoring Oversight Committee (EDPMOC) shall be created 

by the Department of Health that will monitor and ensure the prosecution of the powers 

and responsibilities of the Department of Health as an implementing agency with reference 

to drugs as defined in Section 10 of the Price Act. The same oversight committee 

shall be responsible in determining mandated price ceilings whenever the conditions set 

under Section 7 of the Price Act manifest. It shall be Chaired by an Official of the 

Department of Health who is at least an Assistant Secretary. 

4. The National Drug Policy Program (NDPP), in collaboration with the National Formulary 

Committee (NFC) and the Philippine Health Insurance Corporation (PHIC), shall be 

the lead coordinating unit responsible for determining the generic names and specifications 

of essential drugs that are classified as basic necessities and that must be monitored 

nationwide. 

5. The Bureau of Food and Drugs (BFAD) shall be the lead unit charged in determining 

the firms, (in case of generic drugs) and the brands of medicines whose generic names 

and specifications are classified by the NDPP as basic necessities. 

6. The BFAD shall be the lead unit responsible for the data collection on the prices and 

inventory of essential drugs classified as basic necessities. 

7. The Food and Drug Regulatory Officers under the administrative supervision of the 

Centers for Health Development (CHD) shall be the frontline agents of BFAD for data

740 


collection on prices and inventory. In addition, the BFAD may also deputize consumer 

groups to assist the FDROs in data collection. 

8. The Directors of the CHDs shall ensure that the monitoring activities of the FDROs 

administratively under them are adequately supported in terms of funding requirement, 

logistics and rational workload allocation. Such support must be manifested in the CHDsí 

Work and Financial Plan and Operational Plan. 

9. The Information Management Service shall provide technical support in the systems 

design, development, deployment and maintenance of the required information infrastructure 

to ensure the implementation of the EDPMS and shall prioritize the said activity 

as belonging to its top priority list of activities . 

V 

Specific Guidelines 

A. Determination of the Generic Names and Specifications of Essential Drugs 

Classified as Basic Necessities 

1. The National Drug Policy Program in collaboration with the National Formulary Committee 

shall determine and recommend the list of drugs that must be considered as basic 

necessities and must be monitored throughout the country. 

The list of essential drugs classified as basic necessities shall be primarily based on 

accepted therapies for the prevalent diseases among other criteria such as cost effectiveness 

and cost minimization as determined by the NDPP and the NFC. Additional 

criteria for drug selection shall be inclusion in PHICís clinical practice guidelines and 

frequency of occurrence in PHICs medicine claims reimbursement. 

2. The NDPP and the NFC may invite resource speakers from the other units of DOH, the 

industry, the academe, the health sector, and other agencies of the government whose 

expertise and opinion are of value to their task. 

3. Once the list is finalized, it shall be recommended for approval by the Program Manager 

of the NDPP to the Chairperson of the EDPMOC. If the list is found to be in order 

the Chairperson of the EPDMOC shall approve it, ìBy Authority of the Secretary of 

Health.î 

4. The subject approved list of essential drugs, which are classified, as basic necessities 

shall be applied for the succeeding year. It shall be reviewed and updated every year. 

The deadline for the review and updating of the said list shall be routinely scheduled every 

last day of the first semester. 

5. The subject approved list of essential drugs shall be forwarded immediately to the 

BFAD for the determination of generic firms (in case of generic drugs) and brand names 

that carry inventories of the generic names under the said essential drug list for price 

monitoring. 

B. Determination of Generic Drugs and Branded Drugs Classified as Basic Necessities


1. The BFAD shall determine the firms (in case of generic drugs) and the brand names 

that carry inventories of the generic names and specification based on the approved list 

of essential drugs for monitoring nationwide. The top five generic firms (if thereís any) 

and the top five brand names (if thereís any) in terms of inventory will be determined for 

every generic name and specification reflected on the approved list. This must be completed 

within the third quarter of every year and iteratively done every year. 

2. The BFAD shall collect monthly inventory data from the manufacturer and importers of 

essential drugs reflected at the initial stage of distribution. Such data shall include the total 

quantity of the goods for distribution, their lot numbers and expiration dates, manufacturing 

date, and date of release from customs (if imported). 

3. Also to be collected by BFAD from the manufacturers and importers will be the 

distribution destination or supply chain routes of the subject goods classified as basic 

necessities. Such supply chain routes may be broken down into quantity of the goods 

per intended distributors and per wholesalers or per intended geographic distribution of 

goods i.e., regional or provincial. 

4. Once the firms (in case of generic drugs) or brand names of the generic names and 

specifications that appear on the approved list of drugs classified as basic necessities 

are determined, these shall then be reflected on the price and inventory data entry forms 

template (as shown in Annex A*), which shall be for dissemination to the FDROs under 

the CHDs and to the NDPP. 

C. Data Collection on Drug Prices and Inventory Levels 

1. The BFAD shall collect data on essential drug prices classified as basic necessities at 

the manufacturing, importation, wholesale, and retail level of the distribution chain. The 

BFAD may accomplish this through its FDROs, through consumer groups, or both. 

2. Data on drug retail prices and inventory shall be primarily obtained from three (3) 

general target sources per administrative region or per area of responsibility (AOR) of 

the CHD on a monthly basis. The data sources are the following: 

a. Hospital Pharmacy of the Private Hospital that accommodated the highest 

number of patients (in-and-out patients) in the preceding year; 

b. Hospital Pharmacy of the DOH Retained Hospital that accommodated the 

highest number of patients (in-and-out patients) in the preceding year; 

c. The biggest private drugstore chain operating within the AOR of the CHD. 

The BFAD in coordination with the National Center for Health Facilities Development 

(NCHFD), Bureau of Health Facilities Services (BHFS), and the CHDs shall identify the 

three (3) target data sources per CHDs from which regular monitoring shall be performed. 

The data from drugstore chains shall be collected by BFAD from its frontline 



742 


FDROs within one (1) week after the end of each month and shall thereafter be submitted 

by the BFAD to the NDPP within one (1) week from its consolidation. On the other hand, 

data from hospital pharmacies shall be collected by the PHIC at the same frequency and 

shall also be submitted to the NDPP. 

3. All wholesalers of essential drugs shall be required to submit their wholesale price and 

inventories sold to retail outlets to the BFAD within one (1) week at the end of each 

quarter. Such submissions may be through traditional snail mail, or through electronic 

means. The BFAD shall thereafter submit the consolidated data to the NDPP within one 

(1) week. 

4. All manufacturers, importers, and distributors of essential drugs shall be required to 

submit their factory gate prices and sales information to the BFAD within one (1) week at 

the end of each quarter. Such submissions may be through traditional snail mail, or 

through electronic means. The BFAD shall thereafter submit the consolidated data to the 

NDPP within one (1) week. 

5. Information data requirements (IDR) on drug prices and inventory levels shall be part 

of the performance evaluation of all drug retail outlets and wholesalers for the issuance 

and renewal of their License to Operate (LTO). For the initial issuance of LTO, drug retail 

outlets, wholesalers, manufacturers, importers and distributors shall be compelled to concur 

for the submission of said IDRs as a condition for the release of their LTO. However, 

data gathering from the drug retail outlets, except those identified as regular targets for 

monitoring (as described in V.C.2) shall be performed in accordance with the approved 

inspection schedules of frontline FDROs and until such time that outlets are electronically 

link with BFAD as a consequence of the incipient modernization of the latter. 

6. The NDPP shall prepare the necessary reports and analysis to be approved by the 

Chair of the EDPMOC, ìBy Authority of the Secretaryî, that are for presentation to final 

data and information recipients such as the general public or the National Price Coordinating 

Council and other interested and authorized parties. Such reports and analyses 

must be prepared by the NDPP within one (1) week every after submission of the consolidated 

inventory and price data from BFAD. 

D. Preventive Measures on Price Manipulation 

1. Final approved reports on drug prices and inventories must all be posted and updated 

in the DOH website on a regular basis. A special web-based window shall be created to 

this effect. 

2. The NDPP shall conduct drug price surveillance of essential drugs classified as basic 

necessities using the drug prices of equivalent medicines available in the international 

market. An analysis shall be made by the same unit to compare the price of the subject 

goods with those that are domestically available. Such price surveillance in the international 

market shall be done at least once a year. 

3. The BFAD shall include in their essential task list for inspecting drug retail outlets 

indicators that would ensure compliance to the display of price tags and the conspicuous 

display, availability of an updated price menu books. Such requirement shall be included


in the performance evaluation criteria of drug retail outlets for the issuance and renewal 

of their LTO. 

4. Display of Information, Education and Communication (IEC) materials issued by the 

Department of Health, which provide advice and information to the public to exercise their 

freedom of choice by asking for available generic equivalent of their sought drugs shall 

be mandatory to all drug retail outlets. Information that shall be included in the said IEC 

materials must contain telephone hotline, e-mails of the DOH unit responsible for monitoring 

compliance to the laws and other statutes implemented by the DOH. 

E. Organization Support Structures 

1. Composition of the Essential Drug Price Monitoring Oversight Committee (EDPMOC) 

a. The EDPMOC shall be Chaired by a DOH official who is at least third 

ranking or an Assistant Secretary. 

b. The ex-officio vice-Chair of the EDPMOC shall be the Director of the Bureau 

of Food and Drugs. 

c. The Program Manager of the NDPP shall serve as the Head of the EDPMOC 

Secretariat. 

d. The Directors and Vice President of the following units of the DOH shall 

serve as permanent members of the EDPMOC: 

i. National Center for Health Facilities and Development (NCHFD) 

ii. Health Policy and Planning Development Bureau (HPPDB) 

iii. Bureau of Local Health and Development (BLHD) 

iv. Bureau of International Health Cooperation (BIHC) 

v. Philippine Health Insurance Corporation (PHIC) 

vi. Information Management Service (IMS) 

e. Non-permanent members of the EDPMOC shall include the following: 

i. Chairperson of the National Formulary Committee 

ii. Director of the Bureau of Consumer Welfare and Protection 

iii. Representative(s) from the academe as resource person(s) for specific 

topics or to assess and to improve on the data collection methodology. 

iv. Representative (s) from the pharmaceutical industry as resource person(s) 

to specific topics 

2. Duties and Responsibilities of the EDPMOC 

a. The primary duties of the EDPMOC are as follows: 

i. Review all activities undertaken to implement the Generics Law and Price 

Act.

744 


ii. Recommend to the Secretary of Health mandated price ceilings of essential 

drugs when conditions under Section 7 of the Price Act become prevalent. 

iii. Review and approve policy statements, pronouncement and informational 

materials relating to essential drug prices. 

iv. Directs the NDPP to coordinate with other Agencies of the Government 

and other parties for the development of ways and means that would enhance 

access to essential drugs. 

v. Submits annual accomplishment report to the Secretary of Health 

vi. Reviews and approves the Operational Plan of the NDPP in implementing 

the EDPMS 

vii. Implement other specific instructions given by the Secretary of Health 

relating to essential drug prices and access issues 

b. The primary duties of the NDPP as EDPMOC Secretariat are as follows: 

i. Provides administrative support to the EDPMOC. 

ii. Provides secretariat work in support of the EDPMOC. 

iii. Conducts research and development analyses using input data from 

other units of the DOH and other penalties. 

iv. Main DOH coordinating for inter-agency works and intra-DOH unit works 

relating to essential drug price monitoring. 

v. Conduct IEC Campaign strategies and partnership development works 

that would enhance institutional support to the EDPMS. 

vi. Prepares annual accomplishment report in implementing the EDPMS. 

vii. Submits work and financial plan and operational plan to the EDPMOC 

for the implementation of the EDPMS. 

viii. Maintains essential databases and other forms archive and retrieval 

systems for the implementation of the EDPMS. 

F. Sanctions for Non-Compliance 

1. Pursuant to Section 10, No. 11 of the Price Act, and Rule IV, Section 8 of its IRR the 

DOH may impose the following sanctions to drug establishments who fail to comply with 

the submission of Informational Data Requirements and other tangible proofs that preclude 

asymmetric information on drug prices in the following calibrated order:


a. 1st Offense: Written Warning; 

b. 2nd Offense: Suspension of LTO until proof of compliance is submitted; 

c. 3rd Offense: Revocation of LTO 

2. Officers of the DOH who failed to submit the required reports and other duties required 

hereof shall be sanctioned based on the appropriate provisions of the Laws and 

statutes governing employees and officers of the Government. 

VI. Coordinating Instructions and Transitory Provisions 

1. The BFAD shall implement in its automation and modernization program the capture of 

informational data requirements (IDRs) on drug prices and inventory through electronic 

means. 

2. The submission of IDRs through electronic means on drug prices and inventories of all 

essential drugs from all drug establishments shall be made as an integral part of the 

requirements for the issuance and LTOs that must be carried out in a mandatory fashion 

within one (1) year from the effectivity of this Order. 

3. The EDPMOC and the BFAD shall accredit Peopleís Organizations, Non-Government 

Organization or other parties of the Third Sector who may act as force multiplier in 

monitoring essential drug prices and inventory levels that would provide institutionalized 

assistance to the current manpower of BFAD. A specific mechanism that will provide 

procedures on the deputization of individual drug price watch officers shall be designed 

by the EDPMOC that shall be released through a supplemental issuance. 

4. The IMS shall give priority in providing institutional support to BFAD in ensuring the 

development and deployment of the essential information structure as described in this 

Order. 

VII. Annexes 

Annex A - Essential Drug Price and Inventory Level Form Template 

VIII. Separability Clause 

If any provision in these Guidelines, or application of such provision to any circumstance, 

is held invalid, the remainder of these Guidelines shall not be affected thereby. 

IX. Repealing Clause 

The provisions of previous issuances, which are inconsistent with those provided in 

this Order, are hereby rescinded and modified accordingly. 

X. Effectivity 

This Order shall be effective immediately. 

Adopted: 14 Feb. 2006

746 



(SGD.) FRANCISCO T. DUQUE III, MD, MSc 


--o0o-- 


Revised Implementing Rules and Regulations of Executive Order No. 51, 

Otherwise Known as the ìMilk Code, Relevant International Agreements, 

Penalizing Violations Thereof, and for Other Purposes 

WHEREAS, Section 15 Article II of the 1987 Constitution of the Philippines states 

that ìThe State shall protect and promote the right to health of the people and instill health 

consciousness among themî; 

WHEREAS, Section 2, Article II of the 1987 Constitution of the Philippines states in 

part that ìThe Philippines x x x adopts the generally accepted principles of international 

law as part of the law of the land x x x ì; 

WHEREAS, the Philippines has adopted the WHO and UNICEF ì2002 Global Strategy 

on Infant and Young Child Feedingî, and the various World Health Assembly Resolutions 

to implement the same, and therefore is legally and morally obligated to follow their 

provisions. 

WHEREAS, towards this end, the State shall support the ì2002 Global Strategy on 

Infant and Young Child Feedingî and exerts efforts to address the provision of safe and 

adequate nutrition for infants and young children, by the protection, promotion and support 

of breastfeeding. 

WHEREAS, the WHO/UNICEF Global Strategy on Infant and Young Children Feeding 

recommends not only exclusive breast milk for newborns, but also indigenous, fresh 

and natural foods in combination with continued breastfeeding for infants and young 

children. It is guided by the World Health Assembly Resolutions, Codex Alimentarius, and 

consistent with national laws or national policies; 

WHEREAS, adequate and proper nutrition is an important and universally recognized 

component of each childís right to the enjoyment of the highest attainable standard 

of health as provided for in the United Nations Convention on the Rights of the Child, 

which the Philippine Senate, in accordance with its constitutional prerogative under Section 

21, Article VII, of the 1987 Constitution, ratified on July 26, 1990, and which mandates 

the Philippines to implement various international agreements relevant to Infant and 

Young Child Feeding; 

WHEREAS, the use of breastmilk, which is widely recognized as the best source of 

nutrition for babies, promotes the development of emotional bonding between the mother 

and child, bestows upon the newborn infant protection against infection, provides for the 

mother natural contraception after delivery, and protects the mothers from closely spaced 

pregnancy.


WHEREAS, with the resultant healthier population and the reduction in infant and 

under five mortality rates, the country will be closer in reaching its targets for the Millenium 

Development Goals; 

WHEREAS, breastfeeding is the most far-reaching and the least costly strategy for 

the alleviation of poverty. 

NOW, THEREFORE, Pursuant to the authority under Section 12 (b) (1) of Executive 

Order No. 51 dated 20 October 1986, otherwise known as ìNational Code of Marketing 

of Breastmilk Substitutes, Breastmilk Supplements and Related Products,î the Department 

of Health, through the Honorable Secretary of Health, hereby promulgate the 

ensuing revised rules and implementing regulations: 

Rule 1 

Enabling Provisions 

SECTION 1. Title - The following shall be referred to as the ìRevised Implementing 

Rules and Regulations of Executive Order No. 51, otherwise known as the ìMilk Codeî, 

Relevant International Agreements, Penalizing Violations Thereof, and For Other Purposes.î 

SECTION 2. Purpose - These Revised Rules and Regulations are hereby promulgated 

to ensure the provision of safe and adequate nutrition for infants and young children 

by the promotion, protection, and support of breastfeeding and by ensuring the 

proper use of breastmilk substitutes, breastmilk supplements and related products when 

these are medically indicated and only when necessary, on the basis of adequate information 

and through appropriate marketing and distribution. 

SECTION 3. Scope and Coverage - These Revised Rules and Regulations shall 

apply to the marketing, and practices related thereto, of the following products: breastmilk 

substitutes, including infant formula: other milk products, foods and beverages, including 

bottle-fed complementary foods, when marketed or otherwise represented to be suitable, 

with or without modification, for use as a partial or total replacement of breastmilk, feeding 

bottles and teats. It also applies to their quality and availability, and to information 

concerning their use. 

SECTION 4. Declaration of Principles - The following are the underlying principles 

from which the revised rules and regulations are premised upon: 

a. Exclusive breastfeeding is for infants from 0 to six (6) months. 

b. There is no substitute nor replacement for breastmilk. 

c. Appropriate and safe complementary feeding should start from six months onwards in 

addition to breastfeeding. 

d. Breastfeeding is still appropriate for young children up to two (24months) years of age 

or beyond.

748 


e. Infant or milk formula may be hazardous to a childís health and damage childís formative 

development. 

f. Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and 

other related products are prohibited. 

g. Other related products such as, but not exclusive of, teats, feeding bottles, and artificial 

feeding paraphernalia are prohibited in health facilities. 

h. Government and all concerned stakeholders must continuously accomplish an information, 

dissemination campaign/strategy, and do further research on the advantages of 

breastmilk and the hazards of breastmilk substitutes or replacements. 

i. Milk companies, and their representatives, should not form part of any policymaking 

body or entity in relation to the advancement of breastfeeding. 

Rule II 

Definition of Terms 

SECTION 5. Definition of Terms - For purposes of these Revised Rules and Regulations, 

the term: 

a. ìAdvertisingî refers to any representation by any means whatsoever for the purpose of 

promoting the sale or distribution of breastmilk substitutes/supplements and other related 

products under the scope of this Code; 

b. ìBFADî refers to the Bureau of Food and Drugs of the Department of Health; 

c. ìBreastmilk substituteî means any food being marketed or otherwise represented as 

partial or total replacement of breastmilk whether or not suitable for that purpose; 

d. ìCommitteeî shall refer to the Inter-Agency Committee created under E.O. No. 51, s. 

1986 composed of the Secretary of Health, as Chairman, and the Secretary of Trade and 

Industry, the Secretary of Justice, and the Secretary of Social Welfare and Development, 

as members; 

e. ìComplementaryî means any food, except milk substitutes, whether manufactured or 

locally prepared, suitable as a complement to breastmilk to satisfy the nutritional requirements 

of the infant; 

f. ìContainerî means any form of packaging of products for sale as a normal retail unit, 

including wrappers; 

g. ìDistributorî means a person, corporation or any other entity in the public or private 

sector engaged in the business (whether directly or indirectly) of marketing at the wholesale 

or retail level a product within the scope of this Code; 

h. ì DoHî refers to the Department of Health;


i. ìExclusive breastfeedingî means giving only breastmilk without water, liquids, teas, 

herbal preparations, or other food and fluid intake for the first six months of life; 

j. ìGifts of any sortî means any form of financial, personal or commercial reward, inducement, 

incentives and other favors provided directly or indirectly by manufacturers, distributors, 

and their representatives, of products within the scope of the Code; 

k. ìHealth Care systemî means governmental, non-governmental or private institutions or 

organizations engaged, directly or indirectly, in health care for mothers, infants and 

pregnant women; and nurseries or child care institutions; 

l. ìHealth Facilitiesî means health care systems including but not limited to health centers, 

clinics, birthing and parenting classes venues, hospitals, maternal centers/clinics, birthing 

homes, barangay health stations, health and nutrition posts and lying in clinics; 

m. ìHealth Workerî means a person working in a component of such health care system, 

whether professional or non-professional, including volunteer workers. It also includes 

health workers in private practice. Traditional and other birth attendants, their assistants 

and other community volunteers involved in health and nutrition promotion and education 

shall likewise be covered; 

n. ìInfantî shall refer to a person within the age bracket of 0-12 months; 

o. ìInfant Formulaî means one of the breastmilk substitutes formulated industrially in 

accordance with applicable Codex Alimentarius Standards; 

p. ìLabelî means any tag, brand, mark, pictorial or other descriptive matter, written, 

printed, stenciled, marked, embossed or impressed on, or attached to, a container of any 

product within the scope of this Code; 

q. ìLatching onî means that with the assistance of the health worker and immediately 

after its delivery, the infant is placed to the breast of the mother in order to initiate 

suckling; 

r. ìManufacturerî means a corporation or other entity in the public or private sector 

engaged in the business or function (whether directly or through an agent or an entity 

controlled by or under contract with it) of manufacturing a product within the scope of 

this Code; 

s. ìMarketing firmî refers to an entity that does marketing or provides marketing services; 

t. ìMarketing Materialsî and/or ìservicesî means the promotion, distribution, selling, advertising, 

public relations, information services, internet promotion and communication 

and information dissemination, in whatever form, including but not necessarily limited to, 

mail, email, text messages, telephone calls, website advertising, television, motion pictures, 

stage plays and radio programs, whether live or taped; 

u. ìMarketing personnelî means any person whose functions involve the marketing of a 

product or products within the scope of this Code;

750 


v. ìMedically Indicatedî means special milk formula indicated for infants with inborn errors 

of metabolism, i.e. galactosemia, phenylketonuria* and maple syrup urine disease; 

w. ìMilk companyî shall refer to the owner, manufacturer, distributor, of infant formula, 

follow-up milk, milk formula, milk supplement, breastmilk substitute or replacement, or by 

any other description of such nature, including their representatives who promote or 

otherwise advance their commercial interests in marketing those products; 

x. ìNatural and indigenous foodî means locally grown or produced foods which are 

neither artificial nor processed; 

y. ìOther milk products, foods and beveragesî refers to any provision or drink marketed 

as a partial or total replacement of breastmilk; 

z. ìOther related productsî refers to all materials used to administer breastmilk substitutes; 

such as, but not limited to, feeding bottles, teats and other artificial feeding paraphernalia; 

aa. ìProducts within the scope of this Codeî shall pertain to breastmilk substitutes and 

infant formula, including bottle-fed complementary foods, as well as teats and other commodities 

which intend to replace or substitute, in whole or in part, breastmilk and 

breastfeeding; 

bb. ìPromotionsî means employing any method, scheme, or design, of directly or indirectly, 

encouraging or enticing people, or group of person, in whatever form, whether by 

chance or skill, to purchase or acquire products within the scope of the Code; 

cc. ìSampleî refers to single or small quantities of a product provided for free; 

dd. ìSponsorshipsî shall refer to milk companies, and their agents/representatives, hosting, 

initiating, or otherwise providing games, sport or cultural events, charities, dances/ 

balls, conventions, meetings, youth and women seminars or classes, and other like activities, 

for the purpose of promoting, directly or indirectly, their products covered within the 

scope of this Code; 

ee. ìSuppliesî refers to quantities of a product provided for use over an extended period, 

free or at a low price, for social purposes, including those provided to families in need. 

ff. ìYoung Childî means a person from the age of more than twelve (12) months up to the 

age of three (3) years (36 months). 

Rule III 

Information and Education 

SECTION 6. Responsibility - The Department of Health shall take measures to 

promote, protect, support and monitor appropriate infant and young child feeding (IYCF) 

practices. IYCF practices include the following: 

- Proper Latching-on immediately after birth and initiation of breastfeeding 

within the first thirty (30) minutes thereafter.


- exclusive breastfeeding from 0-6 months 

- appropriate complementary feeding from 6 months onwards 

- continuous breastfeeding up to two (2) years of age or beyond 

The goals will be achieved by providing women access to the support that they 

require - in the family, the community, and the workplace. DOH shall provide objective, 

updated and consistent information and training of health workers and the general public 

on infant and young child nutrition in partnership with the local governments and civil 

societies without any conflict of interest. 

SECTION 7. Hazards and Complete Information on Breastmilk - 

Substitutes and Replacements - It is the responsibility of the State to inform the general 

public on the hazards of the production, preparation and use of breastmilk substitutes 

and other products covered by the Code. When medically indicated and only when 

necessary, the use of breastmilk substitutes is proper if based on complete and updated 

information. 

SECTION 8. Information and Education - The government shall ensure that objective 

and consistent information is provided on infant and young child feeding, for use by 

families and those involved in the field of infant nutrition. This responsibility shall cover the 

planning, provision, design and dissemination of information, and the control thereof. 

a. In this regard, the Department of Health in collaboration with the national agencies, 

local government units, including non-governmental organizations and members of civil 

society, shall: 

a.1 Plan, provide, design, disseminate and regulate information related to 

infant and young child nutrition and the implementation of the Milk Code; 

a.2 Formulate and implement a communication plan, which among others will 

indicate key messages on infant and young child nutrition; 

a.3 Create a Technical Working Group to serve as a clearing house for all 

information and training materials on infant and young child nutrition and the 

Milk Code; and 

a.4 Assist Local Government Units (LGUís) and other partners in developing 

strategies to promote breastfeeding and infant and young child nutrition. 

b. Informational and educational materials intended to reach pregnant women and mothers 

of infant, including women of reproductive age, which materials shall include clear 

information on all of the ensuing; (1) the benefits and superiority of breastfeeding; (2) 

maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the 

negative effect on breastfeeding of introducing partial bottle-feeding; (4) the difficulty of 

reversing the decision not to breastfeed; and (5) where needed, the proper use of infant 

formula, whether manufactured industrially or home-prepared. When such materials 

contain information about the use of infant formula, they shall include the social and 

financial implications of its use; the health hazards of inappropriate foods or feeding

752 


methods; and in particular, the health hazards of unnecessary or improper use of infant 

formula and other related products including information that powdered infant formula 

may contain pathogenic microorganisms and must be prepared and used appropriately. 

c. The promotion, protection and support of breastfeeding and the proper implementation 

of the Milk Code shall be an integral part of all information, education, and communication 

plans and training activities of the Department of Health (DoH), as well as that of the 

Department of Education (DEPED), Department of Social Welfare and Development 

(DSWD), Local Government Units (LGUs), and other such concerned agencies/individuals. 

Rule IV 

Research 

SECTION 9. Research, Ethics Committee, Purpose - The DOH shall ensure that 

research conducted for public policy purposes, relating to infant and young child feeding 

should, at all times, be free from any commercial influence/bias; accordingly, the health 

worker or researcher involved in such must disclose any actual or potential conflict of 

interest with the company/person funding the research. In any event, such research and 

its findings shall be subjected to independent peer review. Towards accomplishing these 

ends; 

a. Assistance for research and clinical trials given by manufacturers and distributors are 

allowed only upon approval by an ethics committee led by DOH. The same committee 

shall monitor said researchers. 

b. The researchers shall be conducted in accordance with an approved protocol. Any 

changes in the protocol after it has been approved will be subject to a new review and 

approval by the Ethics Committee. 

c. Assistance for research maybe allowed subject to the following conditions: 

c.1 Researchers involving well or ill infants and children as subject shall be 

limited to physiological factors and therapeutic studies; 

c.2 These studies should in no case be harmful to the subject; and 

c.3 Should be limited to those with potential benefits for the particular subject. 

d. Recipients of research awards shall not allow themselves, their organizations or their 

subjects, to be used directly or indirectly for any promotional activity related to products 

within the scope of the Code. These may be by way of display of posters and streamers 

patronizing the Company, their products, and/or as lecturers/speakers or testimonials in 

the promotion of the products that undermine breastfeeding. 

e. Assistance for support of laboratory costs, reagents and other materials shall be allowed 

only upon approval and review by the Ethics Committee regarding their use based 

on a submitted protocol.


SECTION 10. Public Disclosure - For transparency purposes, a disclosure and/or 

disclaimer of the sponsoring company should be done by the company itself, health 

worker researcher involved through verbal declaration during the public presentation of 

the research and in print upon publication. 

Rule V 

Advertising, Promotion, Marketing and Sponsorships 

SECTION 11. Prohibition - No advertising, promotions, sponsorships, or marketing 

materials and activities for breastmilk, substitutes intended for infants and young children 

up to twenty-four (24) months, shall be allowed, because they tend to convey or give 

subliminal messages or impressions that undermine breastmilk, and breastfeeding or 

otherwise exaggerate breastmilk substitutes and/or replacements, as well as related products 

covered within the scope of this Code. 

SECTION 12. Authority of the Inter-Agency Committee (IAC) - The Inter Agency 

Committee (IAC) shall review all advertising, promotion or other marketing materials, 

whether written, audio, visual, cinema, theater, audio-visual and electronics, including but 

not limited to mail, email, text messages, telephone calls and website advertising, and for 

communication and information dissemination in any form, for products within the scope 

of this Code. 

The Committee shall develop/update substantive and procedural guidelines 

for reviewing advertising, promotional and marketing materials, including its 

screening when deemed appropriate. All such materials must have been approved 

and consented to in writing by the Committee before the Companyís 

first public or commercial exhibition. 

All approved advertisement and/or promotional materials for milk supplements, 

complementary food, feeding bottles and teats and related products 

must bear the messages both in English and in Filipino. 

The DOH based on the latest scientific information and products may modify 

the messages, provided that wide dissemination of the message to all concerned 

is ensured. 

SECTION 13. Total Effect - Promotion of products within the scope of this Code 

must be objective and should not equate or make the product appear to be as good or 

equal to breastmilk or breastfeeding in the advertising concept. It must not in any case 

undermine breastmilk or breastfeeding. The ìtotal effectî should not directly or indirectly 

suggest that buying their product would produce better individuals, or resulting in greater 

love, intelligence, ability, harmony or in any manner bring better health to the baby or 

other such exaggerated and unsubstantiated claim. 

SECTION 14. Prior Written Consent and Approval of Committee - No advertising, 

promotion or other marketing materials whether written, audio, visual, audio-visual, and 

electronic for products within the scope of this Code, which are marketed as partial or 

total replacement of breastmilk, including bottle-fed complementary foods shall be printed, 

published, distributed, exhibited, and broadcasted or in any manner released to the public 

without the prior written consent and approval of the Committee.

754 


No blanket or general approval shall be allowed. Such written approval must be 

specific in product and time bound. 

SECTION 15. Content of Materials - The following shall not be included in advertising, 

promotional and marketing materials: 

a. Texts, pictures, illustrations or information which discourage or tend to undermine the 

benefits or superiority of breastfeeding or which idealize the use of breastmilk substitutes 

and milk supplements. In this connection, no pictures of babies and children together with 

their mothers, fathers, siblings, grandparents, other relatives or caregivers (or yayas) 

shall be used in any advertisements for infant formula and breastmilk supplements; 

b. The term ìhumanized, ìmaternalizedî, ìclose to motherís milkî or similar words in 

describing breastmilk substitutes or milk supplements; 

c. Pictures or texts that idealize the use of infant and milk formula. 

Rule VI 

Prohibited Acts 

SECTION 16. All health and nutrition claims for products within the scope of the 

Code are absolutely prohibited. For this purpose, any phrase or words that connotes to 

increase emotional, intellectual abilities of the infant and young child and other like phrases 

shall not be allowed. 

SECTION 17. False or misleading information or claims of products within the 

scope of the Code are prohibited. 

SECTION 18. No financial or material inducements or gifts of any sort to promote 

products within the scope of this Code shall be offered or given by milk companies nor 

accepted by health workers and/or members of their families. 

SECTION 19. Manufacturers, distributors and marketing firms or their representatives 

of products within the scope of this Code are prohibited from donating or giving 

directly or indirectly, samples and supplies to any member of the general public, to 

hospitals, and other health facilities, including their personnel and members of the families. 

SECTION 20. Manufacturers, distributors and marketing firms or their representatives 

of product within the scope of this Code are prohibited from using the health workers 

and the health care system in the dissemination, distribution and promotion of products 

within the scope of the Code. 

SECTION 21. Gifts of any sort from milk companies/manufacturers, distributors 

and representatives of products within the scope of this Code, with or without company 

name or logo or product or brand name shall not be given to any member of the general 

public, to hospitals and other health facilities, including their personnel and members of 

their families.


SECTION 22. No manufacturer, distributor or representatives of products covered 

by the Code shall be allowed to conduct or be involved in any activity on breastfeeding 

promotion, education, and production of Information, Education, and Communication 

(IEC) materials on breastfeeding, holding of or participating as speakers in classes or 

seminars for women and children activities and to avoid the use of these venues to market 

their brands or company names. 

SECTION 23. There shall be no point of sale advertising, giving of samples or any 

promotion devices to include sales directly to the consumers at the retail level, such as 

special displays, discount coupons, premiums, rebates, special sales, bonus and tie-in 

sales, loss-leaders, prices or gifts for the products within the scope of this Code. 

SECTION 24. Neither the container nor the label of milk products within the scope 

of this Code shall have pictures of babies and children together with their mothers, fathers, 

siblings, grandparents, other relatives or caregivers (or yayas) or such other pictures 

and graphics of similar import. 

Rule VII 

Containers/Labels 

SECTION 25. Appropriate Use - Containers and labels shall be designed to provide 

the necessary information about the appropriate use of the products within the 

scope of the Code and in such a way as not to undermine, or equate it to, breastfeeding. 

SECTION 26. Content - Each container/label shall contain such message, in both 

Filipino and English languages, and which message cannot be readily separated therefrom, 

relative to the following points: 

a. The words or phrase ìImportant Noticeî or ìGovernment Warningî or their equivalent; 

b. A statement of the superiority of breastfeeding; 

c. A statement that there is no substitute for breastmilk; 

d. A statement that the product shall be used only on the advice of a health worker as to 

the need for its use and the proper methods of use; 

e. Instructions for appropriate preparation, and a warning against the health hazards of 

inappropriate preparation, and 

f. The health hazards of (the use) unnecessary or improper use of infant formula and 

other related products including information that powdered infant formula may contain 

pathogenic microorganisms and must be prepared and used appropriately. 

SECTION 27. Infant Feeding Warning - Food products within the scope of this 

Code marketed for infant feeding, which do not meet all the requirements of an infant 

formula but which can be modified to do so, shall carry on the label, a warning that the 

unmodified product should be the sole source of nourishment of an infant.

756 


SECTION 28. BFADís Authority - The labels of food products within the scope of 

this Code shall, in addition to the requirements in the preceding paragraphs, conform to 

the rules and regulations of the BFAD. 

Rule VIII 

Quality and Standard 

SECTION 29. Quality - The quality of products is an essential element for the 

protection of the health of infants and young children and therefore shall be of highly 

recognized standard. 

SECTION 30. Standards - Food products within the scope of this Code shall, when 

sold or otherwise distributed, meet applicable standards recommended by the Codex 

Alimentarius Commission and also the Codex Code of Hygienic Practice for Foods for 

Infants and Children. 

SECTION 31. Against Adulteration and the Like - To prevent quality deterioration, 

adulteration, or contamination of food products within the scope of this Code, distribution 

outlets, shall not be allowed to open cans and boxes for the purpose of retailing them by 

the cup, bag or in any other form. 

Rule IX 

Health Workers and the Health Care System 

SECTION 32. Primary Responsibility of Health Workers - It is the primary responsibility 

of the health workers to promote, protect and support breastfeeding and 

appropriate infant and young child feeding. Part of this responsibility is to continuously 

update their knowledge and skills on breastfeeding. No assistance, support, logistics or 

training from milk companies shall be permitted. 

SECTION 33. Role of Academe and Others - The academe and allied health 

institutions shall ensure basic education and training of Infant and Young Child Feeding 

(ICYF) and lactation management. 

SECTION 34. Classes, Seminars for Women - In order to protect women of reproductive 

age, including pregnant mothers, milk companies and their representatives, shall 

not be allowed to hold any activity in the guise of classes, seminars, recreation activities, 

fora, and the like, regardless whether or not such activities are intended to promote the 

products covered by the Code. 

SECTION 35. No Promotions - The health workers and the health care system 

shall not be used for dissemination, distribution and promotion of products within the 

scope of this Code. No health care facility should be used for promotions of products 

within the scope of this Code nor as venues that undermine breastfeeding. 

Rule X 

Monitoring and Implementation 

SECTION 36. Monitoring, Implementation, Functions - The Department of Health 

shall be primarily responsible for the monitoring, implementation and enforcement of the 

Milk Code and these Implementing Rules and Regulations.


In coordination with other agencies involved in the implementation of the Code, 

the Department shall adopt such appropriate monitoring guidelines for the 

national, regional and provincial levels. It shall likewise provide regular training 

on monitoring compliance and enforcement on violations of the Milk Code for 

all persons engaged in or volunteering to help in the monitor and implementation 

of the Code. The Department may request for the assistance of nongovernmental 

organizations, civil society, and concerned international agencies 

in order to better monitor the implementation of these rules. 

Accordingly, a monitoring team, composed of the ensuing, is hereby created and 

established: 

National Level: 

- National Center for Disease Prevention and Control (NCDPC) 

- National Center for Health Facilities and Development (NCHFD) 

- Government/Non-government Organizations/Civil Societies without any conflict 

of interest with the breastfeeding culture, and/or direct or indirect connection, 

financial or otherwise, or with commercial interest within the scope of the 

Code 

- Ad Hoc International Agencies such as the United Nations Childrenís Emergency 

Fund (UNICEF) and/or the World Health Organization (WHO) 

Regional/Provincial/City/Municipal/Barangay Levels (in collaboration with their 

respective Local Government Units): 

- Center for Health Development Offices 

- Provincial Health Offices 

- City Health Offices 

- Municipal Health Offices/Rural Health Units 

- Barangay Health Office 

- GOs/NGOs/Civil Societies 

The Monitoring Team shall have the following functions: 

- Monitors compliance as well as problems encountered in the implementation 

of the Milk Code. 

- Reviews/acts on reports of violations of the provisions of the Code. 

- Verifies reports of violations of the Milk Code. 

- Monitors Labels of products within the scope of the Code and marketing 

practices in various distribution centers. 

- Recommends sanctions or punitive actions for violations of the Milk Code to 

the Bureau of Food and Drugs 

- Submits regular reports on the status of the Milk Code implementation to the 

Bureau of Food and Drugs. 

SECTION 37. Report to the Secretary of Health - Monitoring Teams comprised of 

duly accredited teams from non-governmental organizations, and/or civil society may 

report their findings to the Office of the Secretary of Health who shall appropriately 

respond thereto with sufficient dispatch.

758 


SECTION 38. Role of DoH/BFAD in IAC - The Department of Health shall convene 

and chair the Inter-Agency Committee (IAC) with BFAD acting as its Member/Secretariat. 

Rule XI 

Filing of Administrative and Criminal Complaint 

SECTION 39. Role of Bureau of Food and Drugs (BFAD) - The Bureau of Food 

and Drugs (BFAD) shall investigate and verify reports of violations; when appropriate, 

apply administrative sanctions against the violators; and/or file criminal complaints against 

persons and entities found to have violated, singly or repeatedly, the provisions of the 

Code or these implementing rules and regulations. 

SECTION 40. National Level Violations - Reports of violations of the Milk Code 

committed at the national level shall be filed and investigated at the Bureau of Food and 

Drugs. 

SECTION 41. Regional/Provincial Level Violations - Problems/violations arising at 

the regional/provincial levels shall be filed, investigated and resolved at these levels. The 

regional/provincial level shall notify BFAD of any action taken relative to the aforesaid 

problems/violations. Violations that require prosecution or imposition of administrative 

sanction as stated in these rules shall be elevated to the BFAD for appropriate action. 

SECTION 42. Meaning of National/Regional Provincial Level Violations - When 

the violation consists of commercial exhibition or advertisement for those products within 

the scope of this Code and found in areas beyond regions, then the violation is deemed 

to be national. When found or existing in a specific region only, then regional and so on 

down to the other geographical areas. 

SECTION 43. Issuance of Cease and Desist Orders (CDOs) -Immediately upon 

receipt of the report of violation, the investigating officer shall conduct an ex parte examination 

of the evidence presented. If a prima facie case is established, a Cease and 

Desist Order (CDO) shall be issued by the BFAD Director or the DOH Regional Director, 

as the case may be. 

Non-compliance with the CDO shall be ground for the imposition of administrative 

sanctions as stated in Section 47 (f) hereof. The issuance of the CDO 

shall be without prejudice to the imposition of the appropriate administrative 

sanction, if so warranted, after due notice and hearing. 

SECTION 44. Authority of the IAC to Issue CDO. - The IAC Secretariat shall have 

the authority to determine if any advertising, marketing, or promotional material violates 

these Rules and Regulations. In such case, the IAC Secretariat shall issue a CDO, 

signed by the IAC Chairperson stopping the further release, printing, broadcast, or dissemination 

of the violative advertising, marketing, or promotional material. 

In instances where the CDO is not complied with, the rules stated in the 

second paragraph of the preceding section shall apply.


SECTION 45. Role of the Department of Justice - The Department of Justice 

(DoJ) shall cause the criminal prosecution of the violators of this Code. 

Rule XII 

Administrative Sanctions 

SECTION 46. Administrative Sanctions - The following administrative sanctions 

shall be imposed upon any person, juridical or natural, found to have violated the provisions 

of the Code and its Implementing Rules and Regulations. 

a. 1st violation - Warning; 

b. 2nd Violation - Administrative fine of a minimum of Ten Thousand (P10,000.00) to Fifty 

Thousand (P50,000.00) Pesos depending on the gravity and extent of the violation, including 

the recall of the offending product; 

c. 3rd violation - Administrative Fine of a minimum of Sixty Thousand (P60,000.00) to 

One Hundred Fifty Thousand (P150,000.00) Pesos, depending on the gravity and extent 

of the violation, and in addition thereto, the recall of the offending product, and suspension 

of the Certificate of Product Registration (CPR); 

d. 4th violation - Administrative Fine of a minimum of Two Hundred Thousand (P200,000.00) 

to Five Hundred (P500,000.00) Thousand Pesos, depending on the gravity and extent of 

the violation, and in addition thereto, the recall of the product, revocation of the CPR, 

suspension of the License to Operate (LTO) for one year; 

e. 5th and succeeding repeated violations - Administrative fine of One Million 

(P1,000,000.00) Pesos, the recall of the offending product, cancellation of the CPR, 

revocation of the License to Operate (LTO) of the company concerned, including the 

blacklisting of the company to be furnished the Department of Budget and Management 

(DBM) and the Department of Trade and Industry (DTI); 

f. An additional penalty of Two Thousand Five Hundred (P2,500.00) Pesos per day shall 

be made for every day the violation continues after having received the order from the 

IAC or other such appropriate body, notifying and penalizing the company for the infraction. 

For purposes of determining whether or not there is ìrepeatedî violation, each 

product violation belonging or owned by a company, including those of their subsidiaries, 

are deemed to be violations of the concerned milk company and shall not be based on 

the specific violating product alone. 

SECTION 47. Fees, Charges and Fines - All fees collected, charges imposed and 

administrative fines that have accrued as a consequence of the implementation of these 

Rules shall be for the account and income of the Bureau of Food and Drugs. 

SECTION 48. Against Public Employees - In accordance with the Administrative 

Code and pertinent Civil Service Rules and regulations, erring government employees 

found to be liable, and depending on the gravity of said violation, shall be imposed the 

appropriate penalty by the disciplining authority.

760 


SECTION 49. Liability of Manufacturers/Distributors - Manufacturers and Distributors 

of the products covered by the Code shall be directly liable for any violation of 

the provisions of the Code and its IRR. Should the offense be committed by a juridical 

person, the Chairman of the Board of Directors, the president, general manager, or the 

partners and/or the persons directly responsible therefore, shall be made accountable. 

Agents/Representatives of the Manufacturers or Distributors of the products 

within the scope of the Code, who commit any violation of the provisions of 

the Code and its implementing rules and regulations shall be jointly and solidarily 

liable with the said manufacturers and distributors. 

Rule XIII 

Criminal Penalties 

SECTION 50. Penalties - Any person who violates the provisions of this Code or 

these rules and regulations shall, upon conviction, be punished by a penalty of two (2) 

months to one (1) year imprisonment or a fine of not less than One Thousand Pesos 

(P1,000.00) nor more than Thirty Thousand Pesos (P30,000.00) or both. Should the 

offense be committed by a juridical person, the Chairman of the Board of Directors, the 

president, general manager, or the partners and/or the person directly responsible therefore, 

shall be penalized. 

Rule XIV 

Miscellaneous Provisions 

SECTION 51. Donations Within the Scope of this Code - Donations of products, 

materials, defined and covered under the Milk Code and these implementing rules and 

regulations, shall be strictly prohibited. 

SECTION 52. Other Donations By Milk Companies Covered by this Code - Donations 

of products, equipments, and the like, not otherwise falling within the scope of this 

Code or these Rules, given by milk companies and their agents, representatives, whether 

in kind or in cash, may only be coursed through the Inter Agency Committee (IAC), 

which shall determine whether such donation be accepted or otherwise. 

SECTION 53. Construction - All doubts in the implementation and interpretation of 

the provisions of these Implementing rules and regulations shall be resolved in favor of 

and for the promotion of breastfeeding and against breastmilk substitutes and replacements. 

SECTION 54. Supplemental Administrative Issuances - The Secretary of Health, 

or his duly authorized representative, may issue such additional implementing rules and 

regulations as may be necessary to further clarify any part of this IRR. 

SECTION 55. Continuous Review on Prescription Policy - The Department of 

Health shall evaluate every year, or as necessary, its policy of whether or not to subject 

the sale of infant formula or breastmilk substitutes, to prescription. 

SECTION 56. Extending Prohibition for Brandnames and Company Logo Identification 

- The Department shall periodically review whether or not to allow or prohibit the 

use of brandnames or company logos of products within the scope ot this Code which


are similar to the brandnames or logos utilized for products not covered by this Code, 

including the physical appearance of the container, taking into consideration the possibility 

of product confusion, the balance between a free market economy as against the 

decline and fall of breastfeeding rates among mothers and women of reproductive age, 

and public welfare and benefit being its ultimate yardstick. Accordingly, any modification 

of existing policy should first undergo public consultations with all concerned stakeholders 

before its actual implementation. 

Rule XV 

Final Provisions 

SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations 

or parts thereof inconsistent with these revised rules and implementing regulations are 

hereby repealed and modified accordingly. 

SECTION 58. Separability Clause - If for any reasons, any part or provision of 

these Revised Rules and Implementing Regulations, be declared invalid or unconstitutional, 

such validity or unconstitutionality shall not affect the other provisions which shall 

remain in full force and effect. 

SECTION 59. Effectivity - These Revised Rules and Regulations shall take effect 

fifteen (15) days after its publication in a newspaper of general circulation with the requisite 

copy submitted to the University of the Philippines Law Center. 


(SGD.) FRANCISCO T. DUQUE III, MD, MSc. 


(SGD.) MARGARITA M. GALON, MD. MHA (SGD.) ETHELYN P. NIETO, MD 

Undersecretary of Health Undersecretary of Health 

(SGD.) ALEXANDER A. PADILLA (SGD.) JADE F. DEL MUNDO, MD 

Undersecretary of Health Undersecretary of Health 

(SGD.) MARIO C. VILLAVERDE, MD. (SGD.) DAVID J. LOZADA, JR., MD 

Assistant Secretary of Health Assistant Secretary of Health 

(SGD.) NEMESIO T. GAKO, MD. 

Assistant Secretary of Health 

Attested by: 

(SGD.) ROBERT LOUIE P. SO, MD 

Head Executive Assistant

762 


DEPARTMENT OF SCIENCE AND TECHNOLOGY 



Guidelines in the Recovery of Costs of Products and Services of the 

Philippine Atmospheric, Geophysical and Astronomical Services 

Administration (PAGASA) Particularly in the Flight Folder Issuance 

and the Fee Structure Thereof 

WHEREAS, the Republic of the Philippines is a signatory to the Convention on 

International Civil Aviation, ICAO Document No. 7300, otherwise known as the Chicago 

Convention, to further enhance agreement on certain principles and arrangements in 

order that international civil aviation may be developed in a safe and orderly manner and 

that international air transport services may be established on the basis of equality of 

opportunity, and operated soundly and economically; 

WHEREAS, the Philippines is a Member country of the World Meteorological Organization 

(WMO) and a Contracting State of the Convention on International Civil Aviation 

which designated the PAGASA as the Designated Meteorological Authority (DMA) of the 

Government of the Republic of the Philippines primarily taking charge to arrange for the 

provision of meteorological service for international air navigation on its behalf; 

WHEREAS, various principles and methodologies are laid out in the ICAO and 

WMO guidance materials on cost recovery, namely: Manual on Air Navigation Service 

Economics (ICAO Doc. 9161), ICAOís Policies on Charges for Airports and Air Navigation 

Services (ICAO Doc. 9082) and WMO Guide on Aeronautical Meteorological Services 

Cost Recovery (WMO No. 904); 

WHEREAS, pursuant to Executive Order No. 159, it is the goal of the government: 

(1) to promote full recovery of cost of services to free other government revenues for 

priority projects; and (2) to ensure equitable distribution of the burden of cost recovery 

by having the direct recipients of government services account for the costs; 

WHEREAS, pursuant to Section 54, Chapter 12, Book IV of Executive Order No. 

292 (Administrative Code of 1987), heads of bureaus, offices or agencies, may, upon 

approval of the department head, charge and collect the cost of the services rendered by 

the bureau, office or agency concerned; 

WHEREFORE, pursuant to the provisions of the issuances, the following rules and 

regulations for the implementation of collection of fees and charges for PAGASA, products 

and services are hereby promulgated. 

PART I 

GENERAL PROVISIONS


SECTION 1. Title - These Guidelines shall be known and cited as the PAGASA 

Flight Folder Issuance Fee Structure. 

SECTION 2. Definition of terms and acronyms - Unless defined otherwise, the 

following terms and acronyms shall refer to the definitions provided hereunder: 

a. PAGASA refers to the Philippine Atmospheric, Geophysical and Astronomical Services 

Administration. A service institute of the Department of Science and Technology 

mandated to undertake, inter alia, observation, collection, assessment and processing of 

atmospheric and allied data for the benefit of agriculture, commerce and industry. 

b. AMSO refers to the Aeronautical Meteorological Service Office (or AeroMeteorological 

Service Office). An organic unit of the Weather Forecasting Section - Branch mandated 

by law to issue Flight Documentation Folders to aeronautical users. 

c. WMO refers to the World Meteorological Organization. A specialized agency of the 

United Nations purposely established to further the application of meteorology to aviation, 

shipping, water resources management, agriculture and other human activities, among 

others. 

d. ICAO refers to the International Civil Aviation Organization. A specialized agency of 

the United Nations established to standardize, and establish International Standards, Recommended 

Practices and Procedures covering the technical field of aviation: licensing of 

personnel, rules of the air, aeronautical meteorology, and aeronautical charts, among 

others. 

e. DMA refers to the Designated Meteorological Authority. The authority providing or 

arranging for the provision of meteorological service for international air navigation on 

behalf of a Member country. DMA is functionally referred to as ìService Providerî. 

f. FOLDER refers to the Flight Documentation Folder. It consists of written or printed 

documents, including charts or forms containing meteorological information for a flight. 

g. USER refers to an entity or individual that utilizes a service furnished by the Service 

Provider. 

h. FEES refers to all charges and costs assessed against the direct recipients of specialized 

products and services provided by PAGASA in the exercise of its functions. 

i. AerIS refers to AeroMeteorological Information System which is a sub-system of the 

WAFS-Meteorological Laboratory. 

j. PAGASA AerIS refers to PAGASAís aeronautical meteorological information system 

developed through WAFS-MetLab. 

k. SYSTEM ADMINISTRATOR refers to one who, as a primary job function, manages 

computer and network systems on behalf of another, such as an employer or client. 

l. FL refers to flight level. 

m. hPa refers to hecto-Pascal. A unit of measurement of atmospheric pressure.

764 


n. ETOPS refers to Extended Range Operation with two engine airplanes. 

o. AERODROME refers to a defined area on land, ice, or water (including any buildings, 

installations or equipment) intended to be used either wholly or partially for the arrival, 

departure, movement, or servicing of aircraft. 

p. ALTERNATE AERODROME An aerodrome specified in the flight plan to which a flight 

may proceed when it becomes inadvisable to land at the aerodrome of intended landing. 

q. EN-ROUTE ALTERNATE AERODROME refers to an aerodrome at which an aircraft 

would be able to land after experiencing an abnormal or emergency condition while en 

route. 

r. AERODROME OF DESTINATION refers to an aerodrome at which an aircraft is 

designated to land. 

s. SARPs refers to standards and recommended practices employed by both the ICAO 

and WMO. 

t. PROGNOSTIC UPPER-AIR CHARTS refers to prognosticated ICAO standard isobaric 

upper-level charts composed mainly of forecast air-temperature, wind direction and speed 

usually with validity period of six (6) to thirty six (36) hours. 

u. SIGNIFICANT WEATHER CHARTS refers to prognosticated weather charts for a 

designated level usually at FL250-630. It may contain forecasts of: cloud areas with 

indication of its tops; jet streams at different levels, volcanic activity/ash extent and 

location, frontal systems and its direction and speed and other meteorological information 

which may affect the safety of aircraft operations. 

v. WAFS refers to the World Area Forecast System developed by ICAO and WMO to 

improve the quality and consistency of en-route guidance provided for international aircraft 

operations. 

w. TAFOR refers to the complete description of the meteorological elements expected at 

and over the aerodome throughout the whole of the forecast period, it could be in 9 or 24hour 

validity period, including any changes considered to be significant to aircraft operations. 

It is prepared by trained staff (aeronautical meteorological forecaster), who, using 

the latest available regulations, ensure that internationally agreed practices are followed. 

This is one of the basic aeronautical meteorological information needed in flight planning 

for safety of the conduct of international or national air navigation. 

x. METAR refers to the name code for an aviation routine weather report. In the Philippines, 

it is issued at hourly intervals. This type of report is one of the basic considerations 

in the formulation of a TAFOR. 

y. SPECI refers to the name of the code for an aviation special weather report. A SPECI 

can be issued at any time when certain criteria are met. (see Appendix A*)î. This type of 

report is also one of the basic considerations in the formulation of a TAFORî. 

*Appendix not filed with ONAR.


z. Service Provider refers to PAGASA, as an entity that provides meteorological information 

to various users or customers. 

aa. Meteorological Information refers to meteorological report, analysis, forecast, and 

any other statement relating to existing or expected meteorological conditions. 

SECTION 3. Electronic Flight Folder Acquisition. Automated Flight Folder issuances 

shall be in place and shall be maintained by the PAGASA AerIS Systems Administrator 

utilizing its FTP service. Authorized Users shall be given a username and password 

to gain access to the necessary Folder. 

SECTION 4. Folder Preparation and Formulation. The Folder shall be prepared 

and formulated in advance by the AMSO throughout the 24 hour period. 

SECTION 5. Folder Availability. The designated Forecaster shall post the latest 

Folder at the designated PAGASA website two (2) to three (3) hours prior to the intended 

time of departure. 

SECTION 6. Flight Schedule; contents - The User shall be responsible for the 

submission of the frequency of Folder issuance (daily, weekly or monthly) within a period 

of seven (7) working days prior to the effectivity of the schedule. The flight schedule shall 

contain the (a) time of departure; (b) aerodrome of departure; (c) alternate aerodrome 

(including take-off alternate, en-route alternate, ETOPS en-route alternate); and (d) aerodrome 

of destination. 

SECTION 7. Unscheduled, Re-Scheduled and Cancelled Flights - Requests for 

flight Folder outside the submitted schedule or for re-scheduled flights must be made at 

least twelve (12) hours before the intended time of departure. 

SECTION 8. Folder Structure - The general structure of a flight documentation 

folder must be made in accordance with the standard format prescribed in the WMO and 

ICAO Standards and Recommended Practices. It is categorized into International Flight 

Folder; and Domestic Flight Folder. 

International Flight Folder shall be composed of the following items: 

a. Multi-level prognostic upper-air charts, i.e. FL300 and FL390, with validity period of 

twenty four (24) hours or more; 

b. Significant Weather Chart, i.e. FL 250-630, with a validity period of twelve (12) hours; 

c. Compiled list of Terminal Aerodrome Forecast (TAFOR) of each of aerodrome of 

departure, destination, alternate, en-route alternate, take-off alternative, ETOPS en-route 

alternate and destination alternate. 

Domestic Flight Folder shall be composed of the following items: 

a. Multi-level prognostic upper-air charts or a choice of two of the following:

766 


i. Surface (10 meter level); 

ii. 1000 hPa level; 850 hPa level; and 

iii. 700 hPa level. 

b. Significant Weather Charts valid up to twelve (12) hours for the following levels: 

i. Medium level 700 hPa to 400 hPa or FL 100 to FL250); 

ii. Low-level Surface to 700 hPa or SFC-FL 100; 

iii. Compiled list of Terminal Aerodrome Forecast (TAFOR) of each of aerodrome 

of departure, destination, alternate, en-route alternate, take off alternate. 

PART II 

FEES 

SECTION 1. Schedule of Fees - The fees prescribed in this Section are applicable 

to the products and/or services and materials furnished by the AMSO. 

Schedule of Fees 

Reference Code Product/Service Type Cost 

IFF Flight Documentation Folder for US$15.00 

International Flights 

DFF Domestic Folder for Domestic Flights 

(Commercial) P100.00 

SECTION 2. Billing - The Accounting Section shall bill the User on a monthly basis. 

The statement of Account shall be issued by the PAGASA AvIS system administrator 

containing, among others, the description of products and services, corresponding cost 

computed based on the prevailing exchange rate at the time of rendition of service. 

SECTION 3. Delinquent payment; surcharge - Payments made after fifteen (15) 

days from bill date shall be assessed a surcharge of one percent (1%) of the total amount 

due. 

SECTION 4. Folder Access Suspension - Users are entitled to thirty (30) days 

grace period within which to settle their accounts. Beyond which their access to the flight 

folder shall be suspended. The suspension will be lifted three (3) days after the User has 

satisfactorily settled in full his accountabilities which includes his unpaid account plus the 

corresponding surcharge. 

SECTION 5. Fees Collected. The Fees collected by PAGASA from the Users 

pursuant to this Department Order shall be deposited to the National Treasury. 

PART III 

MISCELLANEOUS PROVISIONS 

SECTION 1. Periodic Review of Fees. The PAGASA Flight Folder fee structure 

shall be reviewed whenever necessary provided that the rates of fees herein provided 

may be increased only once a year, unless otherwise required by law, executive orders, 

rules and regulations, and other issuances.


SECTION 2. Revision of Fees - Notice of revision of fees shall be given to users or 

their duly authorized representatives at least four (4) months prior to the intended revision. 

During the said period, users may submit their views and/or comment to the service 

provider. 

SECTION 3. User Consultation - Consultation with the Users shall be done as 

frequent as necessary to gauge the cost effectiveness of the service and/or product. 

SECTION 4. Separability Clause - If any provision of this Department Order is 

declared unconstitutional, illegal or invalid, the other parts not affected shall continue to 

be in full force and effect. 

SECTION 5. Effectivity - This Department Order shall take effect immediately after 

its publication in a newspaper of general circulation. 


(SGD.) ESTRELLA F. ALABASTRO 

Secretary 

DEPARTMENT OF TRADE AND INDUSTRY 


Department Administrative Order No. 03, s. of 2006 

Further Amending Certain Provisions of Ministry Order No. 32, 

series of 1985, as Amended, Particularly Providing for Standard 

Classification for Airconditioning and Refrigeration Service and 

Repair Enterprises 

Adopted: March 2006 




--o0o-- 

Joint DTI-BOI, DOF, NEDA and BOC Administrative Order No. 01, s. 2006 

Rules and Regulations to Implement Executive Order No. 375, entitled 

ìModifying the Rates of Import Duty on Certain Iron and Steel Products 

Under Section 104 of the Tariff and Customs Code of 1978 (Presidential 

Decree No. 1464), as Amendedî 

Pursuant to Section 4 of Executive Order No. 375, the following rules and regulations 

are hereby promulgated.

768 


Rule I. 

Definition of Terms 

SECTION 1. For purposes of these rules and regulations, the following definitions 

shall apply: 

a. ìBoardî shall refer to the Board of Investments. 

b. ìNEDAî shall refer to the National Economic and Development Authority. 

c. ìDOFî shall refer to the Department of Finance. 

d. ìTCî shall refer to the Tariff Commission. 

e. ìBOCî shall refer to the Bureau of Customs. 

f. ìGSPIî shall refer to Global Steel Philippines (SPV-AMC), Inc. (formerly Global 

Steelworks International, Incorporated) 

g. ìE.O.î shall refer to the Executive Order No. 375 

h. ìMFNî shall mean Most Favored Nation. 

i. ìTRM Committeeî shall refer to the Committee on Tariff and Related Matters. 

j. ìAHTNî shall mean ASEAN Harmonized Tariff Nomenclature. 

Rule II. 

Scope and Coverage 

SECTION 2. These rules and regulations shall apply to all articles listed in Annex A 

of E.O. 375 subject to the increase of duty from three percent (3%) to seven percent 

(7%) stipulated therein. 

Rule III. 

Determination of Commercial Operation 

SECTION 3. For purposes of determining the start of the implementation of the 

seven percent (7%) MFN tariff rate on the articles listed in Annex A of the E.O., GSPIís 

hot mill or cold mill shall be deemed to be ìin commercial operationî, when their respective 

production volumes are sustained at least at any of the following levels. 

a. Fifty percent (50%) of the BOI-registered capacity for hot mill or cold mill products (as 

the case may be); or, 

b. Fifty percent (50%) of average Philippine importation volume of hot rolled or cold rolled 

steel products (as the case may be) for five (5) years immediately prior to the start of 

operations.


Production is deemed sustained when the level at which the average daily production 

volume for not less than sixty (60) operating days when multiplied by 276 operating 

days per year is at least at any of the levels specified in (a) and (b) above. 

Sustained production shall be determined on the basis of the reports required under 

Section 4. 

The definition of commercial operation under this IRR shall in no way affect GSPIís 

commercial operation commitment under its BOI Registration Certificate Number 2004- 

136. 

SECTION 4. GSPI shall submit the following to the TRM Committee, copy furnished 

the Board: 

a. Duly notarized written notice, signed by the GSPI President, of commercial operations 

of either or both the hot mill and cold mill, as the case may be, including but not limited to 

the following data/information: 

- Duly notarized true copy of the daily production report for at least sixty (60) 

operating days to support the claim that it has satisfied any of the conditions 

set forth in Section 3 of this implementing rules and regulations for the determination 

of ìcommercial operationî; and 

- AHTN Headings (at the 8 digit level) that cover the hot rolled (coil/plate/ 

sheet), and/or cold rolled (coil/plate/sheet) products that is actually produced 

by GSPIs hot mill and cold mill.î 

b. Duly notarized quarterly reports on hot rolling and cold rolling operations, containing 

value and volume of (1) Slab, hot rolled, cold rolled, Tin Mill Black Plate (TMBP), tinplate 

and tin importation; (2) production (3) domestic sales; (4) export sales; (5) raw materials 

inventory; and (6) finished product inventory, once GSPI has been declared ìin commercial 

operationî. 

c. Quarterly reports will be submitted to the TRM Committee Working Group (TRM-WG) 

for as long as deemed necessary by the TRM Committee but no longer than one (1) year. 

Deadline for submission of the reports shall be a month after the end of each quarter. 

SECTION 5. A TRM Committee Working Group (TRM-WG) composed of representatives 

of the Board, NEDA, DOF, TC and BOC shall confirm/validate GSPIís claim on the 

commercial operation of its hot mill and cold mill. 

SECTION 6. Following the notification of GSPI that it is in commercial operation, 

the TRM-WG shall, at any time, visit the GSPI facilities for purposes of confirming/ 

validating the firmís claims on (a) commercial operation of either or both the hot mill and 

cold mill; and (b) AHTN Headings (at the 8 digit level) that cover the hot rolled (coil/plate/ 

steel), and/or cold rolled (coil/plate/sheet) steel products produced by GSPIís hot mill and 

cold mill. 

The TRM-WG shall submit a formal report of its findings to the TRM Committee not 

later than fifteen (15) days following the plant visit.

770 


SECTION 7. The TRM Committee will issue a notification to the DOF and the BOC 

that GSPI is deemed in commercial operation, indicating the AHTN Headings (at the 8 

digit level) that cover the hot and/or cold rolled flat steel actually produced by GSPIís hot 

mill and cold mill. 

SECTION 8. The BOC shall issue the necessary order to implement the 7% tariff 

within fifteen (15) days upon receipt of the TRM Committee notification. 

SECTION 9. These implementing rules and regulations shall take effect immediately 

following its publication in a newspaper of general circulation. 


(SGD.) PETER B. FAVILA (SGD.) MARGARITO B. TEVES 

Secretary Secretary 

Department of Trade and Industry Department of Finance 

(SGD.) ROMULO L. NERI (SGD.) NAPOLEON L. MORALES 

Secretary of Socio-Economic Planning Acting Commissioner 

National Economic Development Authority Bureau of Customs 


--o0o-- 

Department Administrative Order No. 05, s. 2006 

Mandatory Philippine National Standard for Ceramic Wall and Floor Tiles 

1. In accordance with the provisions of R.A. No. 4109, R.A. No. 7394, Executive Order 

No. 913, series of 1983, DAO No. 02, Series of 2002, DAO No. 1, Series of 1997, DAO 

No. 5, series of 2001, and Sec. 10 (4), Title X, Book IV, of the Administrative Code of 

1987, the following Philippine National Standard is hereby adopted for mandatory implementation: 

PNS 154:2005 - Ceramic Wall and Floor Tiles - Specification 

2. All manufacturers, distributors, importers and retailers of said product shall comply 

with the requirements of this standard. 

3. A third party certification, known as the Product Certification Scheme of the DTI - 

Bureau of Product Standards (BPS), requires all manufacturers and importers of said 

product to secure a Philippine Standard (PS) License and an Import Commodity Clearance 

(ICC), respectively, prior to its distribution and sale. 

4. The DTI-BPS shall promulgate implementing guidelines specifying implementing timetables, 

taking into consideration present inventory levels, production capabilities of industries, 

and testing capabilities of BPS and other testing institutions.


5. The implementation of this standard shall be done in proper coordination with the DTI 

Regional and Provincial Offices and the DTI - Bureau of Trade Regulation and Consumer 

Protection (BTRCP). 

6. All manufacturers, distributors, importers and retailers found not complying with these 

requirements shall be penalized in accordance with the provisions for liabilities and penalties 

under RA 7394, EO 913 and DAO 02:2002. 

7. All other orders or parts thereof which are inconsistent with the provisions of this 

Administrative Order are hereby repealed or amended accordingly. 

8. This Order shall take effect fifteen (15) days after publication in two newspapers of 

general circulation or in the Official Gazette. 

Accordingly, all parties concerned are hereby informed that copies of said standards 

and implementing guidelines may be secured from the BPS Information Services. 

Adopted: 09 June 2006 

(SGD.) PETER B. FAVILA 

Secretary 

Recommended by: 

(SGD.) JESUS L. MOTOOMULL 

Bureau Director, BPS 

(SGD.) ZENAIDA CUISON-MAGLAYA 

Undersecretary, CWTRG 

ENERGY REGULATORY COMMISSION 


Adopted: 05 Jan. 2006 

ERC Case No. 2003-187 

Order re: Guidelines and Procedures Governing 

Remittances and Disbursements of the Universal Charge 



--o0o--

772 



Resolution No. 07, s. 2006 

A Resolution Amending the Terms and Conditions of the 

Certificate of Compliance (COC) Issued to Entities Owning 

Self-Generation Facilities (SGFs) Particularly Item No. 5 Thereof 

WHEREAS, the Guidelines for the Issuance of Certificate of Compliance (COC), 

as amended was approved on June 26, 2002; 

WHEREAS. on the basis of the aforesaid Guidelines, the terms and conditions of 

the Certificate of Compliance (COC) to be issued entities owning self-generation facilities 

(SGFs) were formulated and approved by the Commission in its meeting held on April 23, 

2003; 

WHEREAS, Item No. 5 of the terms and conditions of COC issued to entities owning 

SGFs provides as follows: 

ìWithin 10 days after the end of each month, the Generation Company shall 

submit to ERC an electronic copy of the kWh generated, Company use, loss 

or unaccounted energy, volume and amount of fuel utilized to generate powerî; 

WHEREAS, there is a necessity to amend said Item No. 5 on the monthly submission 

of required reports by entities with SGFs to align with the annual reportorial requirements 

for generation companies/Independent Power Producers (IPPs) to be less burdensome 

to entities owning SGFs; 

NOW, THEREFORE, pursuant to its mandate, to promote a policy of full disclosure 

of all transactions involving public interest and provide an environment conducive to wholesome 

and constructive competition thereby promoting efficiency in the management and 

operation of Industry Participants, the ERC hereby amends Item No. 5 of the terms and 

conditions of the COC issued to entities owning SGFs, existing and newly constructed 

facilities, to read as follows: 

ìWithin 30 days after the end of each year, the Generation Company shall 

submit to ERC an electronic copy of the monthly summary of its kWh generated, 

Company use, loss or unaccounted energy, volume and amount of 

fuel utilized to generate power;î 

This Resolution shall take effect immediately following its publication in a newspaper 

of general circulation in the Philippines. 


(SGD.) RODOLFO B. ALBANO 

Chairman 

(SGD.) JESUS N. ALCORDO 

Commissioner



(SGD.) ALEJANDRO Z. BARIN 

Commissioner 

( On Official Leave) 

OLIVAR B. BUTALID 

Commissioner 

(On Official Leave) 

RAUL A. TAN 

Commissioner 

--o0o-- 


A Resolution Adopting a New Billing Format for the Distribution Utilities 

Whose Rates are Yet to be Unbundled for the Implementation of 

the Recovery of Value Added Tax (VAT) and other Provisions 

of Republic Act No. 9337 

WHEREAS, the Congress of the Philippines has enacted Republic Act No. 9337 

(An Act Amending Sections 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 

117, 119, 121, 148, 151, 236, 237, and 288 of the National Internal Revenue Code 

(NIRC) of 1997, as amended, and for other Purposes); 

WHEREAS, said Act, imposes a Value Added Tax (VAT) on the sales of electricity 

by generation companies, transmission, and distribution companies; 

WHEREAS, on November 7, 2005, the Commission issued Resolution No. 20, Series 

of 2005 entitled, ìImplementing the Recovery of Value Added Tax (VAT) and Other 

Provisions of Republic Act No. 9337 Affecting the Electric Power Industryî; 

WHEREAS, in the same resolution, the Commission adopted a new billing format 

for distribution utilities (DUs) whose rates have been unbundled for the implementation of 

the said law; 

WHEREAS, to date, there are DUs whose rates are yet to be unbundled; 

WHEREAS, this Commission is vested with the power and authority to determine, 

fix and regulate the rates charged by all electric distribution utilities, pursuant to Republic 

Act No. 9136 and Section 18 of Republic Act No. 7638; 

NOW, THEREFORE, be it RESOLVED, as this Commission hereby RESOLVES, to 

APPROVE and ADOPT, as it hereby APPROVES and ADOPTS, a new billing format 

(hereto attached as Annex ìAî*) for the DUs whose rate has yet to be unbundled for the 

implementation of the recovery of Value Added Tax (VAT) and other provisions of Republic 

Act No. 9337. 



774 


Let copies of this resolution be furnished all DUs for their information and implementation. 

Likewise, let copies of this Resolution be furnished the National Power Corporation 

(NPC), National Transmission Corporation (TRANSCO), the Committees on Energy 

of both Houses of Congress and National Electrification Administration (NEA) for 

their information and guidance. 

This resolution shall take effect immediately. 



(SGD.) RODOLFO B. ALBANO 

Chairman 

(SGD.) JESUS N. ALCORDO 

Commissioner 

(SGD.) ALEJANDRO Z. BARIN 

Commissioner 

--o0o-- 


A Resolution Adopting the Guidelines for the Monitoring 

of Power Quality Standards for Distribution Utilities 

WHEREAS, Section 43 (b) of Republic Act No. 9136 (The Electric Power Industry 

Reform Act of 2001 or the EPIRA) and Rule 3, Section 4 (g) of its Implementing Rules 

and Regulations (IRR), provide that, in order to facilitate the provision of efficient, reliable 

and quality service to End-Users, the Commission shall promulgate a Grid Code and a 

Distribution Code that shall include performance standards; 

WHEREAS, Articles 3.2 and 5.2 of the Philippine Distribution Code (PDC) sets 

the power quality standards for Distribution Utilities; 

WHEREAS, on November 16, 2004 the Commission conducted a public consultation 

for the adoption and promulgation of a set of guidelines for the monitoring of power 

quality standards for Distribution Utilities; 

WHEREAS, on November 21, 2005 the Commission received and considered 

the comments and recommendations of the Distribution Management Committee (DMC) 

for the set of guidelines for the monitoring of power quality standards for Distribution 

Utilities; 

WHEREAS, the guidelines seek to: (1) ensure that the power quality specified in 

Article 3.2 of the PDC are complied with; (2) adopt rules and regulations for assessing 

the level of power quality of the distribution system; (3) adopt requirements for monitoring 

power quality in relation with a customerís complaint; (4) provide well-defined data to


allow trend analysis over time for a given utility or among distribution utilities; (5) establish 

a way of tracking and identifying power quality problems; and (6) establish reporting 

requirements to provide consumers, the ERC, and distribution utilities with methodology 

for monitoring power quality within a distribution utilityís franchise area. 

NOW THEREFORE, the Commission, after thorough and due deliberation, hereby 

RESOLVED, as it hereby RESOLVES to APPROVE and ADOPT the set of Guidelines 

for the Monitoring of Power Quality Standards for Distribution Utilities herein attached as 

ìANNEX Aî and made an integral part of this Resolution. 

This Resolution shall take effect fifteen (15) days following its publication in a 

newspaper of general circulation in the country. 

Adopted: 8 March 2008 

(SGD.) RODOLFO B. ALBANO, JR. 

Chairman 


OLIVER B. BUTALID (SGD.) JESUS N. ALCORDO 



RAUF A. TAN (SGD.) ALEJANDRO Z. BARIN 


GUIDELINES FOR THE MONITORING OF POWER QUALITY 

STANDARDS FOR DISTRIBUTION UTILITIES 

ANNEX A 

Pursuant to Section 43 (b) of Republic Act No. 9136, Rule 3 Section 4 (g) of its 

Implementing Rules and Regulations, and Articles 3.2 and 5.2 of the Philippine Distribution 

Code (PDC), the Energy Regulatory Commission (ERC) hereby adopts and promulgates 

the following Guidelines for the Enforcement of Power Quality Standards. 

1.1 Objectives 

ARTICLE I 

GENERAL PROVISIONS 

1.1.1 To ensure that the Power Quality standards specified in Article 3.2 of the 

PDC are complied with. 

1.1.2 To adopt rules and regulations for assessing the level of Power Quality 

of the Distribution System. 

1.1.3 To adopt requirements for monitoring Power Quality in relation with a 

Customerís complaint.

776 


1.1.4 To provide well-defined data to allow trend analysis over time for a given 

utility or among Distribution Utilities. 

1.1.5 To establish a way of tracking and identifying Power Quality problems. 

1.1.6 To establish reporting requirements to provide Consumers, the ERC, 

and Distribution Utilities with methodology for monitoring Power Quality within 

a Distribution Utilitiesí franchise area. 

1.2 General Obligations of a Distribution Utility 

1.2.1 Each Distribution Utility shall maintain a Power Quality monitoring system 

that can monitor performance of its equipment and Distribution System 

and Customer facilities. 

1.2.2 Each Distribution Utility shall provide valuable services to its Customers 

by describing and solving Power Quality problems, which shall include investigation, 

recommending solutions, and implementing the recommended solutions 

using a system perspective to ensure Power Quality. 

1.3 Scope 

1.3.1 Privately-owned Distribution Utilities; 

1.3.2 Electric Cooperatives; 

1.3.3 Local government unit owned-and-operated Distribution Utilities; 

1.3.4 Entities duly authorized to own, operate and maintain Distribution facilities 

within the economic zones; and 

1.3.5 Other duly authorized entities engaged in the Distribution of Electricity. 

1.4 Definition of Terms 

Act Republic Act No. 9136, otherwise known as the 

ìElectric Power Industry Reform Act of 2001.î 

Customer/Consumer Any person or entity supplied with electric service 

under a contract with a Distributor or supplier. 

Distribution System The system of wires and associated facilities belonging 

to a franchised Distribution Utility extending between 

the delivery points on the transmission, sub-transmission 

system, or a generating plant connection and 

the point of connection to the premises of the End-User. 

Distribution Utility/ 

Distributor Any electric cooperative, private corporation, government 

owned utility or existing local government unit which


has an exclusive franchise to operate a Distribution Sys 

tem in accordance with its franchise and the Act. 

Energy Regulatory 

Commission or ERC The regulatory agency created under Republic Act No. 

9136. 

High Voltage A voltage level exceeding 34.5 kV up to 230 kV. 

Long Duration Voltage A variation of the Root-Mean-Square (RMS) Value of 

Variation the voltage for a time greater than one (1) minute. 

Low Voltage A voltage level not exceeding 1000 volts. 

Measuring Point A point where to measure the RMS voltage variation, 

which shall either, be at the substation bus, secondary 

lead wires of distribution transformer, metering point, 

customer main switch, or customerís convenience 

outlet. 

Medium Voltage A voltage level exceeding one (1) kV up to 34.5 kV. 

Nominal Voltage A nominal value assigned by a Distribution Utility to a 

circuit or system of a given voltage class, for the 

purpose of convenient designation. 

Power Quality The quality of the voltage, including its frequency and 

resulting current that are measured in the Grid, 

Distribution System, or any User System. 

RMS Value The equivalent to the square root of the sum of the 

squares of the RMS values of its individual components 

of a complex voltage wave. 

User A person or entity that uses the Distribution System and 

related distribution facilities 

2.1 Nominal Voltage 

ARTICLE II 

VOLTAGE VARIATION 

Each Distributor shall adopt a standard Nominal Voltage or voltages which are consistent 

with the design of the Distribution System for its entire service area and for each 

of the districts, zones, or work centers into which the Distribution System is divided. 

2.2 Limits

778 


Each Distributor shall ensure that no under-voltage or over-voltage is present at the 

Measuring Point of any User during normal operating conditions. 

A Long Duration Voltage Variation is an under-voltage if the RMS Value of the 

voltage is less than or equal to 90 percent of the Nominal Voltage. 

A Long Duration Voltage Variation is an over-voltage if the RMS Value of the voltage 

is greater than or equal to 110 percent of the nominal value. 

2.3 Voltage Outside the Limits not Considered a Violation 

Voltage outside the limits specified in Section 2.2 shall not be considered a violation 

of this rule when such variations: 

2.3.1. Arise from operation of the affected Customerís equipment at power 

factor less than 85 percent lagging; 

2.3.2. Arise from greater than 2.5 percent unbalance operation of the 

Customerís equipment; or 

2.3.3. Arise from scheduled maintenance on equipment by the Customer 

and/or the Distribution Utility. 

2.3.4. Arise from the result of the measurement of the RMS value of the 

voltage at the connection point to the grid which is less than 95 percent or 

greater than 105 percent of the nominal voltage during normal condition. 

2.4 Measurement Procedures 

A Distributor shall assess the RMS voltage variation in the Distribution System by 

conducting voltage measurements in each feeder of the Distribution System at two Measuring 

Points which are the electrically nearest and farthest from the source (substation 

secondary voltage bus). 

2.5 System Average RMS Voltage (Variation) Index x (SARVI x ). 

SARVI x is the average number of RMS value of the voltage variation measurement 

over the assessment period per feeder, where the measured RMS values 

are those with magnitude of less than or equal to 90 percent, or is greater than 

or equal to 110 percent of the Nominal Voltage. 

Where: 

SARVI 110 = N N 

F T 

SARVI 110 = the average number of RMS value of the voltage variation measurement 

over the assessment period per feeder, where the measured RMS


value of the voltage is greater than or equal to 110 percent of the nominal 

value. 

N N = the number of measurements showing RMS voltages greater or equal to 

110 percent of the nominal value, which were measured at Measuring Points 

of the distribution transformers connected to feeders which are electrically 

nearest the source (substation low voltage bus). 

F T = total number of Feeders being assessed of RMS voltage variation. 

SARVI 90 = N F 

F T 

Where: 

SARVI 90 = the average number of RMS value of the voltage variation measurement 

over the assessment period per feeder, where the measured RMS 

value is less than or equal to 90 percent of the nominal voltage. 

N F = the number of measurements showing RMS voltages less than or equal 

to 90 percent of the nominal value, which were measured at Measuring Points 

of the distribution transformers connected to feeders which are electrically 

remote from the source (substation low voltage bus). 

2.6 Voltage Surveys 

F T = total number of Feeders being assessed of RMS 

voltage variation. 

Each Distributor shall conduct annual voltage tests which shall be in accordance 

with the measurement procedures of Section 2.4, in any of the same months that recorded 

the highest demands during the previous year, in order to assess compliance with 

the voltage limits specified in Section 2.2. 

2.7 Required Records 

Records of voltage tests shall be sufficient to determine/indicate the following data/ 

information: 

2.7.1 Location 

2.7.2 Serving Substation 

2.7.3 Feeder or Circuit Number 

2.7.4 Nominal Voltages 

2.7.5 Customer connected electrically nearest to the source (substation 

low voltage bus) of each feeder

780 


2.7.6 Customer connected electrically farthest from the source (substation 

secondary voltage bus) of each feeder 

2.7.7 Measured Voltages 

2.7.8 Date and Time voltage tests were conducted 

2.7.9 Total number of Feeders of the Distribution System 

2.8 Initial and Subsequent Yearís Target 

Each Distribution Utility shall be required to conduct voltage tests at all Measuring 

Points in each feeder of the Distribution System which shall be in accordance with the 

measurement procedures of Section 2.4, and to submit to the ERC the records on or 

before the end of the year 2006 using the prescribed Table-1PQ in Annex A. The data 

shall be used as the basis for computing the Distributorís target of the System Average 

RMS Voltage (Variation) Index x (SARVI x ) for the initial year. 

For the subsequent years, the yearly performance target shall be an improvement 

of the established performance target of the preceding year until such time that under 

voltage or over voltage is no longer present at all Measuring Points of the Distribution 

System. 

2.9 Voltage Test Report 

Records of the voltage tests conducted shall be recorded in the prescribed format 

using Table-1PQ in Annex A and shall be submitted to the ERC in electronic copy using a 

Portable Document Format (PDF) or any other format that cannot be altered, on or 

before the end of the month following the month that the voltage tests were conducted. 

To be included in the report submission are the previous yearís annual load curve 

data of the Distribution System and the load curve data of the month in consideration. 

2.10 Summary of Performance 

For comparing the quality of service voltages being provided to Customer over 

time for a given Distribution Utility and among Distribution Utilities, the ERC shall publish 

in its website, starting year 2007, the summary of the System Average RMS Voltage 

(Variation) Index x (SARVI x ) of all Distribution Utilities before the end of the first semester 

of each year. 

ARTICLE III 

OTHER POWER QUALITY STANDARDS 

3.1 Distributors Obligation to Monitor and Record Variations of Other Types of Power 

Quality Standards


The Distributor shall monitor and record variations of these other types of Power 

Quality standards; Voltage Sags, Voltage Swells, Voltage Unbalance, and Harmonics at all 

High Voltage and Medium Voltage connection points to the Distribution System, to ensure 

that the Power Quality variations are within the limits specified in Section 3.2 of the PDC. 

3.2 Mitigation of the Impact of Customerís Loads 

If in relation to a Power Quality complaint, an evaluation shows that a Customerís 

loads cause a problem on any of the Power Quality standards mentioned in the preceding 

section, the Customer causing the Power Quality problem; shall be required to design 

mitigation measures to reduce the impacts of the Customerís loads on the Distribution 

System, and shall coordinate with the Distribution Utility in the implementation of the 

same. 

In the event that the Customerís mitigation measures are not satisfactory, the Distribution 

Utility shall design and implement mitigation measures in coordination with the 

Customer, and the cost of the design and implementation of the mitigation measures shall 

be charged to the Customer. 

ARTICLE IV 

SEPARABILITY 

If for any reason any provision of these Guidelines is declared unconstitutional or 

invalid by final judgment of a competent court, the other parts or provisions hereof which 

were not affected thereby shall continue to be in full force and effect. 

ARTICLE V 

EFFECTIVITY 

These Guidelines shall take effect fifteen (15) days after publication in two newspapers 

of general circulation in the country. 




Chairman 


OLIVER B. BUTALID (SGD.)JESUS N. ALCORDO 





--o0o--

782 



A Resolution Adopting the Guidelines for the Monitoring 

of Reliability Standards for Distribution Utilities 

WHEREAS, Section 43 (b) of Republic Act No. 9136 (The Electric Power Industry 

Reform Act of 2001 or the EPIRA) and Rule 3, Section 4 (g) of its Implementing Rules 

and Regulations (IRR), provide that in order to facilitate the provision of an efficient, 

reliable and quality service to End-Users, the Commission shall promulgate a Grid Code 

and a Distribution Code that shall include performance standards; 

WHEREAS, Article 3.3 of the Philippine Distribution Code sets the reliability 

standards for Distribution Utilities; 

WHEREAS, on November 16, 2004 the Commission conducted a public consultation 

for the adoption and promulgation of a set of guidelines for the monitoring of 

reliability standards for Distribution Utilities; 

WHEREAS, on November 21, 2005 the Commission received and considered 

the comments and recommendations of the Distribution Management Committee on the 

set of guidelines for the monitoring of reliability standards for Distribution Utilities; 

WHEREAS, the guidelines seek to: (1) ensure the continuous provision of electric 

service to End-Users; (2) adopt rules and regulations for assessing the reliability of 

the distribution system; (3) adopt requirements for maintenance of Interruption data, 

retention of records, and report filing; (4) provide well-defined data to allow trend analysis 

over time for a given utility or among distribution utilities; (5) establish a way of tracking 

and identifying system reliability problems; and (6) establish reporting requirements to 

provide consumers, the ERC, and distribution utilities with methodology for monitoring 

reliability within a distribution utilityís franchise area. 


RESOLVES, as it hereby RESOLVES to APPROVE and ADOPT the set of Guidelines for 

the Monitoring of Reliability Standards for Distribution Utilities herein attached as ìAN- 

NEX Aî and made an integral part of this Resolution. 





Chairman 



Commissioner Commissioner





Guidelines for the Monitoring 

of Reliability Standards for Distribution Utilities 

ANNEX A 

Pursuant to Section 43 (b) of Republic Act No. 9136, Rule 3 Section 4 (g) of its 

Implementing Rules and Regulations, and Article 3.3 of the Philippine Distribution Code 

(PDC), the Energy Regulatory Commission (ERC) hereby adopts and promulgates the 

following Guidelines for the Enforcement of Reliability Standards. 


ARTICLE I 


1.1.1 To ensure the continuous provision of electric service to End-Users. 

1.1.2 To adopt rules and regulations for assessing the Reliability of the Distribution 

System. 

1.1.3 To adopt requirements for maintenance of Interruption data, retention of 

records, and report filing. 

1.1.4 To provide well-defined data to allow trend analysis over time for a given 

utility or among Distribution Utilities. 

1.1.5 To establish a way of tracking and identifying System Reliability problems. 

1.1.6 To establish reporting requirements to provide consumers, the ERC, 

and Distribution Utilities with methodology for monitoring Reliability within a 

Distribution Utilitiesí franchise area. 

1.2 General Obligations of a Distribution Utility 

1.2.1 Each Distribution Utility shall make reasonable efforts to avoid and 

prevent Interruptions of service. However, when Interruptions occur, service 

shall be reestablished within the shortest time practicable. 

1.2.2 The Distribution System shall be designed and operated with sufficient 

protection to ensure safety and to limit the frequency and Duration of Interruptions 

to End-Users. 

1.2.3 Each Distribution Utility shall always maintain the most recent five year 

records and reports of interruptions of service on its Distribution System and 

shall make an analysis of the records for the purpose of determining steps to

784 


be taken to minimize the frequency and duration of occurrences of such 

interruptions. 

1.3 Scope 

1.3.1 Privately-owned Distribution Utilities; 


1.3.3 Local government unit owned-and-operated Distribution Utilities; 

1.3.4 Entities duly authorized to own, operate and maintain Distribution facilities 

within the economic zones; and 

1.3.5 Other duly authorized entities engaged in the Distribution of Electricity. 


Act Republic Act No. 9136, otherwise known as the ìElectric Power 

Industry Reform Act of 2001î. 

Adverse Weather A weather condition that result in abnormally high rate of Forced 

Outages for exposed Components while such condition persists, 

but does not qualify as a Major Storm Disaster. An Adverse 

Weather condition can be defined for a particular System by 

selecting the proper values and combinations of the weather 

conditions reported by the Weather Bureau including thunder 

storm, wind velocity, precipitation, and temperature. 

Component A piece of Equipment, a line or circuit, a section of line or 

circuit, or a group of items, which is viewed as an entity 

for a specific purpose. 

Customer Any person or entity supplied with electric service under a contract 

with a Distributor or Supplier. 

Distribution of 

Electricity The conveyance of electric power by a Distributor through its 

Distribution System. 

Distribution System The system of wires and associated facilities belonging to a 

franchised Distribution Utility extending between the delivery 

points on the transmission, sub-transmission System, or generating 

plant connection and the point of connection to the premises 

of the End-User. 

Distribution Utility/ 

Distributor Any electric cooperative, private corporation, government-owned 

utility or existing local government unit which has an exclusive 

franchise to operate a Distribution System in accordance with 

its franchise and the Act.


End-User Any person or entity requiring the supply and delivery of electricity 

for its own use. 

Energy Regulatory 

Commission or ERC The regulatory agency created under Republic Act No. 9136. 

Equipment All apparatus, machines, conductors, etc. used as part of, or in 

connection with, an electrical installation. 

Force Majeure Any act of God, act of the public enemy, terrorist acts, insurrection, 

riot, fire, earthquake, labor strike or work stoppage, storm 

or flood, breakage or accident to machinery or equipment, 

any order or regulation or restriction imposed by the court, 

governmental, military or lawfully established civilian authority, 

or any other cause beyond the Electric Utilitiesí control. 

Forced Outage An Outage that results from emergency conditions directly associ 

ated with a Component requiring that it be taken out of service 

immediately, either automatically or as soon as switching operations 

can be performed. Also, an Outage caused by 

human error or the improper operation of Equipment. 

Interruption The loss of service to a Customer or a group of Customers or 

other facilities. An interruption is the result of one or more 

Component Outages. 

Interruption The period from the initiation of an Interruption up to the time 

Disruption when electric service is restored. 

Major Storm A weather condition wherein the design limits of Equipment or 

Disaster Components are exceeded, and which results in extensive mechanical 

fatigue to or failure of Equipment, wide spread Customer 

Interruption, and unusually long service restoration time. 

Momentary A state of zero voltage of a Component that lasts not more than 

Interruption five (5) minutes. 

Outage A state of a Component when it is not available to perform its 

intended function due to some event directly associated with 

that Component. An outage may or may not cause an interruption 

of service to Customers. 

Power Quality The quality of the voltage, including its frequency and resulting 

current that are measured in the Grid, Distribution System, or 

any User System. 

Reliability The probability that a System or Component will perform a required 

task or mission for a specified time in a specified environment. 

It is the ability of a power System to continuously 

provide service to its Customers.

786 


Scheduled An Interruption of electric power that result when a Distribution 

Interruption Component is deliberately taken out of service at a selected 

time, usually for the purposes of construction, preventive maintenance, 

or repair. 

Supplier Any person or entity authorized by the ERC to sell, broker, market, 

or aggregate electricity to the End-Users. 

Sustained A state of zero voltage of a Component that lasts greater than 

Interruption five (5) minutes. 

System The Distribution System or any User System. Also, a group of 

Components connected or associated in a fixed configuration to 

perform a specified function. 

ARTICLE II 

RELIABILITY INDICES AND SPECIFICATIONS OF DATA INCLUSIONS AND EX- 

CLUSIONS 

2.1 Reliability Indices 

The following Reliability indices shall be imposed on all Distribution Utilities: 

2.1.1 System Average Interruption Frequency Index (SAIFI) is the average 

number of Interruptions per Customer during the period. It is calculated by 

dividing the total number of sustained Customer power Interruptions by the 

average number of Customers served during the period. 

2.1.2 System Average Interruption Duration Index (SAIDI) is the average 

Interruption Duration per Customer during the period. It is calculated by dividing 

the sum of customer-minutes of sustained power Interruptions by the average 

number of Customers served during the period. 

2.1.3 Momentary Average Interruption Frequency Index (MAIFI) is the average 

frequency of momentary Interruptions per Customer during the period. It 

is calculated by dividing the total number of momentary Customer power Interruptions 

by the average number of Customers served during the period. 

2.2 Specification of Data Inclusions 

A power Interruption shall include any Outage in the primary Distribution System, 

extending from the distribution substation to the distribution transformers, 

which may be due to the tripping action of protective devices during faults or 

the failure of primary distribution lines and/or transformers, and which results 

in the loss of service to one or more Customers or Users. 

2.3 Specification of Data Exclusions


The following Reliability events shall be excluded in the calculation of the Reliability 

indices: 

2.3.1 Outages that occur on the secondary lines of the Distribution System; 

2.3.2 Outages due to generation, transmission line, or transmission substation 

failure; 

2.3.3 Planned or Scheduled Outages where the Customers or Users have 

been notified at least three (3) days prior to the loss of power; 

2.3.4 Outages that are initiated by the System Operator/Market Operator 

during the occurrence of Significant Incidents or the failure of their facilities; 

2.3.5 Outages caused by Force Majeure, Adverse Weather, or Major Storm 

Disasters which result in the declaration by the government of a state of calamity 

in the franchise area of the Distributor; and 

2.3.6 Outages due to other events that the ERC shall approve after due notice 

and hearing. 

ARTICLE III 

RECORDING REQUIREMENTS 

3.1 Outage Management System (OMS) 

Each Distribution Utility shall maintain an automated outage management system 

(OMS) or electronic data base sufficient to determine a history of sustained electric 

service Interruptions experienced by each Customer. The OMS shall have the ability to 

access data for each customer in order to determine a history of electric service Interruptions. 

Data shall also be sortable by each of the following factors: 

3.1.1 Town/s or City/Cities affected, 

3.1.2 Barangay or Subdivision affected, 

3.1.3 Substation affected, 

3.1.4 Circuit Number. 

3.1.5 Service Account Number 

And in combination with the following factors: 

3.1.6 Number of Interruptions in reporting period, and 

3.1.7 Number of hours of Interruptions in reporting period.

788 


3.2 Required Records 

Records on interruptions shall be sufficient to determine the following: 

3.2.1 Starting date and time of the Interruption; 

3.2.2 Location of the outage (town or city and Barangay or Subdivision); 

3.2.3 Circuit number(s) of the distribution circuit(s) affected; 

3.2.4 Number of Customers affected; 

3.2.5 Service account number or other unique identifier of each Customer 

affected; 

3.2.6 Description of the cause of the Interruption; 

3.2.7 Weather conditions at time of Interruption; 

3.2.8 System Component(s) involved (e.g., distribution substation, primary 

lines, distribution transformer, etc.); 

3.2.9 Date and time service was restored; 

3.2.10 Duration of the Interruption; 

3.2.11 Whether the Interruption was scheduled or unscheduled. 

3.3 Cause Codes 

Each Distribution Utility shall keep information on interruption cause codes, interruption 

weather codes, interruption isolating device codes, and interruption equipment 

failed codes. The Distribution Utilities may augment the following code sets to enhance 

tracking: 

3.3.1 The minimum Interruption cause code set should include: (001) human 

being, (002) lightning, (003) major storm disaster, (004) scheduled, (005) 

trees, (006) overload, (007) error, (008) supply, (009) equipment, (010) other, 

(011) unknown, and (012) earthquake. 

3.3.2 The minimum Interruption weather code set should include: (101) wind, 

(102) lightning, (103) rain, (104) clear day, and (105) typhoon. 

3.3.3 The minimum Interruption isolating device code set should include: 

(201) breaker, (202) recloser, (203) fuse, (204) sectionalizer, (205) switch 

and (206) network protectors. 

3.3.4 The minimum Interruption equipment failed code set should include: 

(301) primary line, (302) secondary line, (303) distribution transformer, (304) 

distribution sub-station, (305) splice, (306) lightning arrester, (307) switches,


(308) cross arm, (309) pole, (310) insulator, (311) connector, (312) others, 

and (313) unknown. 

4.1 Setting of Performance Targets 

ARTICLE IV 

PERFORMANCE TARGETS 

The performance targets for each Distribution Utility for the initial year shall be set 

using the mean of the complete four year historical data. 

For the subsequent years, each Distribution Utility has to set its own yearly performance 

targets. The targets for a subsequent year shall be an improvement of the established 

performance target of the preceding year. 

4.2 Separate Performance Targets for each Distribution District, Zone, or Work Center 

Distribution Utilities who have divided their Distribution Systems to several distribution 

districts, zones, or work centers may opt to have separate performance targets for 

each distribution district, zone, or work center. 

5.1 Quarterly Reports 

ARTICLE V 

RELIABILITY REPORTS 

Each Distribution Utility shall submit quarterly Interruption reports (presenting monthly 

data) for its Distribution System, on or before the end of the month following the quarter 

starting year 2006, using the standard format prescribed in Annex-A sufficient to compute 

the annual indices for SAIFI, SAIDI and MAIFI. The data shall be submitted in 

electronic copy using a Portable Document Format (PDF) or any other format that cannot 

be altered. 

The quarterly report should also include calculation of the average minutes of interruption 

per customer due to causes in each of the following categories: Power Supplier, 

Major Storm Disaster, Scheduled, and All Others. 

The Interruptions resulting from either scheduled or unscheduled outages on lines 

or substations owned by Transco are to be accounted for in the ìpower supplierî category. 

The category ìmajor storm disasterî represents service interruptions from conditions 

that cause many concurrent outages because of typhoon that exceed design assumptions 

for the lines. 

The category ìscheduledî refers to interruptions resulting when a distribution transformer, 

line or Distributor owned substation is deliberately taken out of service at a selected 

time for maintenance or other reasons.

790 


The ìall otherî category includes outages primarily resulting from emergency conditions 

due to Equipment breakdown, malfunction or human error. 

5.2 Summary of Performance 

The ERC shall publish in its website the summary of the service performance of all 

Distribution Utilities before the end of the first semester of each year, starting year 2007, 

for the purpose of comparing the Reliability performance over time for a given Distribution 

Utility and among Distribution Utilities. 

ARTICLE VI 

REPEAL AND SEPARABILITY 

All existing rules, regulations or orders or any part thereof inconsistent with this 

Rules are hereby repealed, amended or modified accordingly. If any part or provision of 

these Rules is declared unconstitutional or illegal, the other parts or provisions shall 

remain valid. 

ARTICLE VII 

EFFECTIVITY 

These Guidelines shall take effect fifteen (15) days after publication in two newspapers 

of general circulation in the country. 




Chairman 







--o0o-- 


A Resolution Adopting the Guidelines to Govern the Submission, 

Evaluation, and Approval of Electric Capital Projects 

WHEREAS, Section 43 (f) of Republic Act No. 9136 (The Electric Power Industry 

Reform Act of 2001 or the EPIRA) provides that any significant operating costs or


projects investments of the National Transmission Corporation (TRANSCO) and Distribution 

Utilities (DUs) which shall become part of the rate base shall be subject to verification 

by the Commission to ensure that the contracting and procurement of the equipment, 

assets and services have been subjected to transparent and accepted industry procurement 

and purchasing practices to protect the public interest; 

WHEREAS, the Distribution Services and Open Access Rules (DSOAR) and 

Section 20 (b) of Commonwealth Act No. 146, as amended, require any public service to 

establish, construct, maintain, and operate any reasonable extension of its existing facilities, 

where, in the judgment of the Commission, such extension is reasonable and practicable 

and will furnish sufficient business to justify the construction and maintenance of 

the same, and when the financial condition of the said public service reasonably warrants 

the original expenditure required in making and operating such extension; 

WHEREAS, on April 1, 2005, April 27, 2005, and August 18, 2005 the Commission 

conducted public consultations for the adoption and promulgation of the ìGuidelines 

to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projectsî; 

WHEREAS, the Guidelines seek to: (1) provide the Distribution Utilities with a 

uniform system for filing applications for the approval of Capital Projects; (2) ensure that 

capital projects are in compliance with the Philippine Grid Code and the Philippine Distribution 

Code; (3) protect the public interest as it is affected by the rates and services of 

Electric Utilities and other providers of electric power; (4) ensure the economic, orderly 

and efficient development of Electric Utilitiesí resources that concern public interest; and 

(5) ensure the procurement of equipment, materials and services are transparent and 

compliant with the applicable laws and accepted industry practices and standards. 


RESOLVED, as it hereby RESOLVES to APPROVE and ADOPT the set of Guidelines to 

Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects 

herein attached as ìANNEX Aî and made an integral part of this Resolution. 





Chairman 







792 


Guidelines to Govern the Submission, Evaluation and Approval of 

Electric Distribution Capital Projects 

ANNEX A 

Pursuant to Section 43 of Republic Act No. 9136 otherwise known as the Electric 

Power Industry Reform Act of 2001 (EPIRA), Rules 6 and 7 of its Implementing Rules and 

Regulations, the Distribution Services and Open Access Rules (DSOAR), and Section 20 

(b) of Commonwealth Act No. 146, as amended, the Energy Regulatory Commission 

(ERC) hereby adopts and promulgates the following Guidelines to Govern the Submission, 

Evaluation and Approval of Electric Distribution Capital Projects. 


ARTICLE I 


1.1.1 To provide the Distribution Utilities with a uniform system for filing applications 

for the approval of Capital Projects; 

1.1.2 To ensure that capital projects are in compliance with the Philippine 

Grid Code (PGC) and the Philippine Distribution Code (PDC); 

1.1.3 To protect the public interest as it is affected by the rates and services 

of Electric Utilities and other providers of electric power; 

1.1.4 To ensure the economic, orderly and efficient development of Electric 

Utilitiesí resources that concern public interest; 

1.1.5 To ensure that the procurement of equipment, materials and services 

are transparent and compliant with the applicable laws and accepted industry 

practices and standards. 

1.2 Guiding Principles 

Provisions in Chapter 6 of the PGC and Chapter 6 of the PDC directed the Grid 

Owner and the Distribution Utilities to conduct grid and distribution planning for the preparation 

and evaluation of distribution system reinforcement projects and for the preparation 

of the Distribution Development Plans. Distribution Utilities are mandated to prepare 

and submit their annual 5-year Distribution Development Plans to the DOE. Individual 

development projects found within the DDP shall be reviewed by the ERC. 

Any plan for expansion or improvement of distribution facilities shall be reviewed 

and approved by the ERC to ensure that all Capital Projects are optimized and that the 

contracting and procurement of the equipment, assets and services have been subjected 

to transparent and competitive bidding and purchasing processes to protect public interest.


1.3 Scope of Application 


1.3.2 Privately-Owned Distribution Utilities; 

1.3.3 Local Government Unit Owned-and-Operated Distribution Systems: 

1.3.4 Entities duly authorized to operate within the Economic Zones; 

1.3.5 Qualified Third Parties (QTPs) operating in waived areas of a franchised 

Distribution Utility; 

1.3.6 Utilities who are under the Performance-based rate setting methodology 

shall not be subject to this Guidelines 


Connection Assets Distribution Connection Assets as defined in the DSOAR. 

Department of Energy / 

DOE The government agency created pursuant to Republic 

Act No. 7638 whose expanded functions are 

provided in the Act. 

Distribution Development 

Plan The five-year development plan submitted by the Distribution 

Utilities to the DOE not later than the fifteenth 

(15 th ) of March of every year, pursuant to Section 23 

of R.A. No. 9136 and Rule 7, Section 4(p) of its IRR. 

In the case of Electric Cooperatives, such plans shall 

be submitted through the NEA for review and consolidation, 

in preparation of the National Electric Cooperatives 

Distribution Development Plan. 

Distribution Management 

Committee (DMC) The committee established by the ERC to monitor the 

implementation of the Philippine Distribution Code 

and to perform other functions mentioned in Section 

2.2.1 of the Philippine Distribution Code. 

Distribution System The system of wires and associated facilities belonging 

to a franchised distribution utility, extending between 

the delivery points on the transmission, sub-transmission 

system, or generating plant connection and the 

point of connection to the premises of the end-user. 

DSOAR The Distribution Service and Open Access Rules as 

promulgated by the ERC.

794 


Economic Zone (EZ) The selected areas which are being developed into agroindustrial, 

industrial, tourist, recreational, commercial, 

banking, investment and financial centers. An EZ may 

refer to any of the following: Industrial Estates, Export 

Processing Zones, Free Trade Zones, Information Technology 

Parks and Tourist / Recreational Centers, such 

as but not limited to, those managed, administered, or 

operated by the Bases Conversion Development Authority 

(BCDA), Cagayan Economic Zone Authority 

(CEZA), Clark Development Corporation (CDC), Subic 

Energy Zone (SEZ), Philippine Economic Zone Authority 

(PEZA), Phividec Industrial Authority (PIA), and 

Zamboanga City Economic Zone Authority (ZCEZA). 

Electric Capital Projects These are projects needed to serve forecasted future 

loads and to maintain good electric service to existing 

and future customers satisfying the utilityís technical 

criteria for capacity, reliability, quality and safety. 

Electric Cooperative A Distribution Utility organized pursuant to Presidential 

Decree No. 269, as amended or as otherwise provided 

in Republic Act No. 9136. 

Electric Utility All electric Distribution Utilities as stated in Section 3 of 

Article 1 of these Guidelines. 

Force Majeure Any act of God, act of the public enemy, terrorist acts, 

insurrection, riot, fire, earthquake, labor strike or work 

stoppage, storm or flood, breakage or accident to mahinery 

or equipment, any order or regulation or restriction 

imposed by the court, governmental, military or 

lawfully established civilian authority, or any other 

cause beyond the Electric Utilitiesí control. 

Non-electric Capital Refers to projects other than Electric Capital Projects 

Projects that are essential in the conduct and operation of 

electric service business. 

Performance Based 

Regulation (PBR) The rate setting methodology as approved by the ERC. 

Philippine Distribution The set of basic rules, requirements, procedures,and 

System (PDS) standards to ensure the safe, reliable, secured and efficient 

operation, maintenance, and development of the 

Distribution Systems in the Philippines. It also defines 

and establishes the technical aspects of the working 

relationship of the Distribution Utilities and all users of 

the Distribution System.


Philippine Energy Plan The overall energy program formulated and updated 

(PEP) early by the DOE and submitted to Congress pursuant 

to Republic Act No. 7638. 

Philippine Grid Code (PGC) The set of basic rules, requirements, procedures, and 

standards that will ensure the safe, reliable, secured 

and efficient operation, maintenance, and development 

of the high-voltage backbone transmission system in 

the Philippines. It identifies and recognizes the 

responsibilities and obligations of the Grid Owner, System 

Operator, and the Market Operator. 

Power Development The indicative plan for managing electricity demand 

Program (PDP) through energy-efficient programs and for the upgrading, 

expansion, rehabilitation, repair, and maintenance 

of power generation and transmission facilities, 

formulated and updated yearly by the DOE in 

coordination with the generation, transmission, and 

Distribution Utility companies. 

Qualified Third Party (QTP) The alternative electric service provider authorized to 

serve remote and Unviable Areas pursuant to Section 

59 of the Act and Rule 14 of its Implementing Rules and 

Regulations. It shall refer to persons who meet the qualifications 

set by the DOE and who obtained the necessary 

permits from the ERC and any other agency as 

may be required to be an indirect beneficiary of a 

person of the Universal Charge for Missionary Electri 

fication. 

Splitting of Major Projects The division, separation or partition of one project into 

several phases, stages or minor projects. 

1.5 Classification of Capital Projects 

1.5.1 Major Capital Projects 

These are Electric or Non-electric Capital Projects with costs that are substantial 

in terms of the nature and scope of work. These exclude connection 

assets covered by the DSOAR. 

All Major Capital Projects that qualify under the following conditions shall be 

filed for approval with the ERC: 

a) For a Private Distribution Utility, the total project cost of each Major 

Capital Project included in the DDP for a given year shall be more than or 

equal to 0.25% of the recorded amount of Total Net Property and Equipment in 

Service in its latest audited Balance Sheet.

796 


b) For an Electric Cooperative, the total project cost of each Major Capital 

Projects included in the DDP for a given year shall be more than or equal to 

0.25% of the recorded amount of Total Net Property and Equipment in Service 

in its latest audited Balance Sheet, or PhP500,000.00 whichever is higher. 

Major Capital Projects as indicated in the DDP shall be filed for review and 

approval of the ERC before they are implemented. Splitting of major projects 

is prohibited except with prior authorization from the ERC. 

1.5.2 Minor Capital Projects 

These are Electric or Non-Electric Capital Projects that do not qualify as Major 

Capital Projects. 

An Electric Utility shall not be required to file formal application for ERC approval of 

Minor Capital Projects to be implemented in a given year. An Electric Utility shall report to 

the ERC in writing one 1 month after the start of the implementation of Minor Capital 

Projects, by indicating the following: 

a) Project / Program / Activity Description; 

b) Justification/s or Benefits to be delivered; 

c) Estimated Project / Program / Activity Costs; 

d) Project / Program / Activity Schedule 

Minor Capital Projects shall be deemed approved by the ERC upon their implementation. 

Minor Capital Projects are subject to verification by the ERC for the purpose of 

determining any significant discrepancies or deviations from the submitted documents. 

1.5.3 Emergency Capital Projects 

These are Electric Capital Projects that require immediate implementation during an 

event of force majeure in order to maintain safe, reliable, secure and efficient operation 

of the power system. These projects shall be deemed provisionally approved by the ERC 

upon their implementation provided that, in case of emergency capital projects which are 

classified as major projects, an Electric Utility shall file a formal application within sixty 

(60) days after start of construction. 

Emergency Capital Projects that do not qualify as Major Capital Projects shall be 

reported to the ERC in writing one (1) month after the start of construction, by indicating 

the following: 

a) Project / Program / Activity Description; 

b) Justification/s or Benefits to be delivered; 

c) Estimated Project / Program / Activity Costs; 

d) Project / Program / Activity Schedule


ARTICLE II 

APPLICATIONS AND REQUIREMENTS 

2.1 Application for Major Electric Capital Projects 

The application for the approval of any Major Electric Capital Project/s shall be 

verified by an authorized representative of the Electric Utility, which has to present Board 

Resolution or Secretaryís Certificate to show proof of his / her being the designated 

representative of the Board of Directors and shall be filed with the ERC together with 

properly labeled three (3) hard copies and three (3) electronic copies of the following 

requirements: 

2.1.1 Description of the Project; 

2.1.2 Justifications for the Project (include the adverse effects of the 

non-implementation of the proposed Project(s) and impact or benefits of the 

proposed Project(s) on the system); 

2.1.3 Options / Alternatives considered in lieu of the proposed Project(s); 

2.1.4 5-year Historical and Forecast Planning Data consistent with the 

DDP; 

2.1.5 Technical Analysis (Simulation and/or Computation); 

2.1.6 Projected Financial & Economic Cost Analysis; 

i. Impact / effect on rate base of the proposed Project(s); 

ii. Net Present Value, Internal Rate of Return and Benefit/Cost Ratio analysis 

(include analysis for the alternatives); 

2.1.7 Conceptual Engineering Design and Drawings; 

2.1.8 Project Cost Estimates which has to be in reference to a specified 

design and bill of materials in the latest Manual of Construction Standards 

submitted to the ERC. 

2.1.9 Project Financing Plan; 

2.1.10 Proposed Gantt Chart Schedule (include Bidding and Procurement 

Schedule); 

2.1.11 Board resolution or Secretaryís Certificate approving the proposed 

Project(s); 

2.1.12 Sworn Statement from the authorized representative of the Electric 

Utility that an application for approval from the concerned agencies that may 

have interest in the proposed project has been filed / or shall be filed by 

(specify date of filing and furnish ERC a copy within 5 days upon filing);

798 



Utility that the proposed major capital project is consistent with the DDP. Projects 

which are not included in the DDP need justification. 

2.2 Application for Major Non-Electric Capital Projects 

The application for the approval of any Major Non-Electric Capital Project/s shall be 

verified by an authorized representative of the Electric Utility, which has to present Board 

Resolution or Secretaryís Certificate to show proof of his / her being the designated 

representative of the Board of Directors and shall be filed with the ERC together with 

properly labeled three (3) hard copies and three (3) electronic copies of the following 

requirements: 

2.2.1 Description of the Project; 

2.2.2 Justification for the Project , 

2.2.3 As-built Design and Drawings, if applicable, 

2.2.4 Actual Project Cost, 

2.2.5 Projected Financing Plan, 

2.2.6 Gantt Chart Schedule, 

2.2.7 Board Resolution or Secretaryís Certificate approving the proposed 

project/s; and 


Utility that an application for approval from the concerned agencies that may 

have interest in the proposed project has been filed or shall be filed, if applicable. 

2.3 Evaluation and Approval 

Within fifteen (15) days from receipt of an application, the ERC shall verify the 

completeness of the documents submitted, and notify the results of its findings in writing 

the Electric Utility concerned. In so doing, the ERC shall undertake either of the following: 

i. Notify the concerned Electric Utility to submit missed out documents using 

the requirements stipulated in this guidelines as basis, if some requirements 

were found lacking; or 

ii. Notify the concerned Electric Utility to pay the required filing fee as docketing 

requirement, if all the submitted requirements were found in order. 

Upon filing of the application, the Commission may, on its own or upon motion, 

grant the issuance of a Provisional Authority (PA) based on the allegations of the application 

and on such other documents attached thereto or submitted by the parties. The


Commission, if necessary, may schedule a hearing for the issuance of a PA not later 

than thirty (30) days from the filing of the application. Thereafter, the Commission shall 

issue a ruling either granting or denying the PA stating clearly the reasons therefore, 

within seventy five (75) days from the filing of the application. 

During the ERC review, the staff may request additional information from the Electric 

Utility on issues that the ERC believes need more clarification. 

Any petition, application or action to be filed herein shall be governed by the existing 

Rules of Practice and Procedure Governing Hearings before the ERC, the pertinent 

provisions of the Act or its IRR and other related laws. 

Any application for the approval of Major Capital Projects and/or Major Emergency 

Capital Projects shall be decided by the ERC within ninety (90) days from the time the 

applicant formally offers its evidence; otherwise, it is deemed that the application shall 

have been approved. 

For the authorization and approval of Major Capital Projects and/or Major Emergency 

Capital Projects, an Electric Utility shall be required to pay a permit fee based on 

the existing schedule of ERC Fees and Charges. 

The ERC may refer to the DMC or engage the services of a consultant at a reasonable 

cost, in the evaluation of any Major Capital Project/s application submitted to the 

ERC for approval. The concerned Electric Utility shall be charged an amount equivalent 

to the expenses incurred by the ERC in engaging the services of the consultant, and said 

expenses shall be recovered by the concerned Electric Utility as part of the capital expenditure 

of the project being evaluated. 

2.4 Reportorial Requirements 

A privately-owned Electric Utility and an Electric Cooperative shall submit the Plan 

for Right-of-Way (if applicable) and result/s of the competitive bidding which include 

proposals and purchase orders of major equipment utilized for the particular project/s (if 

applicable) after completion of a Major Capital Project. 

For other government-owned Electric Utilities, the submission of the result/s of the 

competitive bidding which include proposals and purchase orders of materials and/or 

equipment utilized for the particular project/s shall be in accordance with the Implementing 

Rules and Regulations of R.A. No. 9184, or known as ìGovernment Procurement 

Reform Actî. 

An Electric Utility shall be required to submit actual project costs of the Major Capital 

Project thirty (30) days after its full completion. 

Any significant or substantial change in the conceptual engineering design, specifications 

and/or increase/decrease in the bill of materials that will result in a cumulative 

variation order beyond 10% on top of the allocated contingency due to extraordinary 

inflation and currency exchange rate of the original project cost shall be reported to ERC 

in writing within fifteen (15) days before implementing the variation order. The ERC shall

800 


render its decision within thirty (30) days from receipt of the report; otherwise, it is 

deemed that the revision/s shall have been approved. Failure to submit a report within the 

said period shall constitute a waiver by the Electric Utility for any claim. 

The Electric Utility shall submit to the ERC a written report, together with justifications, 

if it decides to defer or cancel approved Major Capital Projects. 

ARTICLE III 

ADMINISTRATIVE SANCTIONS 

Violations of this Guidelines shall be subject to the penalty which the Commission 

may impose in accordance with the Guidelines to Govern the Imposition of Administrative 

Sanctions in the Form of Fines and Penalties pursuant to Section 46 of Republic Act 

9136. 

ARTICLE IV 

TRANSITORY PROVISIONS 

Major Capital Projects that are in the implementation process or which were recently 

completed and have not been covered by any application filed before the ERC, 

shall be submitted to the ERC for approval within three (3) months from the date of 

effectivity of these Guidelines. 

However, capital projects, which have already been included in the applicantís rate 

base, as approved by the ERC, or those that were already filed for inclusion in the rate 

base and presently being evaluated by the ERC, shall be excluded from the application of 

these Guidelines. 

ARTICLE V 

SEPARABILITY CLAUSE 

If for any reason, any provision of these Guidelines is declared unconstitutional or 

invalid by final judgment of a competent court, the other parts or provisions hereof which 

were not affected thereby shall continue to be in full force and effect. 

ARTICLE Vl 

REPEALING CLAUSE 

Any rule or regulation inconsistent with the provisions of these Guidelines is hereby 

repealed and modified accordingly. 

ARTICLE Vll 

EFFECTIVITY 

These Guidelines shall take effect fifteen (15) days upon its publication in a newspaper 

of nationwide circulation.





Chairman 







--o0o-- 


A Resolution Adopting a Uniform Business to Business (B2B) System 

and Designating the Philippine Electricity Market Corporation (PEMC) 

as the Central Registration Body to Manage Transactions Related 

to Enrollment and Switching of End-Users in the Contestable Market 

WHEREAS, Republic Act No. 9136 established the Energy Regulatory Commission 

(ERC) as an independent, quasi-judicial regulatory body mandated to, among others, 

promote competition and ensure the efficient and competitive operation of the retail 

electricity market; 

WHEREAS, retail competition is the provision of electricity to end-users in the 

contestable market by a retail electricity supplier through open access; 

WHEREAS, there is a need to ensure efficient enrollment and switching procedures 

to avert disorder and delay in the settlement of transactions in the retail market; 

WHEREAS, the need to have systematic and uniform arrangements was confirmed 

and acknowledged by the industry participants through a roundtable discussion 

conducted on 15 March 2005; 

WHEREAS, the necessary structures for managing the retail market must be in 

place prior to open access and retail competition to clearly define the interfaces between 

and among players in the retail market; 

WHEREAS, international experience has proven that customer enrollment and 

switching can be efficiently managed through the adoption of a uniform Business to 

Business (B2B) System administered by a central registration body; 

WHEREAS, international experience has likewise proven that the independent 

market operator for the wholesale spot market is the most appropriate central registration 

body to administer the said arrangements;

802 


WHEREAS, the Philippine Electricity Market Corporation (PEMC) is the body 

charged with administering and operating the wholesale electricity spot market; 

NOW THEREFORE, pursuant to its mandate to promote competition at the retail 

level and ensure its effective implementation, the ERC hereby resolves as it is hereby 

resolved, to adopt and oversee the establishment of a B2B System to govern the enrollment 

and switching requirements in the retail market; 

RESOLVED, FURTHER, to designate the PEMC as the central registration body 

charged with managing the B2B System with the end view of fulfilling an efficient enrollment 

and switching by the end-users in the competitive retail market. 





Chairman 

(SGD.) OLIVER B. BUTALID (SGD.) JESUS N. ALCORDO 


(SGD.) RAUF A. TAN (SGD.) ALEJANDRO Z. BARIN 



--o0o-- 


Adopting a Policy that Entry to the Performance Based 

Regulation (PBR) by Private Utilities Under the Distribution Wheeling 

Rates Guidelines (DWRG) be Made Mandatory 

WHEREAS, the Commission has been using the Return on Rate Base (RORB) 

Methodology in deciding on Rate Case Applications of privately-owned distribution utilities; 

WHEREAS, on December 10, 2004 the Commission adopted Resolution No. 

12-02, Series of 2004 entitled ìAdopting a Methodology for Setting Distribution Wheeling 

Ratesî thereby promulgating the Distribution Wheeling Rates Guidelines (DWRG); 

WHEREAS, the DWRG provides for a new methodology for setting the distribution 

rates of private distribution utilities denominated as Performance Based Regulation 

(PBR); 

WHEREAS, entry to the PBR was initially ruled to be at the option of the regulated 

entities subject to the Commissionís approval;


WHEREAS, the Commission still applies the Return on Rate Base (RORB) Methodology 

for those who have not entered the PBR; 

WHEREAS, there now exist two (2) methodologies maintained for rate regulation 

of privately-owned distribution utilities; 

WHEREAS, the DWRG provided five (5) entry groups for privately owned distribution 

utilities (PUs) to be subject to PBR with a limit of five (5) PUs for each group, to wit: 

Group Reset Process Second Regulatory Period 

A January 1, 2006 ñ June 30, 2007 July 1, 2007 ñ June 30, 2011 

B April 1, 2007 ñ September 30, 2008 October 1, 2008 ñ September 30, 2012 

C January 1, 2008 ñ June 30, 2009 July 1, 2009 ñ June 30, 2013 

D April 1, 2009 ñ September 30, 2010 October 1, 2010 ñ September 30, 2014 

E January 1, 2010 ñ June 30, 2011 July 1, 2011 ñ June 30, 2015 

WHEREAS, for Group A, entry to the PBR was made optional by the Commission 

on a first come ñ first in basis; 

WHEREAS, the Manila Electric Company (MERALCO), Dagupan Electric Corporation 

(DECORP) and Cagayan Electric Power & Light Company, Inc. (CEPALCO) 

were qualified to enter the PBR; 

WHEREAS, the Commission finds that in maintaining only a single system of 

rate regulation by mandating the DWRG would promote consistency and efficiency; 

WHEREAS, the previous policy of optional entry to the PBR was due to some 

constraints that the Commission deems will be addressed by appropriate timing; 

WHEREAS, THE Commission finds that now is the appropriate time to make 

entry to the PBR mandatory for all PUs; 

NOW, THEREFORE, be it RESOLVED, as the Commission hereby RESOLVES: 

(1) To APPROVE and ADOPT the policy that entry to the Performance Based Regulation 

by PUs under the DWRG is MANDATORY; 

(2) To mandate the PUs to choose among the remaining four (4) entry points, i.e., for 

groups B, C, D & E, given a maximum of four (4) entrants per entry point: Provided, 

however, that Public Utilities Department ñ Olongapo City and Bauan Electric Light System 

are hereby assigned to Group E; and 

(3) To set the deadline for submission of their letter of intent to enter PBR indicating their 

selected entry point not later than June 30, 2006. 

This Resolution shall take effect immediately after its publication in a newspaper 

of general circulation. This Resolution is hereby ordered to be posted on the ERC 

website and filed with the University of the Philippines Law Center Office of the National 

Administrative Register (ONAR) immediately.

804 




Chairman 




(SGD.) RAUF A. TAN 

Commissioner 

--o0o-- 


A Resolution Adopting a Format For Rate Applications of 

Distribution Utilities (Except for Regulated Entities Under 

Performance Based Regulation ) 

WHEREAS, it is the policy of the State to ensure transparent and reasonable 

prices of electricity in a regime of free and fair competition and full public accountability 

to achieve greater operational and economic efficiency; 

WHEREAS, Section 4 (e) of the Implementing Rules and Regulations (IRR) of 

R.A. 9136 provides that any application or petition for rate adjustment or for any relief 

affecting the consumers must be verified and accompanied with an acknowledgement of 

receipt of a copy thereof by the LGU Legislative Body of the locality where the applicant 

or petitioner principally operates together with the certification of the notice of publication 

thereof in a newspaper of general circulation in the same locality; 

WHEREAS, on April 6, 2006, the Commission conducted a public consultation 

for the adoption of a format on rate application of all Distribution Utilities (DUs) (except for 

those regulated entities under the Performance Based Regulation); 

WHEREAS, the said format seeks to: (1) provide the DUs a uniform rate application 

format; (2) protect the public interest as it is affected by the rates of DUs and other 

providers of electric power; (3) balance the interest of the consumers and the public 

utilities providing electric power through the fair and non-discriminatory treatment of two 

sectors; and (4) ensure transparency in all rate applications affecting electricity consumers; 

NOW, THEREFORE, the Commission, after thorough and due deliberation, RE- 

SOLVED, as it hereby RESOLVES, to APPROVE and ADOPT, as it hereby APPROVES 

and ADOPTS, the format on rate application of all Distribution Utilities (except for those 

regulated entities under the Performance Based Regulation) hereto attached as ìANNEX 

Aî* and made integral part of this Resolution. 





of general circulation in the country. This Resolution is hereby ordered to be posted on 

the ERC website and filed with the University of the Philippines Law Center Office of the 

National Administrative Register (ONAR). 



Chairman 





Commissioner 

--o0o-- 

Amendment to the Guidelines for the Issuance of 

Certificate of Compliance for Generation Companies/Facilities 

SECTION 1. The following provisions of the Guidelines for the Issuance of Certificate 

of Compliance for Generation Company/Facilities are hereby amended as follows: 

1. Section 4 (a) (viii) of Article I of said Guidelines is amended to read as follows: 

(viii) Self-Generation Facilities; 

2. Section 4 (c) (iv) of Article I of said Guidelines is amended to read as follows: 

(iv) Self-Generation Facility; 

3. Additional requirement is inserted as the new Section 2 (b) (5) (ee) of Article III of said 

Guidelines to read as follows: 

(ee) Department of Energy (DOE) Endorsement indicating that the power 

plant project is consistent with the Power Development Program of the Government; 

and 

The old Section 2(b) (5) (ee) shall be renumbered as Section 2 (b) (5) (ff). 

4. Section 6 of Article IV of the said Guidelines is amended to read as follows: 

Subject to the provisions of Section 7, Rule 18 of the Implementing Rules and 

Regulations of R.A. 9136, a Self-Generation Facility shall remit directly to TRANSCO the 

corresponding Universal Charge set by ERC. In relation hereto, TRANSCO shall be

806 


provided access to the customer side of the meter in order to determine the utilization of 

such Generation Facility for the purpose of assessing the corresponding Universal Charge. 

The term ìregisterî provided in the aforementioned rule shall be equivalent to the 

issuances of a COC to the concerned facility. 

5. Article VI shall be renumbered as Article V while Article V shall be renumbered as 

Article VI. 

The new Article VI of said Guidelines is amended to include as its first paragraph 


Upon compliance with the requirements under Article III, the Commission shall 

issue a Certificate of Compliance to the Generation Company/Facilities, subject to compliance 

with such terms and conditions as the ERC may require. 

SECTION 2. Separability Clause - If for any reason, any section of this amendment 

to the Guidelines is declared unconstitutional or invalid, the other parts or section 

hereof which are not affected thereby shall continue to be in full force and effect. 

SECTION 3. These amendments to the Guidelines for the Issuance of Certificate of 

Compliance for Generation Company/Facilities shall take effect immediately upon its 

publication in a newspaper of general circulation. 

Adopted: 7 March 2003 

(SGD.) LETICIA V. IBAY 

Acting Chairman 

(SGD.) MARY ANNE B. COLAYCO (SGD.) OLIVER B. BUTALID 



Adopted: Dec. 2001 

(SGD.) CARLOS R. ALINDADA 

Commissioner 

--o0o-- 

Philippine Distribution Code 




--o0o-- 

Philippine Grid Code


Adopted: Dec. 2001 




--o0o-- 

Resolution No. 17, s. 2006 

Addendum to the Position Paper on the Regulatory 

Reset Process for the Second Regulatory Period 

WHEREAS, on December 10, 2004 the Commission adopted Resolution No. 

12-02, Series of 2004 entitled ìAdopting a Methodology for Setting Distribution Wheeling 

Ratesî thereby promulgating the Distribution Wheeling Rates Guidelines (DWRG); 

WHEREAS, Clause 7.1.2 of the DWRG mandates the publication of a Regulatory 

Reset Issues Paper providing for the issues to be discussed in the current Regulatory 

Reset Process and specifying the information required to be submitted by each 

Regulated Entity and the timelines therefor; 

WHEREAS, pursuant to the said clause the Commission published a Regulatory 

Reset Issues Paper on September 30, 2005; 

WHEREAS, several public consultations were conducted on October 10, 13, 14 

and 28, 2005 as well as November 14, 16 and 18, 2005 for the discussion of concerns of 

the industry stakeholders where inputs were sought from interested parties; 

WHEREAS, based on the inputs received during this process, the Commission 

established its position with regard to the price reset for the Second (2 nd ) Regulatory 

Period and published the same in a Position Paper on December 9, 2005; 

WHEREAS, following the publication of the Position Paper, the Regulated Entities 

sought further clarification on the reset process, particularly the interpretation of 

certain positions taken; 

WHEREAS, to address these inquiries a supplemental document was prepared 

where the issues raised or sought to be further clarified were included; 

NOW, THEREFORE, be it RESOLVED, as the Commission hereby RESOLVES, 

to APPROVE and ADOPT, as it hereby APPROVES and ADOPTS, the ìADDENDUM 

TO THE POSITION PAPER ON THE REGULATORY RESET PROCESS FOR THE 

SECOND REGULATORY PERIODî hereto attached as Annex ìAî* and made an integral 

part of this Resolution. 



808 



of general circulation. This Resolution is hereby ordered to be posted on the ERC 

website and filed with the University of the Philippines Law Center Office of the National 

Administrative Register (ONAR) immediately. 



Chairman 





Commissioner 

--o0o-- 


A Resolution Clarifying Issues on the Appointment of 

A Regulatory Compliance Officer (RCO) and 

Prescribing the Duties and Responsibilities Thereof 

WHEREAS, ERC Resolution No. 04, series of 2006 required all regulated entities 

to designate a Regulatory Compliance Officer (RCO) whose primary function shall be 

to ensure that the regulated entity complies with all the pertinent issuances of the ERC; 

WHEREAS, in the same resolution, it was indicated that the said RCO shall be a 

senior level officer within the entity but not the General Manager or the Chief Executive/ 

Operating Officer; 

WHEREAS, on various dates, the Commission received inquiries regarding the 

appointment, as well as the duties and responsibilities of the said RCO; 

WHEREAS, for purposes of addressing the abovementioned concerns, the Commission 

hereby RESOLVES, as it hereby RESOLVES to issue the hereunder clarifications 

regarding the appointment of the RCO: 

I. There is no specific requirement as to the professional background of an RCO as long 

as he could function as an Internal Coordinator within the regulated entity for purposes of 

complying with ERC issuances; 

II. The Regulated Entity need not create a new position for the RCO as what was required 

is merely to designate one of its senior officers to function as such; and 

III. Replacement of RCO should not be more frequent than once every two (2) years and 

such replacement would only bind the ERC after seven (7) days from its receipt of the 

notice of replacement.


BE IT FURTHER RESOLVED that the RCO, shall, among others, have the following 

duties and responsibilities: 

I. Monitoring of ERC issuances; 

II. Assuring the timely compliance of the regulated entity to pertinent ERC issuances; 

III. Participation in the Mandatory Regulatory Education Program (MREP) courses; 

IV.Attending RCO meetings/seminars/conferences scheduled by the ERC; 

V. Recipient of all general guidelines/issuances of the ERC, wherein the receipt of RCO 

is receipt of the regulated entity rule applies; and 

VI. Such other duties and responsibilities that the ERC may, from time to time prescribe. 

Let copies of this resolution be furnished all regulated entities. 

This resolution takes effect immediately. 

Adopted: 5 April 2006. 


Chairman 






--o0o-- 


A Resolution Suspending the Effectivity and Implementation of 

Certain Rules Issued by the Energy Regulatory Commission 

WHEREAS, Section 43 (t) Republic Act. No. 9136, otherwise known as the 

Electric Power Industry Reform Act of 2001 (EPIRA), authorizes the Energy Regulatory 

Commission (ERC) to perform such ìregulatory functions as are appropriate and necessary 

in order to ensure the successful restructuring and modernization of the electric 

power industryÖ;î 

WHEREAS, in the exercise of such authority, the ERC issues administrative 

rules to implement the provisions of EPIRA, and among such rules it has issued are the 

Amendment to the Guidelines for the Recovery of Costs for the Generation Com-

810 


ponent of the Distribution Utilitiesí Rates dated 22 December 2004 and Resolution 

No. 18, Series of 2005, Implementing Section 43 (t) of Republic Act No. 9136 and 

Rule 3, Section 4(m) of the Implementing Rules of the Said Act dated17 August 2005; 

WHEREAS, the ERC issued the afore-stated rules without conducting public 

hearings or consultations thereon upon its interpretation that the requirement in Section 9 

(1), Chapter 2, Book VII of the Administrative Code of 1987, which provides: 

Sec. 9. Public Participation ó (1) If not otherwise required by law, an agency 

shall, as far as practicable, publish or circulate notices of proposed rules and 

afford interested parties the opportunity to submit their views prior to the adoption 

of any rule. 

is not mandatory; 

WHEREAS, the ERC has received several requests for clarification of the aforestated 

rules and it has recently come to its attention that the Supreme Court has laid down 

a doctrine on the matter of issuance of administrative rules, to wit: 

x x x The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v. 

Michel J. Lhuillier Pawnshop, Inc., is that when an administrative rule goes 

beyond merely providing for the means that can facilitate or render less cumbersome 

the implementation of the law and substantially increases the burden 

of those governed, it behooves the agency to accord at least to those 

directly affected a chance to be heard and, thereafter, to be duly informed, 

before the issuance is given the force and effect of law. (BPI Leasing Corporation 

vs. Court of Appeals, et al., G.R. No. 127624, 18 November 2005). 

WHEREAS, the ERC, in order to obviate a possible legal challenge to the validity of 

the afore-stated rules and to afford all affected parties the opportunity to submit their 

views and comments thereon, has agreed to subject said rules to public hearings. 

NOW, THEREFORE, the ERC hereby RESOLVES, as it is hereby RESOLVED, to 

SUSPEND the effectivity and implementation of its Amendment to the Guidelines for 

the Recovery of Costs for the Generation Component of the Distribution Utilitiesí 

Rates dated 22 December 2004 and Resolution No. 18, Series of 2005 Implementing 

Section 43 (t) of Republic Act No. 9136 and Rule 3, Section 4(m) of the Implementing 

Rules of the Said Act dated17 August 2005, pending the conduct and termination of 

public hearings thereon. 

This Resolution shall take effect immediately. 



Chairman 




(ON OFFICIAL BUSINESS) 




--o0o-- 

Resolution No. 22, s. of 2006 

A Resolution Promulgating the Rules for the Regulations of 

Qualified Third Parties Performing Missionary Electrification in Areas 

Declared Unviable by the Department of Energy 

WHEREAS, Section 43 (t) Republic Act. No. 9136, otherwise known as the 


Commission (ERC) to perform such ìregulatory functions as are appropriate and necessary 

in order to ensure the successful restructuring and modernization of the electric 

power industryÖ;î 

WHEREAS, on 16 December 2005, the ERC posted the ìProposed Guidelines 

for the Regulation of Qualified Third Parties Performing Missionary Electrification in 

Areas Declared Unviable by the Department of Energyî (Proposed Guidelines) on its 

official website (www.erc.gov.ph) for comments; 

WHEREAS, on 16 January 2006, the ERC issued a Notice of Public Consultations 

which indicated the scheduled dates and venues for the public consultations on the 

Proposed Guidelines, as follows: 

Date Venue 

30 January 2006 General Santos City 

9 February 2006 Iloilo City 

27 February 2006 Palawan 

WHEREAS, the ERC conducted public consultations on the dates and venues 

specified above; 

WHEREAS, in the interest of hearing additional comments and opinions on the 

Proposed Guidelines, the ERC issued a Notice dated 17 February 2006, scheduling two 

(2) additional public consultation dates in the following venues: 

Date Venue 

9 March 2006 Tuguegarao City 

20 March 2006 Digos City 

WHEREAS, the ERC received two (2) written comments on the Proposed Guidelines 

and oral comments given during the scheduled public consultations and the same 

were considered in its deliberations on the Proposed Guidelines and the necessary 

revisions were made thereto;

812 


WHEREAS, in accordance with its mandate under the EPIRA, after consideration 

of the various views and comments submitted and manifested by interested parties, 

and based on its own study and analysis, the ERC finds it appropriate to approve the 

Proposed Guidelines with the revisions adopted by the Commission, including the change 

in its title to the ìRules for the Regulation of Qualified Third Parties Performing Missionary 

Electrification in Areas Declared Unviable by the Department of Energy;î 

NOW, THEREFORE, the ERC hereby RESOLVES, as it is hereby RESOLVED, 

to PROMULGATE the RULES FOR THE REGULATION OF QUALIFIED THIRD PAR- 

TIES PERFORMING MISSIONARY ELECTRIFICATION IN AREAS DECLARED 

UNVIABLE BY THE DEPARTMENT OF ENERGY, which is hereto attached. 



Chairman 





Attachment 

RULES FOR THE REGULATION OF QUALIFIED THIRD PARTIES PERFORMING 

MISSIONARY ELECTRIFICATION IN AREAS DECLARED UNVIABLE BY THE 

DEPARTMENT OF ENERGY 

Pursuant to Section 59 (Alternative Electric Service for Isolated Villages) in relation 

to Section 70 (Missionary Electrification) and Section 34 (Universal Charge) of 

Republic Act No. 9136, otherwise known as the ìElectric Power Industry Reform Act of 

2001î (ìEPIRAî), and its Implementing Rules and Regulations (ìEPIRA-IRRî), and cognizant 

of the policies of the Department of Energy (DOE) as expressed in DOE Department 

Circular DC2004-06-006 entitled ìPrescribing the Qualification Criteria for the Qualified 

Third Partyî and DOE Department Circular No. DC2005-12-011 entitled ìPrescribing the 

Guidelines for Participation of Qualified Third Parties (QTPs) for the provision of Electric 

Service in Remote and Unviable Areas, Pursuant to Sections 59 and 70 of the 

Electric Power Industry Reform Act and its Implementing Rules and Regulationsî for 

the promotion of rural electrification, the Energy Regulatory Commission (ERC) hereby 

adopts and promulgates these Rules for the regulation of Qualified Third Parties (QTPs) 

operating in Declared Unviable Areas by the DOE. 

ARTICLE I 

General Provisions 

SECTION 1. Purpose. - These Rules shall establish the framework and procedure 

for:


(a) Determining how ERC will qualify and authorize electric service providers in unviable 

areas, consistent with Rule 14 (Provision of Electricity by Qualified Third Parties) of the 

EPIRA-IRR, and in pursuance of the Stateís policies to ensure and accelerate the total 

electrification of the country and enhance the inflow of private capital and participation of 

private sector in attendant risks, in the energization of remote and unviable areas of the 

country through Qualified Third Parties; 

(b) The issuance of the necessary permits required by the EPIRA for Qualified Third 

Parties to provide electricity service in Declared Unviable Areas; and 

(c) Setting the rates, subsidies and service standards for Qualified Third Parties. 

SECTION 2. Definition of Terms. - 

(a) ìAuthority to Operateî or ìATOî refers to the authorization issued by the ERC to 

the QTP which shall constitute as the latterís license to provide electricity and related 

services, including as necessary, generation of electricity in a specified QTP Service 

area; 

(b) ìCertificate of Complianceî or ìCOCî refers to a certificate given to an Entity by 

the Energy Regulatory Commission to engage in the operation of a power plant facility 

used to generate electricity pursuant to Section 6 of the EPIRA and Sections 4 and 5 of 

the EPIRA-IRR; 

(c) ìDelegated NPC-SPUG Areaî refers to an area not connected to the national grid 

transmission system where a New Power Provider (NPP) or NPPs act on behalf of NPC- 

SPUG in providing electric generation services and its associated power delivery systems; 

(d) ìDeclared Unviable Areaî refers to an Unviable Area which the DOE has declared 

to be open for participation by Qualified Third Parties, in accordance with Section 59 of 

EPIRA and Section 3 of Rule 14 of the EPIRA-IRR, after the waiver thereof by the 

concerned Distribution Utility for inclusion in the DOEís Qualified Third Party Program; 

(e) ìDepartment of Energyî or ìDOEî refers to the government agency created 

pursuant to Republic Act No. 7638; 

(f) ìDistribution Codeî or ìCodeî refers to the term defined in Section 4(m) of the 

EPIRA and Rule 4(y) of the EPIRA-IRR; 

(g) ìDistribution Utilityî or ìDUî refers to any electric cooperative, private corporation, 

government-owned utility or existing local government unit which has an exclusive 

franchise to operate a distribution system in accordance with its franchise and the EPIRA 

as defined in Section 4(q) of the EPIRA and Rule 4(cc) of the EPIRA-IRR; 

(h) ìElectric Cooperativeî or ìECî refers to a distribution utility organized pursuant to 

Presidential Decree No. 269, as amended, as defined in Section 4(r) of the EPIRA and 

Rule 4(ee) of the EPIRA-IRR;

814 


(i) ìElectricity Serviceî refers to the service embodied in the QTP Service Contract 

duly endorsed by the DOE; 

(j) ìEnergy Regulatory Commissionî or ìERCî refers to the independent, quasi-judicial 

regulatory agency created under Section 38 of EPIRA; 

(k) ìEntityî refers to any person or body corporate, and may include a cooperative or a 

local government unit; 

(l) ìEPIRAî refers to Republic Act No. 9136, otherwise known as the ìElectric Power 

Industry Reform Act of 2001î; 

(m) ìEPIRA-IRRî refers to the Implementing Rules and Regulations of the EPIRA; 

(n) ìFull Cost Recovery Rateî or ìFCRRî refers to the rate, expressed in Peso per 

kilowatt-hour, that recovers the full efficient costs of providing Electricity Service sufficient 

to enable the Qualified Third Party to operate viably; 

(o) ìMissionary Electrificationî refers to the provision of basic electricity service in 

Unviable Areas with the ultimate aim of bringing the operations in these areas to viability 

levels, including the provision of power generation and its associated power delivery 

systems in areas that are not connected to the national grid transmission system; 

(p) ìMissionary Electrification Subsidyî or ìME Subsidyî refers, for purposes of 

these Rules, to the fund duly approved by the ERC to cover the difference between the 

FCRR and the Subsidized Approved Retail Rate of a Qualified Third Party sourced from 

the Universal Charge for Missionary Electrification; 

(q) ìNational Power Corporation - Small Power Utilities Groupî or ìNPC-SPUGî 

refers to the functional unit of NPC created to pursue missionary electrification function 

as defined in Section 4(tt) of the EPIRA and Rule 4(bbbb) of the EPIRA-IRR; 

(r)ìQualified Third Partyî or ìQTPî refers to an alternative electric service provider 

that meets the standards in and is chosen in accordance with DOE Circular No. 2005-12- 

011, and is duly qualified and authorized by the ERC to serve Declared Unviable Areas 

pursuant to Section 59 of the EPIRA and Rule 14 of the EPIRA-IRR; 

(s) ìQTP Service Areaî refers to the geographic area corresponding to the Unviable 

Area/s where QTP shall be authorized to provide Electricity Service as stipulated in the 

QSC; 

(t) ìQTP Service Contractî or ìQSCî refers to the contract entered into by NPC and 

the QTP, duly approved by the ERC, defining the QTPís responsibilities in undertaking 

missionary electrification in Declared Unviable Areas. This contract shall set the terms 

and conditions by which the QTP shall provide the Electricity Service, and shall include 

the tariff levels, other electric service charges, and the applicable performance and service 

standards to be met by such QTP; 

(u) ìSelection Processî refers to the formal steps undertaken by the DOE to choose, in 

accordance with the criteria set forth in DOE Circular No. 2005-12-011, the prospective


QTP that can apply for authorization with the ERC for the provision of Electricity Service 

in a Declared Unviable Area; 

(v)ìSubsidized Approved Retail Rateî or ìSARRî refers to the rate, expressed in 

Peso per kilowatt-hour, that the ERC has determined to be the maximum that an end-user 

in a Declared Unviable Area shall pay for the Electricity Service provided by a QTP in that 

Declared Unviable Area; 

(w) ìSubsidy and Disbursement Agreementî or ìSDAî refers to the agreement entered 

into between the QTP and NPC setting forth the terms and conditions governing the 

QTPís availment of the UC-ME subsidy to allow it to viably serve the QTP Service Area; 

(x)ìRetail Rateî refers to the total price paid by end-users consisting of the charges for 

generation, transmission, and related ancilliary services, distribution, supply and other 

related charges for electricity services as defined in Rule 4(uuu) of the EPIRA-IRR; 

(y) ìUniversal Chargeî or ìUCî refers to the charge, if any, imposed for the recovery 

of stranded cost and other purposes pursuant to Section 34 of the EPIRA as defined in 

Section 4(ddd) and 34 of the EPIRA and Rule 4(rrrr) and Rule 18 of the EPIRA-IRR; 

(z) ìUniversal Charge for Missionary Electrificationî or ìUC-MEî refers to the portion 

of the Universal Charge which is designated for Missionary Electrification; 

(aa) ìUnviable Areaî refers to a geographical area within the franchise area of 

a DU where the immediate extension of distribution line is not feasible, as defined 

by Rule 4 (ssss) of the EPIRA-IRR. For purposes of these Rules, Unviable Areas 

shall also include those areas which are currently served by the concerned DU 

but are deemed unviable and are subsequently declared by the DOE as open for 

participation by Qualified Third Parties; and 

(bb) ìWaiver Contractî refers to the contract entered into between the DU and 

the QTP pursuant to Rule 14, Section 5(a) of the EPIRA IRR wherein the DU 

transfers the responsibility to service the area described therein to the QTP. For 

avoidance of doubt, the contract shall be with a period and during its existence, 

the DUís franchise shall not be deemed as transferred, abandoned and/or modified 

with respect to the area included therein, as only the right to service such 

area shall be deemed assumed by the QTP. 

SECTION 3. Scope. - These Rules shall apply to Entities which seek to provide 

Electricity Service as QTPs in Declared Unviable Areas pursuant to Section 59 of the 

EPIRA and Rule 14 of the EPIRA-IRR. 

QTPs: 

ARTICLE II 

Qualification and Authorization of Entities to Provide 

Electricity Service in Declared Unviable Areas 

SECTION 1. Who may become QTPs. - The following may be considered as

816 


(a) An Entity, except a DU whose franchise includes the Declared Unviable Area being 

applied for service by QTP, who was determined as a prospective QTP, in accordance 

with the Selection Process conducted by the DOE for Declared Unviable Areas; or 

(b) An Entity, other than the concerned DU, its affiliate or subsidiary, who, prior to the 

issuance of these Rules, without undergoing the DOEís Selection Process, is already 

engaged in providing electricity service in an Unviable Area; provided that, the same or a 

portion thereof becomes a Declared Unviable Area. 

An affiliate or subsidiary of a DU may participate in the Selection Process of the 

DOE with respect to a Declared Unviable Area within such DUís franchise area and 

become a prospective QTP therein under Section 1 (a), provided that there is complete 

business, operational, and functional separation between such affiliate or subsidiary and 

the concerned DU. 

SECTION 2. Qualification and Authorization of Entities under Section 1 (a) to 

Operate as QTPs. - An Entity who is pre-qualified by the DOE under DOE Department 

Circular 2004-06-006 and selected as a prospective QTP through the DOEís Selection 

Process for a specific Declared Unviable Area, shall file an application with the ERC for 

authorization to provide Electricity Service in a specific Declared Unviable Area as a 

QTP and for issuance of its corresponding ATO and for approval of its QSC with NPC. 

Together with its application, it shall submit the following: 

(a) QSC between the QTP and NPC; 

(b) Waiver Contract signed by the concerned DU and the QTP; 

(c) SDA signed between the QTP and NPC, if any; 

(d) DOE Certification that the QTP was pre-qualified in accordance with DOE Circular 

2004-06-006 and DOE Circular 2005-12-011; 

(e) DOE Certification that the QTP was determined based on the DOEís Selection Process; 

(f) Relevant technical details of engineering design of the proposed system, including 

the generation facilities and associated delivery systems, if necessary; 

(g) Relevant financial details of the project, if necessary; 

(h) Other necessary permits to implement the project, including environmental certificate 

from appropriate government agencies; and 

(i) Other documents and information that the ERC may require. 

SECTION 3. Qualification and Authorization of Entities under Section 1 (b) to 

Operate as QTPs. - An Entity falling under Section 1 (b) who intends to continue operating 

as a QTP shall file an application with the ERC, within One (1) Year from effectivity of 

these Rules, for authorization to provide, as a QTP, Electricity Service in a specific 

Declared Unviable Area where it is already operating as an electricity service provider. 

Together with its application, it shall submit the following and submit the following:


(a) QSC between the QTP and NPC; 

(b) Waiver Contract signed by the concerned DU and the QTP; 

(c) SDA signed between the QTP and NPC, if any; 

(d) Data regarding the continuation of operations of the applicant in the Declared Unviable 

Area; 

(e) DOE Certification that the area already being served by applicant is a Declared 

Unviable Area; 

(f) Relevant technical details of engineering design of the system used by applicant, 

including the generation facilities and associated delivery systems, if necessary; 

(g) Relevant financial details of applicantís operations, if necessary; 

(h) Other necessary permits, including environmental certificate from appropriate government 

agencies, if applicable, secured by applicant; and 

(i) Other documents and information that the ERC may require. 

SECTION 4. ERC Action on the Application. - Upon the filing of the application, 

the ERC may, on its own or upon motion, grant a Provisional Authority (PA) based on the 

allegations of the application and on such other documents attached thereto or submitted 

by the parties. The ERC, if necessary, may schedule a hearing for the issuance of a PA 

not later than thirty (30) days from the filing of the application. Thereafter, the Commission 

shall issue a ruling either granting or denying the PA stating clearly the reasons 

therefor, within seventy five (75) days from the filing of the application. 

The ERC shall decide the application within sixty (60) days from the time the 

applicant formally offers its evidence; otherwise, the application shall be deemed approved 

upon the lapse of said period. Its decision approving the application shall constitute 

as the applicantís license or ATO within the Declared Unviable Area applied for as a 

QTP. 

SECTION 5. NPC Performing the Functions of the QTP. - In the event that no 

QTP qualifies to provide Electricity Service to a Declared Unviable Area, NPC-SPUG 

shall act as the provider of last resort and perform the functions of the QTP. NPC shall 

include its ME Subsidy requirements in its application to the ERC as provided in Section 

3(a) of Article IV. 

SECTION 6. Special Rules for Small QTPs not Requiring Subsidies. - An 

Entity providing Electricity Service in a Declared Unviable Area which: 

(a) has a generating capacity below 200 kW; or 

(b) has fewer than 100 connections; 

and

818 


(c) does not seek to avail of a Missionary Electrification Subsidy because its retail rate is 

equal to or lower than the ERC-approved SARR in the Declared Unviable Area where it 

operates, shall be deemed qualified and authorized to act as QTP upon issuance of a 

COC in its favor, provided that such authorization shall be valid only during the effectivity 

of the COC, while the above conditions are satisfied, or upon revocation by the ERC, 

whichever comes earlier. 

If the above conditions are no longer prevailing, said Entity shall comply 

with Article II, Section 2 or 3, as applicable, if it intends to continue operating as a 

QTP. 

SECTION 7. QTP Service Contracts (QSCs). - The QSC between a QTP and 

NPC shall include the following: 

(a) A clear description of the scope of services to be offered by the QTP, including 

schedule for the target connections, and modalities of payment collections, among others; 

(b) The Full Cost Recovery Rate (FCRR) and an adjustment mechanism provision, if any, 

that promotes fair and reasonable consumer tariffs in accordance with the level of service 

provided by the QTP; 

(c) Efficient allocation of risk; 

(d) The term of the QSC, which shall be commensurate to recover the necessary investment 

of the QTP, but in no case to exceed twenty (20) years; 

In the event that the QSCís term exceeds the remaining franchise term of the concerned 

DU, the QSCís term shall be shortened and the FCRR adjusted accordingly, 

unless Congress grants such DU an extension or renewal of its franchise; 

(e) The responsibility of the QTP to ensure, at all times, consumer safety and protection; 

and 

(f) The applicable service and safety standards as provided in Article III. 

SECTION 8. Other Required Permits. - A QTP whose Electricity Service includes 

the generation of electricity shall likewise be required to secure a COC from the 

ERC in accordance with the ERCís Guidelines for the Issuance of Certificate of Compliance 

for Generation Companies/ Facilities, as Amended. 

ARTICLE III 

Service Standards and Compliance with the Distribution Code 

SECTION 1. Service Standards and Compliance with the Distribution Code - 

Service and safety standards that the ERC shall require QTPs to meet, which may include 

applicable provisions of the Distribution Code, shall be included as specific terms 

and conditions of the QSC.


SECTION 2. Rules for the Setting of Service and other Standards. - Given the 

different technical configurations of the facilities that the QTP may propose to construct, 

the ERC hereby adopts the following rules for setting the service and other operating 

standards for QTP operation, on a case-to-case basis: 

(a) The ERC shall have the full authority to set the actual parameters to be followed by 

any QTP during its review of the technical design for applicable generating facilities and 

associated delivery systems and inspection of the actual construction of entire system. 

The service and other operating standards specified in the approved QSC shall be used 

as the basis of ERCís evaluation of the technical and operating performance of the QTP. 

(b) ERC shall allow special operating standards for low-cost electrification solutions to 

cater to the socio-economic conditions of the target customers in the Declared Unviable 

Areas. 

(c) As a general rule, the QSC must conform to the following requirements of the Philippine 

Distribution Code for safety and acceptable service standards for the consumers, 

subject to the size of QTP and the ability to pay of the target customers: 

(i) Below One (1) MW: those provisions of the Philippine Distribution Code 

that represent the minimum for safety standards; and 

(ii) One (1) MW and above: those provisions of the Philippine Distribution 

Code that represent the minimum for safety and service standards. 

ARTICLE IV 

Process for Setting and Adjusting the Full Cost Recovery Rate (FCRR), the 

Subsidized Approved Retail Rate (SARR) and Missionary Electrification Subsidy 

(ME Subsidy) 

SECTION 1. Determination of the FCRR. - In the QTPís application with the 

ERC for authorization to provide Electricity Service in a specific Declared Unviable Area 

as a QTP and issuance of its corresponding ATO and for approval of its QSC with NPC, it 

shall indicate its proposed FCRR. The ERC shall evaluate and set the appropriate FCRR, 

as follows: 

(a) For areas where two or more qualified Entities participated in the DOEís Selection 

Process, the FCRR shall be that FCRR proposed by the selected Entity. 

(b) For areas where there is only one Entity who participated or qualified in the Selection 

Process, the FCRR shall be determined using the twelve percent (12%) Return on Rate 

Base (RORB) methodology or some other appropriate methodology as benchmark for 

determining if the proposed FCRR of such Entity is reasonable. 

(c) For applications filed pursuant to Section 3 of Article II, the ERC shall also use the 

twelve percent (12%) Return on Rate Base (RORB) methodology or some other appropriate 

methodology as benchmark for determining if the proposed FCRR is reasonable. 

SECTION 2. Rules for Setting the Subsidized Approved Retail Rate (SARR) - 

NPC-SPUG shall file an application with ERC for the setting of the maximum retail rate

820 


which customers should pay for electricity in QTP Service Areas. Based on this application, 

the ERC will establish the maximum Subsidized Approved Retail Rate (SARR). This 

rate may be uniform throughout the Philippines, or may be established at different levels 

for different areas, according to the state of development of the areas. 

Pending ERC approval of the NPC-SPUG Application, the SARR for a particular 

QTP Service Area shall be the ERC-approved and existing retail rate of the waiving DU. 

Where the full cost of serving an area is higher than the SARR, an ME Subsidy 

may be offered to the QTP operating in the area to allow it to viably serve the same while 

charging no more than the SARR. In such cases, revenues from the SARR combined 

with the ME Subsidy should put the QTP in the same financial position as if it was able to 

charge the FCRR. 

SECTION 3. Rules for Setting the ME Subsidy. - Consistent with the NPC- 

SPUG filing for UC-ME for Delegated NPC-SPUG Areas as provided for in ERC Resolution 

No. 11, Series of 2005 entitled ìGuidelines for the Setting and Approval of Electricity 

Generation Rates and Subsidies for Missionary Electrification Areas,î the following 

requirements and procedures shall be followed in the submission, evaluation and approval 

of the UC-ME for QTP areas. 

(a) Periodic Filing. On or before September 30 of every calendar year, NPC-SPUG shall 

file its application with the ERC to set the UC-ME sufficient to cover the ME Subsidy 

estimated requirements for NPC-SPUG, including the amount needed to sufficiently cover 

the ME Subsidy requirements of QTPs. 

In its decision, the ERC shall specifically indicate the amount, expressed in Peso 

per Kilowatt-hour, allocated for QTPs. 

(b) Quarterly True-Up Adjustments. NPC-SPUG shall file a quarterly application, if 

necessary, with the ERC to recover any shortfall in the ME Subsidy caused by factors 

such as: 

(i) Collection shortfall; 

(ii) Adjustments in the FCRR; and 

(iii) Other analogous cases. 

(c) Administration of ME Subsidy. NPC-SPUG shall establish a separate trust account 

wherein all UC-ME transfers allocated to QTPS from the PSALM administered Special 

Trust Fund will be deposited. This bank account will be governed by a set of predefined 

rules. The administrator of the account will make disbursements to the QTPs according to 

such rules. The transfer rules from the Account Administrator to the QTPs will also be 

defined in the SDA signed by the QTP and NPC-SPUG. 

(d) Reconciliation of Actual UC-ME. On or before the first quarter of the calendar year, 

NPC-SPUG shall reconcile all amounts received against all disbursements made for the 

previous year. If the reconciliation results in NPC having surplus funds, the amount of the 

ME Subsidy for the year shall be adjusted accordingly. Conversely, if the reconciliation


results in the NPC-SPUG experiencing a deficiency, NPC-SPUG shall be entitled to file 

an application for an increase in the ME Subsidy to cover the shortfall. 

(e) Priority in the UC-ME. The Missionary Electrification Development Plan (MEDP) 

shall indicate the priority or allocation among the UC-ME supported activities. In any 

event, QTPs shall be pari passu or equal in priority with all NPPs in Delegated NPC- 

SPUG areas which require ME Subsidies. However, small QTPs which are identified in 

the MEDP shall enjoy higher priority on the provision of subsidy over larger QTPs and 

NPPs. 

(f) Automatic Adjustment to UC-ME. If as a result of factors outside its control, NPC- 

SPUG is unable to file an acceptable UC-ME application for Delegated NPC-SPUG Areas 

and/or QTPs before September 30, or the ERC is unable to issue a UC-ME Decision 

before the end of the Calendar Year, the UC-ME approved by the ERC for the previous 

calendar year will be automatically adjusted based on the following formula and events: 

UCME t = UCME t-1 x AF t 

Where: 

t = Forthcoming year 

t-1 = Current year 

UCME t-1 = UC-ME (PhP/kWh) approved for the current year 

AF t 

If NPC-SPUG fails to file an acceptable UC-ME application 

with the ERC before September 30 of the current year: 

= 0.5 when t = 2006 

= 0.6 when t = 2007 

= 0.7 in all other subsequent years 

If ERC is unable to issue a UC-ME Decision before December 

31 of the Current Year: 

= 1.00. 

Nothing in this provision shall be construed as allowing the reduction in the subsidy 

allocation of small QTPs as identified in the MEDP. 

SECTION 4. Rules for Adjusting the FCRR and the SARR. - The FCRR and 

the SARR for a QTP Area may be adjusted as follows: 

(a) The FCRR may be adjusted automatically on a monthly basis by the QTP to reflect 

changes in the price of fuel, foreign exchange rates or other input costs, in accordance 

with the Retail Rate adjustment rules set out in the QSC for that Area. 

(b) After a period of time, the ERC may undertake a review of the SARR, to reset the rate 

at a new level. Increases in the SARR may be made to: 

(i) Directly reflect increases in the FCRR; and 

(ii) Reduce the amount of the subsidy required.

822 


ARTICLE V 

Miscellaneous Provisions 

SECTION 1. Nothing in these Rules shall be construed as to limit the authority of 

the DOE to declare what Unviable Areas, regardless of whether or not the concerned 

DUs waive such areas, shall be open for participation by QTPs under Section 3, Rule 14 

of the EPIRA-IRR. 

SECTION 2. Consistent with Section 5 (a), Rule 14 of the EPIRA-IRR, in case 

the DU fails to provide electricity to an Unviable Area, or if such service made available to 

the area is not comparable to the service provided to the rest of the DUís franchise area, 

and such DU refuses to waive said Unviable Area for inclusion in DOEís QTP Program, 

the ERC shall, upon petition by any affected party or on its own initiative, after due notice 

and hearing, endorse the Unviable Area to the DOE for inclusion in its QTP Program and 

require the DU to execute a Waiver Contract with the QTP chosen in accordance with the 

DOEís CSP to provide Electricity Service in such Unviable Area. 

SECTION 3. The ERC may exempt the QTPs from its requirements imposed on 

generation companies and distribution utilities on the grid as it deems appropriate. 

ARTICLE VI 

Separability 

If for any reason, any section of these Rules is declared unconstitutional or 

invalid, the other parts or sections hereof which are not affected thereby shall continue to 

be in full force and effect. 

ARTICLE VII 

Effectivity 

These Rules shall become effective fifteen (15) days after its publication in a newspaper 

of general circulation or filing thereof with the Office of the National Administrative 

Register at the University of the Philippines Law Center, whichever comes earlier. 



Chairman 





--o0o--




A Resolution Adopting the Rules for the 

Registration of Wholesale Aggregators 

WHEREAS, Section 30 of Republic Act No. 9136, otherwise known as the ìElectric 

Power Industry Reform Act of 2001î, empowers the Energy Regulatory Commission 

(ERC) to authorize other similar entities to become eligible as members, either directly or 

indirectly, of the Wholesale Electricity Spot Market (WESM); 

WHEREAS, there is a need to provide supply options for Distribution Utilities in 

order to facilitate their participation in the WESM; 

WHEREAS, the participation of these Distribution Utilities in the WESM shall be 

facilitated through an entity referred to as a ìWholesale Aggregatorî; 

WHEREAS, the ERC proposed a set of Rules for the Registration of Wholesale 

Aggregators whereby a public consultation was conducted on 31 March 2006; 

WHEREAS, the set of Rules for the Registration of Wholesale Aggregators establishes 

(i) the qualifications, criteria and limitations of Wholesale Aggregators; (ii) the 

requirements and procedures for registration; and (iii) the obligations of Wholesale 

Aggregators; 

WHEREAS, these Wholesale Aggregators shall be bound by the WESM Rules with 

respect to their transactions in the market; 


RESOLVES, as it is hereby RESOLVED, to APPROVE and ADOPT the set of Rules for 

the Registration of Wholesale Aggregators herein attached as ANNEX ìAî and made an 

integral part of this Resolution; 

This Resolution shall take effect fifteen (15) days following its publication in a newspaper 




Chairman 





824 


ERC CASE NO. 2006-003-RM 

Rules for the Registration of Wholesale Aggregators 

ANNEX A 

Pursuant to Section 30 of Republic Act No. 9136, hereinafter referred to as the Act, 

its Implementing Rules and Regulations, the Philippine Grid Code, Philippine Distribution 

Code, and the Wholesale Electricity Spot Market (WESM) Rules, the Energy Regulatory 

Commission (ERC) hereby adopts and promulgates the following Rules for the registration 

of qualified Wholesale Aggregators. 

SECTION 1. Objectives 

ARTICLE I 


The following are the objectives of these Rules: 

a. To promote free and fair competition and accountability of Electric Power Industry 

Participants; 

b. To provide supply options for Distribution Utilities, specifically small electric cooperatives; 

c. To provide for the qualifications of a Wholesale Aggregator and the requirements and 

procedures for registration with the ERC; and 

d. To establish the obligations of a Wholesale Aggregator. 

SECTION 2. Guiding Principles 

Section 30 of the Act empowers the ERC to authorize other similar entities to 

become eligible as members, either directly or indirectly, of the WESM. These entities 

authorized by the ERC shall be bound by the WESM Rules with respect to their transactions 

in the market. 

Hence, no Person, other than a Generation Company, shall implement any contract 

for the sale of electricity to Distribution Utilities without having registered with the 

ERC as a Wholesale Aggregator. 

SECTION 3. Registration -The ERC shall issue a Certificate of Registration to a 

qualified Wholesale Aggregator to become a member of the WESM and to comply with all 

applicable requirements stipulated herein. 

SECTION 4. Scope - This set of Rules shall apply to any Person intending to 

become a Wholesale Aggregator consistent with the Act and its Implementing Rules and 

Regulations.


SECTION 5. Definition of Terms. 

Act Republic Act No. 9136, otherwise known as ìElectric Power 

Industry Reform Act of 2001î; 

Applicant A Person or entity seeking to obtain a Certificate of Registration 

to become a Wholesale Aggregator; 

Certificate of The certificate granted by the ERC to any Person or entity autho- 

Registration rized to act as a Wholesale Aggregator; 

Competition The rules promulgated by ERC to promote and ensure competition 

in the electric power industry pursuant to the Act and its 

Implementing Rules and Regulations; 

Distribution Any electric cooperative, private corporation, government-owned 

Utility utility or existing local government unit which has an exclusive 

franchise to operate a distribution system in accordance with 

the Act; 

Economic Selected areas which are highly developed or have the potential 

Zones (EZs) to be developed into agro-industrial, industrial, tourist, recreational, 

commercial, banking, investment and financial centers 

(with Distribution Utilities) and for purposes of these Rules only, 

shall be considered Distribution Utilities; 

Generation Refers to any person or entity authorized by the ERC to operate 

Company facilities used in the generation of electricity; 

Person A natural or juridical person, as the case may be; 

Wholesale The Wholesale Electricity Spot Market established pursuant 

to Section 30 of the Act; 

Wholesale Any Person or entity, other than a Generation Company, 

Aggregator issued Certificate of Registration by the ERC to sell electricity 

to Distribution Utilities; 

Wholesale The contract entered into by a Wholesale Aggregator with 

Aggregation Distribution Utilities. 

Contract 

Terms, not otherwise defined herein, which are defined in the Act or its Implementing 

Rules and Regulation (IRR) shall have the meaning ascribed to them in the Act or its 

IRR (as the case may be). 

ARTICLE II 

QUALIFICATIONS, CRITERIA AND LIMITATIONS 

OF A WHOLESALE AGGREGATOR

826 


SECTION 1. Any natural or juridical person, other than a Generation Company, 

duly organized to engage in the wholesale aggregation business may register as a Wholesale 

Aggregator. 

SECTION 2. Upon registration with the ERC, the Applicant must demonstrate that 

it has the personnel and business structure in place necessary to manage and operate its 

wholesale aggregation business. 

SECTION 3. Ownership Limitation and Restrictions. 

a. A Wholesale Aggregator or affiliate thereof or any stockholder, director or officer or 

any of their relatives within the fourth (4 th ) civil degree of consanguinity or affinity, legitimate 

or common law, shall not own any interest, directly or indirectly, in TRANSCO or its 

buyer or concessionaire; 

b. Except for ex-officio government-appointed representatives, no Person who is an officer 

or director of the TRANSCO or its buyer or concessionaire shall be a Wholesale 

Aggregator or an officer, director or stockholder of any Wholesale Aggregator. 

ARTICLE III 

REQUIREMENTS AND PROCEDURES 

SECTION 1. The Applicant shall register with the ERC prior to implementing its 

Wholesale Aggregation Contract. Provided all the requirements shall have been complied 

with, the ERC shall approve or reject an application within thirty (30) working days 

from the date of application unless ERC shall have required the submission of additional 

information, or ordered on reasonable grounds, the postponement of final action on an 

application. A Certificate of Registration shall be issued upon approval of an application. 

SECTION 2 The following documents and information are required to be submitted 

by an Applicant: 

a. Articles of Incorporation/Partnership with Certificate of Registration (for juridical person) 

or Business Name Registration Certificate (for single proprietorship); 

b. All applicable contracts already signed and executed in relation to the wholesale aggregation 

business, if any; 

c. List of affiliates engaged in the generation, distribution and retail supply of electricity, 

and their corresponding business addresses, if any; 

d. List of shareholders and their shareholdings, directors and officers, including curriculum 

vitae, if any; and 

e. Duly accomplished Application Form for registration (copy available for downloading 

at the ERC website or can be secured at the Spot Market Division). 

SECTION 3. An Applicant shall incorporate in its Wholesale Aggregator Contracts 

provisions for the protection of Distribution Utilities against fraud, gross negligence, bad 

faith or malicious intent. An Applicant shall be required to provide and maintain a secu-


rity deposit based on its one (1) month actual energy sales under an escrow account 

subject to the terms and conditions acceptable to the ERC. The security deposit may be 

in the form of either cash or any applicable bank guaranty issued by any universal 

commercial bank. For its first month of operation, the one (1) month total projected 

energy sales will initially set the required security deposit and shall be updated every end 

of June and December each year, in which case, will be set to the highest actual energy 

sales occurring during the previous six (6) month period. The Applicant shall submit to the 

ERC a certification from any universal commercial bank stating the amount deposited in 

escrow. An Applicant shall also incorporate in its Wholesale Aggregator Contracts provisions 

on the establishment as well as drawdown of such security deposit. 

SECTION 4. In case of renewal of registration, the Wholesale Aggregators shall 

submit the following requirements: 

a. Duly accomplished Application Form for Renewal of registration (copy available for 

downloading at the ERC website or can be secured at the Spot Market Division); 

b. Recent annual report to shareholders together with Audited Financial Statements; and 

c. Such other information or documents that ERC may require. 

SECTION 5. All contracts entered into by Distribution Utilities with the Wholesale 

Aggregators shall be considered as bilateral contracts and shall be subject to review and 

approval by the ERC pursuant to Section 45 (b) of the Act. 

SECTION 6. Failure to submit the requirements to the ERC shall be a ground for 

denial of the application or renewal of registration. 

SECTION 7. All submissions shall be certified under oath by the Applicant or its 

duly authorized officer, in case of a juridical person. 

ARTICLE IV 

PAYMENT OF FEES 

The Applicant shall pay the registration fee in the amount of Ten Thousand Pesos 

(PhP10,000.00) upon the filing of its application or renewal of registration. 

ARTICLE V 

TERM OF CERTIFICATE OF REGISTRATION 

The Certificate of Registration issued by the ERC shall have a term of five (5) years, 

renewable at the end of every term. The registration shall be non-transferable and shall 

be valid for the stated term unless otherwise revoked by the ERC. 

A Wholesale Aggregator shall apply for the renewal of registration not later than 

sixty (60) days before the expiration of its Certificate of Registration. The ERC shall 

issue the renewed registration within thirty (30) days upon receipt of the documents 

required. The term of the renewed Certificate of Registration shall commence immediately 

after the end of the preceding term of registration.

828 


ARTICLE VI 

REPORTORIAL REQUIREMENTS 

SECTION 1. Each Wholesale Aggregator shall file a report every end of June and 

December each year, or any other report as may be deemed necessary by the ERC 

containing the following information, in a form prescribed by the ERC: 

a. Monthly energy sales to its Distribution Utilities; 

b. Monthly revenues from energy sales to its Distribution Utilities; 

c. Any new contracts signed and executed as well as any amendments to the previously 

filed contracts or agreements, in relation to its wholesale aggregation business; 

d. Certification from any universal commercial bank stating the updated amount deposited 

in escrow referred to in Article III, Section 3 hereof; and 

e. Other information that the ERC deems necessary or useful in carrying out its duties 

and obligations. 

ARTICLE VII 

OBLIGATIONS OF WHOLESALE AGGREGATORS 

SECTION 1. A Wholesale Aggregator who is also engaged in the generation and 

distribution businesses shall ensure that its wholesale aggregation business activities are 

functionally and structurally unbundled from its generation and distribution businesses, 

as provided for in Rule 10 of the IRR of the Act on the Structural and Functional Unbundling 

of Electric Power Industry Participants. In said unbundling, the Wholesale Aggregator 

shall ensure that there is no cross subsidization between and among its power supply 

business activities, in accordance with the ERC-approved Business Separation and Unbundling 

Plan. 

SECTION 2. A Wholesale Aggregator shall comply with the provisions of the Act 

and its Implementing Rules and Regulations, the applicable provisions of the Philippine 

Grid Code, Philippine Distribution Code, the Open Access Transmission Service (OATS) 

and Distribution Services and Open Access Rules (DSOAR), the Competition Rules and 

all applicable rules and regulations prescribed by ERC, including the reportorial requirements 

prescribed in these Rules. 

SECTION 3 . A Wholesale Aggregator shall register and comply with the requirements 

and procedures set by the Market Operator as a WESM trading participant and 

shall comply with the WESM Rules and all relevant manuals, policies and guidelines. 

SECTION 4. A Wholesale Aggregator shall inform the ERC of any material change 

in the information supplied in its application for registration within thirty (30) days from 

the occurrence of such event. 

SECTION 5. A Wholesale Aggregator that intends to cease operations shall notify 

the ERC and the Distribution Utilities it has contracted with, at least sixty (60) days prior to


ceasing operations. A Wholesale Aggregator shall likewise submit a settlement plan or 

proof of payment of any amount owed to the Market Operator, Generation Companies, 

Distribution Utilities or any other entities which the Wholesale Aggregator has contracted 

with relative to its wholesale aggregation business. The security deposit under Article III 

Section 3 hereof shall account for purchases of the Distribution Utilities from other sources 

resulting from the cessation of its operations until such time that the amount of deposit 

has been fully exhausted or the affected Distribution Utility has entered into a new contract 

with another party, whichever comes earlier. Thereafter, the Certificate of Registration 

is deemed cancelled. 

ARTICLE VIII 

SANCTIONS 

The ERC shall impose the appropriate fines and penalties, including the suspension 

or revocation of the Certificate of Registration, for any violation or non-compliance with 

these Rules, pursuant to the ìGuidelines to Govern the Imposition of Administrative Sanctions 

in the Form of Fines and Penalties Pursuant to Section 46 of R.A. 9136î. 

ARTICLE IX 

SEPARABILITY 

If for any reason, any section of these Rules is declared unconstitutional or invalid, 

other parts or sections hereof not affected thereby shall continue to be in full force and 

effect. 

ARTICLE X 

EFFECTIVITY 

These Rules shall take effect on the fifteenth (15 th ) day following its publication in a 




Chairman 






--o0o-- 


A Resolution Requiring All Distribution Utilities, the National Transmission 

Corporation (TRANSCO), the National Power Corporation (NPC) and other 

Regulated Entities to Submit Monthly Reports Relative to their Customers 

Who Are Enjoying Preferential Rates

830 


WHEREAS, pursuant to Section 2(f) of Republic Act No. 9136, otherwise known 

as the ìElectric Power Industry Reform Act of 2001î (or the EPIRA) it is the policy of the 

state to protect public interest as it is affected by the rates and services of electric utilities 

and other providers of electric power; 

WHEREAS, pursuant to Section 16(c) of the Commonwealth Act 146, otherwise 

known as the ìPublic Service Actî; Section 18, paragraph three (3) of Republic Act No. 

7638; otherwise known as the ìDepartment of Energy Act of 1992î; and Sections 19, 25 

and 43(f) of the EPIRA, the Commission has the power to determine, fix, prescribe and 

regulate the rates being charged by all Distribution Utilities, the National Transmission 

Corporation (TRANSCO) and the National Power Corporation (NPC) to their customers; 

WHEREAS, pursuant to Section 74 of the EPIRA, the Commission is mandated 

to phase out all cross-subsidies within the grid, between grids and/or classes of customers; 

WHEREAS, the Commission observes that a number of Distribution Utilities (DUs), 

TRANSCO, NPC and other regulated entities provide preferential rates to their customers; 

WHEREAS, the granting of preferential rates may lead to cross-subsidies to the 

other customers of the said DUs, TRANSCO and NPC; 

WHEREAS, to protect the interest of the electricity consumers who are not granted 

preferential rates, the impact of the preferential rates granted by all DUs, TRANSCO, 

NPC and other regulated entities must necessarily be monitored. 

NOW, THEREFORE, be it resolved, AS THIS COMMISSION HEREBY RE- 

SOLVES, to require all Distribution Utilities, TRANSCO, NPC and other regulated entities 

to submit monthly reports to the Commission relative to the preferential rates they granted 

to their customers. 

The report shall be submitted every fifteenth (15 th ) day of each month and shall 

include the following: 

1. List of customers enjoying preferential rates; 

2. Kilowatthours (kWh) sold to the said customers; 

3. Approved preferential rate for each customer; and 

4. The level of voltage these customers are connected to. 


newspaper of general circulation. This Resolution is hereby ordered to be posted on the 

ERC website and filed with the University of the Philippines Law Center, Office of the 

National Administrative Register (ONAR) immediately. 



Chairman


(SGD.) OLIVER B. BUTALID (SGD.)JESUS N. ALCORDO 





--o0o-- 


A Resolution Adopting the Definition and 

Boundaries of Connection Assets 

WHEREAS, Section 43 (f) of Republic Act No. 9136, otherwise known as the 


Commission (ERC) to establish and enforce a methodology for setting transmission wheeling 

rates; 

WHEREAS, the ERC, at present, determines the transmission wheeling rates to be 

charged to end-consumers through the following regulatory documents: a) Transmission 

Wheeling Rate Guidelines (TWRG); b) Open Access Transmission Service Rules (OATS 

Rules); and c) Connection Charging Policy (CCP); 

WHEREAS, for purposes of rate fixing, the aforementioned regulatory documents 

should be clearly in accord with each other, particularly on the definition of important 

terms commonly used therein; 

WHEREAS, one of the terms whose definition should be uniform insofar as the 

aforementioned regulatory documents are concerned is the term ìConnection Assetsî; 

WHEREAS, be it RESOLVED as the Commission hereby RESOLVES to adopt the 

definition and boundaries of Connection Assets as embodied in Annex ìA*î and illustrated 

in diagrams found in Annexes ìB*î and ìC*î attached hereto and made an integral 

part of this Resolution. Accordingly, whenever the term ìConnection Assetsî is referred to 

in the TWRG, the OATS and the CCP, the definition adopted in this Resolution should be 

utilized. 

This Resolution takes effect immediately. 



Chairman 





832 


(On Official Business) 




--o0o-- 


New Report Formats 

WHEREAS, Section 4 (q) Rule 3 of the Implementing Rules and Regulations (IRR) 

of Republic Act No. 9136 empowers the Energy Regulatory Commission (the Commission) 

to require reports or documents from Electric Power Industry Participants; 

WHEREAS, it has been observed that reports submitted by the Distribution Utilities 

(DUs) no longer fully meet the data requirements of the Commission, thus, the need to 

standardize and rationalize said report submissions; 

WHEREAS, said standardization and rationalization will be achieved through the 

adoption of new report formats to replace ERB M001, ERB MOO2, Monthly Financial and 

Statistical Report (MFSR) and ERB Annual Report; 

WHEREAS, the Commission RESOLVES, as it hereby RESOLVES to ADOPT the 

following new report formats: 1) Distribution Utility Monthly Report 1 (DU-MO1); 2) Distribution 

Utility Monthly Report 2 (DU-MO2); and 3) ERC Annual Report Form, hereto 

attached as Annex ìAî*, ìBî* and ìCî*, respectively and made an integral part of this 

Resolution ; 

WHEREAS, for purposes of submitting said new report forms, the following specific 

guidelines are hereby issued: 

a) DU - MO1 and MO2 must be verified; 

b) DU-MO1 may be modified on the columns part specifying the ëERC Approved Customer 

Classî only; 

c) In the ìParticularsî column, the ìOthers (PhP/kwh)î in ìOther Discountsî should be 

limited to electricity related discounts; and 

d) Other charges or other income by the DUs is not included in DU-MO1 and shall be 

submitted in a separate form indicating such other charges as approved by the Commission. 

WHEREAS, non-compliance with this Resolution shall be subject to the imposition 

of appropriate fines and penalties prescribed in the ìGuidelines for the Imposition of 

Administrative Fines and Penaltiesî. 




Let copies of this resolution be furnished all distribution utilities, the National Electrification 

Administration (NEA) and the Philippine Electric Plant Owners Association 

(PEPOA). 

This Resolution takes effect immediately. 



Chairman 

(SGD.) OLIVER B. BUTALID (SGD.)JESUS N. ALCORDO 





--o0o-- 


Guidelines for the Issuance of Certificate of 

Authority for WESM Metering Service Providers 

Pursuant to Section 30 of Republic Act No. 9136, the Philippine Grid and Distribution 

Codes (PGDC) and the Wholesale Electricity Spot Market (WESM) Rules, the Energy 

Regulatory Commission (ERC) hereby adopts and promulgates the following Guidelines 

for the Issuance of a Certificate of Authority to WESM Metering Service Providers 

(WMSP). 


Article I 

General Provisions 

This set of Guidelines is being promulgated to attain the following objectives: 

1.1.1 To promote free and fair competition and accountability of industry 

participants in order to achieve greater operational and economic efficiency; 

and 

1.1.2 To ensure the quality, reliability, accuracy and security of the WMSPís 

services and facilities. 

1.2 Guiding Principles

834 


No person or entity may provide metering services as a WESM Metering Service 

Provider unless such person has secured a Certificate of Authority from the ERC to 

provide metering services. 

A Certificate of Authority must be secured from the ERC prior to registration with 

the Market Operator. 

1.3 Scope 

This set of Guidelines shall apply to all persons and entities seeking authorization or 

presently operating as WESM Metering Service Providers. 


Accuracy - The extent to which a given measurement agrees with the defined value or the 

degree of conformity of a measure to a standard or a true value; 

Buyer or Concessionaire - A qualified party awarded the sale agreement or concession 

contract for transmission assets; 

Certificate of Authority (CA) - The authority granted by the ERC to any person or entity 

to act as Metering Service Provider; 

Energy Regulatory Commission (or ERC) - The regulatory agency created under 

Section 38 of EPIRA; 

Instrument Transformers - Transformers in which the conditions of current or voltage 

and of phase position in the primary circuit are represented with accuracy in the secondary 

circuit; 

Market Operator (MO) - Either the ìAutonomous Group Market Operatorî or îAGMOî 

constituted by the Department of Energy (ìDOEî) under Section 30 of EPIRA, with equitable 

representation from the Electric Power Industry Participants, initially under the 

administrative supervision of the TRANSCO/Buyer/Concessionaire, or the Independent 

Market Operator (ìIMOî), the entity jointly endorsed by the DOE and the Electric Power 

Industry Participants which shall assume the functions, assets and liabilities of the AGMO; 

Measurement Assurance Program and Procedures - The program and procedures 

to ensure the traceability and accuracy of calibrations and measurements and for ensuring 

the quality of work; 

Metering Services - The services provided by a WESM Metering Service Provider, 

including, but not limited to, the provision, testing, installation, calibration, operation and 

maintenance of metering system (as defined by Chapter 9.2.2.1 of the Philippine Grid 

Code); 

National Transmission Corporation or ìTRANSCOî - The corporation organized 

pursuant to Section 8 of EPIRA to acquire all the transmission assets of the NPC;


Network Service Provider - TRANSCO/buyer/concessionaire, grid owner or distribution 

utility registered as such with the Market Operator; 

Phase Shifting Device - A device for creating a phase difference between alternating 

currents and voltages or between voltages; 

Reference Meter Standard - A special watt-hour meter used as the reference for testing 

other meters. The standard has multiple current and voltage settings so that a single unit 

may be used for testing any normally-rated meters; 

Revenue Meterís Calibration and Testing Equipment - Equipment used for testing 

and calibration of revenue meters; (consisting of phantom load and reference meter 

standard) 

Single or Three Phase Voltage and Current Source (Phantom Load) - A device 

which supplies the various load currents and voltages for meter testing. The power source 

is usually the service voltage which is transformed to different values in single- or in 

three-phase. 

Trading Participant - A person or entity registered with the Market Operator either as a 

customer or a generation company, and may be registered either as a Direct WESM 

member or Indirect WESM member with respect to its activities relating to trading in the 

spot market subject to the compliance with the relevant prerequisites set out in clauses 

2.3 and 2.4 of the WESM Rules; 

Transformer Ratio - The ratio of the primary current or voltage, as the case may be, to 

the secondary current or voltage; 

User - A person or entity that uses the Grid or Distribution System and related facilities 

such as the billing meters. Also, a person or entity to which the Grid Code or Distribution 

Code applies; 

WESM Rules - The detailed rules that govern the administration and operation of the 

WESM; 

WESM Metering Service Provider (WMSP) - A person or entity authorized by the 

ERC and registered with the Market Operator to provide Metering Services in accordance 

with Chapter 4 of the WESM Rules; 

Wholesale Electricity Spot Market or WESM - The wholesale electricity spot market 

created in accordance with Section 30 of EPIRA. 

1.5 Service Provider 

During the initial phase of implementation of the WESM, TRANSCO/Buyer/Concessionaire 

shall provide the services required of the WESM Metering Service Provider, but 

this will not exclude other entities from doing the same, provided they meet the requirements 

under the WESM Rules, PGDC, this set of Guidelines and other applicable laws;

836 


Before it can act as a WMSP during the initial phase of the WESM, TRANSCO/ 

Buyer/Concessionaire shall also be required to comply with this set of Guidelines and to 

obtain its own Certificate of Authority from the ERC. 

2.1 Certificate of Authority 

Article II 

Requirement and Procedures 

All WESM Metering Service Providers shall apply for a Certificate of Authority (CA) 

with the ERC. Provided that all the requirements have been complied with, the ERC shall 

notify the WMSPs of its action within thirty (30) working days from the date of filing of the 

application unless the ERC requires the submission of additional information, or orders 

the suspension of final action on the application based on reasonable grounds. 

2.2 Requirements 

The following documents/information must be submitted to the ERC by an applicant 

upon the filing of its application for a CA: 

2.2.1 Company Profile 

2.2.2 Proof of Technical Qualification 

2.2.2.1 Compliance with the technical requirements under the WESM Rules 

and PGDC; 

2.2.2.2 Sworn Statement that the applicant shall comply with and will continue 

to comply with the applicable requirements under the WESM Rules and 

PGDC for the duration of the CA; 

2.2.2.3 Existence of the following facilities and equipment: 

2.2.2.3.1 At least two (2) sets of Revenue Meter Calibration and 

Testing Equipment, which shall include the following as a minimum in one set: 

2.2.2.3.1.1 Single or three-phase voltage & current source (Phantom 

Load), with adjustable voltage & current output and phase displacement 

2.2.2.3.1.2 Reference meter standard of +/-0.05% accuracy class 

or better for AC power and energy. (accuracy must be traceable to IEC, 

IEEE or its equivalent) 

2.2.2.3.2 At least two (2) sets of instrument transformer ratio and phase 

measuring equipment, complete with its own standard transformers and phase 

shifting devices.


2.2.2.3.3 A Calibration Laboratory, where the reference standards 

are housed and where the various calibration, measuring and testing 

equipment are calibrated against the transfer standards under controlled temperature, 

humidity, illumination, cleanliness, and access. The laboratory must 

have enough space for other sensitive calibration and testing work and the 

setting up and calibration of revenue meters at the laboratory prior to the 

installation. 

2.2.2.3.4 Meter Data Retrieval System, Equipment and other 

infrastructure necessary for the delivery of settlement-ready meter data to the 

Wholesale Electricity Spot Market at the prescribed delivery schedules. 

2.2.2.3.5 Equipment and resources necessary for performing maintenance 

and repairs on metering facilities and equipment. 

2.2.2.4 Measurement Assurance Program and Procedures to ensure the 

traceability of calibrations and measurements as well as the quality of work. 

These shall consist of the following: 

2.2.2.4.1 A Calibration Program Plan, specifying the periodic calibration 

of reference standards. All Equipment used in the measurement of 

meter accuracy or in the establishment of test condition for the determination 

of meter accuracy shall be calibrated and traceable to the National Institute of 

Standards or to any reputable international standard body. The traceability 

shall be carried out in accordance with the guidelines set by the ERC. 

2.2.2.4.2 The WMSPís official Calibration Traceability Chart, showing 

the unbroken chain of calibrations from the source standards to the revenue 

meters and other devices being calibrated/tested, indicating the following 

information: 

2.2.2.4.2.1 Source of calibration traceability for electrical 

power and energy (reference laboratory and its particular calibration/ 

measurement standards). 

2.2.2.4.2.2 The standards used for transferring reference 

quantities, including intermediate calibration/measurement standards, down 

to the revenue meters and other devices being calibrated/tested by the WMSP. 

2.2.2.4.2.3 The uncertainties of electrical quantities (Voltage, 

Current, Power, Energy, Phase, Time, etc.) as they propagate through 

the chain of calibrations shown on the Traceability Chart. 

2.2.2.4.3 Set of Procedures to cover the following tasks: 

2.2.2.4.3.1 Commissioning of metering facilities to service, certifying 

its fitness for service, and the registration of the metering facilities with 

the Market Operator.

838 


2.2.2.4.3.2 Calibration/accuracy testing of measuring and testing 

instruments and revenue meters of the specified accuracy class. 

2.2.2.4.3.3 Ratio accuracy and phase deviation testing of instrument 

transformers used with revenue meters. 

2.2.2.4.3.4 Determining the uncertainty of measurements and values 

of quantities displayed by the Reference Meter Standards, the Voltage/ 

Current Transformer Ratio and Phase Measuring Instruments, and other instruments 

used for certifying the accuracy of metering equipment. The procedures 

must be correct applications of mathematical principles and techniques 

such as those presented in the ISO Guide to the Expression of Uncertainty 

of Measurement. 

2.2.2.4.3.5 Dealing with cases where errors of revenue meters 

and instrument transformers are found to be outside the permissible limits. 

2.2.2.4.3.6 Dealing with cases where calibrations/tests are found 

to be erroneously performed or the results were erroneously documented, or 

if the meter reference standard used in the calibration of revenue meters are 

found to be in a state of non-compliance with its specifications. 

2.2.2.4.3.7 Organization, control, storage, and maintenance of 

official technical documents and quality records. 

2.2.2.4.3.8 Meter reading and collection, validation, storage, and 

delivery of data from the memory of revenue meters, representing the power 

and energy that flowed through the metering point over a prescribed period of 

time. 

2.2.2.5 Other procedures that may be deemed necessary in the provision 

of metering services. 

2.2.3 Financial Capability 

Business Plan for five (5) years. 

2.2.4 Ownership/Control 

2.2.4.1 Charters for Government Agencies/ Government Owned and Controlled 

Corporations 

2.2.4.2 Articles of Incorporation/Partnership (for Corporation / Partnership) 

with Certificate of Registration, including all amendments thereto, if applicable; 

2.2.4.3 Business Name Registration Certificate (for Single Proprietorship) , if 

applicable; and


2.2.4.4 Updated listing of shareholders and corresponding equity shares, as 

evidenced by the most recent General Information Sheet filed with the Securities 

and Exchange Commission, if applicable; 

2.2.5 Such other information or documents that the ERC may require. 

Article III 

Obligations of a WESM Metering Service Provider 

3.1 Compliance with Technical Standards 

A WMSP shall ensure that all its facilities connected to the Grid and the Distribution 

System comply with the technical requirements provided for in the WESM Rules, PGDC, 

Philippine Electrical Code, applicable laws, rules and regulations, and this set of Guidelines. 

3.2 Compliance with Financial Standards 

A WMSP with facilities connected to the Grid and Distribution System shall conform 

to the financial standard specific to WMSPs as may be prescribed by the ERC. 

The activities of a WMSP shall be considered as a separate business segment and 

shall comply with the provisions of the Business Separation Guidelines. 

3.3 Compliance with Competition Rules 

A WMSP shall comply with the Competition Rules as may be prescribed by the 

ERC concerning abuse of market power, cartelization and any other anti competitive or 

discriminatory behavior. 

3.4 Compliance with the ERC policies and procedures such as but not limited to the 

following: 

3.4.1 Contract with a Trading Participant 

Only an ERC-licensed WMSP shall be allowed to enter into a contract with a Trading 

Participant for the provision of metering services. Both parties shall be permitted to 

stipulate terms and conditions for the provision, installation and maintenance of the relevant 

metering installation in accordance with the WESM Rules and this set of Guidelines. 

The WMSP shall be liable for any loss/damage resulting from any inaccuracy of the 

meter, meter reading and maintenance caused to another party due to the fault or negligence 

of the WMSP. In the absence of any express settlement procedures adopted by 

the Market Operator pursuant to item 4.7.1 of the WESM Rules, the WMSP shall be 

allowed to recover any undercharge computed for a period not exceeding three (3) 

months from the party who benefited therefrom.

840 


3.4.2 Metering Responsibility 

The WMSP shall supply, install, connect, test, adjust, place in service, operate, 

check, and maintain the revenue metering system consistent with the WESM Rules. The 

meters may be owned by the WMSP, unless otherwise provided for in its contract with the 

Trading Participant/end-user. 

However, during the initial operation of the WESM wherein the National Transmission 

Company (TRANSCO) /Buyer/Concessionaire shall provide the required services of 

a WMSP until such time that any other WMSP takes over the provision of metering 

services, in which case, TRANSCO/Buyer/Concessionaire shall be required to sell the 

said metering facilities to the WMSP or the trading participant at its depreciated value, 

depending upon the ownership condition in the contract between the WMSP and the 

trading participant/end-user. 

3.4.3 Meter Testing and Calibration 

The WMSP, through the ERC, shall test and seal the meters at least once a year 

and recalibrate or replace such meters if found to be outside the acceptable accuracy 

stipulated in the Grid Code. The meters shall be physically sealed and electronically 

secured by the ERC as a guarantee that the meters are accurate and secure from 

unauthorized access. 

3.4.4 Request for Test 

The WMSP shall request the ERC to test the installed metering equipment if a User 

or the network provider or the Market Operator has reason to believe that the performance 

of the equipment is not within the accuracy limits set forth in the PGDC. 

The test shall be done by the ERC or by an independent party authorized by the 

ERC. 

If the metering equipment fails the test, the WMSP shall pay for the cost of the test. 

If the metering equipment passes the test, the party who requested the test shall pay for 

the test cost. 

3.4.5 Maintenance of Metering Equipment 

The metering equipment at the Connection Point shall be maintained by the WMSP. 

All test results, maintenance programs, and sealing records shall be kept during the 

lifespan of the equipment. The equipment data and test records shall be made available to 

the User, Network Provider, Market Operator and the ERC. 

The WMSP shall institute corrective actions on the metering system as soon as 

practicable and in any event within the period prescribed by the PGDC if a metering 

system malfunctions or maintenance occurs. 

During the initial operation of the WESM, TRANSCO/Buyer/Concessionaire shall 

provide the services required of the Metering Services Provider and be allowed to charge 

a fee for said metering services, subject to the approval of the ERC.


3.4.6 Metering Equipment Security 

The WMSP shall take all reasonable steps to prevent unauthorized interference with 

the equipment. The WMSP shall provide seals and other appropriate devices to prevent 

unauthorized alteration on site settings and calibrations. The metering equipment cubicle 

shall be completely and securely locked and sealed provided any register on equipment 

is visible and accessible. The WMSP shall also provide appropriate security against 

unauthorized access and against corruption of data in transmission. The meters shall be 

physically sealed and electronically secured by the ERC as a guarantee that the meters 

are accurate and to secure it from unauthorized access. 

3.4.7 Meter Reading and Metering Data 

If the Market Operator requires, the WMSP arranges for the provision of remote 

monitoring facilities to alert the Market Operator of any failure of any components of the 

metering installation which might affect the accuracy of the metering data derived from 

that metering installation. 

The WMSP shall, at its own cost, ensure that metering data derived from a metering 

installation for which it is responsible shows the time and date at which it is recorded and 

is capable of being transmitted from the metering installation to the metering database in 

accordance with the Market Operatorís reasonable requirements. 

3.5 Compliance with Operational Standards 

In addition to the obligations under Sections 1 and 2 of Article III of this set of 

Guidelines, a WMSP shall be required to comply with the following: 

3.5.1 Staffing Requirements 

A WMSP should have, at all times, an adequate number of personnel having the 

qualifications required to perform all of the functions and obligations of a WMSP. 

3.5.2 Personnel Qualifications 

A WMSP shall ensure that any person that performs the metering services must 

have the knowledge, experience and training necessary to perform such activities. The 

WMSP shall employ licensed electrical engineers in accordance with RA 7920.î 

3.5.3 Personnel Records 

A WMSP shall establish and keep up to date a register of its personnel that indicates 

the name, training and qualifications of each member of its personnel and shall 

provide such register to the ERC upon request. 

3.5.4 Personnel Training

842 


A WMSP shall maintain such quality assurance, training, competency assessment 

and education program for its personnel as may be required to ensure that its personnel 

can perform all the functions and obligations of a WMSP. 

Article IV 

Reportorial Requirement 

4.1 A WMSP must submit a verified annual report to the ERC on or before the 30 th 

day of March of its compliance with its obligations: 

5.1 Term 

4.1.1 Details of Meter Laboratory Testing equipment 

4.1.1.1 Quantity, Make, Type, Serial Number; and 

4.1.1.2 Date tested, certified and sealed by the Commission. (traceability 

requirement) 

4.1.2 Updated meter calibration and maintenance procedures; 

4.1.3 No. of customers, list and types of customers served and the last calibration 

date of its metering installation; 

4.1.4 Other information that the ERC deems necessary or useful in carrying 

out its duties and obligations. 

Article V 

Term of the Certificate of Authority 

Upon compliance with the requirements under Article II, the ERC shall issue a 

CA to the WMSP applicant, subject to the terms and conditions as may be 

stated in the CA and as the ERC may require from time to time. 

If the WMSP fails to secure a registration from the MO in accordance with the 

WESM Rules, the MO shall notify the ERC of the same, for appropriate action. 

The CA issued by the ERC to a WMSP applicant shall have a term of three (3) 

years from the date of issuance. 

5.2 Renewal 

Any application by the WMSP for renewal of its CA shall be accompanied by proof 

of compliance with all the requirements set forth in this set of Guidelines. 

Article VI 

Revocation/Suspension of the Certificate of Authority


6.1 The ERC may suspend or revoke, after due notice and hearing, a CA based on any 

of the following grounds: 

6.1.1 A WMSP fails to comply with any of the requirements under this set of 

Guidelines; 

6.1.2 A WMSP fails to meet any of the conditions contained in its CA; 

6.1.3 A WMSP is deregistered by the Market Operator; 

6.1.4 A WMSP, after due notice and hearing, is found to have violated any 

law, rules, regulations, guidelines, and policies related hereto that are implemented 

by the ERC. 

6.2 The suspension or revocation of a CA shall be without prejudice to the imposition of 

the appropriate fines and penalties pursuant to Section 46 of EPIRA. 

6.3 Notice of said suspension or revocation shall be furnished to all interested parties. 

Article VII 

Sanction 

A WMSP that fails to comply with any provisions of this set of Guidelines shall be 

subject to fines and penalties as may be imposed by ERC under Article III of the Guidelines 

to Govern the Imposition of Administrative Sanctions in the Form of Fines and 

Penalties Pursuant to Section 46 of R.A. No. 9136. 

Article VIII 

Payment of Fees 

Fees for application and issuance of Certificates of Authority, in such amounts as 

may be prescribed by the ERC, shall be imposed on all applicants upon the filing of the 

application and upon the issuance of the corresponding CA, respectively. 

Article IX 

Monitoring 

The ERC shall monitor the compliance of WMSPs with the terms and conditions of 

their CA and this set of Guidelines. 

Article X 

Separability 

If for any reason any provision of this set of Guidelines is declared unconstitutional 

or invalid by final judgment of a competent court, the other parts or provisions hereof 

which were not affected thereby shall continue to be in full force and effect.

844 


Article XI 

Effectivity 

This set of Guidelines shall take effect immediately upon publication in a newspaper 

of general circulation. 



Chairman 






--o0o-- 


A Resolution Granting a Provisional Certificates of Authority to the National 

Transmission Corporation to Act as a WESM Metering Service Provider 

WHEREAS, the establishment of the Philippine Wholesale Electricity Spot Market 

(WESM) is mandated by Republic Act No. 9136, otherwise known as the ìElectric Power 

Industry Reform Act of 2001 (EPIRA)î; 

WHEREAS, the WESM provides the mechanism for determining the price of electricity 

not covered by bilateral supply contracts between sellers and purchasers of electricity; 

WHEREAS, Section 2.2.2 of the WESM Rules specifies the entities that need to 

register as WESM participants, one of which is the Metering Service Provider (MSP); 

WHEREAS, a Trading Participant who is a Direct WESM Member shall elect an 

MSP who shall perform the responsibilities defined under the WESM Rules; 

WHEREAS, Section 2.3.6 of the WESM Rules provides that any person or entity 

authorized by the Energy Regulatory Commission (ERC) to provide meter services shall 

register with the Market Operator as MSP; 

WHEREAS, Section 2.3.6.3 of the WESM Rules, states that the National Transmission 

Corporation (TRANSCO) is tasked initially to provide the services required of the 

MSP; 

WHEREAS, the TRANSCO through a letter dated January 12, 2005 applied for the 

issuance of a Certificate of Authority (CA);


WHEREAS, the ERC promulgated the ìGuidelines for the Issuance of a Certificate 

of Authority for WESM Metering Service Providersî on May 31, 2006; 

WHEREAS, items 2 and 5, Section 1, Article I thereof, provides that a Certificate of 

Authority must be secured from the ERC prior to registration with the Market Operator to 

act as the WESM MSP to provide metering services; 

WHEREAS, considering that the WESM is set to open on June 23, 2006, there is a 

need to issue a provisional CA to the TRANSCO to act as the WESM MSP; 

NOW, THEREFORE, pursuant to its mandate, to promote free and fair competition 

in the generation and supply of electricity to achieve greater operational and economic 

efficiency and to ensure the quality, reliability, accuracy and security of the MSP services 

and facilities, the ERC RESOLVED, as it hereby RESOLVES, to grant the provisional 

Certificate of Authority (CA) to the TRANSCO to act as the MSP during the initial 

operation of the WESM. This provisional authority, however, does not preclude the ERC 

from directing the TRANSCO to strictly comply with the requirements as contained in the 

subject Guidelines in order to make permanent said provisional authority. 



SO ORDERED. 



RODOLFO B. ALBANO, JR. 

Chairman 

(SGD.) OLIVER B. BUTALID (On Official Leave ) 

Commissioner JESUS N. ALCORDO 

Commissioner 



GOVERNMENT PROCUREMENT POLICY BOARD 


Resolution No. 05-2006 

To Provide the Exemption from Posting of Performance Security for Goods 

Procured Through Shopping Under Section 52 (a) of the IRR-A of RA 9184

846 


WHEREAS, Republic Act No. 9184 (R.A. No. 9184), otherwise known as ìGovernment 

Procurement Reform Actî and its Implementing Rules and Regulations Part A 

(IRR-A) took effect on January 26, 2003, and October 8, 2003, respectively; 

WHEREAS, pursuant to Section 39 of RA 9184, the winning bidder is required to 

post a performance security as a measure of guarantee for the faithful performance of 

and compliance with obligations under the contract; 

WHEREAS, the posting of a performance security guarantees the faithful performance 

of the supplier to indemnify or compensate the Government for any damage or 

loss due to non-completion of projects or non-performance of contracts; 

WHEREAS, the alternative method of Shopping under Section 52(a) of IRR-A may 

be resorted to in the procurement of goods in cases where there is an unforeseen 

contingency requiring immediate purchase; 

WHEREAS, to require the supplier, specifically selected by the procuring entity 

from whom the goods shall be directly procured, to still post a performance security in 

cases where shopping under Section 52 (a) of the IRR-A of RA 9184 is resorted to, will 

result to an absurdity and render the requirement hardly practicable and reasonable in 

view of the immediate compliance of the supplierís obligation to deliver or perform, such 

that, there is no more delivery or performance to be guaranteed or secured, thereby 

rendering nugatory the purpose for which the performance security is to be posted. 

NOW, THEREFORE, premises considered, WE, the Members of the GOVERN- 

MENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law, 

hereby RESOLVE to adopt, as WE hereby adopt the rules as to the exemption of suppliers 

from further posting a performance security in cases where the procurement is done 

through Shopping under Section 52 (a) of the IRR-A of RA 9184 provided however, that 

the goods procured shall be delivered upon purchase. 

This resolution shall take effect immediately. 


(SGD.) ROMULO L. NERI (SGD.) AUGUSTO B. SANTOS 


Department of Budget and Management National Economic and Development 

Authority 

Also signed by other representatives of: 

DEPARTMENT OF NATIONAL DEFENSE 

DEPARTMENT OF HEALTH 

DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT 

DEPARTMENT OF ENERGY


DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS 

DEPARTMENT OF FINANCE 


DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS 


PRIVATE SECTOR REPRESENTATIVE 

Attested by: 

(SGD.) ELMER H. DORADO 

OIC Board Secretary, GPPB 

Officer-in-Charge, GPPB-TSO 

--o0o-- 


Approving and Adopting the Revised Guidelines on 

Index-Based Pricing for Petroleum and Oil Products 

WHEREAS, the Government Procurement Policy Board (GPPB) pursuant to its 

mandate under Republic Act No. 9184 (RA 9184) and its Implementing Rules and Regulations 

(IRR-A) issued the Guidelines on Index-Based Pricing for Petroleum, Oil and 

Lubricant (POL) Requirements during its 3rd meeting held on 28 April 2005, through 

Resolution No. 05-2005; 

WHEREAS, the guidelines referred to above govern the procurement of petroleum 

products by government agencies when the same is a major operational requirement for 

the agenciesí principal mandates, and prescribe the rules and procedures on the use of 

index-based pricing scheme for the aforementioned undertaking; 

WHEREAS, during the 9th meeting on October 7, 2005, the GPPB, through Resolution 

No. 22-2005, introduced amendments to the aforementioned guidelines to implement 

effectively its provisions; 

WHEREAS, requests for further amendments from different government agencies, 

particularly, Department of National Defense (DND) and National Power Corporation 

(NPC), were received by the GPPB through its Technical Support Office (TSO); 

WHEREAS, the Inter-Agency Technical Working Group (IATWG) of the GPPB in 

its meeting on March 2, 2006 reviewed the provisions of the said guidelines, and recommended 

for the consideration and approval of the GPPB, the Revised Guidelines on 

Index-Based Pricing for Petroleum and Oil Products incorporating the proposed amendments 

of DND and NPC.

848 


NOW, THEREFORE, for and in consideration of all the foregoing, WE, the Members 

of the GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers 

vested on US by law, hereby RESOLVE to approve and adopt the REVISED GUIDE- 

LINES ON INDEX-BASED PRICING FOR PETROLEUM AND OIL PRODUCTS, attached 

hereto as Annex ìAî and made an integral part hereof. 

This Resolution shall take effect immediately. 


(SGD.) ROLANDO G. ANDAYA, JR. 

Secretary 

Department of Budget and Management 

Also signed by other representatives of: 








PRIVATE SECTOR REPRESENTATIVE 

Attested by: 

(SGD.) ESTANISLAO C. GRANADOS, JR. 

Executive Director, GPPB-TSO 

ANNEX A 

REVISED GUIDELINES ON INDEX-BASED PRICING FOR 

PROCUREMENT OF PETROLEUM AND OIL PRODUCTS 

1. SCOPE AND APPLICATION 

These guidelines shall govern the use, under extraordinary circumstances, of an 

index-based pricing scheme, in accordance with Section 61 of Republic Act No. 9184 

(R.A. 9184), otherwise known as ìGovernment Procurement Reform Actî and its Implementing 

Rules and Regulations Part A (IRR-A), and the GPPB Guidelines for Contract 

Price Escalation.


These rules and procedures shall govern the petroleum and oil procurement of the 

national government, its departments, bureaus, offices and agencies, including state 

universities and colleges, government-owned and /or controlled corporation, government 

financial institutions and local government units when petroleum and oil is a major operational 

requirement necessary for the prosecution of their principal mandate. Procurement 

of petroleum and oil products from retailers or dealers other than major suppliers as 

hereafter defined, or from those who are engaged in the business of selling the same to 

the general public for ultimate consumption and which are sold at pump prices shall not 

be subject to these guidelines. 

2. PURPOSE 

These guidelines are formulated to meet the following objectives: 

2.1 To identify the conditions for the applicability of the index-based pricing scheme on 

the procurement of petroleum and oil products by a procuring entity. 

2.2 To prescribe the rules and procedures on the use of index-based pricing scheme for 

the procurement of petroleum and oil requirements. 

3. DEFINITION OF TERMS 

a. Bid Price. Refers to the difference of the WPP of the prospective supplier less discounts 

given plus delivery costs and the effect of E-VAT, in case of procurement using 

the WPP index; and the sum of MOPS plus the premium imposed and delivery cost, in 

case of procurement using the MOPS index; 

b. Bulk Procurement. Procurement which, by the totality of all petroleum and oil product 

requirements and by their sheer volume, necessitates procurement from major suppliers 

for purpose of economies of scale. 

c. Total Contract Price. Refers to the aggregate of the amounts set by a procuring 

entity, as the ceiling, to meet the volume requirement for each type of petroleum and oil 

product; the value of which shall not exceed the ABC. 

d. Delivery Cost. Cost of freight incurred by the Supplier from the source to the delivery 

point, i.e., refinery to delivery point for deliveries ex-refinery, or oil terminal/depot to 

delivery point for deliveries ex-depot. 

e. Discounts. Refer to the total deductions from the WPP. 

f. Extraordinary Circumstance - Refers to an event or occurrence, or series of events 

or occurrences, before or during contract implementation, which give(s) rise to price 

movements in petroleum and its derivative products. 

g. Major Suppliers. Refer to petroleum oil wholesale suppliers and who, in the operation 

of their business, either maintains a refinery in the Philippines or directly imports petroleum 

oil products from production or trading venues.

850 


h. Mean of Platts Singapore. Refers to the mean of the high and low components of a 

Platts assessment for oil cargoes loading from Singapore. Platts is a publishing/trading 

house based in Singapore which publishes daily information on oil price and shipping 

rates. 

i. Petroleum and Oil Products. For purposes of these guidelines, shall refer to those 

mentioned in Section 5 hereof. 

j. Premium. All applicable and reasonable cost of expenses (i.e. ocean freight, marine 

insurance, bank charges, ocean loss, storage/handling/throughout fees, profit, margin, 

etc.) to arrive at a landed cost of petroleum fuel in the Philippines. 

k. Wholesale Posted Price. Is the reference fuel prices individually set by local refiners 

and traders subject to periodic changes based on the movement in crude oil prices, 

foreign exchanges, and all other costs as verified and confirmed by the Department of 

Energy (DOE). 

4. CONDITIONS FOR APPLICABILITY OF THESE GUIDELINES 

4.1 These guidelines shall be applicable only in cases of bulk procurement of petroleum 

and oil requirements, by the national government, its departments, bureaus, offices and 

agencies, including state universities and colleges, government-owned and/or controlled 

corporations, government financial institutions and local government units where petroleum 

and oil procurement is a major requirement in their operations. For this purpose, 

procuring entities intending to use these guidelines for their petroleum and oil procurement 

shall notify the Government Procurement Policy Board (GPPB) in writing. 

Petroleum and oil requirements shall be considered as major requirements of the 

procuring entity if the use of the same is necessary in the primary operation of the 

procuring entity and in the prosecution of its principal mandate. The duration of the 

contract to cover the petroleum and oil requirements of the procuring entity shall not 

exceed one (1) year. 

5. INDEX-BASED PRICING FOR PETROLEUM, OIL AND LUBRICANT PRODUCTS 

5.1 The Wholesale Posted Price (WPP), index shall be used in the procurement of the 

following petroleum and oil products; 

i. Premium, Unleaded or Regular Gasoline; 

ii. Automotive Diesel Oil 

iii. Jet A-1; 

iv. AVGAS; and 

5.2 The Mean of Platts Singapore index shall be used in the procurement of the following 

products: 

i. Industrial Fuel Oil: 

ii. Low Sulfur Fuel Oil; and 

iii. Industrial Diesel Oil;


5.3 The foregoing list of petroleum and oil items to be procured using either WPP or 

MOPS indices shall be subject to annual review, modification or re-classification by the 

GPBB, or as often as it deems necessary. 

6. WPP AND MOPS-BASED PRICING SCHEME 

6.1 For the procurement of petroleum and oil products using the WPP index, the Bid 

Price shall be determined based on the prospective supplierís Wholesale Posted Price 

(WPP), subject to the rules under Item 7 hereunder. 

6.2 For the procurement of petroleum and oil products using the MOPS index, the Bid 

Price shall be determined based on the MOPS assessments as officially released by 

Platts Singapore, subject to the rules under Item 7 hereunder. 

7. BID AND CONTRACT PRICES 

7.1 Bid prices for procurement using the WPP index in accordance with Section 5.1 

hereof shall be the individual WPP of the prospective supplier less the discounts given, if 

any, plus delivery cost and the effect of E-VAT. On the other hand, the bid price for 

procurement using the MOPS index in accordance with Section 5.2 hereof shall be the 

MOPS plus premium and delivery cost charged by the bidder. 

7.2 Cost for E-VAT and other governmental costs which fall equally on all prospective 

suppliers are presumed to be included in the computation of the bid price. 

7.3 In determining the Bid Price, reference shall be made to the WPP of the prospective 

supplier ten (10) days prior to the date of bid opening as verified with the Oil Industry 

Management Bureau of the Department of Energy, in case of procurement using WPP 

index, or, the average of MOPS of the immediately preceding calendar month prior to the 

originally determined date of bid opening, in case of procurement using MOPS index. 

8. BID EVALUATION AND COMPARISON OF BIDS 

8.1 For purposes of bid evaluation and/or comparison of bids, regardless of the index 

used, the Lowest Calculated Bid shall be determined by identifying the bidder who 

offered the lowest bid price. 

8.2 For purposes of payment, the discount of premium and the delivery cost stated in the 

contract shall be fixed from the time of the bidding through the life of the contract. 

9. ACTUAL PRICES PAYABLE 

9.1 The amount to be paid by the procuring entity for petroleum and oil requirements 

actually delivered and duly received by it shall be the WPP less the discounts offered, if 

any, plus the delivery cost charged and the effect of E-VAT, at the date of actual 

delivery; or the MOPS, plus the premium imposed and the delivery cost charged, referenced 

to the average of the MOPS of the calendar month immediately preceding the date 

of actual delivery. 

9.2 For staggered deliveries, the procuring entity shall make, after every delivery, an 

accounting of the amount actually payable based on the date of the delivery receipt to

852 


determine the allowable unit/volume that may still be ordered from the remaining amount 

allotted for each petroleum or oil product. The procuring entity shall be allowed to make 

adjustments in the units/volume to be delivered per type of product to conform to the 

remaining amount in the total contract price. 

9.3 For contracts stipulating consignment whereby a supplier makes a delivery of petroleum 

and oil products to a procuring entityís holding area and payment is based on 

volume consumed, the actual price payable shall be determined based on the weighted 

average of the applicable index from the date the order is placed up until the cut-off date 

for payments agreed upon by the parties. The same rule shall apply for contracts where a 

major supplier delivers the petroleum and oil products to the procuring entity through its 

authorized stations and/or distribution centers. 

9.4 If during contract implementation, the total contract price for the project would have 

been consumed notwithstanding that the requirements were not fully delivered in the 

units/volume contemplated, no further order and payments shall be made. This agreement 

shall form part of the bidding documents. 

10. REPEALING CLAUSE 

These Guidelines shall repeal GPPB Resolution No. 05-2005 and the amendments 

thereto per GPPB Resolution 22-2006, dated 01 April 2005 and 07 October 2005, respectively. 

11. EFFECTIVITY 

These Guidelines or any amendments hereto shall take effect fifteen (15) days after 

publication in the Official Gazette or in a newspaper of general nationwide circulation and 

upon filing with the University of the Philippines Law Center of three (3) certified copies 

of these guidelines. 


--o0o-- 


To Approve and Adopt Amendments to GPPB 

Guidelines on Contract Extension for General Services 

WHEREAS, the Government Procurement Policy Board (GPPB) created under 

Republic Act No. 9184 (R.A. 9184), otherwise known as ìGovernment Procurement 

Reform Actî, issued the GPPB Guidelines on Extension of Contracts for General Services 

on 28 April 2005 which took effect on 5 July 2005; 

WHEREAS, the above-mentioned guidelines govern the extension of ongoing contracts 

of general services which are essential, indispensible, or necessary to support the 

operation of the procuring entity or for the enhancement of the welfare of its personnel to 

include, but shall not be limited to, services such as equipment maintenance, janitorial 

and security services, and internet and telephone services;


WHEREAS, provided the conditions for contract extensions have been met under 

the said guidelines, procuring entities are allowed to extend its existing contracts for 

general services on a periodic month-to-month basis but not to exceed two (2) months 

unless otherwise approved by the GPPB; 

WHEREAS, in view of the foregoing provision, several requests for approval for 

contract extension were received by the GPPB for consideration and approval; 

WHEREAS, the Inter-Agency Technical Working Group (TWG) in its meeting on 5 

January 2006 recommends that the necessary approval by the GPPB as required under 

the guidelines be removed and allow procuring entities to assume responsibility in cases 

where extension of contracts would have to be made beyond the allowable two-month 

period subject to existing rules and regulations; 

WHEREAS, the GPPB in its 1st meeting on 20 January 2006 unanimously agreed 

to extend the allowable period for contract extension as provided in the Guidelines for 

Extension of Contracts for General Services from two (2) months to six (6) months; and 

still require the approval of the GPPB for contract extension beyond six (6) months. 

NOW, THEREFORE, premises considered, WE, the Members of the GOVERN- 

MENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law, 

hereby RESOLVE: 

To approve and adopt amendments to GPPB Guidelines on Extension of Contracts 

for General Services issued through Resolution No. 08-2005 dated 28 

April 2005. 

Section 5.1 of the guidelines shall be amended, as follows: 

Unless otherwise approved by the GPPB and upon written request by the 

Procuring Entity, contract extension shall be allowed only on a periodic monthto-month 

basis not to exceed an aggregate period of six (6) months. The first 

monthly extension shall reckon from the day immediately following the last day 

of the period of the original contract; provided, that the Procuring Entity, prior 

to that date, has substantially undertaken procurement activities required prior 

to award. Succeeding monthly extensions shall reckon from the day immediately 

following the last day of the period of the preceding monthly extension. 

This resolution shall take effect immediately . 


(SGD.) ROMULO L. NERI (SGD.) AUGUSTO B. SANTOS 


Department of Budget and Management National Economic and Development 

Authority 

Also signed by other representatives of:

854 







DEPARTMENT OF FINANCE 


DEPARTMENT OF SCIENCE AND TECHNOLOGY 


PRIVATE SECTOR REPRESENTATIVES 

Attested by: 

(SGD.) ELMER H. DORADO 

OIC Board Secretary, GPPB 

Officer-in-Charge, GPPB-TSO 

GOVERNMENT SERVICE INSURANCE SYSTEM 


Resolution No. 12 

Payment of Edu-Child College Education Benefit and Refund 

of Premiums After Cancellation of Plan 

RESOLVED, to APPROVE and CONFIRM the proposed amendment to the Policy 

and Procedural Guidelines (PPG) on the Payment of College Education Benefit and 

refund of premiums paid after cancellation of Edu-Child Plans, a copy of which is hereto 

attached and made an integral part of this resolution. 

Policies, guidelines and procedures previously issued, which are inconsistent 

with what was provided therein shall be assumed modified, superseded and/ or repealed. 

Adopted: 1 Feb. 2006 (Board Meeting No. 3) 

Policy and Procedural Guidelines No. 185-2006


Payment of Edu-Child College Education Benefit and Refund 

of Premiums After Cancellation of Plan 

I. BACKGROUND/RATIONALE 

- One of the products launched under the Pre-need Program during the last quarter of 

1993 was the Edu-Child Plan. 

- The plan guarantees to pay the tuition and other standard school fees when they fall due 

upon notification of acceptance of enrolment of the scholar in a duly accredited Philippine 

college or university. 

- Marketing of the plans immediately followed the launching of the program even before a 

detailed guidelines on the administration of the plans was finalized. 

- In 1998, marketing of these plans were suspended in order to allow the GSIS to update 

its records and reconcile accounts with Prudential Life Plan Incorporated (PLPI), conduct 

an actuarial valuation of the fund to determine its viability and to avoid possible 

losses resulting from unadjusted prices. 

- In 06 March 2001, a Policy and Procedural Guidelines for Edu-child plan was approved 

by the GSIS Board of Trustees under Resolution No. 55 

- Despite the issuance of the PPG, problems have been encountered by the operating 

units specifically on the classification of schools for the purpose of determining the 

benefits for each type of category. 

- Currently, we still pay under a reimbursement scheme where we pay the tuition and 

other fees when they fall due irrespective of the amount so long as the grantee enrolls in 

a school within the category of the purchased plan.Averaging comes in only when the 

scholar enrolls in a school of a different category. This manner of payment creates 

confusion because of the high incidence of mismatched plans. Mismatches occur when 

an Edu-Child scholar enrolls in a university/college which falls under a higher or lower 

category than the purchased plan. Based on statistics provided by Actuarial Group, 

almost three fifths of availing plans are mismatched. These are most prevalent among 

government and non-exclusive plans. For government plans, 58.65% of these plans are 

either enrolled in schools classified as non-exclusive or exclusive. The incidence is a little 

lower for non-exclusive plans, with 53.50% of these plans enrolled in exclusive schools. 

Thus, there is a need to revise/amend existing policy on payment of College Education 

Benefit. 

- Since what actually appears in the plan itself is the school category and not the name of 

a particular school, which means that what the planholder bought is the category and not 

the school, payment of benefits shall be determined on the basis of the purchased plan. 

- Moreover, there are numerous plans which were cancelled despite the issuance of 

Certificate of Full Payment wherein arrearages were settled beyond the two (2) year 

period of updating or reinstatement as provided for under the Plan Agreement.

856 


II. 

Objectives 

The PPG aims to provide clear-cut guidelines for: 

1. payment of college education benefits for each school category; and 

2. settlement of refund of premiums paid after cancellation of Edu-child plans. 

III 

Policies 

A. COLLEGE EDUCATION BENEFIT AVAILMENT 

1. A scholar is eligible to avail of the college education benefits if all of the following 

conditions are satisfied: 

1.1. his EDU-child plan has been fully paid and with no arrearages; 

1.2 the plan has matured as of the date of availment; 

1.3 the scholar is eligible to enroll or is admitted in his chosen course and 

school; 

1.4 at least six (6) years has elapsed from the month of effectivity of the plan 

to the month of availment of the college education benefits; and 

1.5 the planholder submits an accomplished application form as prescribed 

by the System for the availment of the college education benefit 

2. The College Education Benefit chosen by the Planholder shall indicate whether enrolling 

in a four-or-five-year course in an Exclusive, Non-Exclusive or Government Colleges/ 

Universities. 

3. The benefit to be granted for each type of category shall be determined on the basis of 

the purchased plan but which amount shall not exceed the Maximum Limit. 

4. The Maximum Limit of each school category shall be adjusted as deemed necessary 

based on the recommendation of the Actuarial Group and approved by the GSIS Board 

of Trustees. 

5. The Plan shall only pay tuition fees for units not to exceed the total number of units 

prescribed in the curriculum. 

6. For scholars who opt to enroll in college/university wherein college courses are being 

offered on a trimester or on a quarterly basis, the college education benefit shall be 

computed by applying the Pro-Rata Method. Such computation is based on the following 

formula:


Prevailing Average per School Category x No. of Units Enrolled = Amount to be 

21 units in a Quarter Paid by GSIS 

Under this method, the computation is based on a 21-unit per semester assumption. 

At the end of the availment period, an adjustment, if necessary, shall be made. The 

adjustment shall be based on the then prevailing maximum limits. 

7. Pursuant to Board Resolution 71-A dated 20 July 2005 (Annex A), all planholders shall 

be required to sign a ìRelease, Waiver and Quit-Claim (Annex B) to the effect that the 

they agree to the mode of payment/settlement for the Edu-Child plans for and in consideration 

of the receipt of every availment/amount, the Planholders agree to hereby release 

and forever discharge the GSIS from any and all their present and future claims other 

than the regular payments to be made to the schools/educational institutions and that the 

planholders shall hold the System, its officials, employees and agents free and harmless 

from any and all claims arising therefrom. 

B. LAPSING AND CANCELLATION OF EDU-PLAN AGREEMENT 

1. Plans with any unpaid premiums exceeding the 60 days grace period shall be lapsed. 

2. Lapsed plans not reinstated within two (2) years shall be cancelled. 

3. For payment of any premium under this policy a grace period of sixty (60) days 

without interest will be allowed, during which time the plan will remain in force. If the policy 

shall become a claim within the grace period, the overdue premium shall be deducted 

from the amount of insurance payable. 

4. Cancellation/lapsing shall be effective on the due date of the first unpaid monthly 

premium payment 

5. Mere payment of arrearages beyond the grace period shall not reinstate or update the 

plan, but such payments made shall be treated as a deposit until such time that plan is 

fully reinstated or updated and approved by the GSIS in writing. 

6. All premium payments made after the cancellation of the plan shall be refunded by the 

GSIS to the planholder without interest. 

7. For plans deemed to have lapsed/cancelled but are now availing, the benefits received 

shall be deducted from the proceeds of the refund. After applying the proceeds of the 

refund to the benefits already paid, the deficiency shall be considered as a personal 

liability of the member and will be subject to the usual collection policies of the GSIS. 

8. All payments made prior to the cancellation of the plan shall accrue in favor of the 

GSIS. 

9. Planholders whose plans were cancelled and with refund of premiums paid after cancellation 

shall likewise be required to sign a ìRelease, Waiver, and Quit-Claimî pursuant 

to Board Resolution 71-A dated 20 July 2005

858 


Policies, guidelines and procedures previously issued, which are inconsistent with 

what is provided above shall be assumed modified, superseded and/or repealed. 



(SGD.) WINSTON F. GARCIA 

President and General Manager 

--o0o-- 


Increase in the Amount of Emergency/Calamity Loan 

RESOLVED: That, considering that the purpose of the loan is to alleviate the 

plight of affected GSIS members in times of emergencies/calamities, and the proposed 

increase in the amount of emergency loan was based not only on economic but also on 

humanitarian grounds, to APPROVE and CONFIRM the recommendation for the increase 

in the amount of Emergency/Calamity Loan to P20,000.00 from the present amount 

of P10,000.00 and the following changes in its features: 

Feature Existing Proposal 

Interest Rate 10% computed in advance 8% computed in advance 

Term Two (2) years Three (3) years 

Other terms and conditions of the existing Emergency Loan Program shall be 

retained, as follows: 

1. Documentary Requirements: 

a. Duly accomplished Application Form supported by a certification by the 

Barangay Chairman that the applicant is a resident of the calamity area; 

b. Declaration by a duly constituted authority of the affected region, province, 

city or town as a calamity area; 

c. Approval by the President and General Manager of the recommendation of 

the Senior Vice President (Field Operations Group) and the Senior Vice President 

(Social Insurance Group) to grant emergency loans in calamity areas. 

2. Eligibility 

a. Member is a resident or is working in the area declared as a calamity area 

b. Member is in the service and not on leave of absence without pay 

c. Member has no pending administrative or criminal case 

d. Member has no arrearages in the payment of mandatory social insurance 

contributions


e. Member has no salary or housing loan that has been declared in default 

3. Deductions from the Loan Proceeds 

a. Emergency Loan Redemption Insurance (ELRI) premium equivalent to 1.2% 

of the loan amount 

b. Outstanding balance of the previous emergency loan including surcharges, 

if any, and 

c. Service fee of 1% of the gross loan amount 

4. Crediting of Loan Proceeds 

The proceeds of the loan shall be directly credited to the eCard account of 

the borrower or other mode of disbursement. 

5. Conditions for Renewal 

Renewal of emergency loan shall be allowed after payment of twelve (12) 

monthly repayments but not earlier than the anniversary date of the previous 

loan. 

6. Maturity of the Loan 

The loan shall mature at the end of the payment term of thirty-six (36) 

months or upon retirement, separation, permanent disability or death of the 

borrower if any of these events occur before the expiration of the said term of 

the loan. In which case, the entire principal amount of the loan including all 

interest and other charges payable, shall be due and payable without need of 

demand or further notice. 

If upon maturity, the loan remains unpaid, the outstanding balance (principal 

plus interest) shall be charged an interest of 8% per annum simple and a 

penalty of 0.5% per month. 

The application of payment shall be in the following order: 

a. Penalty 

b. Interest 

c. Principal 

7. Penalty Charges 

Monthly repayments due but unpaid or paid partially shall be assessed a 

penalty charge of 0.5% for every month of delay on the unpaid repayment or 

portion thereof until the same is fully paid. 

8. Loan Pre-termination

860 


The borrower may pre-terminate the loan anytime during its term subject to 

the full payment of the outstanding balance less a pre-termination discount if 

the pre-termination is made within 24 months from date of grant as follows: 

9. Loan Cancellation 

No. of months into the Term Applicable Discount 

0 to 12 P3,200.00 

13 to 24 P1,600.00 

25 to 36 None 

Once the emergency loan is approved and the loan proceeds have been 

credited in the eCard or other mode of disbursement, the borrower has no 

more option to cancel the loan but only to pre-terminate it by paying the full 

amount of the outstanding balance including accrued interests, if any, without 

any right to demand the reimbursement of service fee and such other fees 

that might have been deducted under such loan. 

10. Event/Consequence of Default 

Failure of the borrower to pay three consecutive monthly installments shall 

consider him/her in default. In such case, the outstanding balance of the loan 

shall be due and payable without need of demand or further notice, all of 

which the borrower expressly waives. 

Adopted: 1 March 2006 (Special Meeting No. 1) 


--o0o-- 


Amendment to the Policy Guidelines on the 

Change of Birth Date of Members 

RESOLVED, to AMEND the Policy Guidelines on the Change of Birth Date of 

Members approved under Board Resolution No. 189 dated August 13, 2003, to read as 

follows: 

1. Changes in the date of birth shall only be given due course upon presentation by a 

requesting member to GSIS of either a Court Order or copy of Birth Certificate attesting 

to the validity of such change, provided the latter is duly authenticated by the National 

Statistics Office (NSO); 

2. If the request is made within one year from the date of issuance of the original policy 

under Life Endowment Plan (LEP) or Enhanced Life Policy (ELP), the change in date of


birth of an active member in his/her insurance policy data in the GSIS database shall be 

allowed; in which case, the corresponding Memberís Service Profile (MSP), must, likewise, 

reflect the amended/corrected date of birth. 

2.1 Accordingly, the adjustment in the endowment plan under LEP, including 

the computation of a memberís amount of life insurance thereunder, shall be 

effected. 

2.2 The gross amount of insurance under an ELP policy, shall, at all times, 

not be affected by any change in a memberís date of birth. 

3. If the request for amendment in the date of birth in the GSIS database is made after 

one year from the date of issuance of the original LEP or ELP policy, such request shall 

no longer be entertained and, therefore, no change in the date of birth shall be reflected 

in the policy data of the member in the database. 

3.1 However, for retirement purposes, any request for change in date of 

birth made after one year from the date of issuance of the original LEP or ELP 

policy shall be given due course, provided duly supported by either a Court 

Order or NSO-authenticated Birth Certificate; in which case, the amendment 

shall be recorded only in the MSP of the member. 

3.2 The claims system shall, at all times, always refer to the date of birth as 

appearing in the MSP in all cases requiring processing and payment of claims 

for benefits, whether for life or retirement. 

The Information Technology Services Group (ITSG) shall undertake the necessary 

enhancement/ revision in the present systems and programs to conform to the 

foregoing situations/conditions. 

Adopted: 29 March 2006 (Board Meeting No. 6) 

INTELLECTUAL PROPERTY OFFICE OF THE PHILIPPINES 


Office Order No. 49, Series of 2006 

Amendment to Rule 618 of the Trademark Regulations 

To further streamline the business procedures in the registration of marks, Rule 

618 of the Trademark Regulations is amended as follows: 

Rule 618. Provisional Allowance. If the only issue remaining in an application 

based on foreign application claiming priority right is the submission of 

a certified copy of the foreign or home registration, the Examiner may provi-

862 


sionally allow the application and suspend the submission of the certified copy 

of the foreign or home registration for a period not exceeding twelve (12) 

months counted from allowance. On request of the applicant and subject to the 

approval of the Director and payment of the required fee, said twelve month 

period may be extended for good cause by an additional period not exceeding 

twelve (12) months. Should the applicant fail to submit the certified copy of the 

foreign or home registration within the maximum period of twenty four (24) 

months counted from provisional allowance, the claim to priority right will be 

deemed waived. The application will thereafter be published for opposition 

upon payment of the required fees. 

Mr. John Gonzales, Executive Assistant III, is directed to file three (3) certified 

copies of this Office Order with the University of the Philippines Law Center, and one (1) 

certified copy each to the Senate, the House of Representatives, the Supreme Court, and 

the National Library. 

Ms. Corina L. Antonio, Information Systems Researcher I, MIS-EDP Bureau, is 

hereby directed to publish this Office Order in the IPO Website immediately upon receipt 

hereof. 

This Office Order shall take effect fifteen (15) days from publication in the IPO 

Website. For purposes of disseminating the information, this Order may also be published 

in a newspaper of general circulation. 


(SGD.) ADRIAN S. CRISTOBAL JR. 

Director General 

LAGUNA LAKE DEVELOPMENT AUTHORITY 


Resolution No. 192, s. 2004 

Approving the Revised Rules, Regulations and Procedures 

Implementing Republic Act No. 4850, As Amended 

WHEREAS, it is the declared national policy to promote, and accelerate the 

development and balanced growth of the Laguna Lake area and the surrounding provinces, 

cities and towns hereinafter referred to as the region, within the context of the 

national and regional plans and policies for social and economic development and to 

carry out the development of the Laguna Lake region with due regard and adequate 

provisions for environmental management and control, preservation of the quality of human 

life and ecological systems, and the preservation of undue ecological disturbances, 

deterioration and pollution; and


WHEREAS, for Laguna Lake Development Authority to effectively perform its 

quasi-judicial functions and for proper and effective implementation of its regulatory powers, 

the Laguna Lake Development Authority has formulated the Revised Rules, Regulations 

and Procedures implementing Republic Act No. 4850, as amended; 

NOW, THEREFORE, considering the foregoing premises and pursuant to its 

administrative rule-making powers provided for under Section 5, paragraph (k) of Republic 

Act No. 4850, as amended by Presidential Decree No. 813 and Section 4 paragraph 

(a), (b) & (e) of Executive Order No. 927, Series of 1983, the Laguna Lake Development 

Authority hereby promulgates and adopts the following Rules, Regulations and Procedures 

in the implementation of the provisions of Republic Act No. 4850, as amended, for 

the Laguna de Bay and its watershed: 

RULE I 


SECTION 1. Title - These rules shall be known as the Laguna Lake Development 

Authorityís Revised Rules, Regulations and Procedures Implementing Republic Act 

No. 4850, as amended. 

SECTION 2.Scope and Application - These Rules and Procedures shall apply to 

Laguna de Bay and the Laguna de Bay region as defined under Section 41 of Republic 

Act No. 4850 and Section 2 of Executive Order No. 927, Series of 1983. They shall 

govern the proceedings relative to administrative hearings and resolutions of all cases 

affecting the Laguna de Bay and its watershed that include pollution control cases, aquaculture 

cases, shoreland matters and other administrative determinations affecting the 

implementation of the provisions of Republic Act No. 4850, as amended within the Laguna 

de Bay Region. 

SECTION 3. Construction - These Rules, Regulations and Procedures shall be 

liberally construed to carry out the legislated national policy to protect the balanced 

growth of the Laguna de Bay Region and promote public interest and to assist the parties 

in obtaining just, speedy and inexpensive disposition of all cases falling within the jurisdiction 

of the LLDA. 

SECTION 4 . Administration and Enforcement - These Rules, Regulations and 

Procedures shall be implemented, administered and enforced by the Laguna Lake Development 

Authority through the Public Hearing Committee and/or through its duly authorized 

representatives. Enforcement of any order promulgated by the Authority may be 

course through any other government agencies deputized by the Authority pursuant to 

the provisions of Republic Act No. 4850, as amended. 

RULE II 

DEFINITION OF TERMS 

SECTION 1. Definition of Terms - For the purpose of these Rules, Regulations 

and Procedures, whenever the following words or terms are used herein, or in any 

amending rules and regulations hereinafter issued, they shall mean as follows:

864 


ìAuthorityî or LLDA means the Laguna Lake Development Authority. 

ìAnalysisî means any laboratory test or examination of any matter, substance or process 

for the purpose of determining its composition, qualities, causal relations and/or its effects 

upon the environment. 

ìCommitteeî or ìPHCî shall mean the Public Hearing Committee. 

ìDecision/Resolutionî means the judgment or resolution issued by the Public Hearing 

Committee in accordance with these Rules, stating clearly the facts of the case, the 

violations and issues, legal determination and the legal basis thereof and duly approved 

and signed by the General Manager and bears the official seal of the Authority. 

ìDepartmentî or ìDENRî shall mean the Department of Environment and Natural Resources. 

ìEffluentî is a general term denoting any wastewater, partially or completely treated, or in 

its natural state, flowing out any industrial plant, commercial establishment or any treatment 

facility. 

ìEnvironmentî means the physical factors of the total surroundings of human beings, 

including but not limited to the lakes and other bodies of water, land, air, atmosphere, 

climate, sound, odor, plants, insects, animals, its biological and physical factors, all its life 

support systems and all other surrounding matters that affects directly or indirectly the 

existence of human life and other life forms in a specific area. 

ìFishpenî is a structure enclosing a particular area in the lake which make use of 

bamboos or anahaw poles surrounded by nets, fastened by a weight of sinkers embedded 

in the lake bed. 

ìFishcageî is a structure similar to an inverted mosquito net fastened to bamboos. 

ìGeneral Managerî means the chief operating or executive officer of the Laguna Lake 

Development Authority duly appointed by the Office of the President. 

ìIndustrial Wasteî means any liquid, gaseous or solid matter or other wastes substance 

or a combination thereof resulting from any process of industry, manufacturing, trade or 

business or from the development, processing or recovery of any natural resources 

which may cause or tend to cause pollution or contribute to the pollution of the water, air 

and land resources of the Philippines. 

ìLaguna de Bay or Laguna Lakeî refers to that area covered by waters when it is at the 

average annual maximum elevation of 12.50 meters referred to datum 10.00 meters Mean 

Lower Low Waters (M.L.L.W.) as defined under Section 41 of Republic Act No. 4850 , as 

amended. 

ìLaguna de Bay Region or Regionî refers to the watershed region of Laguna de Bay 

which includes the provinces of Rizal and Laguna, the cities of San Pablo, Pasay, 

Caloocan, Quezon, Manila, and Tagaytay; the towns of Tanauan, Sto. Tomas and Malvar 

in Batangas Province; the towns of Silang and Carmona in Cavite Province; the town of


Lucban in Quezon Province; and the towns of Marikina, Pasig, Taguig, Muntinlupa and 

Pateros in Metro Manila as defined under Section 2 of Executive Order No. 927 including 

such other cities and municipalities created hereinafter. 

ìLake Bedî means the lands located at and below the average annual maximum lake level 

elevation of 12.50 meters as referred to datum 10.00 meters below mean lower low water 

(MLLW) and therefore forms part of the inalienable lands of the public domain. 

ìManaging Headî shall mean the President, Managing Director, Managing Partner, Chief 

Executive Officer or highest executive officer of the respondent, if it be a corporation, 

partnership or other juridical person or the owner/proprietor of a business. 

ìPersonî or ìPersonsî shall include any being, natural or juridical susceptible of rights 

and obligations or of being the subject of legal actions. 

ìPermitsî/ îClearanceî shall mean any clearance or legal authorization granted by the 

Authority to undertake any development activity within the Laguna de Bay Region or 

perform any other act allowed under its existing rules. 

ìPollutionî shall mean any alteration of the physical, chemical and biological properties of 

any water, air and land resources of the Philippines or any discharge thereto of any 

liquid, gaseous or solid wastes as will be likely to create or to render such water, air and 

land resources harmful, detrimental or injurious to public health, safety or welfare or 

which will adversely affect their utilization for domestics, commercial, industrial, agriculture, 

recreational or other legitimate purposes. 

ìPollutantsî means any substance in whatever form whether solid, liquid or gaseous, its 

existence or introduction to the environment or a particular area, directly or indirectly: 

a) Alters the quality of any segment of the receiving environment so 

as to affect or to affect adversely the beneficial uses; 

b) Causes hazard to life, limb and property; 

c) Imparts objectionable odor, noise, temperature change or physical; 

chemical or biological changes to any segment of the environment; 

or 

d) Exceeds the allowable limits of concentration or quality standards specified, 

or in contravention to the condition, limitation or restriction prescribed in 

the permits or clearance issued by the Authority. 

ìPollution Control Facilityî or ìPollution Control Deviceî shall mean any structure, contrivance, 

facility, system, device or mechanism which can adequately control or abate liquid, 

gaseous or solid wastes or noise pollution within the allowed quality standards of the 

Department. 

ìPublic Hearingî means the formal inquiry or proceedings in compliance with administrative 

due process, directed against a respondent or respondents, giving them the opportunity 

to controvert the results of the investigation or findings preparatory to the issuance of 

an order, resolution or decision on a particular case or violation.

866 


ìRespondentî means the party, whether individual or corporation, against whom a complaint 

is filed before the Authority for violating any of the Rules. 

ìShorelandî as defined under Sec. 41 (11) of Republic Act No. 4850 shall refer to that 

area occasionally covered by the lake water when it is at an average annual maximum 

lake level of elevation 12.50 meters, as referred to a datum 10.00 meters below mean 

lower low water (M.L.L.W.) 

ìSTPî/CSTP shall mean Sewage Treatment Plant or Centralized Sewage Treatment Plant 

which refers to a facility designed to treat domestic wastewater only. 

ìTreatment Plant or Centralized Wastewater Treatment Facilityî which refers to a facility 

designed to treat an industrial or process waste within an individual establishment or an 

industrial park. 

ìZOMAPî shall mean the Fishery Zoning and Management Plan for the Laguna de Bay 

defining the areas for fishpens, fishcages, sanctuaries and open fishing including navigational 

lanes and other pertinent rules related to lake management. ìWTFî/ îWTPî or 

ìCWTFî shall mean Wastewater Treatment Facility / Wastewater. 

RULE III 

JURISDICTION AND AUTHORITY 

SECTION 1. Jurisdiction . The Authority shall have the sole and exclusive jurisdiction 

over water pollution cases, fishpen/fishcage cases and shoreland cases within the 

territorial jurisdiction of the Laguna de Bay Region as defined herein, and all other matters 

as mandated by R.A. 4850, as amended by P.D. 813 and E.O. 927, including the 

imposition of penalties, administrative fines and other sanctions, except as otherwise 

provided by special laws. 

SECTION 2. Application of Laws, Rules and Regulations 

a) In the exercise of its power to control and abate pollution, the Authority shall implement 

and will be guided by the provisions of Presidential Decree No. 984 otherwise known as 

the Pollution Control Code of the Philippines amending Republic Act No. 3931 otherwise 

known as the National Pollution Control Code of the Philippines and other relevant laws 

related to pollution prevention and environmental protection. 

b) In the exercise of its power to manage and regulate the fishpen/fishcage operation in 

the lake, the Authority shall implement and will be guided by the provisions of the Revised 

Fishery Zoning and Management Plan (ZOMAP) of 1996 and such other rules as may be 

issued by the Board. 

c) In the exercise of its power to manage and regulate the use and/or occupancy of the 

shorelands, the Authority shall implement and will be guided by the provisions of LLDA 

Board Resolution No. 23, Series of 1996 and its amendments and such other rules as 

may be issued by the Board. 

The exercise of LLDA of its quasi-judicial powers shall proceed independent of 

any other administrative or judicial proceedings pending before any other judicial, quasi-


judicial or administrative bodies in the Philippines unless a proper injunction by a competent 

court to this effect is issued. 

SECTION 3. The Public Hearing Committee - For the purpose of effectively 

carrying out the quasi-judicial powers of the Authority within its area of jurisdiction, a 

Public Hearing Committee is hereby created composed of a Chairman and two (2) 

other members representing the Office of the General Manager, the Legal Division and 

the concerned division depending on the matter under consideration (i.e., the Pollution 

Control Division for pollution cases, the Lake Management Division for fishpen/fishcage 

cases and the Special Concerns Division for shoreland cases). The Committee shall be 

designated by the General Manager and any decision, order or resolution must be concurred 

by the majority member of the Committee and duly approved by the General 

Manager. The Secretariat of the Committee shall be the Legal Division. 

SECTION 4. The Hearing Officers - There shall be a set of hearing officers at the 

Legal Division who shall assist the Public Hearing Committee in the reception and evaluation 

of evidence presented for each case. The hearing officer may investigate and hear 

pollution cases, fishpen/fishcage cases, shoreland cases and all other violations of theses 

Rules as may be delegated or authorized by the Public Hearing Committee; provided 

that, the final decision may be promulgated only by the Committee giving due consideration 

to the recommendation of the hearing officer. 

The hearing officer may recommend the issuance, renewal or denial of LLDA 

Clearance and/or Discharge Permit, Fishpen/Fishcage Permit and Shoreland Occupancy 

Permit and/or Shoreland Lease Agreement under such conditions as it may determine 

to be reasonable for the prevention and abatement of pollution within the Laguna de 

Bay and for the prevention of undue ecological imbalance in the Laguna de Bay Region. 

SECTION 5 . Authentication with Official Seal - All legal documents hereinafter 

shall be issued and authenticated with official seal of the Authority. 

RULE IV 

ADMINISTRATIVE PROCEDURES 

SECTION 1. Nature of Proceedings - The proceedings shall be administrative in 

character without necessarily adhering to or following the technical rules of procedure 

and evidence. Due regard shall however, be given to the merits of each case and compliance 

with the substantial requirements of due process. Multiplicity of actions shall be 

discouraged and all issues pertinent or matters relevant to a pending case shall be resolved 

therein as much as practicable. Use and application of new procedural methodologies 

in hastening resolution of cases and issues may be adopted provided that, the 

constitutional requirements for administrative due process shall be substantially met. 

SECTION 2 . Parties - Any persons who have an interest in the subject of the 

action may be a party to a case or proceeding before the Committee. 

The party initiating the action shall be called the ìComplainantî and the party 

against whom a complaint is filed shall be called the ìRespondent.î 

SECTION 3 . Commencement of Actions - Actions within the jurisdiction of the 

Authority may be commenced motu propio by Authority through its concerned divisions

868 


or by a formal complaint filed by any individual, person or group of persons, by the 

Department of Environment and Natural Resources (DENR), and other government agencies, 

institutions and bodies including local government units, before the Authority, for 

pollution control and abatement cases, fishpen/fishcage cases, shoreland cases and any 

other violations of the provisions of R.A. 4850, as amended by P.D. 813 and E.O. 927, 

and/or these Rules and Regulations. 

Actions commenced motu propio shall be deemed instituted upon completion of 

the concerned division investigation of the violation committed and concurred by the 

Public Hearing Committee. 

Actions based on complaints filed by the DENR, Local Government Units, or any 

other government institutions shall be deemed instituted upon endorsement of the complaint 

to the General Manager with the attached investigation reports and concurred by 

the Public Hearing Committee. 

Formal complaints filed by any individual, person or group of persons shall be 

deemed instituted upon filing of a properly verified written complaint before the Authority. 

SECTION 4 . Construction of Pleadings - All pleadings filed before the Authority 

shall be liberally construed so as to do substantial justice to all litigants taking into consideration 

environmental protection and sustainable development of the Laguna de Bay 

Region. Formal requirements may not affect the intrinsic validity of proceedings provided 

that the information and facts alleged therein are clearly indicated for the judicious resolution 

of the case. 

SECTION 5. Caption and Title - In all cases cognizable by the Authority, the full 

names of all parties as far as they are known shall be stated in the caption of the original 

pleadings, application, motion, resolution, notices and processes to be served upon them. 

If the action is initiated by any person other than the Authority, the caption shall be as 

follows: 

Republic of the Philippines 

Department of Environment and Natural Resources 


Rizal Provincial Capitol Compound 

Shaw Boulevard, Pasig City 

Metro Manila 

___________________, LLDA Case No. ________ 

Complainant. For: _________________ 

(State the nature of the 

complaint or law/laws violated, 

e.g.Violation of R.A. 4850, as 

amended) 

- versus - 

___________________, 

Respondent. 

C O M P L A I N T 

Complainant/Counsel for 

the Complainant


In case the action is instituted at the instance of the Authority, the caption shall be as follows: 

Republic of the Philippines 

Department of Environment and Natural Resources 


Rizal Provincial Capitol Compound 

Shaw Boulevard, Pasig City 

Metro Manila 

In the Matter of ___________________ 

________________________________ 

(State the nature of the case, e.g., ìPollution 

Control and Abatement Caseî or ìViolation of Fishpen/Fishcage 

or Shoreland Rules and Regulationsî) 

__________________________, 

Respondent. 

x óóóóóóóóóóóóóx 

LLDA Case No. ___________ 

For: ____________________ 

(State the law/rule violated) 

SECTION 5. Form and Contents of Complaint - The complaint shall be in writing 

and drawn in clear and concise English language. It shall recite the ultimate facts constituting 

the cause or causes of action and/or the violation or R.A. 4850, as amended and/or 

these Rules and Regulations, as well as all information pertinent thereto. It may specify 

the relief sought and such further remedies as may be deemed just and equitable. 

SECTION 6. Effect of Withdrawal of Complaint - The withdrawal of complaint shall 

not have the effect of automatically dismissing it or the proceeding thereon. The Authority 

may motu propio continue the same if it deemed necessary in the interest of public 

welfare, safety and environmental protection. 

SECTION 7. Procedure Before the Authority - Upon any action initiated by the 

Authority or upon receipt of the complaint, from private or public persons/entities, the 

General Manager shall order an investigation or inquiry, in such manner as he may 

determine on the alleged act of violation or failure to comply with any of the provisions of 

R.A. 4850, as amended by Presidential Decree No. 813, Executive Order No. 927, rules 

and regulations duly promulgated by the Authority, and/or these Rules and Regulations; 

which may include but not limited to ocular inspection, surveys of the premises and 

sampling and analysis of wastewater discharge. For this purpose, the Authority may 

request the assistance of other government agencies. If after such survey, investigation 

and/or analysis there appears to be a violation of any of the provisions of R.A. 4850, as 

amended by P.D. 813 and E.O.927 or these Rules and Regulations, or a truth to the 

allegation in the complaint, the General Manager, through the Public Hearing Committee 

shall issue an appropriate order (Notice of Violation, Notice of Public Hearing, Ex-Parte 

Order or Ex-Parte Cease and Desist Order. 

However, where there is a prima facie evidence that the violation committed 

constitute an immediate threat to life, public health, safety or welfare or to animal or plant

870 


life or greatly exceed the allowable DENR standards, as provided in the guidelines established 

by the Authority, a Cease and Desist Order/Order of Demolition maybe issued 

immediately directing a complete cessation of operation. 

SECTION 8. Intervention by an Interested Party - Any party, who claims to have 

interest or may be adversely affected by the proceedings before the Authority, may file a 

motion for intervention stating in simple and concise words the ground relied upon for the 

action in the intervention, and the remedies sought, serving a copy of the same to the 

respondents and the complainants, if any. The motion shall be filed at anytime prior to the 

promulgation of an order or decision. 

SECTION 9. Dilatory Motions not Allowed - No motion for extension of time to file 

any pleadings or postponements shall be allowed before the Authority more than two (2) 

times not to exceed sixty (60) calendar days from receipt of the complaint. Any dilatory 

motion filed shall be considered as a mere scrap of paper. 

SECTION 10. Default - If the respondent fails to answer within fifteen (15) calendar 

days from receipt of notice of complaint, the Public Hearing Committee shall, motopropio 

or upon motion of the complainant with the notice to the respondent, and proof of 

such failure, declare the respondent in default. Thereupon, the Public Hearing Committee 

shall proceed to render judgment granting the complainant such relief as his pleading 

may warrant, unless the Public Hearing Committee in it discretion requires the complainant 

to submit evidence. 

SECTION 11. Notices and Orders - All notices and orders issued by the Public 

Hearing Committee shall be addressed to the respondent and shall contain among other; 

(a) the name of the parties; (b) the nature of the violation; and (c) a directive for the 

respondent to appear for a public hearing; or submit remedial measures to control or 

abate the pollution; or show cause in writing why no ex-parte cease and desist order shall 

be issued against it for the alleged violation. A copy of the complaint or results of investigation 

shall be attached to the notice/order. 

SECTION 12. Service of Notice of Hearing and Orders - The notice of hearing 

shall be served personally upon the complainant and the respondent or any interested 

party at least three (3) days prior to the proceedings. Personal service shall be made by 

handing a copy thereof to the respondent in person or to his authorized representative. A 

notice of violation without water pollution may be delivered by registered mail through the 

postal service. 

If the respondent cannot be served personally as provided for in the preceding 

paragraph or if he unduly refuses to receive the notice or order, service may be effected 

by leaving a copy thereof at the respondentís principal office or regular place of business 

with some competent person in charge thereof. 

The proof of service of notice or order shall be noted by the server on the receiving 

copy setting forth the place and the date of service, and the name and signature of 

the person who received the same. 

SECTION 13. To Whom Will It be Addressed - Notice of hearing and order shall 

be addressed to the manager or managing head, if the respondent is a partnership,


single proprietorship, association or government agency. To the corporate president/ 

general manager, if the respondent is a corporation; or local executive, if the respondent 

is a municipality or city or any political subdivision. 

SECTION 14. Docket Number and Calendar of Cases - All cases before the 

Public Hearing Committee shall be numbered and docketed consecutively and entered 

into an appropriate logbook in accordance with a system of numbering and docketing of 

cases adapted by the Public Hearing Committee. 

RULE V 

PUBLIC HEARING 

SECTION 1. Appearances - The respondent or the accredited Pollution Control 

Officer (PCO) or his duly authorized representative shall be required to appear in all 

proceedings. A senior officer, a legal counsel or a technical consultant may appear with 

him, provided that, in no case shall the respondent be represented by a consultant only. 

SECTION 2. Notice of Public Hearing - The Public Hearing Committee shall serve 

a notice of public hearing to the respondent directing him to bring and furnish the Public 

Hearing Committee, copies of all documents and related articles to the above-stated 

case. The said notice shall be sent to the respondent at least three (3) days prior to the 

date of hearing. Similar notices shall also be sent to the representatives of concerned 

government agencies for the effective resolution of the case. 

Non-appearance will amount to a waiver of the respondentís right to a hearing. 

Despite non-appearance, the Authority will proceed to determine the merits of the case 

and apply the proper relief and measures as may be provided by law. 

SECTION 3. Who Conducts the Public Hearing - The public hearing shall be 

conducted by the Public Hearing Committee or by the hearing officers duly authorized by 

the PHC. Hearing on the merits and reception of evidences may be conducted by the 

hearing officers, provided that, if the motion is litigious in nature such as a motion for the 

issuance of a temporary lifting order, the Public Hearing Committee shall conduct the 

hearing en banc. 

SECTION 4 . Subpoena and Subpoena Duces Tecum - If the attendance of a 

witness or the production of books, papers, documents and other pertinent data necessary, 

any party may request the issuance of the necessary subpoena duces tecum at 

least five (5) days prior to the scheduled hearing. The Committee shall issue the subpoena 

or subpoena duces tecum upon a showing of general relevance. 

SECTION 5. Ocular Inspection - Whenever essential to the determination of the 

issue surrounding the case, the Committee or hearing officer may direct the conduct of 

an ocular inspection. 

SECTION 6. Rules of Evidence - In the conduct of hearings, the Committee or 

hearing officer shall not be bound by the technical rules of evidence under the Rules of 

Court. However, the following simplified rules of evidence shall be observed:

872 


a) The Committee or hearing officer shall admit and give probative value to evidence 

commonly accepted by reasonably prudent men in the conduct of their affairs. In case of 

doubt, all evidence presented shall be admitted, subject to the objection interposed, if 

any. 

b) All documents forming part of the records and material to the issue of the case, 

whether marked or exhibits or not shall be deemed admitted as evidence and may be 

considered in the resolution of the case. 

c) Secondary documentary evidence may be received in the form of copies or excerpts, 

if the original is not readily available. Upon request, the parties shall be given opportunity 

to compare the copy with the original. If the original is in the official custody of a bank or 

other government agency, a certified copy thereof may be accepted. 

d) Every party shall have the opportunity to be heard in accordance with administrative 

due process. 

e) The Committee or hearing officer may take notice of judicially cognizable facts and of 

generally cognizable technical or scientific facts within its or his specialized knowledge. 

The parties shall be notified and afforded an opportunity to contest the facts so noticed. 

Appreciation of all documents submitted as evidence whose probative value shall 

be under the discretion of the hearing officer and/or public hearing committee. 

SECTION 7. Records of Proceedings - The proceedings and testimonies of 

witnesses during the hearing may be recorded by a stenographer, where one is available. 

The appearance of parties and other person shall be duly noted and accounted for 

through their signatures. The Committee Secretariat or hearing officer shall make a 

written summary of the proceeding including the substance of the evidence presented 

which shall form part of the records of the case. The written summary shall be signed and 

certified by the Committee Secretary or the Hearing officer, as the case might be and 

duly conformed by the respondent. 

SECTION 8. Postponement - A motion for postponement of the public hearing 

shall be filed with the Authority and a copy thereof furnished the adverse party, if any, at 

least three (3) days prior to the scheduled date of hearing except motions for continuance 

made in the presence of the other parties; or those in the course of hearing. 

Postponement shall be discouraged and shall be allowed by the Hearing Committee only 

in meritorious cases, like illness of party or counsel for a period of not more than fifteen 

(15) days. 

SECTION 9. Hearing Procedure - As soon as the parties entered their appearances 

and manifested readiness to proceed with the case, the complainant shall be 

allowed to present evidence in support of the charge with the testimony of each witness 

taken under oath, after which the results of surveys or field investigations and/or sample 

analysis shall be made known to the parties. Thereafter, the respondent shall present his 

evidence. 

If the case is commenced by the Authority, the hearing shall proceed directly 

with the presentation of results of surveys or field investigations, samplings, or analysis of 

effluent and other evidence, after which the respondent shall present his evidence.


The procedure in public hearing shall also apply to arbitration proceedings and 

to appropriate cases relating to denial and revocation of permits as provided for under 

these Rules and Regulations. 

SECTION 10. Ex-Parte Hearing - Upon proof of services to the respondent, and 

upon his failure to answer or to appear within the prescribed period, a public hearing may 

proceed ex-parte which shall consist of the presentation of results of surveys or field 

investigation, samplings, analyses and other evidence on the part of the complainant or 

the Authority as the case may be. 

SECTION 11. Submission of Memoranda - The Public Hearing Committee may 

allow the parties upon petition to submit their respective memoranda and/or position 

papers not later than fifteen (15) days after all testimonial and documentary evidence 

have been submitted by the parties. 

RULE VI 

DELIBERATION OF CASES BY THE PUBLIC HEARING COMMITTEE 

SECTION 1. Venue - The hearing or deliberation of cases by the Committee shall 

be held at the office of the Laguna Lake Development Authority or in such other place as 

may be designated by the Authority provided that venue shall be within the Laguna de 

Bay Region. 

SECTION 2. Basis of the Authorityís Action - The General Manager shall base 

his action, order or decision on the entire records of the case. He may however, adopt 

the findings of facts and recommendations of the Public Hearing Committee as his own 

or modify the same as the evidence may warrant, without prejudice to the production of 

additional information as he may require for a complete determination of the case. 

SECTION 3. Deliberation by the Committee - Except where the Committee in its 

discretion, provides for oral arguments or for the presentation of additional evidence, the 

Committee shall deliberate on cases on the basis of the pleadings and the records of the 

case, without the appearance of the parties in a hearing. 

RULE VII 

ORDERS AND DECISIONS 

SECTION 1. Notice of Violation - Notice of Violation shall be issued by the concerned 

divisions as follows: 

a) For cases endorsed by the PCD, a Notice of Violation shall be issued requiring the 

respondent to comply with the documentary requirements or institute corrective measures 

when it concerns water pollution within fifteen (15) days from receipt thereof. 

When it concerns permit requirements, respondent is required to comply within sixty (60) 

days from receipt of the Notice. 

b) For cases endorsed by the LMD, a Notice of Violation shall be issued requiring the 

respondent to comply with the fishpen/fishcage rules within thirty (30) days from receipt 

thereof.

874 


c) For cases endorsed by the SCD, a Notice of Violation shall be issued requiring the 

respondent to comply with the shoreland rules within seven (7) days from receipt thereof. 

SECTION 2. Ex-Parte Orders - An ex-parte order shall be issued requiring the 

respondent to show cause why no Cease and Desist Order will be issued for discharging 

effluent not conforming to the standards within fifteen (15) days from receipt of such 

order for unjustly refusing to allow an inspection in case of refusal of entry of a bona fide 

LLDA inspector. In case of violation of fishpen/fishcage rules, an ex-parte order shall 

likewise be issued requiring the respondent to show cause why no Demolition Order will 

be issued for violating such rules. In case of violation of shoreland rules, an ex-parte 

order shall be issued requiring the respondent to show cause why no Cease and Desist 

Order shall be issued for such violation. 

SECTION 3. Ex-Parte Cease and Desist Order/Demolition Order - Whenever the 

Authority finds prima facie evidence that the discharged wastes or the illegal reclamation 

or the illegal fishpen/fishcage structure are of immediate threat to life, public health, 

safety or welfare to animals or plant life or exceeds the allowable standards/area set by 

the Authority, the General Manager or his absence, the Assistant General Manager shall 

issue an Ex-Parte Cease and Desist Order directing the discontinuance of the same or 

the temporary suspension or cessation of the establishment or person generating such 

emission or wastes or causing such reclamation/backfill activity or such illegal fishpen/ 

fishcage structure without the necessity of a prior public hearing. The said Ex-Parte 

Cease and Desist Order/Demolition Order or any closure order shall be immediately 

executory and shall remain in force until said establishment or person prevents or abates 

the said pollution within the allowable standards or until a Temporary Lifting Order is 

issued. 

The respondent may contest the order by filing a Motion to Lift the Cease and 

Desist Order. The Motion to Lift the Cease and Desist Order shall be set for hearing or 

calendared for the Committeeís deliberation. The filing of such motion shall not stay the 

enforcement and execution of the Order. 

SECTION 4. Implementation of Cease and Desist Order/Demolition Order - The 

Public Hearing Committee or its duly authorized representatives shall implement or cause 

the implementation of the Cease and Desist Order not later than seventy-two (72) hours 

from receipt thereof. The enforcement team shall submit a report to the Public Hearing 

Committee within forty-eight (48) hours after the action taken. Should the Cease and 

Desist Order be implemented beyond seventy-two (72) hours, the enforcement team shall 

justify the delay in a written report to the Committee. 

The enforcement team shall be headed by the Legal Division with a representative 

from the concerned unit and the Public Information Unit (PIU). No other LLDA personnel 

or special group may be deputized without the prior approval of the General 

Manager. 

In the implementation of Cease and Desist Orders/Demolition Order, the Enforcement 

Team may coordinate with the local government concerned, unless local government 

officials are directly or indirectly involved in the business or undertaking causing 

the pollution/violation or have manifested partially in favor of respondent or shown reluctance 

to enforce pollution control laws/LLDA Rules. The Enforcement Team may seek the


assistance of the Philippine National Police and other law enforcement agencies when 

necessary. 

SECTION 5 .Temporary Lifting Order for Purposes of Implementing Pollution 

Control Program - The Committee may upon proper motion of the respondent, issue a 

Temporary Lifting Order (TLO) in cases where it has issued a Cease and Desist Order, in 

order to allow the implementation of a comprehensive pollution control program for a 

period not exceeding six (6) months. Where a Temporary Lifting Order (TLO) is issued, 

the respondent shall be required to submit progress reports indicating therein the latest 

status of the construction or rehabilitation, the percentage of work being undertaken and 

the proposed date of completion. Upon the lapse of the period specified in the Temporary 

Lifting Order, the Cease and Desist Order (CDO) shall automatically resume its effectivity, 

unless there is a compliance or a motion for extension of the TLO was filed with the 

Committee. Extensions of TLO shall be allowed only when a significant improvement is 

observed. 

SECTION 6 . Temporary Lifting Order for Resampling Purposes - The Committee 

may upon proper motion of the respondent, issue a Temporary Lifting Order (TLO) in 

cases where it has issued a Cease and Desist Order in order to allow the taking of 

wastewater samples. Upon the lapse of the period specified in the TLO, the Cease and 

Desist Order (CDO) shall automatically resume its effectivity, without prejudice to the 

filing of a motion for extension of TLO with the Committee. 

SECTION 7. Requirements for the Issuance of a Temporary Lifting Order - No 

Temporary Lifting Order (TLO) shall be issued unless the respondent submits the following: 

a) A notarized undertaking signed by the respondent or its duly empowered managing 

head, to comply with the conditions set by the Committee; 

b) A comprehensive pollution control program, with proof of approved budget and the 

timetable of activities for the construction or rehabilitation of its pollution control facility. 

c) A detailed description of the interim remedial measures to be instituted to mitigate 

pollution pending the completion of the pollution control program. 

d) Immediate payment of at least twenty five (25%) percent of the accumulated daily 

penalty and the remaining balance shall be paid within six (6) months from initial payment 

or upon compliance with the effluent standards, whichever comes first. 

e) File application for discharge permit and assessment of the Environmental User Fees 

as may be determined by the Pollution Control Division; 

f) Appointment of a Pollution Control Officer for accreditation by the Authority. 

g) Submission of a monthly Self-Monitoring Report/progress report on the status of its 

improvement works. 

Such other conditions which the Committee may deem appropriate under the 

circumstances.

876 


SECTION 8. Motion for Extension of Temporary Lifting Order - A motion for extension 

of the effectivity of a TLO may be filed with the Committee at least fifteen (15) days 

before the expiration of the TLO with proof of service of copies thereof to the other parties 

in case there is a complainant. The other parties shall file with the Committee their comments 

within ten (10) days from receipt of the said motion. Only one motion for extension 

may be filed. The Committee shall not extend the TLO except upon motion of the 

respondentís, nor shall it grant the motion for extension unless the respondent presents 

proof that the remedial measures approved by the Committee in granting the TLO have 

been substantially instituted or that there has been a substantial improvement in the 

respondentís effluent. 

SECTION 9. Failure to Comply - Should the respondent fail to abate the pollution 

or implement the remedial measures submitted, the Committee shall promulgate the appropriate 

decision, which shall include making the Cease and Desist Order permanent. 

SECTION 10 . Lifting of Cease and Desist Order and Dismissal of the Case - 

Where after a TLO has been issued or extended, there is a definite finding that the 

respondentís effluent or emissions have passed the allowable standards, the Committee 

may, upon proper motion, issue a resolution formally lifting the Cease and Desist Order 

and terminating the case, provided that, respondent has fully paid the fines and penalties 

imposed upon it and filed the necessary applications. 

SECTION 11. Orders, Resolutions and Decisions - Every decision promulgated 

by the Committee shall be in writing with the seal of the Authority, signed by a majority of 

its members and approved by the General Manager and shall clearly and distinctively 

state the facts and law on which it is based. The Committee shall decide each case within 

thirty (30) days after it is deemed submitted. 

The Committee shall make available for public inspection all decisions or final 

orders and resolutions in the adjudication of cases. 

RULE VIII 

MOTION FOR RECONSIDERATION 

SECTION 1. Motion for Reconsideration - The respondent may move for the 

reconsideration of an Order, resolution or decision of the Committee by filing an appropriate 

motion specifically indicating the grounds therefore, with proof of service of copies 

thereof to the other parties in case there is a complainant within fifteen (15) days from 

receipt thereof. The other parties shall file comments within ten (10) days from receipt of 

the said motion. Thereafter, the motion shall be considered submitted for resolution, 

whether or not such comments are filed. 

Only one motion for reconsideration of an Order, resolution or decision of the 

Committee shall be allowed. All papers and other documents subsequently filed shall be 

considered supplements. The Committee shall decide the motion for reconsideration shall 

suspend the running of the period to appeal. 

SECTION 2. Grounds for Motion for Reconsideration - The grounds for Motion 

for Reconsideration under the Rules of Court may be invoked by an aggrieved party in


his motion in addition to any other justifiable grounds that may be permitted by the 

Authority in the interest of justice and equity. 

RULE IX 

FINALITY OF DECISION/EXECUTION 

SECTION 1.Finality of Orders, Resolutions or Decisions - Subject to the provisions 

of the preceding rule, except for the CDO, any order, resolution or decision of the 

Committee shall become final and executory after (15) days from the date of receipt 

thereof, unless a motion for reconsideration is filed or an appeal is perfected within said 

period. 

SECTION 2. Execution of Order, Resolution or Order - Any order, resolution or 

decision of the Committee, after the same has become final and executory, shall be 

enforced and executed by the Enforcement Team. 

SECTION 3. Enforcement Report - Within forty-eight (48) hours after the completion 

of the enforcement and execution, the enforcement team shall make a report to the 

Committee, signed by the team leader and by its members, on the whole of the proceeding 

taken to enforce and execute the order, resolution or decision, together with the 

corresponding proof of service. 

RULE X 

FINES/PENALTIES AND CRIMINAL PROSECUTION 

SECTION 1. Administrative Fines - The Committee shall impose the administrative 

fine of FIVE THOUSAND PESOS (P5,000.00) pursuant to Section 39-A of Republic Act 

No. 4850, as amended, for any violation of the Rules and Regulations of the Authority. It 

shall likewise impose the fines and penalties provided for in Section 9 of Presidential 

Decree No. 984 for pollution related cases and those provided for in LLDA Board Resolution 

No. 42 series of 1997 and Board Resolution No. 113 series of 1999 for violation of 

fishpen and shoreland rules respectively, and such other violations as may be provided 

therein. 

SECTION 2. Computation of Penalties for Pollution Related Cases - The amount 

of penalties shall be computed in accordance with the existing guidelines of the Committee. 

The amount of penalties shall be computed from the date of initial sampling when the 

violation was discovered until the date of the actual cessation of the pollution or actual 

clearance of the source of pollution unless the actual number of days of discharge is 

proven other wise by the respondent through verified documentary evidence. 

The respondent shall be furnished a copy of the tentative computation of penalties 

during the public hearing for the dismissal of the case. The respondent may choose 

to pay said penalties, without prejudice to the final computation after evaluation of the 

documentary evidence submitted to justify a reduction of the penalties so imposed. 

SECTION 3. Non-Payment of Fines and Penalties - In case the respondent failed 

to pay its accumulated fines and/or penalties despite proper demand, the Public Hearing 

Committee may, after ten (10) days from service of second and final demand letter, 

recommend the issuance of Cease and Desist Order for operating without valid clear-

878 


ance/permit. The Authority may require proper officer to whom it is directed to enforce 

the Cease and Desist Order. 

The PHC may allow the respondent to pay his account on a staggered basis 

upon submission of a proposal with schedule of payment, subject to the approval of the 

General Manager. 

SECTION 4. Criminal Prosecution - The institution of an action under these rules 

shall be without prejudice to and shall not bar a criminal prosecution for violation of the 

penal provisions of Presidential Decree No. 984 and its implementing rules and regulations. 

If the violator is a juridical person, the criminal case shall be filed against the 

managing head of the company or facility responsible for the violation. 

RULE XI 

CONTEMPT 

SECTION 1. Direct Contempt - The Committee or the hearing officer may cite in 

contempt and punish with a fine not exceeding Five Thousand (PHP 5,000.00) Pesos any 

person; 

a) who fails or refuses to comply with the lawful orders, resolutions, decision, notice of 

hearing issued by the Authority. 

b) who refuses entry into the premises of respondent to personnel duly authorized or 

deputized to conduct an inspection or sampling. 

The institution of contempt charges by the Committee with the appropriate court 

or appropriate government agency concerned in accordance with the Rules of Court 

without prejudice to the institution of fines and penalties as provided for herein or existing 

laws, rules and regulations. 

RULE XII 

APPEALS AND ARBITRATION 

SECTION 1. Appeals - Any party not satisfied with the decision or order of the 

Authority may, within fifteen (15) days from receipt thereof, file a notice of appeal stating 

thereof that it is appealing the case to the Office of the Secretary, Department of Environment 

and Natural Resources (OSEC-DENR) or directly to the Office of the President 

(OP), provided that, no simultaneous appeals shall be allowed. The decision or order of 

the Authority shall immediately be executory notwithstanding the appeal unless an order 

from the OSEC-DENR or OP is issued enjoining the implementation and the enforcement 

of the decision. 

SECTION 2 . Arbitration - The Public Hearing Committee duly constituted by the 

General Manager may act as arbitrator on any claim for reparation or restitution of 

damages and losses resulting from the pollution of water, air or land resources of the 

Laguna de Bay Region coming from point sources which are voluntarily brought before it 

for arbitration by any claimant who appears affected thereby, may take cognizant of the 

same taking into account the gravity and duration of the pollution, the extent and reasonable 

value of the damages and the evidence presented by the parties among other things.


SECTION 3. Proceedings in Arbitration - The arbitration proceedings shall be 

recorded and any settlement arrived at shall be reduced to writing, duly attested by the 

Public Hearing Committee and duly approved by the General Manager. The procedure on 

public hearing shall be applicable in arbitration proceedings. 

SECTION 4. Assistance of Expert - Upon motion of either party or at the discretion 

of the Committee or hearing officer, the assistance of experts may be sought on any 

technical matter or issue material to the subject of the proceeding. 

SECTION 5. Finality of an Award or Resolution - Any award or resolution of any 

case submitted for arbitration shall become final and executory fifteen (15) days after 

receipt of said award or resolution by the Committee. 

SECTION 6. Execution of Award or Resolution - Award or resolution of the 

Committee in arbitration proceeding shall be enforced and executed in the same manner 

as an order, resolution and decision of the Committee. 

RULE XIV 

MISCELLANEOUS PROVISIONS 

SECTION 1. Transitory Provision - All cases currently pending with the Public 

Hearing Committee shall within six (6) months from the effectivity of these rules, be 

subject to the provisions hereof. 

SECTION 2. Separability Clause - If any section or provision of these rules and 

regulations or part thereof, is declared unconstitutional or invalid, the other sections or 

provisions thereof which are not affected thereby shall continue in full force and effect. 

SECTION 3. Repealing Clause - All other policies issuances, rules and regulations 

of the Committee that are inconsistent with these rules are hereby repealed or modified 

accordingly. 

SECTION 4. Effectivity Clause - These rules shall take effect fifteen (15) days 

after publication in a newspaper of general circulation. 

Adopted: 26 Feb. 2004 

(SGD.) ROSELLER Z. VALERA 

Vice-Chairman 

(SGD.) MAGNO C. GAZA (SGD.) ZENAIDA C. MAGLAYA 


(SGD.) TERESITA S. LAZARO (SGD.) JORGE N. BERNARDO 


(SGD.) BAYANI F. FERNANDO (SGD.) CASIMIRO A. YNARES III 


ATTESTED BY:

880 



(SGD.) ATTY. JOAQUIN G. MENDOZA 

Board Secretary V 

óo0oó 

Resolution No. 248, S. 2005 

Resolution Amending Board Resolution No. 23, Series of 1996, 

Providing Guidelines on the Use of Shoreland Areas Surrounding 

the Laguna De Bay 

Adopted: 02 June 2005 



U.P. Law Complex, Diliman, Q.C. 

--o0o-- 


Institutionalizing the Program Monitoring Group (PMG) for the 

Public Disclosure Program for the Laguna De Bay Region 

Adopted: 25 Oct. 2005 

Text Available at the Office of the National Administrative Register, 



--o0o-- 


Clarifying the Application of the LLDA Rules of Procedure to 

Establishments Connected to the MWSI and MWCI Sewer System 

WHEREAS, a great number of establishments situated within the Metropolitan Manila 

Area claiming to be interconnected with the sewer lines of the Metropolitan Manila 

Waterworks and Sewerage Sytem (MWSS) currently being operated by the Maynilad 

Water Services, Inc.(MWSI), and Manila Water Corporation, Inc. (MWCI) and paying 

the corresponding sewer charges, but with pending water pollution cases with the LLDA, 

are now questioning the regulatory power and authority to impose fines and penalties 

against such establishments;


WHEREAS, in accordance with R.A. 4850, as amended by PD 813 and EO 927, 

Board Resolution No. 33, Series of 1996 Adopting the Rules and Regulations Implementing 

the Environmental User Fee System and the Revised Rules of Procedure of LLDA 

pursuant to Board Resolution No. 192, series of 2004, the LLDA is empowered and 

authorized to conserve and develop the water resources of the Laguna de Bay Region 

and impose necessary safeguards for any project or activity in or affecting the lake, 

including water/wastewater disposals; 

WHEREAS, for efficient and more effective implementation of the aforestated laws, 

rules and regulations, there is an urgent need to clarify the application of relevant LLDA 

rules and regulations above-described establishments with pending pollution cases with 

the Authority; 

NOW, THEREFORE, for and in consideration of the foregoing premises and pursuant 

to the provisions of R.A. No. 4850, as amended by PD 813 and EO 927, Board 

Resolution No. 33, Series of 1996 Adopting the Rules and Regulations Implementing the 

Environmental User Fee System and the Revised Rules of Procedure of LLDA pursuant 

to Board Resolution No. 192, Series of 2004, BE IT RESOLVED, as it is hereby RE- 

SOLVED, to approve and adopt the following rules and regulations governing those establishments 

connected with the Metropolitan Manila Waterworks and Sewerage System 

(MWSS) currently being operated by the Maynilad Water Services, Inc. (MWSI), and 

Manila Water Corporation, Inc. (MWCI): 

1. Establishments connected to the sewer systems operated by local/urban water utilities 

and the concessionaires of Metropolitan Manila Waterworks and Sewerage System 

(MWSS), Maynilad Water Services, Inc. (MWSI), and Manila Water Corporation, Inc. 

(MWCI), shall no longer be required to secure/renew Discharge Permit from the Authority. 

2. Establishments shall secure a Certificate of Interconnection from the water utilities that 

has jurisdiction over their areas affirming that all their generated wastewater are being 

collected and treated in the concerned water utilitiesí sewerage system. 

3. Discharges from facilities of the water utilities shall be monitored by the Pollution 

Control Division of the LLDA. For each facility of the water utilities shall be required to 

secure Discharge Permit and pay the EUF pursuant to LLDA Board Resolution No. 33, 

Series of 1996. Non-compliance to effluent regulations shall be acted upon in accordance 

with the established policies and regulations, and issued appropriate legal orders 

to compel them to comply with the prescribed standards and pay the computed penalties. 

4. Untreated wastewater shall not be allowed to be discharged into the tributaries and land 

surface within the Laguna de Bay Region and the waters of Manila Bay. 

5. For water pollution cases filed against the Maynilad Water Services, Inc. (MWSI) 

which are still pending before the LLDA Public Hearing Committee, an Order to Pay will 

be issued covering the unpaid accumulated daily penalties. 

The Pollution Control Division of the LLDA will conduct subsequent monitoring inspections 

and if results should fail the effluent standards, an Order will be issued to

882 


compel it to treat its wastewater before final discharge Bay, otherwise, more drastic 

action shall ensure. 

6. Those establishments with pending water pollution cases that are connected to the 

available sewer lines shall be required to secure the following documents from the concerned 

water utilities: 

a. Certificate of Interconnection with the MWSI/MWCI 

- Notwithstanding its interconnection to MWSS/MWCI, the establishments 

shall be liable for all pollutive discharge flowing directly to the lake. 

b. Service Agreement 

c. Water Bills covering the following periods: 

c.1 three (3) months including the date of initial sampling 

c.2 three (3) months latest bills 

d. Certification from LLDA that all discharges flow directly to MWSI/MWCI 

sewers and there is no leak or bypass 

If proof/evidence indicates that interconnection service is being provided prior to 

the commencement of the water pollution case, an Order of Dismissal will be issued sans 

any penalty for water pollution. Otherwise, the establishment shall be liable to pay the 

accumulated daily penalties until its interconnection with the MWSI. If the establishment 

is covered by the LLDA Clearance (LC) requirement pursuant to Board Resolution No. 

224, Series of 2004, the respondent shall first submit a LC and pay administrative fine 

reckoned from the year at which the Notice of Violation was issued before the Order of 

Dismissal is issued by the LLDA. 

7. Monitoring of interconnected establishments will be made to ensure that no by-pass 

canals are being maintained and no overflow to the streets/canals (whether intentional or 

accidental). If an establishment is found to have a by-pass (i.e., water is diverted from the 

sewer line to the streets or nearby canal), LLDA will take samples of the wastewater and 

daily penalty will be imposed until the by-pass is completely sealed off. 

8. Notwithstanding its interconnection to MWSI/MWCI, the establishment shall be liable to 

LLDA for all pollutive discharge flowing directly to the lake and/or its river tributaries. 

RESOLVED, FINALLY, that this resolution shall take effect fifteen (15) days after its 

publication in any newspaper of general circulation. 

Adopted: 31 January 2006 

(SGD.) CIRIO H. SANTIAGO 

Chairman 

(SGD.) ZENAIDA C. MAGLAYA 

Director


(SGD.) CORAZON BAUTISTA-CRUZ (SGD.) NICANDRO D. NATIVIDAD 


(SGD.) ANGELITO S. LAZARO (SGD.) GERARDO CALDERON 



(SGD.) JESUS S. BARROGA 


Attested by: 



--o0o-- 


Approving the Clarificatory Amendment to Section 1, Rule VII of 

Board Resolution No. 192, Series of 2004, Approving the Revised Rules, 

Regulations and Procedures Implementing Republic Act No. 4850, 

as Amended 

WHEREAS, in pursuit of the regulatory and rule-making power of the LLDA for the 

proper implementation and enforcement of Republic Act No. 4850, as amended, the 

LLDA enacted subject revised rules and regulations, among which are as follows: 

Rule VII 

ìOrders and Decisionî 

ìSection 1 - Notice of Violation 

ìNotice of violation shall be issued by the concerned divisions as follows: 

ìa) For cases endorsed by the PCD, a Notice of Violation shall be issued 

requiring the respondent to comply with the documentary requirements or 

institute corrective measures when it concerns water pollution within fifteen 

(15) days from receipt thereof. When it concerns permit requirements, respondent 

is required to comply within sixty (60) days from receipt of the 

Notice. 

ìb) For cases endorsed by the LMD, a Notice of Violation shall be issued 

requiring the respondent to comply with the fishpen/fishcage rules within thirty 

(30) days from receipt thereof. 

ìc) For cases endorsed by the SCD, a Notice of Violation shall be issued 

requiring the respondent to comply with the shoreland rules within seven (7) 

days from receipt thereof.î

884 


WHEREAS, which provisions, upon cursory reading, would show that an evident 

ambiguity as to what concerned division (PCD, LMD, SCD) will really have to issue the 

Notice of Violation, in view of the confusing clause ìFor cases endorsed by....î, not to 

mention the varying period of 7, 15, 30 or 60 days within which to issue the said Notice; 

WHEREAS, that, in the interest of orderly procedure before the Public Hearing 

Committee, this Authority, and to enable the latter to act with dispatch in discharging the 

duties and responsibilities it is mandated to implement under Republic Act No. 4850, 

these ambiguity and non-uniformity necessitate clarification; 

WHEREAS, that the above quoted provisions of subject Section 1, Rule VII of 

Board Resolution No. 192, Series of 2004, be revised and amended to read as follows: 

Section 1 - Notice of Violation 

RULE VII 

ìORDERS AND DECISIONSî 

ìNotice of violation shall be issued by the concerned division, i.e. 

PCD, LMD, and SCD, respectively, in any/all case/s related to or involving 

infringement/s and/or violation/s of the terms and conditions of the 

discharged permit or development permit/s or clearance/s issued, the 

laws, rules and regulations on water pollution, fishpen/fishcage operations 

or aqua-culture activities and on shorelands occupancy and developmental 

activities promulgated by this Authority and/or for conducting 

any project plan, or program within the Laguna de Bay Region without 

any permit or clearance from this Authority, and dependent primarily on 

the mode of discovery of violation, as follows: 

ìa) By Regular Monitoring or Inspection Activities - In case of discovery 

of violation(s) through regular field monitoring or inspection activities, 

the LLDA division/office concerned, through any of its duly authorized 

inspectors or representatives, on site and in writing, or upon receipt 

by the chief of the division or head of the office concerned of the 

completed laboratory analysis of the substance/s in question from Environmental 

Quality Management Office, shall immediately notify the person 

or entity/establishment of the violation/s and shall request for an 

official submission of why the said person or entity/establishment shall 

not be penalized. 

The person, entity or establishment shall be given a period of five (5) 

days from receipt thereof within which to personally appear, by itself or 

through a representative, duly authorized in writing for that purpose, at 

the concerned LLDA office and submit its written reply. 

ìb.) By Desk Review - The discovery of violation may also occur as a 

result of desk review of submitted documents such as self-monitoring 

report or such other documentary compliances or submissions. In such 

case, the LLDA division/office concerned or any of its duly authorized


inspector or representative shall, in writing, immediately notify the person 

or entity/establishment of the violation and request for an official 

submission of why the said person or entity/establishment shall not be 

penalized. 

The person, entity or establishment shall be given a period of five (5) 

days from receipt thereof within which to personally appear, by itself or 

through a representative, duly authorized in writing for the purpose, at 

the concerned LLDA office and submit its written reply. 

ìc.) By Complaints or other Sources - In case the discovery of violation 

may be through a complaint, press report, police report or other 

external sources, the LLDA division/office concerned through any of its 

duly authorized inspector or representative shall, within twenty-four 

(24) hours from receipt of knowledge of any such complaint or report 

shall proceed to the site/location subject of complaint (or report), conduct 

a field verification to determine the validity of the complaint (or 

report) or if it is actionable by the LLDA. If the complaint (or report) is 

within the power of the LLDA to resolve an investigation should be 

initiated within forty-eight (48) hours after validation of the complaint 

(or report). 

Immediately, within the prescribed 48 hours, the LLDA concerned 

division/office shall, in writing, notify the person or entity/establishment 

of the violation and request for an official submission (or reply) on why 

the said person or entity/establishment shall not be penalized. The person, 

entity or establishment shall be given a period of five (5) days from 

receipt thereof within which to personally appear, by itself or through a 

representative, duly authorized in writing for that purpose, at the concerned 

LLDA office and submit its written reply. 

In any of the foregoing modes of discovery of violation, upon receipt 

of the person, entity/establishmentís reply (or official submission), the 

case shall be deemed submitted for decision. At the discretion of the 

concerned division/office of the LLDA, a technical conference or hearing 

may be scheduled prior to the preparation of the decision. Such hearing 

shall only be conducted to clarify issues in the reply (or official submission), 

to request for additional information and/or to give the party/ies 

involved in opportunity to further explain why they should not be penalized. 

If the respondent failed to appear personally or file its reply or its 

official submission within the prescribed period of five (5) days, the concerned 

division/office of LLDA shall immediately prepare and send a 

letter to the respondent to show cause within five (5) days from receipt 

thereof why no punitive action should be taken or a fine should not be 

imposed against the respondent. The show cause letter shall include 

the schedule of technical conference or notice of referral to the Public 

Hearing committee for hearing.

886 


In case of hearing, the chief of the division or head of the office of 

LLDA concerned shall refer the case and forthwith transmit all the records 

of the case, including the Case Disposition Document, containing a brief 

summary of the complaint, the respondentís reply or official submission, 

and the action taken or the recommendations thereon, among 

others, to the Public Hearing Committee. The hearing serves as the final 

opportunity for the respondent to explain why he should not be penalized 

or fined. If the respondent failed to attend the hearing or conference, 

the case shall be deemed submitted for decision. 

WHEREAS, that the repealing proviso and the requirement of publication be 

incorporated and ordained in the resolution. 

NOW, THEREFORE, foregoing premises considered, BE IT RESOLVED as it is 

hereby RESOLVED, to approve the clarificatory amendment to Section 1, Rule VII of 

Board Resolution No. 192, Series of 2004, Approving the Revised Rules, Regulations and 

Procedures Implementing Republic Act No. 4850, as amended. 

RESOLVED, FURTHER, that implementation of said amendment shall take effect 

fifteen (15) days after the publication in a newspaper of general circulation. 

Adopted: 31 January 2006 


Chairman 

(SGD.) ZENAIDA C. MAGLAYA (SGD.) JESUS S. BARROGA 




(SGD.) ANGELITO S. LAZARO (SGD.) GERARDO V. CALDERON 


Date Filed: 04 August 2006 

Attested by: 



--o0o-- 


Approving the Exemption of Lakeshore Local 

Government Units from Payment of Shoreland Lease Fee


WHEREAS, the shoreland areas of Laguna de Bay are those areas consisting of 

the strip of the lakebed along its shores below elevation 12.50 meters as referred to datum 

10.00 meters below mean low water (MLLW), alternately submerged or exposed by the 

annual rising and lowering of the lake water; 

WHEREAS, the shoreland areas, with a total of approximately 14,000 hectares 

have environmental and ecological significance and actual/potential economic benefits; 

WHEREAS, local government units have proposed development projects located 

within these shoreland areas that are intended public purpose; 

WHEREAS, Resolution No. 23, Series of 1996, provides the rules and regulations 

implementing Section 41 (11) of R.A. 4850, as amended, defining the use/occupancy of 

the Laguna de Bay shoreland areas, Article 8(B) of which authorizes the LLDA to lease 

such areas not otherwise covered by legitimate titles or by any national government 

plans, programs and projects, to bonafide residents or duly organized and existing organizations/entities, 

including LGUs, in accordance with the terms and conditions and subject 

to LLDA approval and payment of necessary fees and charges; 

WHEREAS, a growing number of LGUs have requested the LLDA to exempt them 

from payment of such fees and charges considering that their proposed projects are 

intended for public purpose; 

WHEREAS, the LLDA recognizes that LGUs are LLDAís strong partners in the 

sustainable management of the lake being on the frontline and, hence, they are in the 

better position to protect and safeguard the lake. 

NOW, THEREFORE, for and in consideration of the foregoing premises and pursant 

to the provisions of R.A. 4850, as amended, BE IT RESOLVED, as it is hereby RE- 

SOLVED, to approve the exemption of lakeshore Local Government Units from payment 

of shoreland lease fees. 

RESOLVED, FURTHER, that the exemption from shoreland lease payment as hereunder 

provided, covers shoreland areas where the proposed development projects/public 

facilities meet the guidelines governing the use/occupancy of shoreland areas by lakeshore 

LGUs under Board Resolution No. 248, Series of 2005; 

RESOLVED, FURTHER, that notwithstanding their exemption from shoreland lease 

payment, lakeshore LGUs shall be similarly covered by all shoreland lease/occupancy 

requirements, including compliance to all documentary and other requirements of the 

LLDA. 

RESOLVED, FURTHER, that lakeshore LGUs shall be held liable to LLDA for all 

pollutive discharge from their shoreland public facilities flowing directly to the lake and/or 

its river tributaries. 

RESOLVED, FINALLY, that the General Manager shall have the authority to promulgate 

rules and regulations for proper implementation of the shoreland policy.

888 




Chairman 

(SGD.) ZENAIDA C. MAGLAYA (SGD.) JESUS S. BARROGA 




(SGD.) ANGELITO S. LAZARO (SGD.) GERARDO V. CALDERON 


(SGD.) AUGUSTO B. SANTOS 


Attested by: 



LAND TRANSPORTATION FRANCHISING AND 

REGULATORY BOARD 



Modifications on MC 2006-006, Re: Mandatory ìYellowî 

Color Scheme for School Transport Service 

After consultations and meetings with School Transport Service operators, and 

finding merits with their concerns regarding the implementation of MC 2006-006 (MAN- 

DATORY ìYELLOWî COLOR SCHEME FOR SCHOOL TRANSPORT SERVICE), this 

Board resolved to modify the same, specifically the schedule of inspection and the penalty 

for non compliance within the prescribed period, which shall now be read as follows: 

ìx x x. All units shall be subject to inspection before the Board with the following 

schedules: 

Plate Nos. Ending 1 and 7- March 15-31, 2007 

2 and 8- April 1-15, 2007 

3 and 9- April 16-30, 2007 

4 and 0- May 1-15, 2007 

5 and 6- May 16-31, 2007


Failure to comply within the period prescribed by this Memorandum Circular 

shall be subject to a penalty of P2,500.00 per month delay. 

Be it noted and reiterated that the policies and guidelines provided under MC 

2004-012, Re: SCHOOL TRANSPORT SERVICES RATIONALIZATION PROGRAM, should 

be strictly complied with. 

This Memorandum Circular supersedes any and all issuances inconsistent herewith, 

and shall take effect fifteen (15) days following its publication in a newspaper of 

general circulation or in Official Gazette. 

SO ORDERED. 

Approved: 30 March 2006 

(SGD.) MARIA ELENA H. BAUTISTA 

Chairperson 

(SGD.) GERARDO A. PINILI (SGD.) MA. ELLEN DIRIGE-CABATU 

Board Member Board Member 


óo0oó 


Security Device for Franchise Verification Records 

Due to the proliferation of fake and spurious franchise verification records, and 

after consultation with different transport associations, this Board resolved to have a 

security device for franchise verification record/s being issued by the Management Information 

Division by putting therein a hologram with corresponding control number. 

Accordingly, the fee/s for issuance of franchise verification record shall now 

cost fifty pesos (P50.00) from the original cost of forty pesos (P40.00) due to the added 

security device. 

This Memorandum Circular shall take effect immediately and supersedes previous 

issuances inconsistent herewith. 

SO ORDERED. 



Chairperson 



óo0oó

890 




No Smoking Signage 

In order to promote a healthful environment and to further implement R.A. 9211 

otherwise known as ìTobacco Regulation Act of 2003î, all holders of Certificate of Public 

convenience are hereby ordered to post signs of ìNO SMOKINGî inside their authorized 

units, which should be at least ten by twelve (10 x 12) inches for Public Utility Jitneys to 

be placed at the back of the front row seats, three by six (3 x 6) inches for Taxi Airconditioned 

Services to be placed on the glove compartment at the front right side of the vehicle, and 

six by twelve (6x12) for Public Utility Buses to be placed at the upper part of the windshield, 

beginning April 15, 2006. 

Failure to comply with this Memorandum Circular shall be subject to a penalty of 

P500.00/month. 


and shall take effect fifteen (15) days following its publication in a newspaper of 

general circulation or in Official Gazette. 

SO ORDERED. 



Chairperson 




óo0oó 


Mandatory Use of Opticards for All Operators 

Operating in Metro Manila 

In order to fully implement the computerization program of the Board, and to 

better organize the records of the grantee of Certificates of Public Convenience and to 

prevent the proliferation of fake documents, all grantees of Certificate/s of Public Convenience 

(CPC) shall be issued ìOpticardsî per unit in the amount of six hundred pesos 

(P600.00) to replace the CPC and stickers issued by the LTFRB costing P75.00/annum. 

The Opticard/s shall be valid for the whole validity of the CPC including its extension/s. It 

will serve as the information data bank, wherein all operator and unit data shall be contained 

therein with proper security code. The Opticards shall carry the picture of the


operator/owner, and back and side views of the authorized unit. The presence of the 

operator/owner and the unit shall be required in the initialization of the card. 

Phase 1 of the project shall cover Metro Manila only. The schedule of implementation 

is as follows: 

1. For Taxis, it shall be implemented on: 

A. June of 2006 for Plate Nos. ending 1 and 5/4 and 8 

B. July of 2006 for Plate Nos. ending 2 and 6/5 and 9 

C. August of 2006 for Plate Nos. ending 3 and 7/6 and 0 

2. For Metro Manila Point to Point (P2P) Express and Public Utility Jitneys (PUJ), it shall 

be implemented on: 

A. July of 2006 for Plate Nos. ending 1 and 5 

B. August of 2006 for Plate Nos. ending 2 and 6 

C. September of 2006 for Plate Nos. ending 3 and 7 

D. October of 2006 for Plate Nos. ending 4 and 8 

E. November of 2006 for Plate Nos. ending 5 and 9 

F. December of 2006 for Plate Nos. ending 6 and 0 

3. Public Utility Buses, Tourist Transport Services, Truck for Hire Services, Shuttle Services, 

and all other denominations shall be covered upon implementation of their respective 

rationalization programs. 

4. Phase 2 covering Regional Franchises shall be covered at a later date. 

Any change of ownership or change of unit will entail surrendering the old card and 

securing a new card at P1,200.00/card. 

Any loss of card will entail securing a new card at P5,000.00/card. 


and shall take effect after fifteen (15) days following its publication in a newspaper 

of general circulation or in Official Gazette. 

SO ORDERED. 



Chairperson 



óo0oó

892 




Exemptions for Out of Line Operations 

Due to the complaints of Transport Associations/Organizations regarding the 

apprehension of traffic enforcers for ìOut of Line Operationsî this Board resolved to 

enumerate instances and incidents where out of line operations is allowed. 

For proper guidance of traffic enforcers, the following are not considered Out of 

Line Operations: 

1. When the driver is avoiding heavy traffic due to flood, repair of public highways 

and streets and the like; 

2. When the driver is from or going back to its authorized garage to and from the 

point of its authorized route, provided it has no passengers; 

3. When the driver is going to eat for breakfast, lunch, dinner and snacks, provided 

it should not be more than a 500 meter radius from the authorized route; 

4. When there is a temporary re-routing scheme by the Local Government Unit, 

provided, that they can present a copy of the temporary re-routing ordinance or plan; 

5. When the unit is being used for emergency, personal, and family use, as provided 

under Memorandum Circular No. 91-014. 




SO ORDERED. 



Chairperson 




óo0oó 


Voluntary Segregation Program for Public Utility Buses


In line with the policy of the Board to eradicate the harmful and unlawful trade of 

clandestine Public Utility Bus (PUB) operators by operating under an arrangement, commonly 

known as the ìkabit systemî, this Board resolved that Public Utility Buses shall be 

covered by the voluntary segregation program, but with separate segregation fees per 

unit declared from both parties aside from the usual fees and charges of the Board: 

First Party - P25,000.00 

Second Party - P50,000.00 

The guidelines as set forth under Memorandum Circular 2006-005, Re: VOLUN- 

TARY SEGREGATION OF AUTHORITY TO OPERATE A UNIT FROM A CERTIFICATE 

OF PUBLIC CONVENIENCE and Memorandum Circular 2006-013, Re: MODIFYING 

AND AMENDING CERTAIN PROVISIONS OF MC 2006-005, shall be applicable insofar 

as they are not inconsistent herewith. 

For Metro Manila operators, in compliance with Memorandum Order No. 202, re: 

PROVIDING NEW GUIDELINES ON THE OPERATIONS OF BUSES AS PUBLIC TRANS- 

PORTATION IN METROPOLITAN MANILA, dated November 24, 1988, Sec. 1 (B) thereof, 

which requires operators to have at least 10 units, applicants with less than ten (10) units 

after approval of segregation, are given 60 days to cooperate themselves subject to rules 

and regulations of Office of Transport Cooperative (OTC) and Cooperative Development 

Authority (CDA) or to form a consortium to comply with said minimum requirement. 

This Memorandum Circular supersedes any and all issuances inconsistent herewith 

and shall take effect fifteen (15) days after publication in a newspaper of general 

circulation or in Official Gazette. 

SO ORDERED. 




Chairperson 

(SGD.) MA. ELLEN DIRIGE-CABATU 

Board Member 

óo0oó 


Unauthorized Use Of for Hire Plates/Multiple Use of Plates 

Consultation meetings with transport associations reveal that there is rampant 

use of unauthorized for hire plates and/or use of authorized plate for another unit/s are 

being practiced by some operators.

894 


In order to eradicate the said illegal practice, operators found to illegally use for 

hire plates and/or use of authorized plate for another unit/s shall be subject to cancellation 

of all franchises authorized by this Board (entire fleet), and shall be perpetually 

barred from acquiring a Certificate of Public Convenience. 


and takes effect immediately. 

SO ORDERED. 



Chairperson 




óo0oó 


Inspection Fees 

To cope up with the expenses for inspection of units authorized to operate as for 

hire vehicles in order to ensure public safety and convenience, this Board resolved to 

impose an inspection fee of fifty pesos (P50.00) per unit for PUJs, Taxis. Inspection fees 

for buses, coasters, coaches and trucks shall be imposed in the amount of one hundred 

pesos (P100.00). 

Taxi Air-Conditioned services subject to sealing/resealing, shall likewise be 

imposed an inspection fee in the amount of fifty pesos (50.00) per unit. 

This Memorandum Circular supersedes any and all issuances inconsistent 

herewith, and takes effect immediately. 

SO ORDERED. 



Chairperson 



óo0oó




Conversion to LPG Fed Engine 

To encourage grantees of Certificate of Public Convenience to Operate Taxi Air- 

Conditioned Service to convert their engine to Liquefied Petroleum Gas (LPG) fed engine, 

taxi operators who shall have their engine converted shall be granted an additional 

two (2) years to the existing thirteen (13) years maximum age requirement for Taxi Services. 

Be it noted that the additional two (2) years is not automatic but will be granted 

upon filing of a petition for Extension of Validity to be heard by the Board, alleging therein 

that it complied with this Memorandum Circular, and after inspection of the units by the 

Board. 

This Memorandum Circular supersedes all other issuances inconsistent herewith, 




Chairperson 




óo0oó 


Report of Loss of Pull Tight Seal/s 

In view of the number of incidents reported to the Central Office regarding the 

loss of pull-tight seals, the Board hereby orders all grantees of Certificate of Public 

Convenience to operate Taxi Airconditioned Service that in case of its pull tight seal/s is/ 

are lost, the same should be reported to the Board within fifteen (15) days. Otherwise, 

the following graduated penalties against operators shall be imposed: 

First Offense - P500.00 

Second Offense - P1,000.00 

Third Offense - P1,500.00 



SO ORDERED.

896 




Chairperson 




óo0oó 


Submission of Income Tax Return (ITR) Instead of Tax Clearance 

as Requirement for Conversion to P2P (AUV) Express 

The Board, in granting Application for Conversion of Certificate of Public Convenience 

to Operate P2P (AUV) Express, requires applicant/s to submit BIR Tax Clearance 

to establish financial capability to operate public land transportation services. But due to 

the difficulty in acquiring tax clearance from the Bureau of Internal Revenue, this Board 

resolved, that instead of the required tax clearance from the (BIR), applicants may submit 

the latest Income Tax Return (ITR) to establish financial capability. 

Accordingly, the AUV Secretariat is ordered to comply with this Memorandum 

Circular, in the disposition of all Application for Conversion. 



SO ORDERED. 



Chairperson 




óo0oó 


Inter-Regional Applications/Petitions 

For the organized and proper exercise of powers by this Board and its Regional 

Offices, all applications/petitions of whatever nature involving inter-regional routes shall


be filed at the LTFRB Central Office. However, due to the distance of applicantsí/petitionersí 

respective residences to the Central Office of this Board, most especially, applicants/ 

petitioners from Visayas and Mindanao, the Regional Offices may accept the petitions/ 

applications, but shall immediately endorse the same to the Central Office for proper 

disposition. It must be stressed that only Intra-regional applications/petitions shall be 

entertained by the Regional Offices. 

For the purpose of this Memorandum Circular, ìinter-regional applications/petitionsî 

means those that involve routes touching more than one region, thus, divesting the 

regional offices of jurisdiction. On the other hand, ìintra-regional applications/petitionsî 

are those involving routes within a particular region only and do not touch any other 

region. 



SO ORDERED. 



Chairperson 




óo0oó 


Penalty for Submission of Fake and Spurious ORs/CRs and 

Certificate of Year Model and Other Misrepresentations to the Board 

Thorough evaluation of the records of pending applications/petitions for issuance 

of certificates of public convenience reveals that some applicants/petitioners had 

submitted fake and spurious ORs/CRs and Certificate/s of Year Model of their public 

utility vehicle/s and made other misrepresentations to the Board. In order to eradicate 

this practice, this Board, in the exercise of its regulatory powers over public utility providers, 

hereby imposes the following penalties: 

First offense : P10,000.00 fine 

Second offense : Suspension of CPC for thirty (30) days 

Third offense : Cancellation of the CPC (entire fleet) 



SO ORDERED.

898 




Chairperson 




óo0oó 


Modification on Memorandum Circular 92-009, Re: Implementing 

Guidelines on the Department Order No. 92-587, Defining the Policy 

Framework for the Regulation of Transportation Services 

Pursuant to Department Order No. 2005-010 ñ ìPolicy Guidelines on the Exercise 

of Authority and Functions by the Land Transportation Franchising and Regulatory 

Boardî, the LTFRB can now amend or modify, in part or in its entirety, existing Department 

Order(s) previously issued by the DOTC governing the powers and functions of 

LTFRB, specifically in prescribing the terms and conditions of a certificate of public 

convenience. As such, Department Order No. 92-587 defining the Policy Framework for 

the Regulation of Transportation Services and the corresponding implementing guidelines 

thereof outlined in LTFRB Memorandum Circular No. 92-009, particularly Item No. VII 

which pertains to the period of validity of a franchise, is hereby modified/amended to 

read as follows: 

ìPeriod of Validity of CPC ñ The duration or period of validity of a CPC 

shall be five (5) years from issuance thereof, except those Applications/Petitions 

for Issuance of a Certificate of Public Convenience and those with Applications/Petitions 

for Extension of Validity, involving Brand New-Units as proposed 

to be authorized, in which case, the duration or period of validity shall 

be ten (10) years from issuance thereof. 

ìThe Applications/Petitions shall, however, be supported by the following 

documents: 

a. Sales Invoice and Delivery Receipt of the vehicle and/or LTO Registration 

documents; 

b. Manufacturerís certification as to the year model of the vehicle; 

c. Inspection Report from LTFRB; 

d. Stencil of the Motor and Chassis; and 

e. Picture/s of the vehicle (front, sides and back).î 



SO ORDERED. 



Chairperson





óo0oó 


Exemption from Motor Vehicle Inspection of 

Brand New Units for Three (3) Years 

In line with the modernization program of the Department of Transportation and 

Communication (DOTC) and the Land Transportation Franchising and the Land Transportation 

Franchising and Regulatory Board (LTFRB) and to encourage operators to 

modernize their services, all Brand New Units authorized to operate as for hire vehicle 

shall no longer be required to submit certificates of roadworthiness from the Land Transportation 

Office - Motor Vehicle Inspection Service (MVIS) for a period of three (3) 

consecutive years. This Memorandum Circular is consistent with the LTOís three-year 

registration program for brand new units. 



SO ORDERED. 



Chairperson 




óo0oó 


Modifying Department Order No. 97-1097 ìProviding Standard 

Classification for All Public Transport Conveyancesî, Amending 

Memorandum Circular No. 2004-011 ìReclassifying Tourist Transport 

Servicesî to Include City Tours Services as a New Tourist Transport 

Service Sub-Classification and Lifting the Moratorium on the Acceptance 

of Applications/Petitions for New Franchises 

Pursuant to Department Order 2005-010 ìPolicy Guidelines on the Exercise of 

Authority and Functions by the Land Transportation Franchising and Regulatory Boardî,

900 


the LTFRB can amend or modify, in part or in its entirety, existing Department Order(s) 

previously issued by DOTC governing the powers and functions of LTFRB, specifically in 

prescribing and regulating routes, economically viable capacities and zones, or areas of 

operation for public land transportation services provided by motorized vehicles in accordance 

with public land transportation development plans and programs approved by DOTC. 

The Board issued Memorandum Circular No. 2004-011 dated 28 May 2004, 

ìReclassifying Tourist Transport Servicesî and consequently implemented the corresponding 

Conversion Program for all affected Tourist Transport Service franchises. 

The Board issued Memorandum Circular 2003-028 imposing a nationwide moratorium 

on the acceptance of applications/petitions for the issuance new franchises, except 

Trucks-For-Hire. 

Bearing in mind the objective of providing foreign and domestic tourists a regular 

ìhop-on-hop-offî access to the different tourism and scenic sites within key urban centers 

and its peripheries, and thereby boosting the countryís tourism industry, this Board, 

in coordination with the Department of Tourism, is opening a new sub-classification of 

Tourist Transport Services to be known as City Tours Services, with the following physical 

and operational characteristics. 

1. Body Type and Exterior of Vehicle 

To promote the Filipino culture, the type of vehicle shall be coaster-type airconditioned 

jeepney (side-entry/exit) with a seating capacity of not less than 15 but not more than 21 

passengers (excluding driver). The age of the vehicle shall not more than five (5) years 

from the date of manufacture at the time of the application. 

The exterior of the vehicle should show Filipino character in its design. The name 

ìHop-On. Hop Offî City Tours shall be prominently placed on the front and at both sides 

of the vehicle for the information of the passengers. 

2. Interiors and Amenities 

The interiors shall be luxurious with upholstery and carpeting. Additional Audio/ 

Video amenities and refrigerator shall also be provided for the benefit of the tourists. 

3. Engine Displacement and Roadworthiness 

The engine must be Diesel-fed (132HP minimum) and capable to operate dual-air 

conditioning system. It must pass the LTO MVIS and PETC for roadworthiness and 

emission standards, respectively. 

4. Communications 

The unit shall have a two-way radio device or any communication device on-board 

and an internal public address system public at all times for dispatching, emergency and 

tourist landmark information.


5. Fares 

The fares shall be regulated by the Board and shall not be increased or decreased 

without the prior approval of the Board. The fares shall be a flat rate of Php 150.00 for 

regular passengers and Php120.00 for senior citizens (65 years old and above) and 

children below thirteen (13) years old. The fare would be good for one day and shall be 

a ride-all-you-can service, regardless of route or vehicle. 

The operator shall set up sales booths where tourists can purchase tickets for the 

rides. The ticket-issuing machines shall be registered with the BIR as duly certified Cash 

Register Machines. Upon payment, the operator shall issue tickets, as well as brochures 

indicating the City Tours routes. 

6. Route 

The routes shall pass along major landmarks in the city, including, but not limited to, 

historical sites, cultural sites, major commercial centers, recreational areas and parks. 

The operator shall place a map of the route inside the vehicle at all times. In case of new 

routes, the operator shall first furnish a copy of the proposed route to the Board, the 

Department of Transportation and Communications and Department of Tourism for approval. 

The route shall be a loop type service, with a distance not exceeding 20 km. On 

special circumstances, routes exceeding 20 km may be approved provided that the applicant 

should prove the viability of the route and that if the route were limited to 20 km, there 

would be few landmarks which can be traversed. 

In case of touristís or hotelís requests for special exclusive tours, outside the regular 

routes, the operator shall first file for an application of Special Permit (SP) at least one (1) 

week before the scheduled tour. 

7. Stops and Terminals 

The vehicle shall only be allowed to load and unload passengers at the stops within 

the pre-determined tourist landmarks. They shall be prohibited from picking up and 

dropping off passengers between and/or outside of these stops. 

The operator shall be responsible in coordinating with the management of the landmarks 

for the setting up of off-road terminals and loading and unloading spots in 

these areas. These stops should have appropriate signages indicating passenger loading 

and unloading platforms. The operators, in coordination with the management of the 

landmarks, shall also provide benches, railings for queuing, waste baskets and billboards 

indicating the routes and schedules. These stops shall have overhead protection from the 

elements. 

8. Frequency of Service 

The units shall maintain headway of not less than 20 minutes but not more than 40 

minutes in between arriving vehicles. The operator shall submit to the Board their pro-

902 


posed schedule and operating hours for approval by the Board. The operator shall be 

penalized for every late arrival and for every trip that he fails to run. 

The schedules of penalties are as follows: 

Every late arrival (more than 40 minutes headway): Php 1,000.00 

Every trip less than the approved number of trips per day: Php 5,000.00 

To monitor the frequency of service, the operator shall submit to the Board copies of 

their dispatch logbooks the morning of the day after. These logbooks shall be checked 

and signed by the manager or administrator of the starting landmark. 

Every vehicle that shall be approved by the Board shall have copies of their Certificate 

of Public Conveyance (CPC) on-board at all times. 

9. Drivers and Guides 

All drivers and tour guides of the City Tours Services units shall undergo training 

and shall be accredited by the Department of Tourism (DOT). A tour guide is to be 

assigned for each trip and shall provide information, trivia and assistance to the passengers 

during the trip. 

10. DOT Endorsement and Accreditation 

As requirements prior to LTFRB processing of applications/petitions for new CPCs/ 

franchises, the operator submit the following: 

10.1 DOT accreditation and endorsement 

10.2 DOT Sticker posted on the windshield of the vehicle 

10.3 Copies of the engineering drawings and design perspectives of the 

unit/s, including seating arrangement. 

10.4 Copies of the agreements or endorsement from the management of 

these landmarks 

10.5 Layouts, perspectives and description of tourist landmarks 

Other rules and regulations that are inconsistent with the provisions of this Memorandum 

Circular Order are hereby repealed and/or modified accordingly. 

This Memorandum Circular shall take effect fifteen (15) days following the filing 

of three copies hereof with the U.P. Law Center, pursuant to Presidential Memorandum 

Circular No. 11, dated 09 October 1992. 

SO ORDERED. 



Chairperson



(SGD.) GERARDO A. PINILI 

Board Member 

óo0oó 


Modifying Memorandum Circular No. 2006-024 ìVoluntary 

Segregation Program for Public Utility Buses (PUBs)î 

Pursuant to the agreements reached during the consultation with the DOTC Secretary 

and concerned PUB operators last 12 May 2006, the following features of Memorandum 

Circular No. 2006-024 are hereby modified and/or amended accordingly: 

1. Payment of Voluntary Segregation Fees per unit declared shall be based on the following 

schedule of monthly payments: 

First Party - P25,000.00 @ P2,083.35 monthly payments for 

twelve (12) months 

Second Party - P50,000.00 @ P4,166.70 monthly payments for 

twelve (12) months. 

2. All operators with segregated units (both First and Second Parties) under the affected 

CPCs/franchises which are fifteen (15) years old, reckoned from the date of manufacture 

shall be given two (2) years to acquire/re-fleet with brand new bus units. 

Other rules and regulations that are inconsistent with the provisions of this Memorandum 

Circular Order are hereby repealed and/or modified accordingly. 

This Memorandum Circular shall take effect fifteen (15) days following the filing 

of three copies hereof with the U.P. Law Center, pursuant to Presidential Memorandum 

Circular No. 11, dated 09 October 1992. 

SO ORDERED. 




Chairperson 


Board Member 

óo0oó

904 



Support of All Transport Groups for the National Coin Recirculation 

Program of the Bangko Sentral ng Pilipinas (BSP) Through the Acceptance 

of Coins as Payment from Passengers, the Giving of Exact Change to 

Passengers and Our Participation in Other Coin Recirculation Campaigns 

In view of the need for steady supply of coins in the transport sector for efficient 

operation, the Board hereby enjoins all transport group to support the National Coin 

Recirculation Program of the BSP by encouraging the acceptance of coins as payment 

from passengers, the giving of exact change to passengers and our participation in other 

coin recirculation campaigns to bring about efficient recirculation of coins. 



Chairperson 




óo0oó 


Certified True Copy or Photocopy of Policy Issuances 

By virtue of the powers vested in the Board under Section 5(j) of Executive Order 

No. 202 dated 17 June 1987, it is hereby resolved that a service/certification fee of 

FIFTY PESOS (P50.00) shall be charged on all requests for issuance of certified true 

copy or photocopy of any policy issuance of the Board. The service/certification fee 

charged shall be covered by a corresponding official receipt and the number and date of 

issuance thereof shall be indicated in the copy of the policy issuance this requested. The 

true copy or photocopy of the policy issuance shall be certified as such by the Executive 

Director of the Board and a gold hologram shall be properly attached thereto. 

Any request, sent through mail, for issuance of certified true copy or photocopy 

of any policy issuance of the Board must be accompanied by Postal Money Order 

payable to the order of the Land Transportation Franchising and Regulatory Board. The 

Board shall see to it that, on return mail, an official receipt is issued therefor. 

Any copy of a policy issuance by the Board which is not properly certified shall 

not be recognized as an official copy and cannot be used legally as basis for any 

transaction with the Board or with any government agency. 


and shall be effective fifteen (15) days after its publication in a newspaper of general 

circulation or in the Official Gazette.




Chairperson 




óo0oó 


Amendment on MC 2006-027, Re: Conversion to LPG Fed Engine 

This Board hereby amends and modifies MC 2006-027 dated May 13, 2006, so 

that it should now read as follows: 

ìTo encourage grantees of Certificate of Public Convenience (CPC) to Operate 

Taxi Air-Conditioned Service to convert their engines to Liquefied Petroleum 

Gas (LPG) fed, taxi operators who shall convert their engines shall have 

an additional three (3) years in the validity date of their CPCís which makes 

the validity period from five (5) to eight (8) years, provided that all its units shall 

comply with the thirteen (13) years maximum age requirement for Taxi Services. 

Be it noted that the additional three (3) years is not automatic and shall be 

added to the validity of the CPC only after inspection. Petition for Extension of 

Validity with LPG conversion should be filed and heard by the Board alleging 

therein that it complied with this Memorandum Circular.î 


and shall take effect immediately. 

SO ORDERED. 



Chairperson 




óo0oó

906 



Amendment on MC 2006-027, Re: Lifting of Moratorium on Application 

for School Transport Services and Re-Applications of Existing CPCs 

Adopting New Guidelines Governing School Transport 

Services Rationalization Program 

This Board hereby amends and modifies MC 2004-012 dated April 23, 2006, 

specifically item F (6), which pertains to SPECIFICATIONS AND STANDARDS (Year 

Model) of the same, so that it should now read as follows: 

ìF SPECIFICATIONS AND STANDARDS 

X X X 

6. Year Model ñ should not be more than 15 yrs old from the date of manufacture, 

except Public Utility Jitneys, which has no minimum age requirement, 

provided it shall pass the inspection for roadworthiness to be conducted by a 

joint team from LTO any duly authorized personnel of this Board.î 




SO ORDERED. 



Chairperson 




óo0oó 


Dry-Run of the EDSA ìBus Courtesyî Scheme as an Integral 

Component of the EDSA PUB Volume and Trip Optimization Program 

Based from the recent EDSA Bus Revalidation Survey which was completed last 

January 2006, the daily average rate of occupancy of PUBs range from 48-52%. Further 

analysis reflect the skewed or distorted deployment scheme of PUBs by concerned 

operators contributing to the increased consumption of diesel/petrol fuel (with less economic 

returns) and causing undue traffic congestion along EDSA even during passenger


off-peak periods, not to mention its residual effects in other major thoroughfares in Metro 

Manila. 

In order to optimize PUB operations, decongest EDSA and enhance business 

profitability of authorized franchisees, the Board deems it necessary to control and regulate 

the deployment, including the orderly dispatching of said PUBs and assist Metro 

Manila Development Authority (MMDA) in managing traffic along EDSA, in coordination 

with concerned Local Government Units (LGUs). 

Relatedly, pursuant to Section 5 of Executive Order 202 s. 1987, the Board is 

mandated to enact, promulgate and enforce rules and regulations relative to the operations 

of all public utility vehicles. 

As much, the Board hereby implements the ìBus Courtesy Schemeî ON A DRY 

RUN BASIS FROM 3-8 July 2006, adopting the following routes and mechanics: 

1. From 10:00 am to 3:00 pm, authorized Metro Manila PUBs operating along thirty five 

(35) EDSA Routes with license plates ending in even numbers are banned /not allowed 

from plying the streets of Metro Manila: 

Plates ending with even numbers Monday, Wednesday and Friday 

Total number of units with plates ending in 2 = 300 





TOTAL NUMBERS OF UNITS WITH EVEN-NUMBERED ENDING = 1,746 

Plates ending with odd numbers - Tuesday, Thursday and Saturdays 






TOTAL NUMBER OF UNITS WITH ODD-NUMBER ENDING = 1,755 

2. The LTFRB Task Force, in coordination with LTO and MMDA traffic enforcers shall be 

responsible for the monitoring and enforcement of the project during the dry-run period. 

3. Operators and drivers found violating the provisions of this Memorandum Circular shall 

be meted with the following penalties: 

P1,000.00 fine for the driver 

P1,000.00 fine for the operator 

4. Coordinating meeting with MMDA shall be conducted relative to the dispatching system, 

particularly under the MMDAís Organized Bus Route (OBR) Scheme. Moreover, 

MMDA shall provide spaces for PUBs as lay-over areas during down time.

908 


5. A Project Evaluation Team composed of the following LTFRB Personnel and PUB 

Operator representatives shall undertake assessment and evaluation after the project dryrun 

and its recommendations shall be subject to Board approval: 

a. Atty. Gonzalo Go. Team Leader 

b. Ms. Lilia Coloma Assistant Team Leader 

c. Mr. Victor Lorenzo Member 

d. Mr. Giomarti Gamayo Member 

e. Mr. Joel Bolano Member 

f. Four (4) duly designated PUB Operator representatives 

Other rules and regulations that are inconsistent with the provision of this Memorandum 

Circular Orders are hereby repealed and/or modified accordingly. 

This Memorandum Circulars shall take effect fifteen (15) days following the filing of 

three copies hereof with the UP Law Center, pursuant to Presidential Memorandum Circular 

No. 11, dated 09 October 1992. 

SO ORDERED. 



Chairperson 




óo0oó 


Clarification on MC 2003-031 

In connection with Memorandum Circular 2003-031, Re: INFORMATION/DATA 

TO BE SUBMITTED BY OPERATORS AND APPLICANTS, this Board clarifies, that 

grantee/s of Certificates of Public Convenience and/or applicant/s with multiple franchises 

and/or applications is just required to comply or file only one information/data for 

all the franchises under different case numbers. The same shall be deemed substantial 

compliance with the aforementioned Memorandum Circular. 



SO ORDERED. 

Adopted: 06 June 2006



Chairperson 




óo0oó 


Affidavit of Payment in Lieu of Assessment and Clearance of Accounts 

For the speedy disposition of all Petitions/Applications, this Board resolved to 

allow applicants/petitioners to execute an affidavit stating therein that it had already paid 

all the supervision fees and annual report fees for the previous years, and to the best of 

his/her knowledge, is cleared from any and all accounts, instead of going to the process 

of assessment and clearance of accounts. In case the contents of the affidavit are found 

by this Board to be untrue or there was a misdeclaration to the prejudice of the government, 

the Board shall cancel and revoke the franchise after due notice and hearing to the 

parties concerned and shall have the option to file necessary criminal charges before the 

regular courts. 

This Memorandum Circular shall take effect immediately and supersedes previous 

issuances inconsistent herewith. 

SO ORDERED. 



Chairperson 




óo0oó 


Turn-Over and Surrender of Yellow Plates 

In a Joint LTO-LTFRB Memorandum Circular No. 2004-002-J dated 6 August 

2004, all PUV operators applying for dropping and substitution of unit/s were directed to 

directly turn-over and surrendered the yellow plates of the unit/s proposed to be dropped 

to the LTFRB. The concerned LTFRB offices shall then issue the corresponding acknowl-

910 


edgment receipt therefor. All the surrender yellow plates shall be cut crosswise and 

lengthwise and thereafter turned over to LTO for final disposition. 

In order to reduce the increasing number of vehicles running without plates 

during the pendency of the approval of the application/s, the yellow plates of the unit/s 

proposed to be dropped shall now be required to be surrendered to LTFRB once the 

Order approving the application for Dropping and/or Dropping and Substitution has already 

been signed by the Board. The applicant shall be properly notified of the approval 

of the application through a letter sent via registered mail. Also, the applicant shall be 

required to personally receive the Order and turn over the yellow plates. 



circulation or in the Official Gazette. 



Chairperson 




óo0oó 


Amendment to Memorandum Circular No. 2004-023 

Dated 17 August 2004 (Re: Registration of Units) 

The Board issued Memorandum Circular (MC) No. 91-004 dated 25 January 

1991 declaring therein that PUV operators are required to register the authorized units 

with the Land Transportation Office (LTO) within thirty (30) days from receipt of the 

Decision as one of the conditions in the Certificate of Public Convenience. 

On 17 August 2004, the Board issued MC No. 2004-023, amending the third 

paragraph of MC 91-004, and thereby sets a policy that failure to register the authorized 

units with the LTO within the required period of thirty (30) days shall forever bar the 

registration of the unregistered unit/s. Hence, the unregistered unit/s can no longer be 

operated as ìFor Hireî vehicles. Also, any Petition/Motion for Late Registration shall no 

longer be approved, except in very exceptional cases as may be determined and approved 

by the Board En Banc. 

After a circumspect review of MC 2004-023, The Board hereby amends the 

quoted portion of the said circular to read as follows: 

ìIn the interest of public service, the Board hereby sets a policy that failure 

of the franchise grantee to register any of the authorized units with LTO within


thirty (30) days from receipt of the Decision, a penalty in the amount of TWO 

HUNDRED FIFTY PESOS (P250.00) per unit/per month of delay shall be 

charged prior to confirmation of the unit/s.î 

This Memorandum Circular supersedes any and all issuance inconsistent herewith 






Chairperson 

(SGD.) GERARDO A. PINILI 

Board Member 

óo0oó 


Certified True Copy of OR/CR 

In view of a number of incidents involving alteration of Official Receipts/Certificates 

of Registration, and submission of photocopied of spurious and altered OR/CR, all transactions 

involving the submission of Official Receipt/Certificate of Registration shall be 

accepted only by the Board if the said OR/CR are stamped ìCertified True Copyî and 

duly signed and issued by the District Officer concerned. 




SO ORDERED. 




Chairperson 


Board Member 

óo0oó

912 



Extension of Deadline for Filing of Application/s 

Under the Segregation Program 

Due to the clamor of public utility providers and in order to give them ample time to 

comply with the requirements of the Board, the period for filing of application/s under the 

Segregation Program set forth in Memorandum Circular No. 2006-005, as amended by 

Memorandum Circular No. 2006-013, and Memorandum Circular No. 2006-024, as 

amended by Memorandum Circular No. 2006-035, is hereby extended up to July 31, 

2006. 







Chairperson 


Board Member 

óo0oó 


Clarifications on MC 2005-031 (Deferment of the Implementation 

Relative to the Voluntary Amnesty Program for Extension of 

Route for Public Utility Bus Service) 

On 28 September 2005, this Board issued Memorandum Circular No. 2005-031 

deferring the implementation of Memorandum Circular 2005-029 (Voluntary Amnesty 

Program for Extension of Route of Public Utility Bus Services) dated 02 September 2005 

and effective 17 September 2005. In order to elucidate and avoid confusion among 

concerned stakeholders, this Board hereby declares the following clarifications: 

1. All applications/petitions filed with, duly stamp-received and assessed by LTFRB 

Regional Franchise Regulating Offices (RFROs) under the said voluntary amnesty program 

from the effectivity date of MC 2005-029 (17 September 2005) until the effectivity 

date of MC 2005-031 (28 September 2005) shall be qualified for regular LTFRB processing, 

subject to standard procedural guidelines and specific provisions of MC 2005-029. 

2. Payment of regular fees and charges, including amnesty fees made after the 

aforementioned window of effectivity dates (17-28 September 2005) shall be accepted 

relative to applications/petitions deemed qualified for processing.


All previous issuances, or parts thereof inconsistent with this Memorandum Circular 

are hereby superseded, revoked and/or modified accordingly. 

This Memorandum Circular shall take effect immediately. 

SO ORDERED. 



Chairperson 

(SGD.) GERARDO A. PINILI (SGD.) MA ELLEN DIRIGE-CABATU 



--o0o-- 


Deferment of Memorandum Circular No. 2006-040 Relative to 

the Dry-Run Implementation of the EDSA Bus Courtesy Scheme 

Last 06 June 2006, this Board issued Memorandum Circular No. 2006-040 (Dryrun 

of the EDSA Bus Courtesy Scheme as an Integral component of the EDSA PUB 

Volume and Trip Optimization Program). The dry-run was scheduled from 03-08 July 

2006. However, the preparations for the bus lay-over areas located in strategic areas of 

affected EDSA PUB routes, during the ìoff-peakî period window (10:00 a.m. to to 3:00 

p.m.) are still being finalized with the Metro Manila Development Authority (MMDA) and 

concerned local government units. 

As such, this Board hereby reschedules the implementation of the EDSA ìBus 

Courtesyî Scheme from 31 July to 05 August 2006. A follow-up consultation shall be 

undertaken in coordination with affected stakeholders and concerned agencies prior to 

the actual implementation of the said ìBus Courtesyî Scheme dry-run. 

All previous issuances, or parts thereof inconsistent with this Memorandum Circular 

are hereby superseded, revoked and/or modified accordingly. 

This Memorandum Circular shall take effect immediately. 

SO ORDERED. 



Chairperson 

(SGD.) MA ELLEN DIRIGE-CABATU 

Board Member

914 


LAND TRANSPORTATION OFFICE 


Memorandum Circular No. 701-2006 

Amendment to Memorandum Circular No. RTL-MC-03450 

Memorandum Circular No. RTL-MC-03450 dated April 10, 2003 which refers to 

updating the LTO-IT Projectís System for transactions processed manually has been 

found to be no longer effective under the present situation. 

In view of this, the aforesaid Memorandum Circular is now being amended and 

the following guidelines shall be observed by all concerned: 

ìNo transactions will be processed manually in all automated district/extension 

offices and licensing centers. In case of power failure, systems failure and 

the like, no transaction shall be processed.î 

All orders/memoranda in conflict herewith are deemed superseded. 

For strict compliance. 



(SGD.) ANNELI R. LONTOC 

Assistant Secretary 

óo0oó 


Apprehension and Adjudication of Violations Where 

Correction of MV Defect is Required 

It has been observed that there has been an increasing number of motor vehicles 

traversing the highways with two wheels removed in order to circumvent R.A. No. 8794 

and the ordinance on truck ban, making these motor vehicles unsafe and unfit to be 

operated, contrary to law. Pursuant therefore to the Road Safety Program of the Office 

and consistent with its mission to put order on the road and to register roadworthy and 

emission compliant motor vehicles, the following guidelines are hereby promulgated, for 

the observance of all concerned: 

A. Duty of law enforcement officer 

It is reiterated that included in the duties of deputized law enforcement officers 

(LEO) is the ocular inspection of motor vehicles to determine their fitness for operation, 

in accordance with Sec. 4 (d) (6) of R.A. No. 4136.


B. Apprehension and adjudication of violations necessitating correction of MV defect 

1. Where it is found through random roadside inspection conducted by a LEO that the 

specified number of wheels of a motor vehicle has been reduced by actual removal, the 

driver of said motor vehicle shall be cited with the violation of reckless driving by operating 

an unsafe vehicle under Sec. 48 of R.A. No. 4136. 

The registered owner/operator, because of improper and invalid motor vehicle classification, 

shall be meted the penalty provided for under DOTC Dept. Order No. 93-693, in 

addition to the penalty of surcharge consisting of and equal reduction and removal of the 

specified wheels may also be a cause of action for the institution of criminal and civil 

action against the offending operator and driver, their accomplices and accessories. 

2. The driver/operator shall be duly notified by the LEO of the nature of the violation(s) 

and the legal requirement to correct the defect of the vehicle by the re-placement and 

return of the removed wheels. Two MV plates shall be confiscated together with the 

license of the driver/operator with instruction indicated in the TOP that the motor vehicle 

shall be operated ìup to garage onlyî and that the defect found must be corrected before 

the apprehension can be resolved. 

3. In the adjudication and settlement of the case, the adjudicating officer shall likewise 

observe the requirement of correction of the gross vehicle weight by the re-placement 

and return of the removed wheels. 

He shall include in the resolution that the MV must undergo correction of defect and 

be subject to actual inspection and weighing by the LTO Motor vehicle inspection station 

(MVIS) and/or the district office where the apprehension shall be settled, based on specifications, 

aside from payment of prescribed fine and imposition of accessory penalty. 

4. If it has been established by the LTO MVIS/DO that there was undercollection of the 

road userís charge (RUC) under R.A. No. 8794, the custodial or releasing officer shall 

not release the confiscated items unless proof of correct payment of RUC has been 

made from the issuing agency, in the meantime. The adjudicating officer must include in 

the resolution as well, an order for the collection of the correct RUC aside from payment 

of penalty due, and for the immediate correction of entries in the certificate of registration 

and official receipt. 

C. Responsibility for Entry of Corrections 

The MID shall make the necessary coordination with the service provider to ensure 

that the IT system is programmed in such a way as to make possible the immediate 

correction of entries in the data base. 

D. Penal Clause 

All employees are enjoined to implement these provisions strictly and consistently. 

Any one found violating these guidelines shall be subject to administrative disciplinary 

action in accordance with existing CSC rules and regulations, without prejudice to the 

institution of appropriate criminal and civil action, where warranted.

916 


E. Repealing Clause 

All provisions of memoranda, orders, and circulars previously issued which are 

in conflict herewith are deemed superseded and/or modified accordingly. 

F. Effectivity 

This memorandum circular shall take effect fifteen days (15) after the filing of the 

three (3) copies hereof with the University of the Philippines Law Center, in accordance 

with Presidential Memorandum No. 11, dated October 9, 1992 and publication 

thereof in a newspaper of general circulation. 

For guidance and strict compliance. 





óo0oó 

Memorandum 

OR Cancellation and Re-Printing 

Reports have reached this Office that there are errors being encountered in the 

Revenue Collection Process when the system hangs, such as the following: 

1. The Official Receipt (OR) on queue skips. As a result, the grand total in the Abstract 

Collection does not tally with the actual total collections; and 

2. The OR Re-printing facility cannot proceed or be performed. 

In view thereof, the following procedures shall be observed: 

1. The Cashier should use the OR Number Modification Module for the OR number to 

match with the actual/physical OR No.; and 

2. The Cashier should cancel the physical OR of the transaction which cannot be reprinted 

and re-process by tagging the 1 st transaction as failed to return it to the evaluator 

work step. 

For your information and strict compliance. 




óo0oó




MVUCs Matrices for Quick Reference 

For uniformity in the computation and collection of the Motor Vehicle Userís 

Charge (MVUC) and for purposes of having a quick reference not only for the consumption 

of this Office but for its clients as well, the attached MVUC matrices are hereby 

officially disseminated for the guidance of all concerned. 

Be guided further that the attached MVUC matrices* consisting of 20 pages shall 

serve only as a ìquick referenceî for the determination of collectible MVUCs. Though the 

values presented in the matrices and the computations used to derive the collectible 

MVUCs are all based on the Republic Act 8794, Memorandum Circulars BGC-MC-01328 

and BGC-MC-1328-A (implementing guidelines of R.A. 8794), and Administrative Order 

with numbers 010-2005 and 86AO-006, the existing law, rules and regulations on land 

transportation as far as MVUC is concerned shall always prevail in case of discrepancy. 

For guidance and dissemination. 





óo0oó 


Utilization of DLS Data Take-On and Maintenance Facilities 

Aware of the negative reports from PMO-DLS Team on the indiscriminate utilization 

of the Data Take-On and DL Maintenance Facilities, resulting in the creation of 

instant Student Permit and Driverís License without going through the required process, 

all concerned are directed to strictly adhere to the guidelines and procedures in the use 

of the Data Take-On and DL Maintenance Facilities, as follows: 

DL MAINTENANCE FACILITY (DLMF) 

1. The facility shall be installed only at the Approving/Assistant Approving Officer workstation; 

2. The facility shall be limited only to the editing of information as a result of wrong data 

encoding or systemís error. The conduct of a thorough investigation by the Chief of 

Office to assuage the veracity of the information for DL maintenance is required; 



918 


3. The facility shall be limited only to the following information: 

3.1 License Number 

3.2 License Type 

3.3 Restriction Code/Condition 

3.4 Expired Date 

4. The justification for any change made in the DLMF must be properly indicated in the 

ìRemarksî field of the facility. 

DATA TAKE-ON (DTO) 

1. The facility shall be limited for use only by two (2) designated personnel per site; 

2. Two (2) alternate-DTO personnel shall be designated and authorized to use the facility 

in the absence of the DTO designates; 

3. The facility shall be limited only for encoding details of manually processed driverís 

license for renewal; 

4. In case of duplicate license, the issuing district office/licensing center may process 

the same using the DTO. In the event that a certification of license has been issued by 

the Central Office (CO) License Section, the transaction for duplicate license can be 

effected in any LTO field office. 

These guidelines/procedures are also being undertaken to improve the LTO-IT 

Systemís security controls aimed to safeguard the integrity of the IT database and pose 

as deterrent to the unscrupulous manipulation of the system. 

It is emphasized that the Approving Officer/designated DTO personnel shall be 

responsible for the consequences that may result in the irregular utilization of the facilities. 

Violation hereof shall constitute a grave offense with a penalty of dismissal from the 

service in accordance with the Civil Service rules and regulations. 

All orders/memoranda in conflict herewith are deemed amended/superseded. 

For immediate and strict compliance. 





óo0oó 

Memorandum 

Acceptance of Drug Test Results Issued by 

Philippine Army Drug Testing Center


R.A. 9165, otherwise known as the ìComprehensive Dangerous Drugs Act of 

2002î, mandates the Department of Health as the lead agency in the accreditation and 

monitoring of drug testing laboratories. The Philippine Army Drug Testing Center (PADTC) 

was granted accreditation to perform screening test for prohibited drugs on March 02, 


In view hereof, you are hereby directed to accept the results generated by 

PADTC, provided that it should bear the Department of Healthís Drug Testing Operations 

Management Information System (DTOMIS) authentication code. 






óo0oó 


Implementing Rules and Regulations of 

Joint Administrative Order No. 03, Series of 2006 

Pursuant to the provisions of Joint Administrative Order No. 03 Series of 2006, 

(Enforcement of Regulation on the Implementation of the NCPP on Motor Vehicles under 

the Revised Chemical Control Order (CCO) for Ozone Depleting Substances (ODS) 

(DENR Administrative Order No. 2004-08, series of 2004), the following Rules and Regulations 

are hereby promulgated and adopted: 

SECTION 1. Title - These Rules and Regulations shall be known as the Implementing 

Rules and Regulations of Joint Administrative Order No. 03 series of 2006. 

SECTION 2. Scope - These Rules and Regulations shall cover and define the 

roles and functions of the Department of Environment and Natural Resources-Environmental 

Management Bureau (DENT-EMB) and the Department of Transportation and 

Communication-Land Transportation Office (DOTC-LTO) in the implementation of the 

DAO 2004-08 known as the Revised Chemical Control Orders for Ozone Depleting Substances 

(ODS) with particular emphasis on the pertinent provisions of Sections 4, 5, 8, 11 

and 12 thereof and in accordance with the Memorandum of Agreement dated 29 April 

2003, particularly Section I and III, paragraph 1 and 2 and section IV thereof. 

SECTION 3. Administrative and Enforcement - The following Rules and Regulations 

shall be administered by the Land Transportation Office (LTO): 

a) All Mobile Air Conditioning (MAC) information and refrigerant type should be indicated 

in the MVIR. No vehicles registration transaction shall be approved without the inclusion 

of necessary information on MAC system.

920 


b) All inspectors and/or personnel concerned shall maintain a logbook for manual recording 

of all MACs inspected and for easy capturing of data in the report preparation. 

c) All vehicles with model 1999 up to present should have Hydro Fluorocarbon (HFC) 

134a or R-134a system. Any vehicles of the abovementioned models found to have 

converted to R-12 should not be given registration or renewal of registration unless converted 

back to HFC 134a. 

d) All vehicles, 1998 models and below with R-12 MAC system as the original system will 

not be restricted to renew their registration. However, some vehicles of the same model 

with originally installed HFC 134a, should not convert their MAC to R-12, otherwise they 

shall be restricted to register unless converted back to HFC 134a. 

e) MAC information and refrigerant type shall be indicated in the Official Receipts (OR) 

of registration prior to releasing. 

SECTION 4. Powers and Functions of the Land Transportation Office 

The LTO shall: 

a) Prohibit starting January 2006 the renewal of registration of all vehicles manufactured 

from January 1, 1999 onwards if their MAC contains CFC; 

b) Inspect all motor vehicles on their MAC Systems prior to registration, in accordance 

with the Manual for MAC System Inspection and Refrigerant Identification; 

c) Require all motor vehicles owners/operators applying for registration to specify in the 

Motor Vehicle Inspection Report (MVIR) form information on MAC systems and refrigerant 

types; 

d) Designate and maintain teams that will conduct random inspection of MACs in the 

different areas comprising its district offices and apprehend violators; 

e) Maintain records and data on refrigerant type of all motor vehicles inspected and 

provide such information to DENR-EMB as required. 

f) Update the DENR-EMB-POD semi-annually on the state of CFC usage in MACs; 

g) Conduct public awareness campaign in coordination with the policy statements on 

MAC Systems; 

h) Organize trainings of MAC inspection teams in coordination with DENR-EMB. The 

training shall be conducted by DENR-EMB and DOLE-TESDA, and; 

i) Impose and collect all the allowable fines and penalties and recommend the filing of the 

necessary administrative and/or criminal actions against violators. 

SECTION 5. Powers and Functions of the Environmental Management Bureau- 

DENR - The Environmental Management Bureau (EMB) shall:


a) Provide technical assistance and 44 units of refrigerant identifiers equipment to the 

LTO in the enforcement of MAC inspection; 

b) Conduct public awareness campaign in cooperation with the LTO; 

c) Conduct and organize trainings for MAC inspection teams in cooperation with the 

LTO, and; 

d) Enlist the assistance of the LTO in the prosecution of criminal cases against violators. 

For this purpose, LTO may recommend the filing of necessary criminal actions against 

violators. 

SECTION 6. Conduct of Random Roadside Inspection - Random Roadside Inspection 

(RRI) Operational Procedure 

a) The Random Roadside Inspection (RRI) shall be conducted regularly twice every month 

b) The RRI shall be conducted simultaneously with the conduct of anti-smoke belching 

activities. 

c) A minimum of twenty-five (25) vehicles should be inspected during the conduct of RRI. 

d) Proper markings such as ìPASSî or ìFAILî and percentage of refrigerant shall be 

stamped on the OR of the inspected vehicle. 

e) Selection of vehicles to be inspected should represent the different vehicle models, 

classifications and types. 

f) The inspection team shall maintain a logbook for manual recording of all MAC systems 

inspected and for easy capturing of data in the report preparation. 

g) The deadline for the submission of inspection reports to the Central Office shall be 

every fifth ( 5 th ) day of the month. 

h) The RRI Team shall be composed of LTO Inspectors and EMB personnel designated 

by their respective Regional Directors and representative from TESDA, when necessary. 

SECTION 7. Training - The DOTC-LTO in cooperation with DENR-EMB shall 

organize continuous training for MAC inspection teams. The training shall be conducted 

by DENR-EMB in coordination with DOLE-TESDA. 

SECTION 8. Adoption of Manual - The Manual for MAC System Inspection and 

Refrigerant Identification prepared by the DENR-EMB is hereby adopted and made integrated 

part of these Rules. 

SECTION 9. Fines and Penalties 

The following penalty provisions shall apply to violators of the JAO: 

1. On the first offense, owners/operators of vehicles not complying with the provisions of 

the JAO No. 03, Series of 2006, shall be warned and shall be ordered to immediately 

convert its MAC to non-CFC system.

922 


2. On the second and succeeding offenses, if an owner/operator failed to comply with 

the provisions of the JAO No. 03, a corresponding fine of PhP10,000.00 shall be imposed, 

as stated in the R.A. 6969 and its Implementing Rules and Regulations. 

3. Prior to renewal registration, all motor vehicles that have been caught in violation of this 

order shall be required to present said vehicles in any EMB Regional Offices, LTO Regional 

Offices, and LTO MVIS, for validation purposes. 

SECTION 10. Separability Clause - Should any provision of these Rules be 

declared void or unconstitutional by a competent court, the other provisions herein shall 

continue to be in force and effective and shall not in any way be affected by the provision 

so declared void or unconstitutional. 

SECTION 11. Repealing Clause - All other Rules and Regulations or parts of said 

rules and regulations that are deemed inconsistent with these Rules and Regulations are 

hereby revised, amended, modified and/or superseded. 

SECTION 12. Amendments - These Rules and Regulations may be amended and/ 

or modified from time to time by the Department of Transportation and Communications- 

Land Transportation Office. 

SECTION 13. Effectivity - These Rules and Regulations shall take effect fifteen 

(15) days after publication in at least three (3) newspapers of general circulation in the 

Philippines. 

Adopted: 17 April 2006 




óo0oó 

Memorandum Order 001-2006 

Intensified Anti-Colorum Enforcement Action 

Effective immediately, you are hereby directed to intensify our drive against 

colorum vehicles and out-of-line public utilities without let-up until erring MV operators are 

cleared out from Philippine roads and highways with the deployment of LTO enforcers 

including lady enforcers and deputized agents in accordance with the following areas of 

responsibility: 

1. SLEX entry/exit point (provincial/regional boundary) ñ LTO Region IV 

2. NLEX entry/exit point (provincial/regional boundary) ñ LTO Region III 

3. Strategic points along full length of EDSA ñ LES OIC ALFREDO B. GOZON 

4. Alabang, Ortigas & Coastal Road areas ñ LTO-NCR Acting Regional Director/DOTC 

Asst. Sec. REYNALDO I. BERROYA


5. Respective national and provincial roads ñ concerned region 

The priority targets and areas of this drive are the following: 

1. Unfranchised operations of private motor vehicles: 

a. Used as for hire 

b. Habitually used for freighting 

c. Using unauthorized improvised yellow plates or illegally transferred yellow 

plates 

2. Common practices of operators with franchise: 

a. ìKambalî operations 

b. Use of motor vehicles with expired, revoked, cancelled, suspended CPCs 

c. Operations violative of the provisions of CPCs (breach of franchise) e.g. 

mega-taxi operating as filcabs, tourist bus operating as regular bus 

3. Out-of-line operations 

All regional directors shall give inputs and suggestions for best results and shall 

coordinate all actions with this Office. All regions shall render daily reports every afternoon 

to the undersigned. 

These strategic measures against Colorum operations and Out-of-Line public utilities 

shall form part of the DOTC/LTOís report on the first agenda of NEDA group meeting 

on May 2, 2006. 




References: 



óo0oó 


Guidelines in the Registration of Rebuilt Motor Vehicles 

1. Memorandum Circular No. BGC-MC-01327 dated 11 December 2000 

2. Memorandum Circular No. 509-2004 dated 29 March 2004 

3. Memorandum Circular No. 542-2004 dated 15 September 2004 

4. Circular No. 82-008 dated 04 February 1982

924 


Pursuant to Republic Act 4136, as amended, the following guidelines are hereby 

promulgated for the guidance in the registration of rebuilt motor vehicles. 

SECTION 1. Objective. These rules and regulations are designed to establish 

uniformity in the registration of rebuilt motor vehicles. 

SECTION 2. Definition of Terms 

2.1 Rebuilt ñ refer to locally assembled/manufactured motor vehicles out of local chassis 

and body with imported engine or parts of previously registered motor vehicles. 

2.2 Trailer ñ refers to locally manufactured or fabricated trailers out of local materials 

2.3 Certificate of Stock Reported (CSR) ñ refers to the computer printout for the assembly 

of the rebuilt motor vehicle in compliance with RA 6539, the Anti-Carnapping Act 

2.4 Manufacturers, Assemblers, Importers and Dealers Reporting System (MAIDRS) ñ 

refers to the system that processes stock reports for the issuance of CSR in the Central 

Office and Regional Offices. 

SECTION 3. Documentary Requirements. The following documents shall be 

submitted for the registration of rebuilt motor vehicles: 

3.1 For rebuilt motor vehicles with local chassis and body and with imported engine. 

3.1.1 Original sales invoice of engine, chassis duly authenticated by the 

Regional Office 

3.1.2 Source of body 

3.1.3 Affidavit of rebuilt executed by the owner and mechanic, stating among 

others the date of completion 

3.1.4 CSR issued by the Regional Office-MAIDRS certifying that the rebuilt 

motor vehicle was reported to LTO in compliance with RA 6539, the Anti- 

Carnapping Act 

3.1.5 PNP-TMG Clearance 

3.1.6 Certificate of Compliance to Emission Standard (CCES) issued by the 

DOTC or LTO Regional Office authorized by the DOTC 

3.1.7 Duly accomplished Motor Vehicle Inspection Report (MVIR) issued by 

the MVIS in the Regions with MVIS facility 

3.1.8 Appropriate Insurance Certificate of Cover. 

3.2 For rebuilt motor vehicle with engine and/or chassis that are parts of previously 

registered motor vehicles 

3.2.1 Certificate of Registration (CR) and the latest Official Receipt (OR) of 

payment of registration fees of the engine and/or chassis 

3.2.2 Source of body 

3.2.3 Confirmation of the CR and OR from the registering district office if the 

rebuilt motor vehicles shall be registered in another district office (Circular No. 

137).


3.2.4 CSR issued by the Regional Office-MAIDRS certifying that the rebuilt 

motor vehicle was reported to LTO in compliance with RA 6539, the Anti- 

Carnapping Act. 

3.2.5 PNP-TMG Clearance 

3.2.6 Certificate of Compliance to Emission Standard (CCES) issued by the 

DOTC or LTO Regional Office authorized by the DOTC or LTO Regional 

Office authorized by the DOTC 

3.2.7 Duly accomplished Motor Vehicle Inspection Report (MVIR) 

3.2.8 Appropriate Insurance Certificate of Cover. 

SECTION 4. Issuance of Motor Vehicle License Plates 

4.1 For rebuilt motor vehicles with local chassis and body and with imported engines 

This transaction shall be considered original registration and shall be assigned and 

issued new set of motor vehicle license plates. 

4.2 For rebuilt motor vehicle with engine and/or chassis that are parts of previously 

registered motor vehicles. 

This transaction shall be considered original registration and shall be assigned and 

issued new set of motor vehicle license plates. 

SECTION 5. Amendatory Clause. All orders, memoranda and other issuances 

inconsistent herewith are hereby superseded, amended or modified accordingly. 

SECTION 6. Effectivity. This Memorandum Circular shall take effect fifteen 

(15) days after publication thereof in a newspaper of general circulation once a week for 

three (3) consecutive weeks. 

For strict compliance 





--o0o-- 


Revised Guidelines in the Registration of Chopped/Cut-Up Motor Vehicles 

References: 

1. Memorandum Circular No. 88-044 dated 22 January 1988 

2. Memorandum Circular No. 88-063 dated 15 August 1988

926 


In pursuant to Republic Act 4136 in relation to LTO Memorandum Circular No. 

88-044, the following revised guidelines in the registration of chopped/cut-up motor vehicles 

are hereby promulgated: 

SECTION 1. Scope and Application. This Memorandum Circular covers all 

chopped/cut-up motor vehicles for original/initial registration or renewal/subsequent registration. 

SECTION 2. Definition of Terms. The following terms and phrases are hereby 

defined for this purpose: 

2.1 Chopped/Cut-up Motor Vehicles refers to a motor vehicle whose components like the 

engine, chassis and body are of the imported type and assembled into a whole unit by 

Non-BOI registered assembler. 

2.2 Luxury/sports cars refer to motor vehicles that add pleasure or comfort to life but 

absolutely not necessary. 

2.3 Non-BOI Registered Assembler ñ refers to an individual, backyard or assembler/ 

manufacturer/rebuilder who are not participant/member in the Motor Vehicle Development 

Program (MVDP) of the Board of Investment (BOI) 

2.4 Original/Initial Registration refers to the first registration of the motor vehicle in the 

Philippines 

2.5 Renewal Registration refers to the subsequent registration of the chopped/cut-up 

motor vehicles 

2.6 Components refer to any major parts of the motor vehicle namely the engine, chassis 

and the body. 

2.7 Monocoque or Unitized Body refers to the component in which the chassis is an 

integral part of the body. 

2.8 Date of Original Registration (DOR) refers to the concept of age of a motor vehicle 

reckoned from the date of initial/original registration regardless of the year/model thereof. 

2.9 Certificate of Stock Reported (CSR) refers to the computer printout for the assembly 

of the rebuilt motor vehicle in compliance with RA 6539, the Anti-Carnapping Act. 

2.10 Motor Vehicle Development Program (MVDP) refers to the program launched by the 

government through the Board of Investment, Department of Trade and Industry. 

2.11 Bureau of Customs Certificate of Payment (BOC CP) refers to the payment of the 

taxes and duties of the engine, chassis and body from the BOC. 

2.12 Bureau of Internal Revenue Certificate of Clearance of Motor Vehicle (BIR CCMV) 

refers to the payment of the ad valorem or excise tax for the assembly of the components 

into whole motor vehicle.


SECTION 3. Documentary Requirements. The following documents are required 

for the registration of chopped/cut-up motor vehicles: 

3.1 For Original/Initial Registration 

3.1.1 Authenticated copy of the BOC CP for the engine, chassis and 

body 

3.1.2 CSRs for the engine and chassis 

3.1.3 CSR issued by the Regional Office for the assembly of the rebuilt 

motor vehicle in compliance with RA 6539, the Anti- 

Carnapping Act 

3.1.4 Authenticated Sales Invoices for the engine and chassis 

3.1.5 BIR CCMV 

3.1.6 PNP-TMG clearance 

3.1.7 Certificate of Compliance to Emission Standard (CCES) 

3.1.8 Duly Accomplished Motor Vehicle Inspection Report (MVIR) 

3.1.9 Appropriate Insurance Certificate of Cover 

3.1.10 Affidavit of Rebuilt 

3.1.11 Affidavit of Conversion when applicable 

3.2 For Renewal Registration 

3.2.1 Photocopy of Certificate of Registration (CR) 

3.2.2 Current Original Official Receipt of Payment (OR) 

3.2.3 Circular 137 for verification of BIR CCMV and BOC CPs for 

change venue in case previous transaction was manually encoded 

3.2.4 Duly Accomplished Motor Vehicle Inspection Report (MVIR) 

3.2.5 Certificate of Emission Compliance (CEC) 

3.2.6 Appropriate Insurance Certificate of Cover 

SECTION 4. Exclusion. The following motor vehicles are not covered by this 

Memorandum Circular. 

4.1 Cars and Passenger Vans such as Mitsubishi Pajero/Montero, Nissan Patrol/Terrano, 

Toyota Land Cruiser/RAV4, Range Rover, Land Rover, Ford Expedition, Jeep Cherokee, 

Daihatsu Feroza, Suzuki Vitara, Honda CRV, Mercedes Benz Musso, Kia Sportage, Opel 

Vectra and other similar vehicles whose DOR is 1980 or earlier. 

4.2 Luxury/Sport Cars such as AUDI, BMW, CELICA, MAZDA RX7, MERCEDES BENZ, 

PORSCHE, PEUGOT and the like. 

4.3 Light trucks, pick-ups, delivery trucks and delivery vans such as Isuzu Elf, Isuzu 

Pick-up, Isuzu Forward, Cargo Trucks and dump trucks with 18000kg GVW or less 

whose DOR is 1984 or earlier. 

4.4 Cargo trucks and dump trucks with more than 18000kg GVW 

4.5 Special Purpose Vehicles regardless of weight as authorized under EO No. 782

928 


4.6 Motor Vehicles assembled by BOI registered assemblers who are members of the 

MVDP 

4.7 All chopped/cut-up motor vehicles that were issued CP by the Bureau of Customs 

under the voluntary payment program. 

SECTION 5. Change of Components. The primary determinant of the liability of 

a motor vehicle to pay taxes and/or duties is the BODY. Corollarily, a change in the other 

components of a motor vehicle does not affect the tax liability of the vehicle except for 

monocoque or unitized body regardless of the source thereof, i.e. whether or not the 

source is a chopped vehicle or not. 

5.1 Change Engine and/or Chassis. A tax paid chopped motor vehicle whose engine 

and/or chassis have changed is not liable to pay a tax or duty on account of the change 

engine and/or chassis. 

5.2 Change Body. A chopped motor vehicle that has paid its taxes/duties whose body 

have changed is liable to pay a tax or duty with a proportionate tax credit or credit on 

account of the previous payment. 

SECTION 6. Repealing Clause. All issuances, memorandum and circulars in 

conflict herewith are deemed superseded or amended accordingly. 

SECTION 7. Effectivity. This Memorandum Circular shall take fifteen (15) days 

after publication. 





óo0oó 


Collection of Computer Fees 

Upon successful completion of the functional and other applicable testing, Certificates 

of Acceptance of an IT Facility (CAIFs) for the modules of the Motor Vehicle 

Registration System (MVRS) and Revenue Collection System (RCS) were issued for 

Polomolok Extension Office. 

Accordingly, in compliance with the applicable User Acceptance Test Plan, you 

are hereby directed to commence the collection of the computer fees for the MVRS and 

DLS modules applicable to your respective sites, as follows:


Computer Fee 

MVRS P134.40 

All orders/memoranda in conflict herewith are deemed superseded. 

This Memorandum Circular shall take effect after publication in three (3) newspapers 






Assistance Secretary 

óo0oó 

Memorandum 

Manual Processing in Case of Typhoons and Unusual Flood 

In case of brownouts and unavailability of VSAT due to typhoons and unusual 

flood, manual processing shall be allowed. However, the following guidelines should be 

observed, to wit: 

1. All the regional offices, district offices and licensing centers affected by typhoons shall 

be allowed to, manually process plain renewal transactions only, during the period that 

electricity and telephone lines are not available. Previously expired transactions are not 

included in this ruling and should not be processed manually; 

2. New transactions shall not be processed manually. In case of new registration wherein 

the registration should be done within the prescribed seven-day period, the applications 

should be marked submitted by the regional office/district office, and the applicant shall 

be requested to come back when the operation in the Regional Office/District Office is 

already normal, meaning, electricity is already available and telephone lines are already 

working. Penalties for late registration shall not be imposed to new registration transaction 

when the applicant comes back to the concerned LTO office within the next two (2) 

days of normal operation; 

3. The manually processed transactions should be uploaded in the regional office/district 

office within the first two days of normal operation; 

4. During these situations, the regional offices/district offices are instructed to maintain a 

record in the logbook of all manually processed transactions; and 

5. The regional offices/district offices are required to submit to the Office of the Assistant 

Secretary a report on the occurrence of brownouts and similar situation as a result of

930 


typhoons, together with the certification from local service provider on power outage and 

the like. 

All concerned are instructed to strictly observe the aforementioned guidelines. 





óo0oó 


Guidelines in the Registration of Light Electric Vehicles (LEV) 

Pursuant to the provisions of Batas Pambansa Bilang 43 and 74, Republic Act 

4136, Republic Act 8794 and Administrative Order Number 3, the following rules and 

regulations are hereby promulgated for the observance of all concerned. 

SECTION 1. Definition of Terms 

1. Light Electric Vehicle. Adopting the definition of ìmopedî under Administrative Order 

No. 3, which is defined as ìtwo-wheeledî or ìthree-wheeledî vehicle that is powered by a 

small motor of less than fifty (50) cubic centimeters piston or cubic centimeters displacement, 

light electric vehicle shall be defined as two-wheeled or three-wheeled vehicle that 

is powered by a battery-powered motor with no more than 36 voltage output and with 

amps per hour ranging from 10 to maximum of 60. 

2. Provincial Roads. These are roads that connect cities and municipalities without 

traversing national roads; roads that connect national roads to barangays through rural 

areas; and roads that connect to major provincial government infrastructure. 

3. Municipal and City Roads. These are roads within the poblacion; roads that connect 

to provincial and national roads; and roads that provide inter-barangay connections to 

major municipal and city infrastructure without traversing provincial roads. 

4. Barangay Roads. These roads refer to other public roads within the barangays. 

SECTION 2. Classification of Light Electric Vehicle - Light electric vehicles shall 

be classified as private motorcycles without sidecar. They shall not be used for commercial 

purposes or be hired to transport goods and passengers. Any attachment similar to 

a sidecar as that of tricycle is likewise not permitted. Rider is required to wear an 

approved helmet. 

SECTION 3. Motor Vehicle Userís Charge - Pursuant to Republic Act 4136 or the 

ìAct Imposing a Motor Vehicle Userís Charge on Owners of all Types of Motor Vehicles 

and for other Purposesî, the computation of the Road Userís Tag for light electric vehicles 

shall be similar to that of the ìmotorcycleî as provided under RA 8794.


SECTION 4. Coverage and Restriction of Operation - The operation of light electric 

vehicles shall be restricted to a limited speed of up to 30-35 mph (about 50-55 km/hr). 

It can be operated only along provincial roads, municipal/city roads and barangay roads 

defined in this Administrative Order. It can pass along the main thoroughfares, highways 

or national road for purposes of crossing only when the provincial or municipal/city, or 

barangay road is divided by a highway, main thoroughfares, or the national road, provided 

however that the LEV rider shall yield the right of way to all incoming traffic that 

constitute an immediate hazard, or if the main thoroughfares, highways, or national road 

has been designated and posted as open for travel by LEVs by concerned government 

agencies. 

SECTION 5. Registration Requirements - The following shall be the guidelines in 

the registration of LEVs at the LTO District offices: 

1. Stamping of the Vehicle Identification Number (VIN). The VIN shall be stamped at the 

frame of the LEV. Those LEVs that are already manufactured and sold in the Philippines 

without VIN shall be stamped with VIN within three months upon the issuance of this 

Administrative Order, at the LTO District Offices nearest to the LTO Regional Offices. The 

Land Transportation Office shall authorize one (1) District Office per region to conduct 

the stamping of the VIN. 

The VIN that will be stamped to the LIV shall be of the format described as follows: 

XXXXX-XX-00000001 

Name 

Serial Numbers 

Year of Manufacture 

Initials of Manufacturer/Imported Trade 

Note: The initials of the manufacturer/imported trade name must first be 

approved by the LTO to avoid duplication. 

All LEVs which shall be imported into the country upon the issuance of this Administrative 

Order shall have the VIN already stamped by the LEV manufacturer. 

2. Presentation by the registrant of the following documents: 

The following documents shall be submitted by the registrant to the LTO District 

Office to effect the registration of the LEV: 

a. Certificate of Conformity (COC) issued by DENR; 

b. Commercial Invoice of the vehicle issued by the country of origin; 

c. Type approval from the country of origin with specifications including the 

speed restriction; 

d. Motor vehicle inspection report for road worthiness and smoke emission 

compliance. LEVs shall not be allowed registration, unless it is equipped with 

brake in good operating condition, head lights, left and right signal lights, hand 

brake, brake activated tail light, side mirrors and power switch.

932 


e. Appropriate motor vehicle insurance cover; 

f. Certificate of payment issued by the Bureau of Customs; 

g. PNP-TMG motor vehicle clearance; and 

h. Other importation documents being required by LTO. 

3. Issuance of Plates 

LEVs shall be issued an orange-colored motorcycle plate at the rear and a 

sticker in front to be used exclusively for all electric motor vehicles to differentiate 

from the gasoline-powered vehicles. The sticker shall be of the type that 

will be destroyed once removed from the vehicle, hence, cannot be transferred 

to another vehicle. 

SECTION 6. Applicable Provisions of the Law - All applicable existing laws, 

rules and regulations that are not in conflict herewith shall be enforceable to LEVs. 

SECTION 7. Effectivity - These guidelines shall take effect fifteen (15) days 

from the date of approval by the Secretary of the Department of Transportation and 

Communications. 





Recommending Approval: 

(SGD.) RICARDO E. ALFONSO, JR. 

Undersecretary for Land Transportation 

Department of Transportation and Communications 

Approved: 

(SGD.) LEANDRO R. MENDOZA 

Secretary 

Department of Transportation and Communications 

óo0oó 

Memorandum 

Desist/Refrain from Registering All Terrain Vehicles (ATVs) 

Based on the reports that have reached this Office there were a number of All 

Terrain Vehicles (ATVs) that have been registered as motorcycles notwithstanding that 

subject type of vehicle is not classified as such neither the same could be registered as 

ATVs.


In view hereof, all concerned employees are hereby directed to DESIST OR 

REFRAIN from registering ATVs until such time that this type of vehicle is properly classified 

and appropriate guidelines for their registration had been issued. 

Any employee or official or District / Extension Office found to have violated this 

regulation or policy will be meted with corresponding administrative sanction or penalty. 

Strict compliance is hereby enjoined. 





óo0oó 


Implementing Rules and Regulations of Administrative Order 2006-01 

on the Guidelines in the Registration of Light Electric Vehicles (LEV) 

Administrative Order 2006-01 was issued for the observance of all concerned 

pursuant to the provisions of Batas Pambansa Bilang 43 and 74, Republic Act 4136, 

Republic Act 8794 and Administrative Order Number 3. All concerned LTO employees 

are hereby instructed to implement the provisions of AO 2006-01. Attached as Annex 

ìAî* is a copy of the said AO for compliance. 

Pursuant to the other LTO governing rules and regulations and for further clarification, 

the following directives are likewise provided: 

1. All manufacturers, assemblers, importers and dealers of LEVs should be accredited 

by LTO; 

2. LEV is defined as two-wheeled or three-wheeled vehicle that is powered by a batterypowered 

motor with no more than 36 voltage output and with amps per hour ranging from 

10 to maximum of 60 and capable of propelling the device at a speed of not more than 55 

km/hr on flat surface. Electric bicycle or ìbicycle-likeî vehicles are not covered by the 

definition of LEVs, hence should not be registered; 

3. LTO will collect as MVUC an amount of P300.00 for the registration of LEV; 

4. LEVs operating beyond the provincial roads, municipal and city roads as defined in 

AO 2006-01 and its IRR shall be apprehended. The operation of LEVs shall be limited to 

a maximum speed of not more than 55 km/hr. For safety reasons, LEVs shall operate 

only along provincial, municipal, city and barangay roads with normal speed of 55 km/hr 

or below. Riders of LEVs shall be required to use helmet, otherwise, they will be apprehended. 

*See page 930 for AO 2006-01.

934 


5. However, LEVs can pass across main thoroughfares, highways or national roads for 

purposes of crossing only provided the LEV rider shall yield the right of way to all incoming 

traffic that constitute an immediate hazard. It shall operate on the right hand outermost 

lane only and shall ride as near as practicable to the edge of the roadway except 

when preparing to make a left turn, overtaking and passing another vehicle and it reasonably 

necessary to avoid conditions that make it unsafe to continue along the right hand 

edge of the roadway. 

6. For monitoring purposes, LEV will have its separate classification under private motorcycles. 

The registration documents should use LEV as its classification to distinguished 

LEVs from other types of motorcycles; 

7. All regional offices are instructed to designate the district office nearest the regional 

office to conduct the stamping of the VIN. The regional offices are instructed to provide 

the stamping paraphernalia for the district offices that will be authorized to conduct the 

stamping. The stamping paraphernalia should be uniform in all district offices. The 

Property Section, Central Office shall provide the specifications for uniformity. Training 

should be conducted to ensure uniform implementation. 

8. Orange-colored motorcycle plate shall be placed at the rear of the LEV and orange 

colored sticker shall be placed in front of the LEV to differentiate LEV from gas-powered 

vehicle. 

These guidelines shall take effect immediately. 

Strict compliance is hereby enjoined. 





óo0oó 


Guidelines in the Issuance of Validating Tags and Stickers 

It has come to our attention that there are some district offices requesting for 

2005 validating tags and stickers for newly registered motor vehicles particularly motorcycles. 

This only shows that these district offices still collect a minimum of less than one 

year MVUC which is in violation of MC No. 575-2005 dated 14 February 2005 which 

states that ìFor the initial registration of motor vehicles excluded in this order (3 years 

registration), the minimum is one (1) year and the maximum collection is one and three 

forth (1 æ) years depending on the plate issuedî so that the stickers to be issued is for 


In addition, for those motor vehicles which were already initially registered in 

2006 but were collected only an MVUC of less than one year, which requires the motor


vehicle owner to return for renewal registration within the year, we issue the 2006 sticker 

as provided for in Sec. 3.3.6 of the MVRS Manual which states that ìA newly registered 

motor vehicle on which a registration fee (MVUC) equivalent to a portion of the year has 

been paid shall be issued a current year sticker. However, renewal of the same motor 

vehicle on the same year shall not require the payment and issuance of another sticker.î 

For your guidance and strict compliance. 





--o0o-- 


Correction on the Collectible MVUC for For-Hire Trucks 





--o0o-- 


Banning of LTO Decals on Motor Vehicles 

There has been a proliferation of LTO decals notably on windshields of motor vehicles, 

including those on public utility vehicles. Further, the practice may serve as subterfuge 

to evade apprehension for traffic and/or administrative violation/s. Employment of 

LTO decal as countersign against apprehension, whether real or imagined cannot be 

condoned by the Office. Hence, it is hereby ordered that the use of LTO decals on all 

motor vehicles, except on LTO service and patrol vehicles be banned, effective immediately. 

Further, all LTO law enforcement officers are directed to cause the removal of these 

decals on vehicles found sporting them. On top of it all, administrative sanction in accordance 

with law, shall be imposed on any employee found to be engaged in selling or 

distribution of said decals. 

All previous orders/memoranda and other issuances in conflict herewith are deemed 

superseded.

936 


This memorandum circular shall take effect fifteen days (15) after the filing of three 

(3) copies hereof with the University of the Philippines Law Center, in accordance with 

Presidential Memorandum No. 11, dated October 9, 1992 and publication thereof in a 

newspaper of general circulation. 






--o0o-- 

Memorandum 

Authority to Suspend Private Emission Testing Centers (PETCs) 

This has reference to several inquiries from the different PETC owners regarding 

the authority of the Regional Director to suspend Private Emission Testing Centers (PETCs). 

Per JAO 2003 only the Department of Transportation and Communication has the authority 

to suspend PETC Centers from their operations. PETC Regional Office Committee 

has the visiting power to monitor all PETC Centers under their area of responsibilities and 

report their findings and observation to the Office of the Assistant Secretary through the 

CO PETC Chairman and the same shall be forwarded to DOTC for appropriate action. 

In this regard you are hereby directed to refrain from issuing suspension to the 

PETC Centers in your area of responsibilities. 

For proper guidance and strict compliance. 





--o0o-- 

Memorandum 

Reiteration of the Policy on Automated Transactions 

In the heels of reports that reached this Office about the alleged ìrampant practice(s) 

of collecting computer fees by unautomated District/Extension Officesî and the acceptance 

by the unautomated District/Extension Offices of transactions that were previously 

transacted via the ìcomputerized system by automated District/Extension Offices, this


Office would like to reiterate and direct all frontline personnel to strictly abide by the 

following: 

1. Automated District/Extension Offices are strictly ìnot allowed to collect computer fees, 

and 

2. Unautomated District/Extension Offices are strictly not allowed to accept, process and 

transact the documents of all MVs that were previously transacted by the automated 

District/Extension Offices, hence should only be transacted and documented via the 

computer system. 

This Memorandum is in accordance with the policy direction currently pursued by 

the Office in the light of its computerization program and in order to improve and upgrade 

the quality of documentation with the utilization of the LTO IT system. 

Any breach committed against this Memorandum shall be dealt with accordingly. 

For strict compliance and appropriate guidance. 




NATIONAL AGRICULTURAL AND FISHERY COUNCIL 



Adoption and Enforcement of the Philippine Agricultural 

Engineering Standards Volume V Series of 2005 

WHEREAS, Articles 5, 6 and 7, Chapter I, Title II of R.A. 7394 (Consumer Act of 

the Philippines) mandates the Department of Agriculture (DA) to develop and enforce 

standards on agricultural products; 

WHEREAS, the DA, pursuant to Section 59 of R.A. 8559 (Agriculture and Fisheries 

Modernization Act) and Section 2, Chapter 1, Title IV (Agriculture), Book IV of EO 292 of 

1987, is responsible for the promotion and regulation of agricultural machinery; 

WHEREAS, the development and enforcement of agricultural engineering standards 

is vital and necessary in ensuring the safety, functional efficiency and economic 

viability of agricultural and fishery machinery and other agricultural engineering projects 

of the DA;

938 


WHEREAS, the DA, through Administrative Order (AO) No. 10 Series of 2002, No. 

6 series of 2003, No. 11 Series of 2003 and No. 5 Series of 2005, has adopted the 

Philippine Agricultural Engineering Standards Volume I Series of 2000, PAES Volume II 

Series of 2001, PAES Volume III Series of 2002, PAES Volume IV Series of 2004 and 

requires all bureaus, attached agencies, corporations and regional field units to comply 

with the said standards; 

WHEREAS, the DA has entered into a Memorandum of Agreement with the University 

of the Philippines at Los BaÒos for the continuation of the development of agricultural 

engineering standards which shall be undertaken by the Agricultural Machinery Testing 

and Evaluation Center (AMTEC); 

WHEREAS, seventeen (17) additional standards were developed by the DA and the 

UPLB comprising the Philippine Agricultural Engineering Standards Volume V Series of 

2005 and have undergone extensive technical reviews, circulation and public hearings 

conducted by the NAFC; 

NOW, THEREFORE, I, DOMINGO F. PANGANIBAN, Secretary of Agriculture, pursuant 

to Section 3 paragraph 3, Chapter I, Title IV, Book IV of EO 292 of 1987 and in view 

of the foregoing, do hereby order the following: 

SECTION 1. Adoption of PAES V, Series of 2005 - The following seventeen agricultural 

engineering standards, attached as Annex ìAî, are hereby adopted as the Philippine 

Agricultural Engineering Standards Volume V, Series of 2005: 

1. Formulation of PAES Part I - General (PAES 010-1:2005) 

2. Formulation of PAES Part 2 - General (PAES 010-2:2005) 

3. Metrication Guidelines (PAES 020:2005) 

4. Weeder - Specifications (PAES 141:2005) 

5. Weeder - Methods of Test (PAES 142:2005) 

6. Rice Drum Seeder - Specifications (PAES 143:2005) 

7. Rice Drum Seeder - Methods of Test (PAES 144:2005) 

8. Fertilizer Applicator - Specifications (PAES 145:2005) 

9. Fertilizer Applicator - Methods of Test (PAES 146:2005) 

10. Chipping Machine - Specifications (PAES 222:2005) 

11. Rice Combine - Specifications (PAES 224:2005) 

12. Micromill - Specifications (PAES 226:2006) 

13. Micromill - Methods of Test (PAES 227:2005) 

14. Fiber Decorticator - Specifications (PAES 228:2005) 

15. Fiber Decorticator - Methods of Test (PAES 229:2005) 

16. Coconut Oil Expeller - Specifications (PAES 230:2005) 

17. Coconut Oil Expeller - Methods of Test (PAES 231:2005) 

SECTION 2. Enforcement - a. All concerned DA Undersecretaries, Assistant 

Secretaries, Heads of Bureaus, Attached Agencies and Corporations, and Regional Executive 

Directors shall enforce the PAES V, Series of 2005, including those agricultural 

engineering standards previously adopted by the DA through Administrative Orders No. 

10 Series of 2002, No. 6 Series of 2003, No. 11 Series of 2003 and No. 05 Series of 

2004 - PAES I, II, III, and IV, respectively as an integral part in the planning, regulation,


bidding and implementation of their agricultural and fishery machinery and other agricultural 

engineering projects; 

b. The PAES V shall serve as a technical reference for all DA agricultural engineers 

in the signing and sealing of plans, designs and technical specifications of DA agricultural 

machinery and other agricultural engineering projects; 

c. All Regional Field Units (RFUs), through their Regional Agricultural Engineering 

Divisions (RAEDs), shall coordinate with the Local Government Units, State Colleges and 

Universities (SCUs) and the field offices of concerned national government agencies for 

the enforcement of PAES I, II, III, IV and V. 

SECTION 3. Repealing Clause - All DA Administrative Orders, Special Orders and 

other issuances inconsistent with this Administrative Order are hereby repealed and/or 

modified accordingly. 

SECTION 4. This Administrative Order shall take effect fifteen (15) days following 

the publication in the Official Gazette or any newspaper of general circulation. 


(SGD.) DOMINGO F. PANGANIBAN 

Secretary 

NATIONAL CONCILIATION AND MEDIATION BOARD 


Resolution No. 1, series of 2005 

Amending the 1999 Revised Accreditation Guidelines 

WHEREAS, the existing Revised Guidelines in the Accreditation and Delisting of 

Voluntary Arbitrators approved on November 15, 1999 provided that the accreditation of 

voluntary arbitrators should be renewed every five years; 

WHEREAS, the Council recognized that the availability of committed, sincere and 

competent voluntary arbitrator is crucial to the success of the voluntary arbitration program 

in order to respond to the expanding issues cognizable by the system; 

WHEREAS, the Council further recognized the need for voluntary arbitrators to 

continuously present themselves as reassuring partners of labor and management who 

can dispense labor justice in the most effective and efficient manner; 

WHEREAS, the Council further realized that in order to maintain a competent and 

credible core of voluntary arbitrators, retooling and upgrading process of knowledge, 

skills and attitude should be done on a regular basis;

940 


WHEREFORE, the 1999 Revised Guidelines in the Accreditation and Delisting of 

Voluntary Arbitrators is hereby amended to include innovations that will make the system 

responsive to the need of the modern day industrial relations, to wit: 

I. ACCREDITATION 

A. Nature of Accreditation 

Accreditation of an individual as voluntary arbitrator shall be subject to the condition 

that he/she meets all the qualifications prescribed by the NCMB for accreditation. If 

found qualified, accreditation AS VOLUNTARY ARBITRATOR SHALL BE ON A LIFE- 

TIME BASIS, UNLESS DELISTED PURSUANT TO THE DE-LISTING GUIDELINES AP- 

PROVED BY THE COUNCIL. TO MAINTAIN THEIR ACTIVE STATUS, HOWEVER, VOL- 

UNTARY ARBITRATORS SHALL BE REQUIRED TO ATTEND THE ARBITRATORSí CON- 

TINUING RETOOLING PROGRAM (ACRP). THE ACRP SHALL CONSIST OF THE FOL- 

LOWING: (1) GENERAL RETOOLING SEMINAR CONDUCTED BY THE NCMB EVERY 

THREE YEARS AND (2) REGULAR RETOOLING SEMINARS WHICH SHALL BE CON- 

DUCTED BY THE ACRP SERVICE PROVIDERS ACCREDITED BY THE TVAAC. 

AN ACTIVE VOLUNTARY ARBITRATOR SHALL MEAN ONE WHO SATISFIES 

THE FOLLOWING CONDITIONS: 

1. HANDLES AT LEAST ONE (1) CASE PER CALENDAR YEAR, OR PARTICIPATES IN 

NCMB ADVOCACY ACTIVITIES IN WHATEVER CAPACITY; AND 

2. ATTENDS TO THE GENERAL RETOOLING SEMINAR OR COMPLETES THE REGU- 

LAR RETOOLING SEMINAR. 

ONLY ARBITRATORS WITH ACTIVE STATUS SHALL BE INCLUDED IN THE 

LIST OF ACTIVE ARBITRATORS BEING DISSEMINATED TO LABOR AND 

MANAGEMENT FOR SELECTION AND APPOINTMENT PURPOSES. THE 

LIST SHALL BE UPDATED ON AN ANNUAL BASIS. 

B. Requirements for Accreditation 

1. Minimum Criteria 

To qualify as an Accredited Voluntary Arbitrator, a person must possess the minimum 

criteria for accreditation, as follows: 

1.1 He/she must be a Filipino citizen residing in the Philippines. 

1.2 He/she must be a holder of at least a Bachelorís degree preferably 

relevant to Labor and Social Relations, Economics and related fields of study. 

1.3 He/she must have at least (5) yearsí experience in the field of Labor- 

Management relations. 

1.4 He/she has no pending criminal case involving moral turpitude. 

2. Supporting Documents 

Applicants shall submit an application letter with the NCMB or any of its Regional 

Branches, together with:


2.1 An updated bio-data 

2.2 Two (2) copies of ì2 X 2î black and white picture 

2.3 Photocopy of Diploma or Certificate of Graduation From Baccalaureate 

Degree or Photocopy of License if Lawyer, CPA or other Board Professionals. 

2.4 Certificate of Employment from present employer (if applicable). 

2.5 APPLICANTíS Affidavit stating that S/HE has no pending criminal case 

involving moral turpitude. 

2.6 Three (3) Character References 

THE NCMB SHALL REVIEW ALL DOCUMENTS SUBMITTED AND VALI- 

DATE THE INFORMATION STATED THEREIN, AND SHALL RECOMMEND 

TO THE TRIPARTITE VOLUNTARY ARBITRATION ADVISORY COUNCIL 

(TVAAC) SITTING AS THE ACCREDITATION COMMITTEE WHETHER THE 

APPLICANT IS ELIGIBLE FOR INTERVIEW. 

3. PANEL INTERVIEW 

IN ORDER TO ASSESS THE APPLICANTíS LEVEL OF KNOWLEDGE, SKILLS, 

OR ORIENTATION, THE TVAAC SHALL INTERVIEW THE APPLICANTS. 

THE TVAAC SHALL GATHER INFORMATION ABOUT THE APPLICANT, AND 

SHALL THEN DECIDE WHETHER THE APPLICANT WILL BE ALLOWED TO UNDER- 

TAKE THE PRE-ACCREDITATION TRAINING. 

4. TRAINING REQUIREMENTS 

AN APPLICANT WHO PASSED THE INTERVIEW PROCESS will be required 

to undergo a pre-accreditation training program to equip him with basic knowledge, 

skills and value orientation necessary to perform the responsibilities 

and functions of an accredited voluntary arbitrator. The training program shall 

be designed jointly by the NCMB with the Philippine Association on Voluntary 

Arbitration, Inc. 

5. Roll of Accredited Voluntary Arbitrator 

Upon satisfactory completion of the training, the new Voluntary Arbitrator will 

be given his/her Certificate of Accreditation bearing his/her Accreditation 

Number, and hereafter will formally take his/her Oath of Office and sign the 

Roll of Accredited Voluntary Arbitrators. 

Once accredited, the voluntary arbitrator can serve as such in any region. 

However, for purposes of administrative supervision, the voluntary arbitrator 

shall continue to be enrolled in the list of accredited voluntary arbitrators in the 

region where they are accredited. 

C. Maintenance of Active Status 

THE NCMB SHALL MAINTAIN AN ACTIVE AND INACTIVE LIST OF VOLUNTARY 

ARBITRATORS. ACTIVE STATUS SHALL MEAN THE FOLLOWING:

942 


1. ATTENDANCE AND PARTICIPATION IN THE GENERAL RETOOLING SEMINAR 

TO BE CONDUCTED BY THE NCMB ONCE EVERY THREE (3) YEARS; OR 

2. IN CASE OF FAILURE TO ATTEND THE GENERAL RETOOLING SEMINAR, ATTEN- 

DANCE AND PARTICIPATION IN AT LEAST TWO (2) REGULAR RETOOLING SEMI- 

NARS WITHIN THE THREE-YEAR PERIOD; AND 

3. HANDLING OF AT LEAST ONE (1) VOLUNTARY ARBITRATION CASE PER CALEN- 

DAR YEAR OR PARTICIPATION IN NCMB ADVOCACY ACTIVITIES; 

FAILURE TO SATISFY THE FOREGOING REQUIREMENTS SHALL PLACE THE 

VOLUNTARY ARBITRATOR ON INACTIVE STATUS. 

THE REGULAR RETOOLING SEMINARS SHALL BE CONDUCTED BY INSTITU- 

TIONS ACCREDITED BY THE TVAAC AS SEMINAR PROVIDERS. 

THE GUIDELINES FOR THE ARBITRATORSí CONTINUING RETOOLING PROGRAM 

(ACRP) SHALL BE FORMULATED BY THE TVAAC IN CONSULTATION WITH THE PHIL- 

IPPINE ASSOCIATION ON VOLUNTARY ARBITRATION, INC. (PAVA INC). 

NOW, THEREFORE, the Tripartite Voluntary Arbitration Advisory Council has 

RESOLVED, as it is hereby RESOLVED to adopt the amendments to the 1999 Revised 

Accreditation and Delisting Guidelines. 

BE IT FURTHER RESOLVED that the General and Regular Retooling Program 

for Voluntary Arbitrators be established and institutionalized by the Council, the adoption 

of which to be covered by a separate guidelines. 

Adopted: 22 Sept. 2005 

(SGD.) HANS LEO J. CACDAC 

Chairman 

(SGD.) PERLITA B. VELASCO 

Member, Government Sector 

(SGD.) ALLAN S. MONTA—O 

Member, Labor Sector 

(SGD.) GASTON V. TAQUIO 


(SGD.) ANIANO G. BAGABALDO 

Member, Employer Sector 

(SGD.) BENJAMIN T. CO 


APPROVED: 

(SGD.) PATRICIA A. STO. TOMAS 

Secretary 

óo0oó



Resolution No. 2, Series of 2005 

Approving the Conduct of General and Regular Retooling 

Seminars for All Accredited Voluntary Arbitrators 

WHEREAS, there has been no continuing retooling program since 1999; 

WHEREAS, the Tripartite Voluntary, Arbitration Advisory Council (TVAAC)/institutionalized 

the Arbitratorsí Continuing Retooling Program (ACRP) through Resolution No. 

1, series of 2005; 

WHEREAS, in implementation of Resolution No. 1, series of 2005, the TVAAC 

agreed to hold within the year a General Retooling Seminar for all accredited voluntary 

arbitrators and every three (3) years thereafter, and conduct Regular Retooling Seminars 

in the succeeding years; 

NOW, THEREFORE, the TVAAC has RESOLVED, as it is hereby RESOLVED to 

approve the conduct of the General and Regular Retooling Seminars subject to the guidelines 

to be issued. 




Chairman 











APPROVED: 


Secretary 

óo0oó

944 


Resolution No. 3, series of 2005 

Approving the Conduct of the Accreditation 

Program for New Voluntary Arbitrators 

WHEREAS, there has been no accreditation of new voluntary arbitrators since 

1997; 

WHEREAS, the Tripartite Voluntary Arbitration Advisory Council (TVAAC) revised 

and amended the accreditation process of arbitrators through Resolution No. 1, series of 

2005; 

WHEREAS, the number of active voluntary arbitrators as of the First General Retooling 

Seminar held in December 1-2, 2005 total to 125 only nationwide; 

WHEREAS, the TVAAC recognized that the Board, in order to respond to the 

expanding issues cognizable by the system, needs to reinforce the current roster of 

active voluntary arbitrators; 

WHEREAS, the TVAAC recognized to strengthen the current roster by inviting 

fresher breed of new leaders who can infuse vigor, vitality, energy and dynamism to the 

existing voluntary arbitration program; 

WHEREAS, in implementation of Resolution No. 1, series of 2005, the TVAAC 

agreed to revitalize the current roster of voluntary arbitrators through resumption of accreditation 

of voluntary arbitrators; 

NOW THEREFORE, the TVAAC has RESOLVED, as it is hereby RESOLVED, to 

approve the conduct of Accreditation Program for New Voluntary Arbitrators. 

Adopted: 13 Dec. 2005 


Chairman 










Member, Employer Sector



APPROVED: 


Secretary 

óo0oó 


Approving the Implementing Guidelines for the Conduct of the 

Regular Retooling Seminars for Voluntary Arbitrators 



Text Available at the Office of the Administrative Register, 


óo0oó 


Approving the Application of the Philippine Association 

on Voluntary Arbitration, Inc. as Service Provider of the 

Regular Retooling Seminars for Accredited Voluntary Arbitrators 

WHEREAS, the Tripartite Voluntary Arbitration Advisory Council institutionalized 

the Arbitratorsí Continuing Retooling Program (ACRP) through Resolution No. 1, series 

of 2005; 

WHEREAS, in the implementation of Resolution No. 1, series of 2005, the Council 

agreed to delegate the responsibility of conducting the Regular Retooling Seminars to 

credible institutions, subject to the supervision and monitoring of the National Conciliation 

and Mediation Board (NCMB) and the guidelines set forth in Resolution No.1, series of 

2006; 

WHEREAS, the Philippine Association on Voluntary Arbitration, Inc. as the national 

organization of all voluntary arbitrators nationwide, signified its intention to become the 

service provider of continuing retooling seminars of voluntary arbitrators during the First 

PAVA Board Meeting on 27 January 2006; 

NOW, THEREFORE, the Council has RESOLVED, as it is hereby RESOLVED to 

approve the application of the PAVA as the service provider of the continuing retooling 

seminars of voluntary arbitrators, subject to the implementing guidelines set forth in Resolution 

No. 1, series of 2006. 

Adopted: 08 March 2006

946 




Chairman 











APPROVED: 


Secretary 

óo0oó 


Amending the Guidelines on the Schedule of Fees Under the 

Subsidy Entitlement Program for Voluntary Arbitration Cases 

WHEREAS, Resolution No. 1, series of 1999 approved on November 15, 1999 

amended and consolidated the Guidelines on the fees and in the processing and payment 

of subsidy entitlement for voluntary arbitration; 

WHEREAS, in view of the changing times, these guidelines need to be reviewed 

periodically in consideration of the increasing costs of professional services and other 

expenses incidental to arbitration of labor disputes; 

WHEREAS, to promote acceptance of voluntary arbitration, there is a need to 

remove the burden of cost from the parties; 

WHEREAS, the TVAAC, during its 62 nd Special Meeting held on 23 February 

2006, resolved to revise and increase the schedule of fees under subsidy entitlement for 

voluntary arbitration cases; 

WHEREFORE, pursuant to the provisions of Republic Act No. 6715 authorizing 

the Council to recommend appropriate guidelines on provision of subsidy entitlement for


voluntary arbitration cases, Resolution No. 1, Series of 1999 is hereby amended to read 

as follows: 

I. Coverage 

The subsidy shall cover all arbitration cases whether involving unionized or nonunionized 

establishments, upon proof by either or both parties of lack of capacity to pay 

the cost of arbitration in accordance with no. II herein and subject to the following conditions: 

A. Under Regular and Expedited Voluntary Arbitration Cases 

The subsidy shall be provided to all arbitration cases involving unionized establishments 

including the maritime cases under Resolution No. 1, series of 2001. 

B. Under the Free Legal Aid and Voluntary Arbitration Services (FLAVAS) Program, 

the subsidy shall be available to the following: 

1. Individual workers or group of employees in establishments with no unions 

or with no collective bargaining agreements (CBAs); 

2. Unions which are still in the organizational stage; and 

3. Management of distressed companies and small and medium enterprises 

(SMEs). 

II. Procedures and Requirements 

A. The Arbitrators who are entitled to be paid by the subsidy are any of the following: 

1. Those Arbitrators named in the CBA, either accredited by the NCMB or 

not; 

2. Those accredited voluntary arbitrators directly chosen by the parties without 

the assistance of the NCMB; 

3. Those accredited voluntary arbitrators, either selected or appointed with 

the assistance of the NCMB, who are included in the active roster as of 

date of application for subsidy. 

B. The subsidy is payable to the voluntary arbitrator or to the Chairman of the panel of 

arbitrators, except in cases of reimbursement for amounts paid to the arbitrator or panel 

of arbitrators by either party, in which case it shall be paid to the union or the company, 

as the case may be. 

C. The request for subsidy shall be supported by the following: 

1. Duly-accomplished request for Subsidy Entitlement Form; 

2. Copy of Decision, Order, Resolution or Award; 

3. For establishments with CBAs, copy of CBA or Certificate of CBA Registration, 

as verified and validated by the NCMB staff;

948 


4. Copy of Submission Agreement; 

5. In cases of reimbursement, proof of partial/full payment to the voluntary 

arbitrator; 

6. Waiver from the other party not availing of the subsidy 

All requests, accompanied by the aforementioned documents shall be filed with the 

appropriate Regional Branch of the NCMB. 

III. Amount of Subsidy 

A. As a rule, the amount of subsidy shall be FIFTEEN Thousand Pesos (P15,000.00) per 

case for all types of voluntary arbitration cases, EXCEPT as specified hereunder: 

1. TWENTY thousand pesos (P20,000.00) per case shall be provided if: 

a) The case is submitted under the Expedited Voluntary Arbitration Procedure 

as laid down in TVAAC Resolution No. 2, series of 1999. 

b) The case involves two or more issues independent of each other. 

c) The case involves bargaining deadlock regardless of the number of 

issues. 

2. Five thousand pesos (P5,000.00) shall be provided if the case is submitted 

under the FLAVAS program. 

The amount shall be disposed of as follows: 

a) P1,000.00 shall be paid to the office of the legal aid; 

b) P 500.00 shall be remitted to the PAVA Regional Chapter; 

c) P3,500.00 shall be paid to the voluntary arbitrator 

B. In instances where the case is settled through a compromise agreement entered into 

by the parties with the assistance of the Voluntary Arbitrator, full regular subsidy may be 

given to the parties should it appear to the satisfaction of the Board that the compromise 

agreement is not contrary to law, morals, good order and public policy and entered into in 

good faith and not solely for the purpose of claiming the subsidy. The subsidy under this 

provision can be availed of by the same parties only once. Any agreement which tantamount 

to a mere withdrawal of the case is excluded from coverage of this provision. 

C. If both parties avail of the subsidy, the applicable amount shall be applied in accordance 

with the sharing scheme of the parties per CBA provision. Should the sharing 

scheme provide for 60-40 or 70-30 or any sharing other than 50-50, for purposes of 

subsidy, the amount to be provided shall be reversed; the bigger amount will be applied to 

labor. In the absence of any scheme, the subsidy shall be applied equally. However, in no 

case shall the subsidy be more than the share of either party in the agreed fees of the 

arbitrator. 

IV. Supersession Clause


All other Resolutions inconsistent with this Resolution are hereby superseded. 

V. Approval of the Guidelines 

These guidelines shall be subject to the approval of the Secretary of Labor and 

Employment. 

NOW, THEREFORE, the Tripartite Voluntary Arbitration Advisory Council has 

RESOLVED, as it is hereby RESOLVED, that the National Conciliation and Mediation 

Board shall observe and comply with the guidelines set forth herein as approved by the 

Secretary of Labor and Employment, in the administration of the Special Voluntary Arbitration 

fund and in the use of the voluntary arbitration subsidy. 



Chairman 











APPROVED: 


Secretary 

NATIONAL DAIRY AUTHORITY 


Administrative Order No. 02, S. 2006 

Dairy Cattle Farm Accreditation Program

950 


WHEREAS, by virtue of Executive Order No. 292, otherwise known as the 

ìAdministrative Code of 1987î, the Department of Agriculture is mandated with the planning, 

formulation, execution, regulation and monitoring of programs and activities relating 

to agriculture, food production and supply; 

WHEREAS, the Genetic Improvement Program (GIP), one of the major components 

of the Ginintuang Masaganang Ani Livestock Program (GMA-LP), aims to improve 

the countryís livestock breeder base, sustain cow-calf operations, increase milk production 

and improve the quality of milk produced; 

WHEREAS, by virtue of Section 3 and 4 of Department of Agriculture Administrative 

Order No. 9, Series of 2005 issued by then Secretary Arturo C. Yap, creating a 

Livestock and Poultry Farm Accreditation Program, the National Dairy Authority shall be 

the lead agency in the dairy cattle accreditation and shall serve as the Secretariat for the 

Dairy Cattle Farm Accreditation Program; 

WHEREAS, cognizant of the objective of sustaining superior and/or improved 

genetic makeup of dairy cattle, it is imperative that only accredited dairy cattle farms 

should be allowed to sell breeder stocks; 

WHEREAS, among the livestock industries, the dairy cattle industry is in most 

need to be strengthened and further developed; 

NOW, THEREFORE, I, DOMINGO F. PANGANIBAN, Secretary of the Department 

of Agriculture, do hereby order the accreditation of dairy cattle farms engaged in 

producing and selling breeder animals. To implement this task on a sustained basis, the 

following mechanisms are hereby created. 

SECTION 1. Objectives of the Program 

1. To identify, accredit and promote dairy cattle breeder farms with genetically-improved 

quality stocks to participate as input suppliers for government-financed or privately-financed 

projects that require accreditation; and 

2. To develop the dairy industry by ensuring availability and widespread distribution of 

good quality breeder stocks and the promotion of good dairy farming practices. 

SECTION 2. Institutional Arrangements 

There is hereby created in the Department of Agriculture, the Breeder Dairy 

Cattle Farm Accreditation Advisory Board (BDCFAAB), Zonal Technical Working Group 

(ZTWG) and Central Technical Working Group (CTWG) which shall be composed of the 

following: 

1. Breeder Dairy Cattle Farm Accreditation Advisory Board (BDCFAAB) 

Chairperson - Administrator, National Dairy Authority 

Members - Chairman-Dairy Confederation of the Philippines 

- 2 Representatives of Dairy Confederation of the Philippines 

from Islands other than that of Chairman


- Chairman, Dairy Training and Research Institute, 

UP Los BaÒos 

- Representative, Commercial Dairy Raisers Group 

Terms of Reference : The Breeder Dairy Cattle Farm Accreditation 

Advisory Board (BDCFAAB) shall provide the overall policy guidelines 

for the Program: and approve plans and policies pertinent to its implementation. 

The Advisory Board chairperson shall issue the accreditation 

certificate upon recommendation of the TWG involved and upon 

approval of the members of the Advisory Board. 

2. Zone Technical Working Group (ZTWG) 

The Zonal Technical Working Group shall be regionalized; to composed of the 

concerned NDA-Regional Roving Veterinarian, the NDA-Project Development Officer IV 

assigned to the farm being evaluated for accreditation and a Guest Evaluator from another 

NDA Island Office. 

Terms of Reference: The Zonal Technical Working Group is responsible for the 

actual evaluation of breeder farms and recommends measures/amendments on the criteria 

and procedures of accreditation as maybe necessary; provided that all amendments 

must be approved by the Advisory Board. The accomplished evaluation form shall be 

forwarded to the Secretariat for final evaluation/assessment by the Advisory Board. 

3. Central Technical Working Group (CTWG) 

The NDA Central Office Technical Working Group shall serve as the Secretariat for 

the Program. The technical working group shall be composed of the Head and two (2) 

members of the Technical Working Group with the designated Manager of the NDA 

Operations Manager as Technical Adviser. 

Terms of Reference: The Central Technical Working Group send notices of renewal 

to accredited farms and acts as repository of all data pertinent to the Program. The 

CTWG also provides application forms to the ZTWG and Dairy Cattle Associations in the 

Region, conducts preliminary evaluation and schedules farm visit (farm evaluation), in 

coordination with the ZTWG. 

SECTION 3. Details of Implementation 

1. Legal Requirements 

A Dairy Cattle Farm must be a member of/or a dairy cooperative registered 

with the Cooperative Development Authority or a private dairy farm duly 

registered with the SEC and recognized by the NDA. 

2. Minimum Technical Requirements and Criteria for Evaluation 

Criteria Multiplier Farm Commercial Farm 

Pedigree 1. Bull or Same

952 


2. A.I. 

Cow-with pedigree 

Minimum No. of Animals 10 head (any dairy breed) 40 head (any 

dairy breed) 

Cleanliness (20%) Farm Area Same 

Feeding Troughs 

Animal Shed 

Loafing Area 

Milking Parlor 

Milking Hygiene, Health Wipe cloth per animal Same 

and Waste Control Teat dip/spray 

Practices (30%) CMT testing done 

Supply and use of Sanitizer 

Proper housekeeping 

Water treatment 

Waste Control 

Farm Resources (25%) Water resource Same 

Power 

Forage and/or Pasture 

Feeds 

Farm tools, Equipment and 

Cooling facilities 

Farm Records (25%) Milk Production Same 

Breeding Record 

Pregnancy Record 

Calving Record 

Animal Health Record 

Farm income and expenses 

a. For farms practicing A.I., semen used should be registered with the 

BAIís UNAIP for traceability and assigned a unified animal ID by the 

Central Data Management Unit (CDMU) of BAI. 

b. Bulls should come from accredited multiplier farms or imports/AI and 

with proper animal identification for traceability. 

3. Farm Classification 

Farms are classified into different groups according to the scores they get 

after evaluation: 

Class A12 - 96-100% 

Class B9 - 86-95% 

Class C - 76-85% 

Class D - 66-75%


4. Validity 

Accreditation shall be granted to all Class A farms at one (1) year validity 

and Class B farms at 9 months validity. Accreditation is renewable upon 

expiry. Spot inspection maybe conducted by NDA or any member of the 

ZTWG anytime within the period. Accreditation maybe suspended/withheld/ 

cancelled for failure to comply with the minimum technical requirements of 

this Order. 

5. Fees 

On the initial year of implementation, accreditation and evaluation fees will 

be free. Starting 2007, the renewal fee will be P1,500 which is equivalent to 

recovering the cost of administering the accreditation. As an incentive, 

Class A12 farms will be given a 50% discount in renewal fee, while Class B9 

farms will be given 25% discount. Class C and D farms will be charged the 

full amount. Proceeds from the Accreditation Program (accreditation fees) 

shall be deposited under a sub-account of the Philippine Livestock Promotion 

Fund (Sec. 9, RA 1578). This sub-account fund shall be managed by 

the NDA and shall be used to sustain the activities of the program such as 

conduct of advisory boards and consultative meetings and farm evaluation, 

subject to usual government accounting rules and regulations. 

6. Implementation and Monitoring 

The Zonal Technical Working Group shall be responsible for the monitoring 

of Accredited Dairy Cattle Farms and provide the DCFAPB thru the CTWG 

with status reports on a regular basis. 

7. Procedures for Accreditation (6 days processing time) 

Working days 

a. Submission of duly accomplished Form to the 1 

Secretariat of ZTWG 

b. Farm visit and evaluation by the ZTWG 2 

c. Action by the NDA Administrator (approval/disapproval) 1 

d. Recommendation of ZTWG to the Advisory Board 1 

e. Issuance of Accreditation Plate and Certificate 1 

This Order shall be in effect unless revoked. 



Secretary

954 


NATIONAL MEAT INSPECTION SERVICE 


Memorandum 

Full Implementation of DA AO 26, Series of 2005 

The Department of Agriculture, after amending the Annex ìCî of Administrative 

Order No. 26, series of 2005, will proceed with the full implementation of said AO on June 

15, 2006. 

As such, REDs are advised to inform all Veterinary Quarantine Officers/Inspectors 

assigned at the ports of entry in their region to observe among others the following 

provisions in the implementation of this AO: 

Section VIII.C.3. Reseal the container van/s carrying the meat and/or 

meat products; 

4. Issue and sign the Veterinary Quarantine and Meat Inspection and 

Laboratory Certificate (VQMILC) (attached as Annex ìCî) and stamp 

ìINSPECTED AND PASSED FOR TRANSFER TO NMIS ACCRED- 

ITED COLD STORAGEî on the authentic copy of BOC import documents/entries; 

5. Issue official receipt for the payment of necessary DA inspection 

fees; and 

6. Endorse the original VQMILC and the shipment to NMIS for meat 

inspection and/or laboratory analysis, as required. 

NMIS Regional Directorís are likewise advised to implement the following: 

Section VIII.D.1. Immediately designate and dispatch an NMIS Inspector and 

conduct meat inspection within 24 hours; 

2. Check and verify the integrity of the VQMILC and BAI seal; 

4. Sign the VQMILC that was endorsed by BAI VQO if the NMIS inspection 

and/or laboratory test results are satisfactory. 

It is further reiterated that no other revision was made in this AO except for Annex 

ìCî. Please find the attached copy of 1) DA Administrative Order No. 4*, series of 2006, 

Amendment of Annex ìCî of DA AO No. 26,* series of 2005 (VETERINARY QUARAN- 

TINE AND MEAT INSPECTION AND LABORATORY CERTIFICATE); and 2) DA Administrative 

Order No. 26*, series of 2005. 

*Not included.


Please advise your veterinary quarantine officers and NMIS meat plant officers 

to remind the importers/brokers/agents and/or representatives to return the fully accomplished 

VQMILC (original copy) to the BOC for final liquidation of importation documents. 

Also, in the event that a shipment in an accredited cold storage is requested to 

be inspected beyond the regular operating hours, please inform the importers to refer to 

Memorandum Circular No. 05-2005-6, Series of 2005, ìGuidelines on the Extended Operation 

Scheme of Meat Establishments Providing Overtime compensation to NMIS Plant 

Officers Assigned Thereatî. (copy hereto attached)* 

It is essential that close coordination be in place at all times between DA RFU 

quarantine officers and DA NMIS meat plant officers to ensure that the regulation is 

properly implemented with the least inconvenience to legitimate business. Likewise, an 

open communication with the affected sector must be maintained in anticipation of probable 

issues arising during implementation particularly in its initial stages. 

Attached herewith also is the Import Procedure Flow Chart.** 

For your guidance and compliance. 



Secretary 

NATIONAL TELECOMMUNICATIONS COMMISSION 


Memorandum Circular No. 02-06-2006 

Guidelines for the Grant and Authorization of 

500 Watt FM Broadcast Stations 

Whereas, pursuant to Executive Order (E.O.) No. 546, Series of 1979, the National 

Telecommunications Commission (NTC) is vested with the power to promulgate rules and 

regulations, as public safety and interest may require, to encourage a larger and more 

effective use of communications, radio and television broadcasting facilities, and to maintain 

effective competition among private entities; 

Whereas, current Technical Standards and Operating Requirements for FM Broadcast 

stations require that the minimum transmitter power for Class B stations should be 

one (1) kilowatt; 

*Not Included. 

** Text Available at Office of the National Administrative Register, U.P. Law Complex, 


956 


Whereas, the establishment of FM broadcast stations using transmitters with power 

of less than one (1) kilowatt allow localities to have broadcast service(s) with programming 

that recognizes their local needs and preferences and focuses on local or community 

news, issues and concerns; 

Whereas, noting further the geography and physical terrain characteristics of our 

country, and given the thrust of the National Government to provide wider access to news, 

entertainment, information, and education specifically to the unserved and underserved 

areas of our country, the use of transmitters with power of less than one (1) kilowatt is 

necessary and desirable for the purpose of achieving the above objectives; 

WHEREFORE, this Commission, pursuant to E.O. 546, s. 1979 and Act 3846, as 

amended, hereby set forth the following guidelines for the grant and authorization of 500 

Watt FM broadcast stations: 

1. Section 4.2, Class B station, of the Technical Standards and Operating Requirements 

for FM Broadcast stations is hereby amended to include Class B-1 as a commercial FM 

Broadcast station. Consequently, said section shall read as follows: 

Class B - Station 

A Class-B station shall have an authorized transmitter power of not exceeding 

10 kilowatts and an Effective Radiated Power (ERP) of not exceeding 30 

kilowatts, and limited in antenna height of 500 feet above average terrain. The 

minimum transmitter power shall be 1 kilowatt (KW). 

A Class B-1 station is a commercial station having an authorized Effective 

Radiated Power (ERP) not exceeding five (5) kilowatts and in no case lower 

than one kilowatt; and with an authorized transmitter power output of 500 

watts; antenna height shall be limited to 200 feet above average terrain 

2. ìESTABLISHED SERVICE AREASî is defined herein as the SERVICE AREAS where 

Class ìAî or Class ìBî stations have been established prior to the establishment of a 500 

Watt (Class B-1) FM station. 

3. Only Class ìAî or Class ìBî FM broadcast stations, as defined in Section 4 of the 

Technical Standards and Operating Requirements for FM Broadcast Stations, shall be 

allowed to operate in ìESTABLISHED SERVICE AREASî. The list of ìESTABLISHED 

SERVICE AREASî is hereto attached as Annex ìAî and made integral part hereof. 

4. Class B-1 stations shall be allowed to operate in areas outside of the ìESTABLISHED 

SERVICE AREAî as defined in Item No. 2 of this Memorandum Circular. 

5. New and pending applications for 500 Watt (Class B-1) FM stations shall be evaluated, 

for compliance with existing Technical Standards for protection ratios, as Class ìBî applications, 

provided that the same shall not be put up in ìESTABLISHED SERVICE AREASî 

as defined in Item No. 2 of this Memorandum Circular. 

6. Existing 500 Watt (Class B-1) FM broadcast stations located in ìESTABLISHED SER- 

VICE AREASî shall be required to operate in accordance with the existing Technical


Standards for Class ìAî or Class ìBî stations. These stations shall be allowed continued 

operation after validating the technical feasibility of the same. 

7. When a 500 Watt (Class B-1) FM broadcast station has been licensed to operate in a 

service area prior to the establishment of any Class ìAî or Class ìBî station in its service 

area, the same shall be allowed to continue operating as a 500 Watt station. This area 

shall not be considered as an ëESTABLISHED SERVICE AREAî as defined in Item No. 2 

of this Memorandum Circular. 

8. All other classifications and requirements for FM Broadcast Stations as provided for 

in Section 4 of the Technical Standards and Operating Requirements for FM Broadcast 

Stations shall be strictly observed. 

9. The 800 Khz minimum frequency separation requirement for FM broadcast stations 

having the same service area shall be strictly observed. 

10. A maximum of two hundred (200) Low Power FM (500 Watt) radio broadcast stations 

shall be allowed to be established nationwide. However, the Commission may opt to 

review this cap as the circumstances warrant. 

11. For any geographical region, only a maximum of thirty (30) Low Power FM (500 Watt) 

radio broadcast stations may be operated. 

12. All classes of FM stations shall be protected up to the 1mV/m or 60 dBu contour as 

provided for in Section 4.5 of the Technical Standards and Operating Requirements for 

FM broadcast stations. 

13. Radio broadcast networks applying for authority to operate additional FM radio broadcast 

stations under this Memorandum Circular must show proof of financial capacity in 

support of the proposed network expansion. 

Any Circular, Order or Memorandum or parts thereof inconsistent herewith are 

deemed superseded and/or amended accordingly. 

This Circular shall take effect fifteen (15) days after publication in a newspaper of 

general circulation and three (3) certified true copies furnished the UP Law Center. 


(SGD.) RONALD OLIVAR SOLIS 

Commissioner 

(SGD.) JORGE V. SARMIENTO (SGD.) JAIME M. FORTES, JR. 

Deputy Commissioner Deputy Commissioner

958 


OFFICE OF THE GOVERNMENT CORPORATE COUNSEL 


Rules Governing the Exercise by the Office of the Government Corporate 

Counsel (OGCC) of its Functions and Powers as Principal Law Office of All 

Government Owned or Controlled Corporations 

Pursuant to the provisions of Section 10, Chapter 3, Title III, Book IV of the 

Administrative Code of 1987 and Presidential Decree No. 242, and the relevant provisions 

of Republic Act No. 9285, the Alternative Dispute Resolution Act of 2004, the 

Government Corporate Counsel hereby promulgates the following rules to efficiently discharge 

its functions and powers as principal law office of all government owned or controlled 

corporations, their subsidiaries, other corporate offsprings and government acquired 

asset corporations and effectively exercise its power of control and supervision 

over all legal departments maintained separately by them. 

PART ONE 


RULE 1 

TITLE AND CONSTRUCTION 

SECTION 1.1. Title of the Rules.- These Rules shall be known and cited as the 

OGCC Rules. 

SEC. 1.2. Applicability.- These Rules shall apply to all matters/cases properly 

brought or referred to the OGCC for advice or representation, as well as to disputes, 

claims and controversies between or among government owned or controlled corporations. 

SEC. 1.3. Construction.- These Rules shall be liberally construed in order that 

justice may be administered in an efficient, effective, equitable, just, speedy and inexpensive 

manner. 

RULE 2 

DECLARATION OF POLICY 

It is hereby declared the policy of the Office of the Government Corporate Counsel 

(OGCC) to efficiently discharge its functions and powers as principal law office of all 

Government Owned or Controlled Corporations (GOCCs), their subsidiaries, other corporate 

offsprings and government acquired asset corporations as well as to promote and 

encourage the resolution and settlement of disputes, claims and controversies between 

or among government offices, agencies and instrumentalities, including GOCCs, through 

the appropriate mode such as arbitration, negotiation and/or mediation/conciliation, even 

if there is a private person or entity involved, always bearing in mind that in the ultimate 

analysis, there is only one predominant real party-in-interest namely, the Government 

that is instituted to serve the welfare of the Filipino people.


For purposes of these Rules, the term ìGovernment Owned or Controlled Corporations 

(GOCCs)î refers to a corporation organized as a stock or non-stock corporation 

vested with functions relating to public needs, whether governmental or proprietary in 

nature, and owned by the National Government directly or through its instrumentalities 

either wholly or, where applicable as in the case of stock corporations, to the extent of at 

least fifty-one percent (51%) of its capital stock. This term shall also include subsidiaries, 

offsprings, acquired asset corporations, and other government entities of which the OGCC 

is the principal law office. 

SECTION 3.1. Powers.- 

RULE 3 

POWERS OF THE OGCC 

3.1.1. As principal law office and as supervisor. - The OGCC, as principal law office 

exercising control and supervision over the law departments separately maintained by the 

GOCCs, shall have the following powers: 

a) Represent GOCCs in the litigation of appropriate cases brought before the 

courts or quasi-judicial bodies in the Philippines or abroad in accordance with 

Rule 5 hereof; 

b) Review, revise or modify, as the case may be, all contracts referred by 

GOCCs, as required by law, to make the same conform with existing laws and 

applicable government rules and regulations, and/or to prepare such contracts 

when so requested in appropriate cases in accordance with Rule 6 

hereof; 

c) Render legal opinions, as required by law, on all important legal questions 

referred by the GOCCs in accordance with Rule 6 hereof; 

d) Mediate or arbitrate under P.D. 242, in relation to relevant provisions of 

R.A. 9285 and the Administrative Code of 1987, appropriate disputes, claims 

and controversies between or among GOCCs in appropriate cases in accordance 

with Part III hereof; 

e) Investigate and, in appropriate cases, hear administrative disciplinary cases 

involving all officials and employees of GOCCs upon the request of the latter in 

accordance with Rule 7 hereof; 

f) Conduct periodic performance audit of the legal departments maintained 

by the GOCCs; 

g) Require the legal departments of GOCCs to submit periodic reports of work 

performed and/or accomplished; 

h) Conduct fact-finding and preliminary investigation in appropriate referred 

cases;

960 


i) Enjoin GOCCs from hiring private lawyers or law firms to represent them or 

to be their legal retainers except upon the conditions stated in Rule 9 hereof; 

j) Impose or recommend appropriate administrative or disciplinary sanctions 

against erring lawyers in the legal departments of GOCCs in accordance with 

Rule 7 hereof; and 

k) Promulgate rules and regulations and exercise such other powers as may 

be necessary or proper to effectively implement its mandate. 

In exercising its power of administrative supervision over the legal departments of 

the GOCCs, the OGCC shall: 

a) ensure that the legal positions adopted by GOCCs are not in conflict with 

each other or the national government position; 

b) hold regular consultations with the concerned GOCC on the referred case/ 

s to ensure satisfactory collaborative formulation of legal strategies and evidence 

presentation and on relevant legal matters; and 

c) formulate and conduct capability-building programs. 

3.1.2 Power to enforce the Property Insurance Law. - The OGCC, upon its own initiative, 

shall have the power to enforce the Property Insurance Law pursuant to Republic Act 

No. 656, as amended by Presidential Decree No. 245, in domestic or international transactions. 

3.1.3 Power to make assessments and to receive attorneyís fees. ñ 

a) In addition to the regular assessment mentioned in Sec. 4 of P.D. 1415, the 

Government Corporate Counsel is authorized to make special assessments 

upon GOCCs serviced by its office, to meet contingencies, obligations, and 

undertakings necessary to maintain and promote the efficiency of the service. 

b) The OGCC is authorized to receive attorneyís fees adjudged in favor of 

client GOCCs in judicial proceedings handled by the OGCC. These attorneyís 

fees shall accrue to a special fund of the OGCC, and shall be deposited in an 

authorized government depository as a trust liability and shall be made available 

for expenditure without the need for a cash disbursement ceiling, for 

purposes of upgrading facilities and equipment, granting of employeesí incentive 

pay, and other benefits, and defraying such other incentive expenses 

not provided for in the General Appropriations Act as may be determined by 

the Government Corporate Counsel. (Sec. 10, Chapter 3, Title 3, Book 4, 

Administrative Code of 1987) 

SEC. 3.2. General guidelines for exercise of power. - The OGCC, in exercising 

its powers, shall be guided by due considerations of the universal principles of fairness, 

justice, the rule of law and the welfare of the Filipino people.


PART TWO 

RULES OF THE OGCC 

RULE 4 

ORGANIZATIONAL SET-UP 

SECTION 4.1. Composition. ó Unless otherwise provided by law, the Office 

of the Government Corporate Counsel (OGCC) shall be composed of the Government 

Corporate Counsel (GCC), One Deputy Government Corporate Counsel (DGCC), Ten 

(10) Assistant Government Corporate Counsels (AGCCs), all of whom shall be appointed 

by the President of the Philippines. All other members of the legal staff of the OGCC shall 

be appointed by the Government Corporate Counsel, the numbers and ranks of which 

shall be as follows: Ten (10) Government Corporate Attorney IV (GCA-IV), Fourteen (14) 

Government Corporate Attorney III (GCA-III), Seventeen (17) Government Corporate 

Attorney II (GCA II), Four (4) Government Corporate Attorney I (GCA I), One (1) Associate 

Government Corporate Attorney II, and One (1) Associate Government Corporate 

Attorney I. 

SEC. 4.2. Administrative staff. ó The Office of the Government Corporate 

Counsel shall be supported by an administrative staff all of whom shall be appointed by 

the Government Corporate Counsel and shall consist of the following personnel: secretarial 

pool, records management, messengerial, library, supply & property, utilities, accounting 

& finance, human resources and management, paralegal and such other personnel 

as the exigency of the service may require. 

SEC. 4.3. Organization into teams. óUnless otherwise determined by the Government 

Corporate Counsel, the Legal Staff shall be divided into teams, each to be 

headed by an AGCC as team leader. The classification of the teams shall include, but 

shall not be limited to: (1) Gaming & Allied Services; (2) Ecozones; (3) Information & 

Energy; (4) Environment & Water; (5) Banking & Finance; (6) Transportation, Communication 

& Infrastructure; (7) Agriculture & Trade; and (8) Housing & Urban Development. 

4.3.1 Each team leader shall be designated by the Government Corporate 

Counsel and shall be directly responsible for the supervision of the members 

of his/her team. The Government Corporate Counsel, assisted by 

the Deputy Government Corporate Counsel, shall have over-all direct 

supervision and control over all the Teams. 

4.3.2 Special Project Teams may be created by the Government Corporate 

Counsel as the need arises. 

SEC. 4.4. Arbitration and mediation group. ó A special group tasked to handle 

cases for arbitration or mediation shall be formed or organized from among the members 

of the various teams. Members of the legal staff who are duly accredited arbitrators and/ 

or mediators shall automatically become members of the Arbitration and/or Mediation 

team. 

SEC. 4.5. Special assignments. ó When the exigency of the service requires, 

any member of the OGCC legal staff may be assigned or designated to the client GOCC 

as a corporate officer or to perform additional or special tasks; provided, that the Govern-

962 


ment Corporate Counsel approves the assignment or designation. In such cases, the 

designated legal officer shall be entitled to receive such additional compensation and 

privileges as may be granted him/her by the GOCC concerned. 

RULE 5 

PROCEDURES AND POLICIES IN HANDLING CASES 

SECTION 5.1. Policies in accepting referred cases. 

5.1.1 The OGCC shall accept only important cases that are referred by the GOCC and 

other client entities. Importance may be inferred from issues that: 

a) affect the GOCCs charter/mandate or their operations; 

b) involve questions of law; 

c) raise novel questions that may involve new jurisprudence and legal policy; 

and 

d) raise other matters that the Government Corporate Counsel may deem 

important. 

5.1.2 In cases where the GOCC has no legal department, all legal matters/cases shall 

be referred to the OGCC for its appropriate action, except in cases where the engagement 

of a private lawyer has been authorized in accordance with Rule 9 hereof. 

5.1.3 The OGCC shall accept only cases that have been officially endorsed by the 

GOCC through its duly authorized representative. 

5.1.4 The OGCC shall act on referred civil and criminal cases only if the following are 

forthwith submitted or complied with: 

a) detailed historical background of the case; 

b) photocopies of pertinent documents; 

c) the names of focal officials knowledgeable about the case; and 

d) payment of the pertinent legal fees and other costs or a written undertaking 

to pay the same. 

5.1.5 Any referral of cases not in accordance with Section 5.1.4 may, at the discretion 

of the Government Corporate Counsel, be returned to the concerned GOCC without 

action. 

5.1.6 The OGCC may, in exceptional cases and for cases that do not meet the standards 

of importance as indicated in Section 5.1.1 above, designate the legal department 

of the client GOCC as its handling counsel, subject always to its control and supervision. 

For this purpose, the GOCCís legal department shall submit periodic reports of said


cases. No compromise agreement may be entered upon by said handling counsel unless 

approved by the OGCC. 1 

SEC. 5.2. Assignment of cases. ñ A request for the handling of cases from 

GOCC shall be coursed through the Government Corporate Counsel who shall assign the 

case to the appropriate team or to any member of the legal staff. 

RULE 6 

OPINIONS AND CONTRACT REVIEW 

SECTION 6.1. Requests for legal opinion and contract review. ñ Requests for 

legal opinion and contract review shall be signed by the Head of the GOCC or its duly 

authorized representative. 

6.1.1 Requests for legal opinion shall, as far as practicable, state the position already 

taken by the GOCC concerned on the issue/s posed for opinion. A proposed contract 

transmitted for review shall be submitted in clear legible hard copy together with a soft 

copy thereof. The transmittal letter shall contain background information on all relevant 

circumstances and transactions that led to its preparation. 

6.1.2 In reviewing the proposed contract or in drafting the opinion, the OGCC 

shall be guided by the following considerations: 

a) consistency with the economic policies and priorities of the Government, 

particularly those formulated by the National Economic and Development Authority 

(NEDA); 

b) compliance with GOCCís charter or law of its creation and does not violate 

the Constitution, any law, public order, public policy, morals, good customs, or 

is not prejudicial to a third person with a right recognized by law; and 

c) is otherwise fair to all concerned. 

6.1.3 A signed contract shall not be acted upon unless there is a provision therein 

which states that the same shall be subject to review by the OGCC and any amendment or 

revision made by the OGCC shall be deemed incorporated therein. 

SEC. 6.2. Report on action taken. ñ The OGCC may require the legal department 

or officer of the client GOCC to submit proof of compliance with or any action taken 

in relation to the review or opinion. 

SEC. 6.3. Requests for reconsideration. ñ Requests for reconsideration of opinions 

and contract reviews shall be acted upon only if filed by the requesting client GOCC 

within fifteen (15) days from receipt thereof. Such request shall be signed by the Head of 

the GOCC or its duly authorized representative and shall clearly state the grounds relied 

upon. As a general rule, the request for reconsideration shall be assigned to the lawyer 

who drafted the original opinion or contract review. 

1 Landbank of the Philippines vs, Panlilio- Luciano, G.R. No. 165428, July 13, 2005; 

Landbank of the Philippines vs. Heirs of Fernando Alsua, G.R. No. 167361, September 

28, 2005.

964 


SEC. 6.4. Requests for copies of opinions and contract reviews by non-client 

GOCCs or private persons or entities. ñ In accordance with the provisions of Section 3, 

Rule IV of R.A. 6713, otherwise known as the ìCode of Conduct and Ethical Standards 

for Public Officials and Employees,î the OGCC shall provide copies of its opinions, 

contract reviews or other official information and records to any private person or entity 

requesting the same, except if: 

a) such opinion, contract review, information or record must be kept secret in 

the interest of national defense or security or to the conduct of foreign affairs; 

b) such disclosure will put the life and safety of an individual in imminent 

danger; 

c) the opinion, contract review, information or record sought falls within the 

concepts of established privilege or recognized exceptions as provided by 

law or settled policy or jurisprudence; 

d) such opinion, contract review, information or record comprises of drafts only 

of such opinion, review, information or record; 

e) it would disclose information of a personal nature where disclosure would 

constitute a clearly unwarranted invasion of personal privacy; and 

f) other instances accepted by R.A. 6713. 

Unless officially endorsed by the client GOCC concerned or otherwise approved 

by the Government Corporate Counsel, requests for copies of opinions and contract 

reviews by parties other than the client-GOCC concerned and private persons or entities 

shall be granted subject to the provisions of R.A. 6713 and its IRR. 

RULE 7 

PROCEDURE ON ADMINISTRATIVE DISCIPLINARY CASES 

SECTION 7.1. Disciplinary cases involving GOCC employees. - The Office of 

the Government Corporate Counsel may, upon request by the head of the GOCC, handle 

administrative cases referred by client corporations. 

7.1.1 Application of Rules. - The internal rules of the client GOCC, if available, shall 

apply in the conduct of administrative cases referred to the OGCC. Otherwise, the Civil 

Service Rules on administrative cases shall govern the procedure for client GOCCs with 

original charters. 

7.1.2 Assignment. ñ 

a) As Prosecutor. - Upon request of the GOCC for a lawyer from the OGCC to 

prosecute an administrative case, the Government Corporate Counsel may 

assign a Government Corporate Attorney (GCA) who is a member of the team 

assigned to the GOCC concerned. The Government Corporate Counsel may 

delegate the assignment of a lawyer to the DGCC or to the team leader.


b) As Hearing Officer. - Upon the request of the GOCC, the Government 

Corporate Counsel may assign a Hearing Officer to investigate the administrative 

case. However, the assignment may be made to a lawyer who is not a 

member of the team assigned to the particular requesting GOCC in order to 

ensure impartiality, unless the composition of the hearing panel has been 

specifically agreed upon between the OGCC and the GOCC concerned. The 

assignment of a hearing officer may be delegated by the Government Corporate 

Counsel to the DGCC. 

7.1.3 Period to conduct administrative cases. ñ 

a) As Prosecutor. - The GCA assigned as prosecutor shall endeavor to terminate 

presentation of his/her evidence within a reasonable time. 

b) As Hearing Officer. - The GCA assigned as hearing officer shall terminate 

the proceedings within thirty (30) days from receipt of the complete records of 

the case. He shall have fifteen (15) days from termination of proceedings to 

submit the formal investigation report and his recommendations to the referring 

GOCC through the Government Corporate Counsel. Said periods may be 

extended for justifiable reason. 

Venue of Administrative Cases. ñ 

a) The venue for every hearing and conferences of all administrative cases 

shall, as far as practicable, be held at the OGCC offices. 

b) Out-of-town hearings and conferences shall be allowed only upon agreement 

of the parties concerned as to expenses and disbursements involved 

taking into consideration cost-benefit or other justifiable reasons. 

c) Transmittal of report. - The formal investigation report prepared by the 

hearing officer shall be endorsed by the Government Corporate Counsel for 

transmittal to the proper disciplining authority of the requesting GOCC. 

SEC. 7.2. Disciplinary cases involving OGCC employees. ñ 

7.2.1 Application of Rules. - The Civil Service Rules on administrative cases shall 

govern the conduct of cases involving disciplinary action filed against erring personnel of 

the OGCC. 

7.2.2 Assignment of hearing officer/panel. - The Government Corporate Counsel shall, 

in his/her discretion, designate a hearing officer or constitute a hearing panel which will 

be tasked to hear the disciplinary action against an erring OGCC personnel. The Government 

Corporate Counsel shall further designate a prosecuting officer from among the 

members of the Legal staff for said purpose. 

RULE 8 

RULE ON CRIMINAL CASES

966 


SECTION 8.1. Limited representation. - ñUpon due request, the OGCC shall handle 

only criminal cases filed by the complaining GOCCs against any party 2 . 

SEC. 8.2. Extent of legal assistance. - The OGCC shall represent the complaining 

GOCC in all stages of the criminal proceedings. The legal assistance extended is not 

limited to the preparation of appropriate sworn statements but shall include all aspects of 

an effective private prosecution including recovery of civil liability arising from the crime, 

subject to the control and supervision of the public prosecutor. 

RULE 9 

PROHIBITION FROM HIRING PRIVATE LAWYERS 

SECTION 9.1. General rule prohibiting the hiring of private lawyers.- All GOCCs 

are enjoined from hiring private lawyers or law firms to handle their cases and legal 

matters for the reason that the OGCC is expressly mandated by law to be the principal law 

office of all GOCCs. 

SEC. 9.2. Exception to general prohibition.- Notwithstanding the foregoing prohibition 

stated in Section 9.1.above, the GOCC may engage private counsel in exceptional 

cases upon prior approval of the OGCC and with the written concurrence of the 

Commission on Audit (COA). 3 

9.2.1 Considerations in hiring private lawyers. - In determining whether or not to 

approve such hiring, the Government Corporate Counsel may consider the following 

circumstances, in addition to the nature of the case, among others: 

a) the absence of a legal department or legal officer when the exigencies of 

service so requires; 

b) the venue is in a distant province and the hiring of a local lawyer in that 

province would entail less expenses than in sending an OGCC lawyer to handle 

the case; 

c) the nature of the case requires immediate attention; 

d) the expertise or capability of the proposed private counsel in a particular 

field is well known or respected, and the hiring of the same will facilitate the 

completion of the negotiation or termination of proceedings thereof; and 

e) in highly exceptional cases as may be determined by the Government Corporate 

Counsel 

PART THREE 

RULES ON ALTERNATIVE DISPUTE RESOLUTION (ADR) 

2 OGCC order no. 026; Urbano v. Chavez, 183 SCRA 347. 

3 Presidential Memorandum Circular No. 9 dated 27 August 1998, and as ruled in 

PHIVIDEC Industrial Authority and Adaza vs. Capitol Steel Corporation, G.R. No. 155692, 

October 23, 2003.


RULE 10 


SECTION 10.1. Definition of terms. ñ 

10.1.1 Alternative Dispute Resolution (ADR) means any process for resolving a dispute 

or controversy other than by judicial adjudication. These include Mediation, Arbitration, 

or Early Neutral Evaluation. 

10.1.2 Arbitration is a process by which a neutral third party resolves a dispute by 

rendering an award. 

10.1.3 Mediation is a voluntary process by which a neutral third party facilitates communication 

and negotiation, and assists the parties in reaching a voluntary agreement in 

resolving their dispute. 

10.1.4 Early Neutral Evaluation is a process of assessing on a non-binding basis the 

strengths and weaknesses of each partyís case for the purpose of serving as basis for a 

compromise agreement. 

10.1.5 Arbitral tribunal means a sole arbitrator or a panel of three (3) arbitrators. 

SEC. 10.2. Authority to conduct ADR. ñ Pursuant to Presidential Decree No. 

242 in relation to Section 71, Chapter 14, Title I, Book III of Executive Order (E.O.) No. 

292, the Administrative Code of 1987, in conjunction with Sections 10 and 11, Chapter 3, 

Book VII of said Code, the OGCC shall, in the public interest, encourage settlement 

through early neutral evaluation, mediation and/or arbitration to resolve disputes, and is 

accordingly vested with authority to settle claims, disputes, and controversies involving 

GOCCs the legal departments of which are under its control and supervision. 

SEC. 10.3. Choice of appropriate mode. ñ Consistent with the declared policy 

under Rule 2 above, the Government Corporate Counsel shall choose the most appropriate 

mode of dispute resolution according to the nature of the interests involved. 

SEC. 10.4. Selection criteria. - Disputes involving constitutional issues, public 

order, public policy, morals, principles of public exemplarity or other matters of public 

interest shall be resolved through adjudication. All others may be the subject of a compromise 

agreement secured through negotiation, mediation/conciliation or other alternative 

mode of dispute resolution, except those that by law cannot be the subject of a 

compromise. 

SEC. 10.5. Application and interpretation. - In applying and construing the provisions 

of these ADR Rules, consideration must be given to the state policy ìto actively 

promote party autonomy in the resolution of disputesî 4 and the need ìto promote candor 

of parties and mediators through confidentiality of the mediation process, the policy of 

fostering prompt, economical and amicable resolution of disputes in accordance with 

principles of integrity of determination by the parties, and the policy that the decisionmaking 

authority in the mediation process rests with the parties.î 5 

4 Section 2, RA 9285 

5 Section 8, RA 9285

968 


RULE 11 

PROCEDURE IN MEDIATION 

SECTION 11.1. Coverage. ñ The rules on mediation shall apply to all disputes, 

claims, and controversies, including incipient ones and those ongoing or pending cases 

with the OGCC, between or among GOCCs that do not involve constitutional issues, 

public order, public policy, morals, principles of public exemplarity or other matters of 

public interest, which cases are better resolved by adjudication, provided that the involvement 

of a private third party, which is indispensable to the final resolution of the dispute, 

will not preclude the application of these Rules. 

SEC. 11.2. Preliminary determination. ñ The Government Corporate Counsel 

shall, after evaluating the nature of the dispute, determine whether it is mediatable under 

the criteria set forth in Section 11.1. 

SEC. 11.3. Preliminary mediation conference. - Following such determination, 

the Government Corporate Counsel, or his/her duly designated Deputy or Assistant, shall 

direct the parties, through their duly authorized representative, to appear before the 

assigned AGCC, for a preliminary mediation conference specifying the date, time and 

place. 

The representatives of the parties appearing before the OGCC panel in mediation 

proceedings must be fully authorized to appear, negotiate and enter into 1) a stipulation 

of facts; and 2) a compromise agreement. For this purpose, an appropriate Board 

Resolution and/or Special Power of Attorney issued by each of the parties shall be 

submitted to the Mediator during the preliminary mediation conference. 

During such conference, the process and benefits of mediation shall be explained 

to the parties, together with an assessment of the risks and costs of pursuing 

litigation. An agreement to submit the dispute to mediation shall be signed by the parties 

through their duly authorized representatives. 

SEC. 11.4. Selection of mediator. ñ After agreeing to mediation, the parties 

shall, assisted by the assigned AGCC, select from among the list of accredited OGCC 

lawyer-mediators, who will be the Mediator of their dispute. If the parties cannot agree on 

a common choice, the assigned AGCC shall proceed to assign the Mediator. 

SEC. 11.5. Presence of lawyers. ñ Lawyers of the parties may attend the 

mediation proceedings and shall cooperate with the Mediator towards securing a settlement 

of the dispute. The Supreme Court Guidelines on the Role of Lawyers during 

Mediation Proceedings shall be observed. 6 

SEC. 11.6. Initial joint conference. ñ During the initial joint conference, the 

Mediator shall make an opening statement introducing himself/herself and informing the 

parties of the process flow, including the manner by which the proceedings will be conducted, 

and shall stress the confidentiality thereof as provided in Section 11.7 hereunder. 

6 A.M. No. 04-3-15-SC, 23 March 2004.


The parties shall each make an opening statement of how the controversy arose 

and their respective positions therein. 

After the statements made by the parties, the Mediator shall: 

a. draw out the partiesí underlying interests behind the legal issues and explore 

common ground for settlement; and 

b. suggest options for parties to consider, and if practical or necessary seek 

the assistance of a co-mediator or a technical expert, to help resolve the 

dispute. 

The parties, with the assistance of the Mediator, shall endeavor to resolve their 

dispute. 

If no settlement is reached at this conference, the Mediator may, with the consent 

of both parties, hold separate caucuses with each party to enable the Mediator to 

determine their respective real interests in the dispute. Thereafter, another joint conference 

may be held to consider various options, including assessment (on a non-binding 

basis) of the strengths and weaknesses of each partyís case, proposed by the Mediator 

to resolve the dispute. 

The Mediator shall not record the proceedings in any manner, although he may 

take down personal notes to guide him. 

The OGCC shall not keep a file of mediation proceedings, except the report of 

the Mediator. All other records or documents that may have been submitted by the parties 

during the mediation shall be returned to them. 

Thirty (30) working days after the initial mediation conference with no settlement 

having been reached, the mediation proceedings shall be terminated, unless the parties 

agree to further continue the mediation, in which case an extension of another thirty (30) 

working days may be granted by the Mediator, with the written approval of the Government 

Corporate Counsel. 

SEC. 11.7. Confidentiality. ñ The Mediation proceedings and all incidents thereto 

shall be kept strictly confidential, unless otherwise specifically provided by law, and all 

admissions or statements made therein shall be inadmissible for any purpose in any 

proceeding. 

Communications by one party to the Mediator during the separate caucuses that 

are not intended to be known by the other party or parties, including documents, reports, 

position papers, and affidavits, shall not be communicated or shown to the latter, unless 

permitted in writing by such party. However, evidence or information that is otherwise 

admissible or subject to discovery does not become inadmissible or protected from discovery 

solely by reason of its use in mediation. 

The parties shall not rely on or introduce as evidence in any other proceeding, 

the following matters:

970 


a. views expressed or suggestions made by the other party in respect of a 

possible settlement of the dispute; 

b. admissions made by either party in the course of the mediation proceedings; 

c. proposals for settlement suggested by the Mediator; and 

d. the fact that the other party had indicated willingness to accept any particular 

proposal for settlement expressed to the Mediator. 

No transcript or minutes of the mediation proceedings shall be taken, and the 

personal notes of the Mediator, if any, shall not be furnished any court, tribunal or body 

for whatever purpose. Any such transcript, minutes and notes shall be inadmissible as 

evidence in any other proceeding. 

SEC. 11.8. Successful settlement; compromise agreement. ñ Where parties 

agreed to a full or partial compromise, the Mediator shall see to it that the written terms be 

immediately drafted with the concurrence of the parties or counsel. And for this purpose, 

the OGCC shall provide legal assistance to their clients in the drafting of the compromise 

agreement. 

The final compromise agreement shall be signed by the parties through their duly 

authorized representatives together with their respective counsels. 

The approved compromise agreement may be converted into an arbitral award 

under R.A. 9285 which shall be submitted to the Secretary of Justice under Section 70, 

Chapter 14, E.O. 292 for his final approval. 

SEC. 11.9. Enforcement of mediated settlement agreements. ñ The rules for 

the deposit and enforcement of mediated settlement agreements provided by R.A. 9285, 

together with such implementing rules as may be promulgated by the Supreme Court, are 

hereby adopted. 

SEC. 11.10. Costs of mediation. ñ The costs of mediation shall be imposed by 

way of special assessment in accordance with the schedule hereto attached, as may be 

modified from time to time. 

RULE 12 

PROCEDURE IN ARBITRATION 

SECTION 12.1. Parties. ñ GOCCs which have claims, disputes or controversies 

with other GOCCs, including private individuals/entities that are indispensable to the final 

resolution of the dispute, may be parties to the arbitration proceedings. 

SEC. 12.2. Coverage. ñ The following cases between or among GOCCs, which 

were not earlier selected by the Government Corporate Counsel as appropriate for mediation, 

shall be submitted to the OGCC for adjudication through Arbitration: 

a) cases of first instance, where a petition for arbitration is filed;


b) cases forwarded or transmitted after a failed mediation; and 

c) matters referred by the Secretary of Justice. 

SEC. 12.3. How commenced. ñ A petition shall be filed by the aggrieved party 

with the OGCC in the form required under the following Section. 

SEC. 12.4. Form of petition. ñ The petition shall be verified and shall contain the 

following: 

a) names and addresses of the parties; 

b) the ultimate facts upon which the cause of action rests; 

c) signature of the head of the GOCC; and 

d) disclosure on whether the matter is pending before another forum. 

SEC. 12.5. Order to file an answer. - The Government Corporate Counsel shall 

issue an Order for the respondent/s to answer the petition within a period of ten (10) days 

from receipt thereof, attaching thereto all pertinent documents, and furnishing the claimant 

with a copy of the answer. Said answer shall contain facts admitted and those denied 

together with issues raised and defenses interposed. 

In the event of failure of the respondent to answer, the dispute may be resolved 

on the basis of the complaint and documents submitted. 

SEC. 12.6. Extension. ñ Except for the most serious reasons, no extension of 

time bars shall be allowed and if so allowed, the period of extension shall not exceed the 

original period. 

SEC. 12.7. Claim or defense based on documents. ñ Whenever a claim or 

defense is based upon a written instrument or document, the substance thereof shall be 

set forth in the petition or answer, and the original or a copy thereof shall be attached as 

an annex thereto. 

SEC. 12.8. Selection of an arbitral tribunal. ñ The Government Corporate Counsel 

shall assign from among the list of accredited OGCC lawyer-Arbitrators, those who will 

arbitrate the dispute. 

SEC. 12.9. Arbitration proceedings of record; Arbitration and Mediation Division 

(AMD) Secretariat. ñ All arbitration proceedings under this Rule shall be of record. 

The AMD Secretariat shall perform all the duties of a clerk of court and act as custodian 

of all records relative to such proceedings. 

SEC. 12.10. Authority of AMD Secretariat. ñ The AMD Secretariat shall exercise 

the same authority conferred by law upon an administrative or non-judicial officer 

authorized to take testimony or evidence. Persons who, without lawful excuse, fail or 

refuse to obey orders issued in arbitration proceedings shall be dealt with in accordance 

with the law. 

SEC. 12.11. Preliminary conference.ñ After all issues have been joined, the 

arbitral tribunal shall send a notice to the parties setting the date, time and place of the

972 


preliminary conference to discuss, among others, the simplification of issues, necessity 

or possibility of obtaining stipulations of facts and of documents to avoid unnecessary 

proof, the limitation of the number of witnesses, the propriety of submitting the case for 

decision without trial, and such other matters as may aid in the prompt disposition of the 

dispute. 

In the event of failure of the petitioner to attend such conference, the petition 

may be dismissed. 

In the event of failure of the respondent to attend such conference, despite 

having filed an answer, the case may be deemed submitted for decision taking into 

consideration both the petition and the answer, and after reception of the evidence of the 

petitioner and such other evidence as may be necessary for the arbitral tribunal to render 

a just and equitable resolution. 

SEC. 12.12. Arbitratorís disclosure. ñ During the preliminary conference, the 

arbitrator/s shall make disclosures to the parties of such facts and circumstances that 

may be perceived by them as affecting his/her impartiality and independence. 

SEC. 12.13. Place of arbitration. - The place of arbitration shall initially be held 

at the OGCC office. Subsequent sessions or proceedings shall be held at the venue 

mutually agreed upon by the parties and the arbitral tribunal. 

SEC. 12.14. Subpoena and subpoena duces tecum. ñ The arbitral tribunal shall 

have the power to require any person to attend a hearing as a witness. It shall have the 

power to subpoena witnesses and documents when the relevancy of the testimony and 

the materiality thereof has been demonstrated. 

SEC. 12.15. Hearing by arbitral tribunal. ñ The order of trial in judicial proceedings 

shall be followed subject to such modification thereof as may be determined by the 

arbitral tribunal. 

Upon agreement of the parties or upon the initiative of the arbitral tribunal, a site 

inspection of the premises may be held. The expenses to be incurred by such inspection 

shall be as agreed upon by the parties as to amount and sharing thereof or as directed by 

the arbitral tribunal. The absence of a party after an agreement or despite due notice 

shall not be a ground to suspend the inspection. 

SEC. 12.16. Testimony of witnesses. ñ The direct testimony of witnesses shall 

be reduced to writing in affidavit form in sequentially numbered question and answer and 

shall be divided into as many parts as there are issues that have been formulated by the 

parties. The affidavit of the respective parties shall be exchanged simultaneously not less 

than five (5) days before the hearing, furnishing copies thereof to the arbitrator. 

Cross-examination of witnesses for the petitioner shall immediately be commenced 

on the day of hearing. No additional direct examination questions shall be allowed. 

Thereafter, cross-examination of witnesses for the respondent shall follow. 

Re-direct and re-cross examination of a witness may be allowed upon the discretion 

of the arbitral tribunal.


Clarificatory questions may be asked at any stage of the hearing by the arbitral 

tribunal. 

SEC. 12.17. Offer of documentary evidence. ñ The parties shall submit together 

with the affidavits required above, a formal offer of documentary evidence in appropriate 

matrix form divided into markings, description, and purpose. 

SEC. 12.18. Postponement. ñ Except for the most serious reasons, no postponement 

of hearing shall be allowed. 

SEC. 12.19. Draft decisions. ñ After termination of presentation of evidence, 

the arbitral tribunal shall require the simultaneous submission of the partiesí memorandum 

of arguments in the form of draft decisions in their respective favors within ten (10) 

days therefrom. Said draft decisions shall be divided into as many parts as there are 

issues. 

SEC. 12.20. Reopening of hearing. ñ The hearing may be reopened by the 

arbitral tribunal upon the request of any party, upon good cause shown, for the purpose 

of receiving newly-discovered evidence, at any time before an arbitral award is made. 

SEC. 12.21. Submission for decision without hearing. ñ After considering the 

stipulation of facts that have been made and the documentary evidence submitted, the 

parties may agree to submit their dispute for decision, without need of formal presentation 

of further evidence, on the basis of their pleadings and upon submission of draft 

decisions in their respective favor. 

SEC. 12.22. Award. ñ The arbitral tribunal, after evaluating the evidence presented 

and the draft decisions submitted by the parties, shall, within thirty (30) days from 

submission of the partiesí draft decisions, render a decision in the form of an award 

stating clearly and distinctly the facts and the law on which it is based. The arbitral 

tribunal shall sign the award and file it with the AMD Secretariat. 

SEC. 12.23. Prohibited pleading.- A motion for reconsideration or for new trial 

shall be considered a prohibited pleading. 

SEC. 12.24. Motion for correction. ñ A motion for correction may be allowed 

on the following grounds: 

a) evident miscalculation of figures or evident mistake in the description of a 

person, thing or property referred to in the award; and 

b) where the arbitral tribunal made an award upon an issue not submitted for 

resolution by the parties. 7 

SEC. 12.25. Transmittal to the Secretary of Justice. ñ After ten (10) days from 

notice to the parties, the award shall be transmitted to the Secretary of Justice for final 

action, approving, disapproving or modifying the award made. 

7 Section 25, R.A. 876.

974 


SEC. 12.26. When award becomes final and binding. ñ The award, as approved 

or modified by the Secretary of Justice, shall become final and binding upon the 

parties. 

SEC. 12.27. Appeal to the Office of the President. ñ An appeal may be taken to 

the Office of the President by filing a notice of appeal and serving the same upon all 

parties within a period of fifteen (15) days from receipt of a copy of the final action taken 

by the Secretary of Justice. In such event, the award shall become final only upon 

affirmation/approval by the Office of the President. If no appeal is taken to the Office of 

the President within the said period, the action taken by the Secretary of Justice shall 

become final upon the expiration of the said period. 

SEC. 12.28. Costs of arbitration. ñ The costs of arbitration shall be imposed by 

way of special assessment in accordance with the schedule hereto attached, as may be 

modified from time to time. 

RULE 13 

PROCEDURE FOR AMENDMENT OF RULES 

SECTION 13.1. Creation of a committee to study proposed amendment. - Any 

amendment or revision of any provision of these Rules shall be made by the Government 

Corporate Counsel, who shall create a committee to carefully study and analyze whether 

there are sufficiently weighty reasons to amend the same. Report thereon by said committee 

containing its recommendation shall be submitted to the Government Corporate 

Counsel within thirty (30) days from assignment. 

SEC. 13.2. Action on the committee report. - Upon receipt of the report, the 

Government Corporate Counsel may, at his/her discretion, approve or amend, alter and 

modify said report. 

SEC. 13.3. Prospective application. - Any provision/s of the Rules that have 

been amended, altered or modified shall only have prospective application. 

SEC. 13.4. Effectivity of amendment. ñ The amended Rules duly approved by 

the Government Corporate Counsel shall take effect fifteen (15) days after its publication 

in a newspaper of general circulation. 

RULE 14 

FINAL PROVISIONS 

SECTION 14.1. Application of Rules of Court. ñ The Rules of Court shall not 

apply to proceedings under these Rules, except by analogy or in a suppletory character, 

whenever practicable and convenient and to make effective the authority vested in the 

OGCC. 

SEC. 14.2. Supplemental rules. ñ Supplemental rules shall be issued from time 

to time as may be necessary to ensure the fair and expeditious disposition of cases. 

SEC. 14.3. Repealing clause. ñ All rules, circulars, memoranda or other issuances 

or any part thereof inconsistent with the provisions of these Rules are hereby 

repealed, amended or modified accordingly.


SEC. 14.4. Separability clause. ñ If for any reason or reasons, any portion or 

provision of these Rules shall be held unconstitutional or invalid, all other parts or provisions 

not affected shall thereby continue to remain in full force and effect. 

SEC. 14.5. Effectivity clause. ñ These Rules shall take effect fifteen (15) days 

after publication in a newspaper of general circulation. 


OFFICE OF THE PRESIDENT 


Approved by: 

(SGD.) AGNES VST DEVANADERA 

Government Corporate Counsel 

Executive Order No. 516 

Returning the Bases Conversion Development Authority 

to the Office of the President 

WHEREAS, Executive Order No. 504 (s. 2006) Section 5 mandated the Secretary 

of Trade and Industry to exercise policy oversight over the Bases Conversion and 

Development Authority (BCDA). 

NOW, THEREFORE, I, GLORIA M. ARROYO, President of the Philippines, by 

virtue of the powers vested in me by law and the Constitution, do hereby order: 

The BCDA is hereby reverted to the Office of the President, Section 5 of Executive 

Order No. 504 is hereby repealed. 



(SGD.) GLORIA MACAPAGAL-ARROYO 

By the President: 

(SGD.) EDUARDO R. ERMITA 

Executive Secretary 

óo0oó 


Amending Executive Order No. 124, Series of 2002 Providing 

for the Implementing Mechanism of the ARMM Social Fund 

Project for Peace and Development

976 



U.P. Law Center, Diliman, Q.C. 



óo0oó 


Delegating to the Secretary of Trade and Industry the Power 

to Exercise Oversight Function Over the Optical Media Board 

WHEREAS, the Videogram Regulatory Board (VRB) created under the Presidential 

Decree No. 1987 was reorganized into Optical Media Board (OMB) under Republic 

Act No. (RA) 9239, approved on February 10, 2004, otherwise known as the ìOptical 

Media Act of 2003î; 

WHEREAS, pursuant to Section 4 of RA 9239, the OMB is placed under the 

Office of the President; 

WHEREAS, Section 17, Article VII of the 1987 Constitution provides that the 

President shall have control of all executive departments, bureaus and offices and shall 

ensure that the laws be faithfully executed; 

WHEREAS, paragraph 2, Section 31, Chapter 10, Title III, Book III of the 

Administrative Code of 1987 grants the President the continuing authority to reorganize 

the administrative structure of the Office of the President; 

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic 

of the Philippines, by virtue of the power vested in me by law, do hereby order: 

SECTION 1. Delegation of the Secretary of Trade and Industry. The power of 

the President to exercise oversight function over the Optical Media Board is hereby 

delegated to the Secretary of Trade and Industry. 

SECTION 2. Repealing Clause. All other executive issuances, rules and regulations 

or parts thereof which are inconsistent with the provisions of this Executive Order 

are hereby repealed, amended or modified accordingly. 

SECTION 3. Effectivity. This Executive Order shall take effect immediately. 






óo0oó




Transferring the Supervision of and Control of the Philippine 

Charity Sweepstakes Office from the Department of Health to the 

Office of the President 

WHEREAS, on August 22, 2005, the President issued Executive Order No. 383 

placing the Philippine Charity Sweepstakes Office (PCSO) under the supervision and 

control of the Department of Health; 

WHEREAS, pursuant to its Charter, the PCSO is the principal government agency 

for raising and providing for funds for health programs, medical assistance and services 

and charities of national character. 

WHEREAS, the support of the PCSO is vital to the social agenda of the President 

as detailed in the Medium Term Development Plan and the 10-Point Legacy Agenda; 

WHEREAS, in order to facilitate coordination of policies and programs with the 

view of ensuring the effective implementation of the social agenda of the President, it is 

best that the supervision and control over the PCSO be transferred from the Department 

of Health to the Office of the President. 

WHEREAS, Book lll, Title lll, Chapter 10, Section 31 (3) of the Administrative 

Code of 1987 authorizes the President to ìxxx transfer agencies to the office of the 

President from other departments or agencies as well as transfer agencies to the Office 

of the President from other departments or agenciesî. 

NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, President of the Republic 

of the Philippines, by virtue of the powers vested in me by law, do hereby order: 

SECTION 1. The Philippine Charity Sweepstakes Office shall hereby be placed 

under the supervision and control of the Office of the President. Unless otherwise provided, 

the Presidential Chief of Staff shall exercise the foregoing functions for and in 

behalf of the Office of the President. 

SECTION 2. All orders, issuances rules and regulations or parts thereof inconsistent 

with this Executive Order are hereby repealed or modified accordingly. 

SECTION 3. This Executive Order shall take effect immediately. 






óo0oó

978 




Abolishing the National Health Planning Committee 

WHEREAS, Executive Order No. 205 dated 31 January 2002 created a National 

Health Planning Committee; 

WHEREAS, there is a need to strengthen line accountabilities rather than dilute 

them through a proliferation of interagency committees; 

NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, by virtue of the powers 

vested in me by law, do hereby order: 

SECTION 1. The National Health Planning Committee created by Executive Order 

No. 205 is hereby abolished. 

SECTION 2. The Secretary of Health shall steer the implementation of health reforms. 

He shall formulate the blueprint for implementing health sector reforms throughout 

the country in accordance with the Medium-Term Philippine Development Plan for 2004- 

2010. 

SECTION 3. Executive Order No. 205 is hereby repealed. 



Date Filed 20 March 2006 





óo0oó 


Abolishing the National Anti-Crime Task Force for Other Purposes 

WHEREAS, the National Anti-Crime Task Force (NACTAF) was created by virtue 

of Executive Order No. 463 dated 23 September 2005 to take cognizance of heinous 

crimes, including those defined and penalized under Republic Act No. 7659 (Heinous 

Crime Law), and was placed under the Presidential Anti-Organized Crime Commission 

(ìPAOCCî), which is headed by the President herself;


WHEREAS, Executive Order No. 515 dated 15 March 2006 created the National 

Anti-Environment Crime Task Force (NAECTAF) to be headed by the Secretary of Environment 

and Natural Resources and was placed under the PAOCC; 

WHEREAS, under Section 31, Chapter 10, Title lll, Book lll of the Administrative 

Code of 1987, the President has the continuing authority to reorganize the administrative 

structure of the Office of the President. 

NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, President of the Republic 


SECTION 1. Abolition of National Anti-Crime Task Force. ñ The National Anti- 

Crime Task Force (NACTAF), created pursuant to Executive Order No. 463 (EO) dated 

23 September 2005 is hereby abolished. 

SECTION 2. Funds, Assets and Equipment. ñ All the funds, assets and equipment 

of the NACTAF shall be turned over to the National Anti-Environment Crime Task 

Force (NAECTAF) created pursuant to EO 515 (s. 2006). 

SECTION 3. Repealing Clause. ñ All orders, rules, regulations and other issuances 

of parts thereof which are inconsistent with this Executive Order are hereby repealed 

or modified accordingly. 

SECTION 4. Effectivity. ñ This Executive Order shall take effect immediately. 







óo0oó 

Administrative Order No. 110-A 

Amending Administrative Order No. 110 S. 2004 Directing the 

Institutionalization of a Government Energy Management Program (GEMP) 

WHEREAS, Administrative Order No. 110 dated October 25, 2004 directed the 

institutionalization of a Government Energy Management Program (GEMP); 

WHEREAS, Section 3, Item 3.2 of Administrative Order 110 provides that at least 

50% of the savings to be realized through the GEMP may be used by the government 

entity for the improvement of energy efficiency in its facilities subject to the guidelines to 

be promulgated by the DOE and DBM;

980 


WHEREAS, Section 3, Item 3.2 of Administrative Order No. 110 only appropriates 

50% GEMP savings for the improvement of governmentís energy efficiency, thereby 

limiting the use of said savings for said specific purpose. 

WHEREAS, Administrative Order No. 135 dated December 27, 2005 authorized 

the grant of Collective Negotiation Agreement (CNA) incentive to employees in government 

agencies; 

WHEREAS, the grant of the CNA is in recognition of the efforts of labor and 

management to achieve all planned targets, programs and services approved in the 

agencyís budget at lesser costs; 

WHEREAS, it has become necessary to amend the above specific provision of 

Administrative Order No. 110 to provide for the needs of the government employees, 

giving them non-economic benefits in the form of transportation (shuttle bus and service 

vehicles to and from the office) for their active participation and in appreciation in their 

role in the realization of the GEMP; and 

WHEREAS, the shuttle buses and service vehicles made available to government 

employees and officials will not only provide them safety and comfort, but will lessen their 

travel time and expenses, thereby giving them more quality time to spend with their families. 


Philippines, by virtue of the powers vested in me by law, do hereby order: 

SECTION 1. Section 3, Item 3.2 of Administrative Order No. 110 is hereby 

amended to read as follows: 

ìSECTION 3. FUNDING 

x x x 

3.2. Use of Energy Savings 

The savings to be realized through the GEMP may be used by the government 

entity for the improvement of energy efficiency, subject to the guidelines to be 

promulgated by the DOE and DBM, and also for the purchase of shuttle buses 

and service vehicles for their employees and officials subject to the usual 

government auditing and accounting rules and regulations.î 

SECTION 2. This Order shall take effect immediately. 



By the President:





óo0oó 

Memorandum Order No. 208 

Directing the Secretary of Budget and Management to Prioritize 

the Study on Compensation Reforms 

WHEREAS, national government employees have been clamoring for an adjustment 

in their compensation in view of recent increases in prices of basic goods; 

WHEREAS, such clamor cannot be fully satisfied by piece-meal legislation authorizing 

increases in allowance, which merely serve as interim measures; 

WHEREAS, a sustainable compensation reform must take into consideration the 

constitutional policy of salary standardization and the fiscal targets of this administration; 

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, 

by virtue of the powers vested in me by law, do hereby direct the Secretary of 

Budget and Management to work in close coordination with the Civil Service Commission 

and perform the following: 

(a) Benchmark existing compensation of government employees as against those 

being received by employees of mid-level firms in the private sector; 

(b) Propose reforms and innovations to the compensation and position classification 

system of the national government in order to enhance its performance-based component 

and simplify the position classification system; 

(c) Ensure that the proposed compensation reforms are consistent with the constitutional 

policy of salary standardization; 

(d) Improve professionalism and meritocracy in the civil service by decompressing 

salary levels of key middle management positions and providing for performance-based 

incentives; 

(e) Estimate and program the forward costs of the proposed reform to ensure a 

fiscally sustainable compensation system; and 

(f) Submit a bill proposing said reforms to Congress by end of this year. 



By the President:

982 





óo0oó 

Executive Order No. 380-A 

Clarifying Certain Provisions of Executive Order No. 380 

Dated October 26, 2004 

WHEREAS, the Public Estate Authority (PEA) created under Presidential Decree 

No. 1084 was established to provide for a coordinated, economical and efficient 

administration of lands and real estate especially reclaimed lands belonging to, managed 

and/or operated by the government and was further designated to be primarily responsible 

for integrating, directing and coordinating all reclamation projects for and on behalf 

of the National Government pursuant to Executive Order No. 525 dated February 14, 

1979; 

WHEREAS, the PEA is tasked to develop, improve, administer, deal in, subdivide, 

dispose, lease and sell any and all kinds of lands, buildings, estates and other forms 

of real property owned, managed, controlled and/or operated by the government; 

WHEREAS, current national policy identified reclamation undertaking as one of 

the primary sources of Government revenue and is incorporated in the Medium-Term 

Philippine Development Plan for the years 2004-2010 which carries the imprimatur of the 

Office of the President and the Congress. 

WHEREAS, the Department of Finance (DOF) is the principal agency responsible 

for the generation and management of financial resources of the government; 

WHEREAS, Executive Order No. 329, series of 2004 transferred the oversight 

over the PEA from the Department of Public Works to the Department of Finance; 

WHEREAS, pursuant to the Administrative Code of 1987, the President has the 

continuing authority to reorganize the National Government; 

NOW, THEREFORE, I GLORIA-MACAPAGAL-ARROYO, President of the Republic 

of the Philippines, by virtue of the powers vested in me by laws do hereby order: 

SECTION 1. Transformation of PEA into PRA. The PEA is hereby renamed 

the Philippine Reclamation Authority, and shall continue to perform the powers and functions 

of the PEA pursuant to Presidential Decree No. 1084 (PEA Charter) as amended 

under Executive Order No. 525 (EO 525) and Executive Order No. 654 (EO 654), including 

but not limited to the functions to reclaim land; to develop, manage and dispose of 

lands, buildings, estates and other forms of real property arising from functions of the 

PEA pursuant to Presidential Decree No. 1084 (PEA Charter) as amended under Executive 

Order No. 525 (EO 525) and Executive Order No. 654 (EO 654), including but not 

limited to the functions to reclaim land; to develop, manage and dispose of lands, build-


ings, estates and other forms of real property arising from reclamation; to provide, operate 

or administer infrastructure facilities and services on the above-mentioned reclaimed 

properties; and to authorize, through the rules of public bidding, reclamation projects by 

other entities. 

SECTION 2. PRA Subsidiary. The Public Estates Authority Tollway Corporation 

(PEATC) is hereby spun off as a separate corporation with its own management and 

supervision, notwithstanding it shall continue to be recognized as a subsidiary of the 

PRA. The Chairman and members of the Board of PEATC shall be appointed by the 

President of the Philippines and shall include some representatives of the PRA. PEATC 

shall remit to the PRA whatever dividends it may derive from its operations. 

SECTION 3. Non-Reclamation Assets of PRA. The PRA shall transfer to the 

National Government or to the appropriate Government agency or corporation its nonreclamation 

assets. 

SECTION 4. Separability Clause. If any provision of this Executive Order is 

declared unconstitutional the other portions or provisions hereof which are not affected 

therefore shall continue to be in full force and effect; 

SECTION 5. Repealing Clause. All executive issuances, rules and regulations 

or parts thereof which are inconsistent with this Executive Order are hereby revoked, 

amended or modified accordingly. 








óo0oó 


Instituting the Use of Alternative Dispute Resolution in the 

Executive Department of Government 

WHEREAS, Article III, Section 16 of the Constitution guarantees the right of all 

persons to a speedy disposition of their cases before all judicial, quasi-judicial or administrative 

bodies; 

WHEREAS, Republic Act No. 9285, otherwise known as the ìAlternative Dispute 

Resolution (ADR) Act of 2004î, declares that it is the policy of the State to actively

984 


promote and encourage the use of ADR as an important means to achieve speedy and 

impartial justice and to declog court dockets; 

WHEREAS, the use of the alternative modes of dispute resolution has proven to 

be effective in amicably and speedily resolving disputes filed before judicial and quasijudicial 

agencies; 

WHEREAS, there is a need to promote the use of ADR to achieve speedy 

resolution of all disputes before all administrative bodies in the Executive Department. 

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, 

by virtue of the powers vested in me by law, do hereby order: 

SECTION 1. Use of Alternative Dispute Resolution. All administrative bodies 

shall promote the use of alternative modes of dispute resolution such as, but not limited to, 

mediation, conciliation and arbitration as part of their practice in resolving disputes filed 

before them. 

SEC. 2 Training. All agencies of the Executive Department shall train in the field 

of ADR at least two (2) senior officials who shall be designated to organize, develop and 

implement the use of ADR in their agency. 

SEC. 3. Management of Alternative Dispute Resolution in Executive Agencies. 

The Office of the President shall manage the development of the ADR practice in the 

executive agencies. It shall: 

3.1 coordinate/direct the development of rules, regulation and procedures to implement 

ADR policies in each agency; 

3.2 assist in providing training resources for the development of the use of ADR in each 

agency; 

3.3 monitor and evaluate the compliance with and efficiency of the use of ADR in each 

agency; 

3.4 educate and encourage the public in the use of ADR; 

3.5 perform such other functions as may be necessary to carry into effect the purpose 

of this order. 

tion 

SEC. 4. Principles to Promote Just and Efficient Administrative Dispute Resolu- 

4.1 All executive agencies are mandated to review periodically their administrative dispute 

resolution processes and develop specific procedures to reduce delay in decisionmaking, 

to institutionalize the use of ADR processes prior to litigation, to facilitate selfrepresentation, 

and expand non-lawyer counseling and representation where appropriate;


4.2 All executive agencies shall review their administrative dispute resolution processes 

that may create or induce prejudice on the part of the decision-makers that may result in 

injustice to persons who appear before administrative dispute resolution bodies; regularly 

train all fact-finders, administrative hearing officers, and other decision makers to eliminate 

such prejudice; and establish appropriate mechanisms to receive and resolve complaints 

of such prejudice from persons who appear before administrative dispute resolution 

bodies; 

4.3 An agency may propose the enactment of new laws to minimize litigation so as not 

unduly burden the courts. The agencyís proposed legislation and regulations shall provide 

a clear legal standard for affected conduct rather than a general standard, and shall 

promote simplification and burden reduction. 

SEC. 5. Funding. Funding for managing ADR programs shall be included in the 

yearly appropriations of each agency. 

SEC. 6. Transitory Provision. Until the general policies and implementing rules 

and guidelines are issued by the Joint Congressional Oversight Committee, all existing 

ADR policies in administrative bodies, if any, shall continue to be in full force and effect. 

Nothing in this order shall be construed to require any administrative body to act in a 

manner contrary to any existing laws, rules or regulations. 

SEC. 7. Separability Clause. If any provision of this Executive Order is declared 

invalid or unconstitutional, the remaining provisions not affected thereby shall 

continue to be in full force and effect. 

SEC. 8. Effectivity. This Executive Order shall take effect immediately. 

Adopted: 07 April 2006. 






óo0oó 


Expanding the Procurement Service Coverage to 

Include Government Employeesí Cooperatives and Associations 

WHEREAS, the goals of the national economy, as enshrined in Article XII, Section 

1 of the 1987 constitution, include: a more equitable distribution of opportunities, 

income and wealth; a sustained increase in the amount of goods and services produced

986 


by the nation for the benefit of the people; and an expanding productivity as the key to 

raising the quality of life for all, especially the under privileged; 

WHEREAS, the continued increase in the prices of basic commodities has reduced 

the purchasing power of fixed income earners, particularly government employees; 

WHEREAS, the government recognizes the need to augment the resources of 

government employees given the limited allowances provided to them by law through noncash 

benefits such as low-priced basic commodities available for their own consumption; 

WHEREAS, the National Government undertook, in two Memoranda of Undertaking 

for Quality Public Service and Performance, dated March 22, 2004, to set up and 

operate a commissary facility for government employees, thereby recognizing the need 

for the establishment of the aforesaid commissary; 

WHEREAS, Letter of Instruction (LOI) No. 75, and Executive Order Nos. 285 

and 359, dated July 25, 1987 and June 2, 1989, respectively, mandated the Procurement 

Service of the Department of Budget and Management to implement and operate a central 

procurement system for the whole of government; 

WHEREAS, the Procurement Service has efficiently carried out its function of 

procuring government supplies, materials, and equipment from reliable sources in economic 

lot sizes through the centralized procurement system, thereby making them available 

to government agencies at low prices. 


of the Philippines, by virtue of the power vested in me by law, do hereby order: 

SECTION 1. In the interest of public economy, efficiency, and good governance, 

the Procurement Service is hereby authorized to transact with and enlist the 

participation of government employeesí cooperatives and/or associations to act as retailers/commissaries 

of the Procurement Service in the selling of common use and basic 

commodity items exclusively to government employees. 

SEC. 2. The Procurement Service is likewise authorized to sell basic commodity 

items to government employees, in addition to the common use office supplies and equipment 

made available and regularly sold therein. The Procurement Service shall procure 

such supplies in the most economical and efficient manner, by public bidding in economic 

lot sizes, by observing optimum specifications and by making prompt payments. 

SEC. 3. Government employees who will purchase items sold at the Procurement 

Service shall place their orders directly with existing employeesí cooperatives or 

employees associations duly authorized by the Procurement Service to operate as retailers/commissary. 

SEC. 4. The Secretary of the DBM shall issue such rules, regulations, and other 

issuances as may be necessary to ensure the effective implementation of this Executive 

Order.


SEC. 5. Any portion or provision of this Executive Order that may be declared 

unconstitutional shall not have the effect of nullifying other provisions hereof, as long as 

such remaining provisions can still subsist and be given effect in their entirety. 

SEC. 6. All rules and regulations, other issuances or parts thereof, which are 

inconsistent with this Executive Order, are hereby repealed or modified accordingly. 

SEC. 7. This Executive Order shall take effect immediately. 







óo0oó 


Creating a Special Task Force to Investigate Irregularities 

Committed in Relation to the Payment of Taxes in Transfers of 

Titles of Real Properties, and for Other Purposes 

WHEREAS, anti-corruption and good governance constitute one of the five main 

components of the Medium-Term Philippine Development Plan for 2004-2010; 

WHEREAS, there are reported irregularities in relation to the payment of taxes in 

transfers of titles of real properties; 

WHEREAS, the Department of Justice (DOJ), Office of the Ombudsman and the 

Commission on Audit entered into a Memorandum of Agreement on 20 September 2005 

to ensure the proper payment of taxes in transfer of titles of real property and detect, 

investigate and prosecute corruption or irregularities committed in relation thereto; 

WHEREAS, Section 31, Chapter 10, Title III, Book III of the Administrative Code 

of 1987 provides the President with continuing authority to organize the Office of the 

President; 

NOW, THEREFORE, I, GLORIA M. ARROYO, President of the Republic of the 

Philippines, by virtue of the powers vested in me by law, do hereby order: 

SECTION 1. Creation ñ There is hereby created a Task Force attached to the 

Presidential Anti-Graft Commission to investigate irregularities in the transfer of titles of 

real properties;

988 


The Task Force shall be headed by the Presidential Adviser on Revenue Enhancement 

and shall include other members as needed: provided, that three members 

shall come from the signatory agencies of the Memorandum of Agreement referred to 

above. 

SECTION 2. Powers and Functions. ñ The Task Force shall have the following 

powers and functions: 

a. Investigate and gather evidence against public officials and employees of the Registries 

of Deeds and the Bureau of Internal Revenue as well as individuals and entities who 

allegedly committed irregularities in the transfer of titles of real properties without payment 

of the correct capital gains, documentary stamp, real estate and other taxes, without 

prejudice to the on-going investigation and gathering of evidence by the DOJ, or to the 

latterís authority to continue investigating and gathering evidence against said public 

officials, employees, individuals and entities; 

b. Initiate and/or recommend the filing of the appropriate administrative civil and criminal 

cases; 

c. Hire personnel on a project or contractual basis; 

d. Call upon any department, bureau, office, or other agencies of the government for 

technical, administrative and operational assistance in the pursuit of its mandate; 

e. Coordinate with other government agencies, non-government organizations and other 

individuals and entities as may be deemed necessary to attain its objectives; 

f. Render assistance to the Inter-Agency council created by the DOJ, the Ombudsman 

and the COA pursuant to the above Memorandum of Agreement, if called to do so. 

SECTION 3. Personnel. ñ The hiring of personnel shall be subject to the approval 

of the Executive Secretary. 

SECTION 4. Term. ñ The Task Force shall exist for two years from the date of 

effectivity of this Order. After which its functions shall be turned over to the Department 

of Justice. 

SECTION 5. Reports. ñ The Task Force shall submit quarterly reports to the 

Inter-Agency Council established pursuant to the abovementioned Memorandum of Agreement 

dated 20 September 2005. 

SECTION 6. Funding. ñ Funds for the operation of the Task Force shall be 

sourced from the Office of the President and the DOJ. An initial funding of One Million 

Pesos (P1,000,000.00) from the appropriation of the OP and One Million Pesos 

(P1,000,000.00) from the appropriations of the DOJ shall be released upon effectivity of 

this Order. 

SECTION 7. Effectivity. ñ This Order shall take effect immediately.








óo0oó 


Establishing a Procedure for the Approval of Activities by the 

Philippine Government Under the Agreement Between the Government 

of the Republic of the Philippines and the Government of the United 

States of America Regarding the Treatment of United States Armed 

Forces Visiting the Philippines 

WHEREAS, the agreement between the Government of the Republic of the Philippines 

(RP) and the Government of the United States of America (US) regarding the 

treatment of United States Armed Forces Visiting the Philippines, otherwise known as the 

RP-US Visiting Forces Agreement (VFA), was signed on February 10, 1998 and entered 

into force on June 1, 1999; 

WHEREAS, the RP-US Visiting Forces Agreement essentially provides for the 

mechanism for regulating the circumstances and conditions under which US armed forces 

and personnel may be present in the Philippines in connection with activities approved by 

the Philippine Government; 

WHEREAS, the establishment of the Security Engagement Board implements 

the provisions of the VFA, provides the framework and mechanism for direct and continuing 

liaison and consultation between appropriate RP and US authorities on non-traditional 

security concerns, including international terrorism, and serves as the forum for discussions 

and planning of concrete measures and arrangements designed to enhance RP- 

US cooperation in this regard; 

WHEREAS, under the VFA, all measures and arrangements recommended by 

the Security Engagement Board, shall be subject to the approval by appropriate authorities 

of the Government of the Republic of the Philippines. 


of the Philippines, by virtue of the power vested in me by law do hereby order: 

SECTION 1. Approval. ñ the Secretary of Foreign Affairs and the Secretary of 

National Defense shall have the authority to jointly approve cooperative measures and 

arrangements recommended by the Security Engagement Board (SEB). In the discharge 

of this responsibility, they shall ensure that all cooperative measures and arrangements 

are in accordance with the Philippine Constitution and applicable laws, rules and 

regulations, and consistent with pertinent principles of international law and mutual re-

990 


spect for each nationís sovereignty. A report of all actions taken in this regard shall be 

regularly submitted to the Office of the President. 

SEC. 2. Inter-Agency Participation and Support. ñ The Secretary of Foreign 

Affairs and the Secretary of National Defense may call upon any department, bureau, 

office or agency of government to participate in the security consultative process, provide 

technical and other necessary support to the SEB, and take part in the activities and 

exercises relating to non-traditional security concerns duly approved by the Philippine 

Government. 

The respective department, bureau, office or agency of government shall bear 

the cost of its participation in the SEB process as well as in any approved measures and 

arrangements. 

SEC. 3. Repealing Clause. ñ All orders and issuances that are inconsistent with 

this Memorandum Order are hereby repealed or modified accordingly. 

SEC. 4. Effectivity. ñ This Memorandum Order shall take effect immediately. 







óo0oó 


Modifying the Rates of Duty on Certain Imported Articles 

as Provided Under the Tariff and Customs Code of 1978, as Amended, 

In Order to Implement the Preferential Tariff Rates on Certain Products 

Under the ASEAN Industrial Cooperation (AICO) Scheme 

WHEREAS, the Philippines is a Contracting Party to the Basic Agreement on the 

AICO Scheme signed in Singapore on 27 April 1996; 

WHEREAS, the Philippines is a signatory to the Protocol to Amend the Basic Agreement 

on the AICO Scheme signed in Singapore on 21 April 2004; 

WHEREAS, the Philippines is a participating country in the approved AICO Arrangement 

of Philippine Auto Components, Inc. (PACI) along with Thailand; 

WHEREAS, under the AICO Certificate of Eligibility No. Denso/2005/7 issued on 

24 November 2005, the Philippines (Philippine Auto Components, Inc.) will import from


Thailand (Denso Thailand) Co., Ltd.) certain original equipment manufacture (OEM) parts/ 

components for motor vehicles, as specified in Annex ìAî. In exchange, Thailand (Denso 

International (Thailand) Co., Ltd.) will import from the Philippines complementary parts/ 

components for the OEM of motor vehicles under the aforementioned AHTN headings; 

WHEREAS, in consonance with Articles 5 and 7 of the Basic Agreement of the 

AICO Scheme, as amended participating companies in the approved AICO Arrangement 

shall qualify for 0% preferential tariff rates to be extended by Thailand and the Philippines 

as participating countries. 

NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President of the Philippines, 

pursuant to the powers vested in me under Section 402 of the Tariff and Customs 

Code of 1978, as amended, do hereby order: 

SECTION 1. The articles specifically listed in Annex ìAî hereof, as classified 

under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be accorded 

the AICO rate of 0% as specified in Column 5 thereof. 

SECTION 2. The AICO rate provide in Annex ìAî shall be accorded to the AICO 

entity from Thailand (Denso (Thailand) Co. Ltd. upon the effectivity of this Executive 

Order. 

SECTION 3. The articles specifically listed in the aforesaid Annex A which are 

entered or withdrawn from warehouses in the Philippines for consumption shall pay the 

applicable AICO preferential tariff rates specified under Sections 1 hereof, subject to 

qualification under the Rules of Origin for the CEPT, as evidenced by the Certificate of 

Origin- Form ìDî. 

SECTION 4. This Executive Order shall take effect fifteen (15) days following its 

complete publication in two (2) newspapers of general circulation in the Philippines. 



(SGD.) GLORIA MACAPAGAL- ARROYO 




--o0o-- 


Temporarily Modifying the Rates of Import Duty on Crude Petroleum 

Oils and Refined Petroleum Products Under Section 104 of the Tariff 

and Customs Code of 1978 (Presidential Decree No. 1464), as Amended

992 


WHEREAS, soaring fuel prices to unprecedented levels brought about by current 

international and geo-political tensions, and tight gasoline supplies, warrant the modification 

in the rates of duty on crude petroleum oils and refined petroleum products to protect 

consumer welfare; 

WHEREAS, an automatic tariff mechanism, based on certain triggers indexed to 

international oil prices, would soften the impact of high and rising world prices on the 

economy and the consuming public, without necessarily draining government revenues; 

WHEREAS, Section 6 (Tariff Treatment) of Republic Act (R.A.) 8479, otherwise 

known as the ìDownstream Oil Industry Deregulation Act of 1998î, provides that: ìAny 

law to the contrary notwithstanding and starting with the effectivity of this Act, a single and 

uniform tariff duty shall be imposed and collected both on imported crude oil and imported 

refined petroleum products at the rate of three percent (3%): Provided, however, 

That the President of the Philippines may, in the exercise of his powers reduce such tariff 

rate when in his judgment such reduction is warranted, pursuant to Republic Act No. 

1937, as amended, otherwise known as the ìTariff and Customs Codeî: Provided, further, 

That beginning January 1, 2004 or upon implementation of the Uniform Tariff 

Program under the World Trade Organization and ASEAN Free Trade Area commitments, 

the tariff rate shall be automatically adjusted to the appropriate level notwithstanding 

the provisions under this Section.î 

WHEREAS, Section 401 of the Tariff and Customs Code of 1978 (Presidential 

Decree No. 1464), as amended, empowers the President of the Republic of the Philippines 

to increase, reduce, or remove existing rates of import duty, as well as to modify the 

form of duty and the tariff nomenclature, under Section 104 of the Code; 

NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President of the Republic 


SECTION 1. The articles specifically listed in Annex ìAî hereof, as classified under 

Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to the 

Most Favoured Nation (MFN) rate of import duty in accordance with the schedule indicated 

opposite each article. 

SECTION 2. The rates of import duty on tariff headings not enumerated and those 

listed but represented by the symbol ìx x xî shall remain in force and effect. 

SECTION 3. The MFN rates on crude and refined petroleum products shall be 

reduced based on certain triggers indexed to oil prices in the world market. The tariffs 

shall be automatically restored as international oil prices move down based on the same 

trigger prices. The MFN rates shall take effect upon certification by the Department of 

Energy (DOE) that a trigger price has been reached and notification of the same shall 

have been made to the Department of Finance, for which the corresponding Customs 

Memorandum Order shall be issued by the Bureau of Customs. 

SECTION 4. Upon the effectivity of this Executive Order, all articles listed in Annex 

ìAî which are entered and withdrawn from warehouses in the Philippines for consumption 

shall be levied the MFB rates of duty therein prescribed in accordance with Section 3 

above.


SECTION 5. The DOE, in coordination with the Department of Finance, the Department 

of Trade and Industry, the National Economic and Development Authority, and 

the Bureau of Customs shall promulgate the guidelines to implement this Executive Order. 

SECTION 6. All Presidential issuances, administrative rules and regulations, or 

parts thereof, which are contrary to or inconsistent with this Executive Order are hereby 

revoked or modified accordingly. 

SECTION 7. This Executive Order shall be effective for a period of six (6) months 

subject to review. 

SECTION 8. This Executive Order shall take effect immediately following its complete 

publication in two (2) newspapers of general circulation in the Philippines. 







--o0o-- 


Reducing the Rates of Duty on Capital Equipment, Spare Parts 

and Accessories Imported by the Board of Investments (BOI) Registered 

New and Expanding Enterprises 

WHEREAS, Executive Order No. 313, dated 15 May 2004, entitled ìModifying the 

Rates of Duty on Capital Equipment, Spare Parts and Accessories Imported by the 

Board of Investments (BOI) Registered New and Expanding Enterprisesî provide for zero 

percent duty and one percent duty on certain articles imported by BOI registered new 

and expanding export and domestic enterprises, respectively; 

WHEREAS, EO 313 is effective for a period of two (2) years from its effectivity or 

until 6 June 2006; 

WHEREAS, the Government is committed to continually encourage investments in 

preferred areas of activities; 

WHEREAS, there is a need to extend BOI registered enterprises duty-free treatment 

on importation of capital equipment, spare parts and accessories, which are currently 

being enjoyed by enterprises located within economic zones and freeports; 

WHEREAS, importation of capital equipment is one of the major cost burdens of 

business enterprise in their start up operations;

994 


WHEREAS, allowing duty free importation will make the Philippines more competitive 

in attracting industries in the face of an increasing competitive Asian market for 

foreign direct investments; 

WHEREAS, Section 401 of the Tariff and Customs Code of the Philippines empowers 

the President of the Republic of the Philippines, upon the recommendation of the 

National Economic and Development Authority to increase, reduce or remove existing 

protective rates of import duty. 

NOW, THEREFORE, I GLORIA MACAPAGAL ARROYO, President of the Philippines, 

by virtue of the power vested in me, do hereby order: 

SECTION 1. Any importation of capital equipment, spare parts and accessories by 

enterprises registered with the Board of Investments (BOI) shall be subjected to zero 

(0%) duty, as indicated in Section 2 hereof. 

SECTION 2. The zero percent (0%) duty on article or equipment classified under 

Chapters 40, 59, 68, 70, 73, 82, 83, 84, 85, 87, 89, 90, 91 and 96 of the Tariff and 

Customs Code of the Philippines, as amended, shall be granted to BOI registered new 

and expanding enterprises, upon the issuance by the BOI of a Certificate of Authority; 

provided that the importation of machinery, equipment, spare parts and accessories shall 

comply with the following conditions: 

a. They are not manufactured domestically in sufficient quantity, of comparable 

quality and at reasonable prices; and 

b. They are reasonably needed and will be used exclusively by the enterprise in its 

registered activity, unless prior approval of the BOI is secured. 

SECTION 3. The registered enterprise cannot sell, transfer or dispose of the aforementioned 

capital equipment, machinery, spare parts, and accessories without prior 

Board approval within five (5) years from date of importation. Otherwise, the registered 

enterprise will be solidarily liable to pay twice the amount of the duty foregone without 

prejudice to other applicable penalties under E.O. 226. 

SECTION 4. The Board of Investments shall promulgate the implementing rules and 

regulations governing the importation hereof. 

SECTION 5. All Presidential issuances, administrative rules and regulations or parts 

thereof, which are inconsistent with this Executive Order are hereby revoked or modified 

accordingly. 

SECTION 6. This Executive Order shall take effect thirty (30) days following its 

complete publication in two (2) newspaper of general circulation in the Philippines and 

shall be availed of for a period of five (5) years from the date of effectivity of this Order or 

until enactment of the bill amending E.O. 226, otherwise known as the Omnibus Investment 

Code of 1987, as amended, whichever is earlier. 

Adopted: 12 May 2006







--o0o-- 


Approving Amendments to Sections 42.5, 54.2 (b) (d), and 61.1 of the 

Implementing Rules and Regulations Part A (IRR-A) of Republic Act No. 9184 

WHEREAS, in its Resolution Nos. 016-2005 and 24-2005 dated September 12, 

2005 and November 25, 2005, respectively, the Government Procurement Policy Board 

(GPPB) has resolved to endorse for approval the proposed amendments to Sections 

42.5, 54.2 (b) (d), and 61.1 of the Implementing Rules and Regulations Part A (IRR-A) of 

Republic Act No. 9184; 

WHEREAS, the proposed amendments will streamline and improve the procurement 

procedures for a more effective procurement system; 


of the Philippines, by virtue of the powers vested in me by law, do hereby approve 

the proposed amendments of the Implementing Rules and Regulations Part A (IRR-A) of 

Republic Act (RA) 9184 as follows: 

SECTION 1. Sections 42.5, 54.2 (b) (d), and 61.1 of the IRR-A of RA 9184 are 

hereby amended as follows: 

Section 42. Contract Implementation and Termination 

42.5 Procuring entities may issue a letter of credit in favor of a local or 

foreign supplier; provided that, no payment on the letter of credit shall be 

made until delivery and acceptance of the goods as certified to by the procuring 

entity in accordance with the delivery schedule provided for in the contract; 

Provided further, that, the cost for the opening of letter of credit shall be 

for the account of the local or foreign supplier and shall be so stated in the 

bidding documents. 

Section 54. Terms and Conditions for the Use of Alternative Methods 

54. 2 x x x 

(b) For item (a) of Section 53, the procuring entity shall draw up a list of at 

least three (3) suppliers, contractors, or consultants in good standing which 

will be invited to submit bids and negotiate with the bidder who submitted the

996 


lowest calculated bid or highest rated bid, whichever is applicable. If the offer 

of the bidder who submitted the lowest calculated bid or highest rated bid, 

whichever is applicable, is not responsive to the original specifications and 

ABC, negotiation shall be made in ascending order starting from the lowest 

offer. The bidder whose bid is found to be responsive to the original specifications 

and ABC shall be considered for award. In all cases, the award of 

contract shall be posted at the G-EPS website of the procuring entity, if any, 

and in conspicuous place within the premises of the procuring entity. 

(c) x x x 

(d) For item (b) Section 53 of the Act and this IRR-A, the negotiation may be 

made with a previous supplier, contractor or consultant of good standing of the 

procuring entity concerned, or a supplier, contractor of consultant of good 

standing situated within the vicinity where the calamity or emergency occurred. 

The award of contract shall be posted at the G-EPS website of the 

procuring entity, if any, and in conspicuous place within the premises of the 

procuring entity. 

Section 61. Contract Prices 

61.1 for the given scope of work in the contract as awarded, all bid 

prices shall be considered as fixed prices, and therefore not subject to price 

escalation during contract implementation, except under extraordinary circumstances 

and upon prior approval of the GPPB. All contracts shall be 

denominated and payable in Philippine currency, and this shall be stated in 

the bidding documents: Provided, however, That subject to the guidelines issued 

by the GPPB, the procuring entity may provide the bidding documents 

that obligations may be paid in foreign currency; Provided further, That should 

the processing entity receive in bids denominated in foreign currency, the 

same shall be converted to Philippine currency based on the exchange rate 

prevailing on the day of the bid opening for purposes of bid comparison and 

evaluation. 

SECTION 2. All other provisions of the IRR-A of RA 9184 shall remain unchanged. 

SECTION 3. This Memorandum Order shall take effect immediately upon its 

publication in a newspaper of general circulation. 






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Mandating the Philippine Tourism Authority to Exercise 

Administration and Control Over Boracay Island 





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Administrative Order No. 151 

Affirming the Authority of the Manila International Airport 

Authority (MIAA) Over All Operations in the Premises of the 

Ninoy Aquino International Airport (NAIA) 

WHEREAS, under Section 9(b) of EO 903, the MIAA General Manager is empowered 

to provide general supervision and overall coordination of all government agencies 

operating in the NAIA with respect to the allocation and use of building space and 

airport premises; 

WHEREAS, under Section 18(b) of EO 125, the MIAA has police authority over 

the NAIA premises including the area allocated and used by said government agencies 

and the Airport Security Center, which is under the direct control of the MIAA General 

Manager, has the authority to plan, supervise, control, coordinate, integrate and direct 

intelligence and operational activities of all police and military units, security and safety 

units, government monitoring and intelligence units and other security operating units 

employed by government entities in the NAIA; 

WHEREAS, as Charter Member of the United Nations and as part of the International 

Coalition against terrorism, the Philippines must actively implement United Nations 

Security Council Resolutions against terrorism; 

WHEREAS, in the war against terrorism, there must be a comprehensive security 

plan for critical infrastructure; 

WHEREAS, NAIA is critical infrastructure in the war against terrorism; 

WHEREAS, to ensure that security requirements for NAIA are fully addressed, it 

is imperative that the MIAA General Manager be given jurisdiction over terrorist and 

violators of the law who might avail themselves of the services of, and facilities in, government 

agencies operating in NAIA;

998 


WHEREAS, based on the experience of other international airports in other 

countries, the concept of a single authority to control and supervise the exercise of 

relevant government functions including law enforcement in the airport has been successful 

and effective in promoting efficiency, security, safety, public service and convenience 

thereat; 

WHEREAS, the President of the Philippines has control and supervision over all 

agencies operating in NAIA; 

NOW, THEREFORE, I, GLORIA M. ARROYO, by virtue of the powers vested in 

me by the Constitution and law, do hereby order: 

SECTION 1. The General Manager of the MIAA, upon his determination on the 

basis of validated intelligence, relevant data and information, that certain persons, things 

or transaction conducted in the government agencies operating in NAIA pose risks or 

threats to the safety and security of the airport and its users, or the Philippines and its 

citizens, may hold, stop or otherwise prevent the entry or exit of such persons or things, 

or the conduct of such transactions, or do such acts as may be necessary or proper to 

address fully, swiftly, and effectively such risks or threats. 

SECTION 2. The General Manager of the MIAA may cause the government 

agencies operating in the NAIA to modify or make adjustments in the layout of their 

offices, the flow of work and other arrangements and procedures, if he finds that the 

same or any of them contravenes or is inconsistent with the safety and security plans and 

programs of the MIAA as approved by the Office for Transportation Security established 

under Executive Order No. 311 dated 26 April 2004, or abets, facilitates or creates 

opportunities for breach of security or safety regulations or violation of law. He may also 

make as a condition for the occupancy and use of areas in the NAIA premises by 

government agencies or their continued occupancy and use thereof, adherence to certain 

design, layout, procedures, processes and stipulations to ensure consistency with 

the security and safety plans and programs of the MIAA. 

SECTION 3. Within ninety (90) days from the effectivity hereof, the General 

Manager shall review the activities of, and the conduct and manner these activities are 

being undertaken by the various government agencies operating in the NAIA, and if 

necessary amend the working arrangement (lay-out, design, activity list, work flow, guidelines, 

etc.) taking into account services efficiency, security, safety, public service and the 

convenience of the transacting public. Said working arrangement shall govern the conduct 

and manner of the activities of all government agencies operating in the NAIA; 

Provided, that for the purpose of implementing the said working arrangement, the General 

Manager shall exercise supervision over the personnel of such government agencies: 

Provided, further, that such supervision by the General Manager over the personnel 

of such government agencies for the purpose of implementing the said working arrangement, 

neither removes nor diminishes the power and authority of said government agencies 

insofar as their legal mandates are concerned and their control and supervision over 

their personnel; Provided, finally, that the said working arrangement may be amended or 

adjusted by the General Manager from time to time as and when the need arises. All 

government agencies operating at NAIA are directed to give their utmost cooperation and 

assistance in the review of activities and in the amendment of the working arrangements.


SECTION 4. All government agencies operating in the NAIA shall be covered by 

this Order. These include, but shall not be limited to, the Bureau of Immigration, Bureau 

of Customs, Bureau of Quarantine, Philippine National Police ñ Aviation Security Group, 

Air Transportation Office and the National Bureau of Investigation. 

SECTION 5. The actions and directives of the General Manager in the exercise 

of his authority hereunder shall be immediately executory and shall be followed and 

implemented forthwith by the concerned government agencies and personnel. 

SECTION 6. All orders and issuances inconsistent with this Administrative Order 

are hereby repealed or accordingly modified. 

SECTION 7. This Administrative Order shall take effect immediately. 







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Authorizing the National Development Company to Issue Bonds 

Under Executive Order No. 83, Series of 1998, for the Pump-Priming 

Activities and Other Projects of the Government 

WHEREAS, Executive Order No. 83, Series of 1998 (ìEO No. 83î), authorized 

the National Development Company (NDC) to issue long term bonds to support projects 

for economic growth under a revitalized rural development program; 

WHEREAS, Section 4 of EO No. 83 provides that the proceeds from the issuance 

of the bonds shall be used exclusively for the development of the agricultural and 

agrarian sectors; 

WHEREAS, there is a need to expand the coverage of EO No. 83 in order that 

the proceeds of the bonds to be used by NDS may be used to fund, by way of loan or any 

other mode of financing, the economic pump-priming activities of Government-Owned 

and Controlled Operations which have existing projects on housing, irrigation, infrastructure 

and the like which are designed to pump-prime the economy and alleviate poverty; 

WHEREAS, the NDC, pursuant to Presidential Decree No. 1648, as amended 

(the ìRevised Charter of the NDCî), is the corporate vehicle of the government designed

1000 National Administrative Register Volume 17/2 

to pursue commercial, industrial, agricultural, mining and other enterprises which may be 

necessary or contributory to the economic development of the country; 

NOW, THEREFORE, I, GLORIA M. ARROYO, President of the Republic of the 

Philippines, by virtue of the powers vested in me by law and the Constitution, do hereby 

order: 

SECTION 1. Authorizing NDC to Issue Bonds Under EO No. 83 to be Used for 

Economic Pump-Priming Activities and Other Projects of the Government ñ NDC is 

hereby authorized to issue bonds under EO No. 83. The utilization of the proceeds of the 

bonds under EO No. 83 (hereinafter referred to as the ìFundî) is hereby expanded to 

include economic pump-priming projects of the GOCC and any other projects designed 

for economic growth and poverty alleviation. 

SECTION 2. Utilization of Fund and Evaluation of Projects ñ the National 

Economic and Development Authority and the Department of Budget and Management 

are hereby directed to select the GOCCs to whom NDC will lend the Fund. 

The GOCCS that will borrow from the Fund shall be responsible for the implementation 

and monitoring of their respective projects as well as the proper Disbursement 

of the Fund once the same has been released by NDC. 

SECTION 3. Repayment to NDC ñ The DOF and DBM shall promulgate such 

rules and regulations and execute any and all documents necessary to ensure repayment 

to NDC of the Fund it will lend to the GOCCs and the eventual retirement of the bonds it 

will issue under EO No. 83 and this Executive Order. 

SECTION 4. Repealing Clause. ñ All executive issuances, rules and regulations 

or parts thereof which are inconsistent with this Executive Order are hereby revoked, 

amended or modified accordingly. 

SECTION 5. Effectivity - This Executive Order shall take effect immediately. 







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Adjusting the Dividend Rates of Metropolitan Waterworks and 

Sewerage System on its 2002, 2003 and 2004 Net Earnings Pursuant 

to Section 5 of Republic Act No. 7656


WHEREAS, Section 1 of Republic Act (RA) No. 7656 provides that: 

ìSection 1. Declaration of Policy. ñ It is hereby declared the policy of the 

State that in order for the National Government to realize additional revenues, 

government-owned or controlled corporations, without impairing their viability 

and the purpose for which they have been established, shall share a substantial 

amount of their net earnings to the National Government.î 

WHEREAS, Section 5 of RA 7656 provides that, ì[I]n the interest of national 

economy and general welfare, the percentage of annual earnings that shall be declared 

by a government-owned or controlled corporations may be adjusted by the President of 

the Philippines upon recommendation by the Secretary of Finance.î 

WHEREAS, to support the viability and mandate of the Metropolitan Waterworks 

and Sewerage System (MWSS), the liquidity, capital position, retained earnings and 

medium-term plans and programs of MWSS were considered in the determination of the 

reasonable dividend rates on its 2002, 2003 and 2004 net earnings. 

WHEREAS, pursuant to Section 5 of RA 7656, the Secretary of Finance has 

recommended the adjustment on the percentages of 2002, 2003 and 2004 net earnings 

that shall be declared by MWSS as dividend to the National Government, in the interest of 

national economy and general welfare. 


of the Philippines, do hereby order: 

Section 1. The percentage of net earnings to be declared and remitted by 

MWSS as dividends to the National Government as provided for under Section 3 of 

Republic Act No. 7656 is authorized to be adjusted to the rates specified hereunder. 

1. Eleven percent (11%), or with an equivalent amount of not less than P65.31 

M for 2002; and, 

2. Ten percent (10%), or with an equivalent amount of not less than P109.97 

M and P66.20 M for 2003 and 2004, respectively. 

SECTION 2. The adjusted dividend rates provided for under Section 1 are only 

applicable on the 2002, 2003 and 2004 net earnings, respectively, of MWSS. 







óo0oó




Strengthening the Presidential Anti-Graft Commission by Amending 

Executive Order No. 12 Series of 2001, As Amended by 

Executive Order No. 327 Series of 2004 and Revoking 

Memorandum Order No. 86 Series of 2003 

WHEREAS, Article VII, Section 17 of the Constitution provides that the President 

shall have control of all executive department, bureaus and offices; 

WHEREAS, improving moral standards in government is a major thrust of the Arroyo 

administration; 

WHEREAS, by virtue of Executive Order No. 12 dated 16 April 2001, the Presidential 

Anti-Graft Commission was created to assist the President in the campaign against graft 

and corruption; 

WHEREAS, there is a need to strengthen the Presidential Anti-Graft Commission; 

NOW, THEREFORE, I, GLORIA M. ARROYO, President of the Philippines, by virtue 

of the powers vested in me by the Constitution and the laws, do hereby order the following 

amendments to Executive Order No. 12: 

SECTION 1. Operating Units of the Presidential Anti-Graft Commission - The 

Presidential Anti-Graft Commission, hereinafter referred to as the ìCommissionî, may, 

subject to pertinent laws, rules and regulations, create, organize and set in operation 

such organizational units necessary for the performance of its powers, functions and 

duties and for the enforcement of this Executive Order. Such operating units shall be 

staffed by duly qualified personnel and those detailed to the Commission by other 

government entities. 

The Chairperson of the Commission shall have the authority to appoint, promote 

and discipline the personnel of all operating units, subject to the rules and regulations of 

the Civil Service Commission. 

The Commission may hire new personnel; provided that the organization structure 

and staffing pattern of the Commission and subsequent changes in the same shall be 

approved by the Department of Budget and Management. 

SECTION 2. Jurisdiction, Powers and Functions - (a) The Commission shall have 

the power, on complaint or motu proprio, and concurrent with the Office of the Ombudsman, 

to investigate, receive, gather and evaluate evidence, intelligence reports and information 

on or hear administrative cases against all Presidential appointees in the Executive 

Branch of the government and any of its agencies or instrumentalities occupying the 

position of Assistant Regional Director or an equivalent rank, and higher, otherwise classified 

as Salary Grade ì26î and higher, under the Compensation and Position Classification 

Act of 1989 (Republic Act No. 6758) including members of the governing board of any 

instrumentality, regulatory agency, chartered institution, and directors or officers appointed


or nominated by the President to government-owned or -controlled corporations or 

corporations where the government has a minority interest, or who otherwise represent 

the interests of the government, hereinafter referred to as ìcovered Presidential 

appointees,î as well as other public officers and employees, and private persons, in 

conspiracy or connivance with covered Presidential appointees, for acts or omissions 

constituting violations of any of the following: 

(1) Republic Act No. 3019, as amended, otherwise known as the ìAnti-Graft and Corrupt 

Practices Actî; 

(2) Republic Act No. 1379 on the unlawful acquisitions of property by a public officer or 

employee; 

(3) Republic Act No. 6713, otherwise known as the ìCode of Conduct and Ethical Standards 

for Public Officials and Employeesî; 

(4) Any provisions under Title Seven, Book Two of the Revised Penal Code; 

(5) Executive Order No. 292, Series of 1987, otherwise known as the ìAdministrative 

Code of 1987î, whenever it defines and imposes administrative sanctions on acts and 

omissions constituting violations of the foregoing laws and issuances; 

(6) Rules and Regulations duly promulgated by competent authority to implement any of 

the foregoing laws and issuances; and 

(7) Other violations as may be referred to the Commission by the President of the Philippines. 

(b) The Commission may enlist the aid and support of any law enforcement agency of the 

government in the exercise of its functions. It may also call upon all government agencies 

and instrumentalities, including government-owned and -controlled corporations for 

assistance, whether for acquisition of documents pertinent to its investigation or to 

participate in the investigation itself. The Commission may recommend the admission of 

vital witnesses into the Witness Protection Benefit Program administered by the Department 

of Justice. 

(c) The Commission shall, on complaint or motu proprio, have the authority to 

administratively adjudicate all cases falling within its jurisdiction upon sufficient cause. All 

decisions of the Commission shall be in the form of resolutions and recommendations to 

the President or the Executive Secretary rendered en banc, and shall state, among 

others, the factual findings, legal conclusions and appropriate administrative penalties 

applicable. 

(d) Upon the filing of a complaint or charge, the Commission may recommend to the 

President or the Executive Secretary the issuance of an order of preventive suspension 

against covered Presidential appointees, when the circumstances of the investigation 

warrant the same, as when the charges are punishable with removal from the service or 

when respondentís continued stay in office would prejudice the fair determination of the 

case. The preventive suspension shall continue until the case is terminated by the 

Commission but in no case shall exceed a maximum of ninety (90) days, except when the


delay in the disposition of the case is due to the fault, negligence or petition of the 

respondent, in which case the period of such delay shall not be counted in computing the 

period of suspension. 

(e) The Commission shall use every and all reasonable means to ascertain the facts in 

each case or complaint speedily and objectively. 

(f) The Commission shall, after due investigation, file the appropriate criminal complaints 

with the Office of the Ombudsman or the Department of Justice, or otherwise refer cases 

for the appropriate action of any such offices or other appropriate Constitutional 

Commissions or government units, including government-owned or controlled corporations, 

assist the prosecuting agency or officer towards the successful prosecution of such 

cases, and monitor the same. The Commission shall coordinate with the Office of the 

Ombudsman, the Department of Justice, the Anti-Money Laundering Council, and other 

appropriate government agencies and instrumentalities to ensure the successful prosecution 

of cases investigated by the Commission. 

(g) The Commission shall have the mandate to formulate national anti-corruption plans 

and strategies pursuant to the Medium-Term Philippine Development Plan of the Arroyo 

administration, and cause the efficient and effective implementation of such plans and 

strategies. For this purpose, the Commission shall enlist the services of the Presidential 

Management Staff on measures to prevent and minimize the opportunities for graft and 

corruption at all levels of bureaucracy. 

(h) The Commission may engage the services of qualified consultants and/or deputies 

from the public and private sectors, subject to pertinent laws, rules and regulations. 

(i) The Commission shall oversee the implementation and compliance by all agencies, 

instrumentalities and offices in the Executive Branch with all anti-graft and corruption 

laws and issuances and shall secure their compliance with integrity development or 

enhancement plans. 

(j) The Commission may develop and conduct public awareness and information 

campaigns, and engage in partnerships or cooperative undertakings with local government 

units, civil society, peopleís organizations, the academe and/or the business sector, to 

encourage public participation in the governmentís anti-corruption efforts. 

(k) The Commission may recommend the issuance and adoption of appropriate policies 

that would strengthen anti-corruption efforts and hasten the arrest and prosecution of 

corrupt government officers and employees, including private persons conspiring with 

them. 

SECTION 3. Power to Summon Government Personnel and Administer Oaths - 

Pursuant to its power to investigate and adjudicate, the Commission shall have the power 

to administer oaths and summon or subpoena government personnel and records. 

SECTION 4. Effect of Non-Compliance with Summons - Any unreasonable delay 

or refusal of a Presidential appointee to comply with the summons or subpoena issued by 

the Commission shall constitute a ground for administrative disciplinary action to be


recommended by the Commission en banc against the Presidential appointee to whom 

such summons or subpoena was addressed. The Commission en banc may, for this 

purpose, also file the appropriate criminal charge or complaint against the erring public 

officer or employee with the civil courts, Civil Service Commission and other appropriate 

tribunals. 

SECTION 5. Interagency Assistance and Cooperation - All government agencies 

and instrumentalities shall give the Commission all the assistance and cooperation required 

in order to ensure the success of its programs and investigation pursuant to 

provisions hereof. 

SECTION 6. Disclosures - The Commission and its personnel shall not disclose or 

make public any record or information in connection with any investigation, when such 

disclosure would deprive the respondent of his/her right to a fair and impartial disposition 

of the case. Only the Chairperson may disclose any information to the public; provided, 

that any such disclosures shall be balanced, fair and accurate. 

SECTION 7. Personnel - The Commission may from time to time restructure the 

plantilla, transfer officers and employees from one position to another in order to comply 

with the ratio of eighty percent (80%) investigative personnel and twenty percent (20%) 

administrative personnel. 

SECTION 8. Funding - The Commission shall have an appropriate budget as determined 

by the Deputy Executive Secretary for Finance. 

SECTION 9. Separability Clause - In the event that any provision of this Executive 

Order or any part thereof is declared invalid, illegal or unconstitutional, the remainder of 

this Executive Order or any provision not thereby affected shall remain in force and 

effect. 

SECTION 10. Revoking Memorandum Order No. 86 - Memorandum Order No. 86 

dated 30 January 2003 is hereby revoked. For this purpose, the signing authority of all 

orders, resolutions and decisions rendered by the Commission reverts to the Executive 

Secretary. 

SECTION 11. Repealing Clause - All orders, rules and regulations and issuances 

or parts thereof inconsistent with this Executive Order are hereby repealed, amended or 

modified accordingly . 

SECTION 12. Effectivity - This Executive Order shall take effect fifteen (15) days 

after its publication. 


(SGD.) GLORIA MACAPAGAL ARROYO 




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Delegating to the Secretary of Education the Power to 

Exercise Oversight Over the National Historical Institute 

WHEREAS, the National Historical Institute, an agency tasked, among others, to 

encourage researches in Philippine history as well as the writing and publication of 

textbooks on the subject, the research and writing of biographies of heroes including 

accounts of historical events, and the translation of important scholarly works of Filipino 

and foreigners, is attached to the National Commission for Culture and the Arts (Section 

8, Republic Act No. 9155); 

WHEREAS, the power to exercise oversight function over the National Commission 

for Culture and the Arts is delegated to the Secretary of Education (Section 1, Executive 

Order No. 430, s. 2005); 

WHEREAS, history is a primary area of concern of education; 

WHEREAS, Section 17, Article VII of the Constitution provides that the President 

shall have control of all executive departments, bureaus and offices and shall ensure that 

all laws be faithfully executed; 



SECTION 1. Delegation to the Secretary of Education. The power of the President 

under Section 17, Article VII of the Constitution and as administrative head of the 

Government to exercise oversight over the National Historical Institute is hereby delegated 

to the Secretary of Education. 

SECTION 2. Repealing Clause. All other executive issuances, rules and regulations 

or parts thereof which are inconsistent with the provisions of this Executive Order are 

hereby repealed, amended or modified accordingly. 



(SGD.) GLORIA MACAPAGAL ARROYO 



Executive Secretary


PHILIPPINE HEALTH INSURANCE CORPORATION 


PhilHealth Circular No. 11, S. 2006 

Guidelines on the Renewal of Accreditation of Out-Patient Clinics 





óo0oó 


Requirement for a Continuous Quality Improvement Program 

in Accreditation of Hospitals 

Section 50 of the Revised Implementing Rules and Regulations of the National 

Health Insurance Act (RA 7875) as amended by RA 9241 states that the Corporation 

ìshall implement a Quality Assurance Program applicable to all health care providers for 

the delivery of health services nationwide..ensure that the health care services rendered 

to the members by accredited health care providers are of the quality necessary to 

achieve the desired health outcomes and member satisfaction.î 

Related to this, the PhilHealth Benchbook on Performance Improvement of Health 

Services (Benchbook) was adopted, through Circular No. 12, S. 2005, as the main 

reference for assessing and evaluating the performance of accredited health care providers. 

The Benchbook embraces the shift in paradigm of the Corporationís quality 

assurance framework from that of purely accountability to that of continuous quality 

improvement. 

In view of this, starting January 1, 2007, PhilHealth shall require all hospitals 

applying for accreditation, to have a Continuous Quality Improvement (CQI) Program as 

described in Part III of the PhilHealth Benchbook. Likewise, accredited government 

hospitals are advised to refer to DOH Administrative Order No. 2006-0002 for additional 

guidance. 


(SGD.) LORNA O. FAJARDO, CESO III 

Officer-in-Charge 

Office of the President and CEO 

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ICD-10 Coding Guidelines for Tuberculosis 




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Amendment to PhilHealth Circular No. 26 of 2003: PhilHealth 

Coverage of Avian Influenza and Influenza Pandemic 

Pursuant to PhilHealth Board Resolution No. 880, S. 2006, PhilHealth benefit for 

Severe Acute Respiratory Syndrome (SARS) is expanded to include coverage of avian 

influenza and influenza pandemic. The following rules apply to all claims for SARS, avian 

influenza and influenza pandemic. 

I. Coverage 

A. Avian Influenza/Influenza Pandemic 

1. Avian Influenza (AI) or ìbird fluî is a contagious disease normally infecting 

animals that may cause serious illness when transmitted to humans. Influenza 

pandemic (IP) occurs when a new influenza A virus appears in the human 

population and then spreads easily from person to person worldwide. 

2. This benefit covers only avian influenza or influenza pandemic caused by 

subtypes of avian influenza A virus recognized by the Department of Health 

(DOH) as risks to human health and capable of creating influenza pandemic. 

This includes: 

a. Avian influenza A virus H5N1; or 

b. New subtypes of Avian influenza A virus that have never circulated 

among humans; & 

c. Other subtypes of Avian influenza A virus that have not circulated 

among humans for a long time. 

3. Excluded from this benefit are the following: 

a. Influenza-like illness (ILI) and; 

b. Other seasonal outbreaks of influenza caused by established flu 

viruses (e.g., H1N1, HIN2 and H3N2) that occur widely in humans


II. Benefit 

These cases of influenza are covered by the regular hospitalisation benefits 

of PhilHealth. 

B. Systemic Acute Respiratory Syndrome 

1. Severe Acute Respiratory Syndrome (SARS) is a respiratory viral infection 

caused by a coronavirus ñ SARS CoV. 

2. This benefit covers only probable and confirmed cases of SARS identified 

by DOH. 

3. Patients classified only as SARS suspect cases are not covered by this 

benefit. Moreover, cases of acute respiratory illness where an alternative diagnosis 

can fully explain the illness are excluded from this benefit. 

1. This benefit may be availed of by qualified PhilHealth members (including 

Overseas Workers program) and dependents identified by DOH as cases of 

SARS or avian influenza/pandemic influenza. For confinements abroad, it 

must be certified by the attending physician. 

2. Excerpt for confinements abroad, patients availing this benefit be admitted 

in a DOH designated SARS or AI/IP hospital. 

3. Hospitalisation benefits for members and dependents admitted in a DOHdesignated 

SARS or AI/IP hospital is set at 50,000 pesos per case. 

4. Hospitalisation benefits for health care workers (HCWs) in DOH-designated 

SARS or AI/IP hospitals is set at 100,000 pesos per case provided that: 

a. HCW contracted the disease while caring for a SARS or AI/IP patient 

(person-to-person transmission) 

b. HCW renders service in a DOH-designated hospital for SARS or AI/IP 

c. DOH attests that the HCW contacted the disease while performing his 

official duties in a DOH-designated hospital for SARS or AI/IP. 

d. HCW is a qualified member of the National Health Insurance Program 

5. The SARS or Avian Influenza/Influenza Pandemic Benefit covers payment 

for the following: 

a. Room and board 

b. Drugs and medicines 

c. Radiographic services and laboratory examinations 

d. Supplies 

e. Transfer services from referring hospital to DOH-designated hospital 

f. Use of the operating room complex 

g. Professional fees 

h. Other medically necessary care

1010 


6. Professional fees are incorporated in the benefit. Computation is based on 

the table below and total doctorsí PF is subtracted from the total benefit 

package 

SERVICE PROFESSIONAL FEE MAXIMUM 

BENEFIT 

Medical Management: 

a. General Practitioner 150 pesos/day 900 pesos 

b. Specialist 250 pesos/day 2,500 pesos 

Surgical management: 

a. Surgeon 40 pesos/RVU 16,000 pesos 

b. Anesthesiologist 30% surgeonís fee 5,000 pesos 

Example: 

BENEFIT 

Case Rate 50,000 pesos 

a. Professional Fee 2,500 pesos ñ pay to doctor 

b. Hospital Charges 47,500 pesos ñ pay to hospital 

7. The rule on single period of confinement and 45-day allowance per year 

applies. 

III. Claims Filing 

1. The following are required for claims processing: 

a. PhilHealth Form 1 - duly accomplished by member and employer (if 

employed) 

b. PhilHealth Form 2 - duly accomplished by hospital representative 

c. List of DOH designated SARS or AI/IP hospitals as proof facility 

designation 

d. Certification from DOH for HCW patients 

e. Certification from attending physician for confinement abroad 

f. Other supporting documents as required by PhilHealth Circular No. 18 

series of 2003 

2. Itemization of Parts III and IV of Claims Form 2 is not required provided that 

item 12 in Part I is duly accomplished (declaration of actual charges). 

3. PhilHealth benefit for SARS, avian influenza, and influenza pandemic shall 

be paid directly to DOH-designated hospitals and accredited doctors. 

4. All claims applications shall be filed within 60 days from date of discharge of 

patient. 

5. In cases where members are required by hospitals to buy drugs, medicines 

and supplies or requested to seek out other necessary services (laboratory


procedures) from other facilities, reimbursement to members is allowed, provided 

that: 

a. Hospital cannot provide the necessary items and services covered by 

the benefit. 

b. These items and services are used during confinement. 

c. Official receipts and/or other documents of purchases are submitted. 

d. The reimbursements to members depend on the actual cost of the receipts 

submitted but not more than the difference between the maximum 

benefit and the hospital reimbursement. 

e. The hospital acknowledges that the cost of benefits and services it provided 

is less than the maximum benefit by appropriate filling-up item 12 

of Part I of Form 2. 

Example: 

BENEFIT 

Case Rate 50,000 pesos 

a. Professional Fee 2,500 pesos ñ pay to doctor 

b. Hospital Charges 42,500 pesos ñ pay to hospital 

c. Official receipts ñ total 12,000 pesos 5,000 pesos ñ pay to member 

6. Benefit payment shall not exceed the maximum benefit, or the actual charges/ 

benefit deducted from the patient whichever is the lowest. 

IV. Eligibility Requirements 

1. Current eligibility rules apply for the availment of this benefit. 

2. Employed and IPP members should have at least three (3) months of contributions 

within the immediate six (6) months prior to the month of admission. 

3. Sponsored members may avail of this benefit within the validity period stated 

in their PhilHealth membership Identification Card or Certificate of eligibility 

(Form CE1) as per PhilHealth circular No. 3, s. 2005. 

4. OWP members or their dependents may avail of this benefit within the validity 

period stated in their Medicare Eligibility Certificate (MCE), PhilHealth 

Certificate of Eligibility (PCE) or enhanced Memberís Data Record (MDR). 

V. Effectivity 

This circular shall take effect for all claims with discharge dates starting June 1, 


All other rules and guidelines not contrary to this circular shall remain in full force 

and effect. 

Adopted: 18 April 2006

1012 



(SGD.) LORNA O. FAJARDO 

Acting President & CEO 

óo0oó 


Reimbursement of Claims for PNDF Drugs Used Only in Hospitals 

Accredited Under the DOH Antimicrobial Resistance Surveillance Program 

Pursuant to Section 37 of Republic Act 7875 (as amended by RA 9241) which, 

among others, provide for reimbursement for the use of drugs included in the PNDF, we 

would like to reiterate that the following drugs are reimbursable only when used in hospitals 

accredited under the DOH Antimicrobial Resistance Surveillance Program (see Annex 

A*): 

1. Cefepime 

2. Gatifloxacin 

3. Meropenem 

4. Piperacillin + Tazobactam 

5. Vancomycin 

This circular shall take effect for all claims with admission dates starting June 1, 


All other provisions consistent herewith shall remain in full force and effect. 




Acting President and CEO 

--o0o-- 

PhilHealth Circular No. 16, s. 2006 

Reformed Value Added Tax (RVAT) Implementation on 

PhilHealth Reimbursements for Professional Fees 

Pursuant to Republic Act No. 9337 and Bureau of Internal Revenue Memorandum 

Circular No. 16-2005, professional fees (PF) of doctors are covered in the application of 

RVAT. Doctors earning an annual income of more than 1.5 Million shall be subjected to 




RVAT while those whose annual income does not exceed 1.5 Million shall be VAT-exempt. 

In the implementation of RVAT, PhilHealth shall use the Copy of the BIR updated Certificate 

of Registration (COR)--whether VAT registered or VAT exempt, as basis for the 

application of the withholding taxes as follows: 

3% percentage tax for VAT-exempt doctors 

5% final tax for VAT registered doctors 

In line with this, all accredited doctors are advised to submit a copy of their updated 

BIR Certificate of Registration to the Accreditation Department (Central Office ) or any 

PhilHealth Office (Regional, Branch or Service Offices) on or before July 31, 2006. In 

the absence of a COR, the professionals/doctors shall be considered VAT registered and 

the 5% final tax shall be withheld on their PF starting August 1, 2006 until the submission 

of COR. 

Submission of COR, however, does not preclude the requirement of the annual 

(June to July) submission of Affidavit/Sworn Declaration (A/SD) of Current Yearís Gross 

Income which will be the basis for the implementation of Expanded Withholding Tax 

(EWT) on income. In the absence of A/SD, the 15% withholding tax shall be applied on all 

PF payments starting August 1, 2006 and thereafter, until the submission of an A/SD on 

or before December 31 of the current year. 

This circular shall be applicable to all benefit reimbursements of PF effective August 

1, 2006. All other issuances consistent with this remain in effect. 

Please be guided accordingly. 



Acting President and CEO 

PHILIPPINE NATIONAL POLICE 


I. References: 

Circular No. 01-2006 

Free Legal Assistance of the IBP to PNP Personnel 

with Service Connected Offenses 

a. Section 49, RA No. 6975 as amended by Section 56, RA No. 8551; 

b. Joint Memorandum Circular of the DOJ, NAPOLCOM and PNP implementing 

Section 49, RA No. 6975; 

c. PNP Rules and Regulations Governing the functions of the Legal Assistance 

Board;

1014 

II. Scope 


d. LAB Resolution No. 2001-01 ñ creating the Legal Assistance Board at PROís 

and NSUís; 

e. DPRM Letter Orders Number 1270 dated December 19, 2005; 

f. IBP and PNP Memorandum of Agreement dated January 30, 2006. 

This circular shall cover the procedures to be observed in the processing and 

granting of free legal assistance to be rendered by the IBP to PNP personnel charged 

with service connected offense and the availment of lecturers from the Integrated Bar of 

the Philippines to lecture on laws and jurisprudence related to police functions. 

III. Objectives 

a. To boost/promote the morale of every PNP personnel, especially those assigned with 

the operations and investigation, by providing them legal counsel or legal aid from the 

Integrated Bar of the Philippines, ready and willing to assist and tend to their cases and 

prepare for their personal defense in service related offenses; 

b. To contribute to the attainment of a high crime solution efficiency and conviction rate 

of criminals and for more effective and efficient crime prevention and suppression. 

c. To enhance the performance capability of the PNP thru efficient and effective investigation, 

handling and presentation of evidence and the proper collaboration in the prosecution 

of cases. 

IV. Definition of Terms: 

For purposes of this circular, the following terms are hereby defined: 

a. Legal Assistance ñ Court appearances and representations, preparation and submission 

of pleadings and other documents required to be produced and submitted by the 

court or tribunal, and such other legal services needed for the protection of the rights of a 

PNP member who has been charged of a service connected offense, subject, however, 

to the ìMerit and Means Testî of the IBP. Such legal assistance could be availed in 

administrative, criminal and civil cases upon the filing of the complaint before the administrative 

body, the prosecutors office or before the Ombudsman or at any stage of the 

proceeding or even on appeal on a case to case basis, if still warranted by the circumstances. 

b. NHQ Legal Assistance Board ñ the Board created at the NHQ headed by the TCDS 

who shall endorse for approval of the IBP the recommendations of the RLAB. 

c. Regional/NSU Legal Assistance Board ñ Board created at the different Police Regional 

Offices/NSUs who shall deliberate and/or approved requests for legal assistance. 

d. Personnel who may be entitled to Legal Assistance ñ all active uniformed personnel of 

the Philippine National Police with the rank of Police Officer One (PO1) to Police Chief 

Inspector (PCINSP) who shall pass the ìmerit and meansî test of the Integrated Bar of 

the Philippines (IBP), except such PNP personnel is accused of violations of the Bill of


Rights and other laws of the land where the IBP handles the said cases in behalf of the 

prosecution or the complainant. 

e. Service ñ Connected Offense ñ any Administrative, Criminal and Civil case that may 

be charged against PNP personnel resulting from the lawful performance of official duties. 

f. Criminal Case ñ an action, suit or cause instituted to punish an infraction of criminal 

laws (Blackís Law Dictionary 1990 ed.), arising from the lawful performance of official 

function. 

g. Administrative case ñ complaint filed with the Ombudsman, Sandiganbayan, Quasi - 

Judicial Bodies, PLEB, Mayorís Office, IAS and PNP Disciplinary Authorities arising 

from the lawful performance of official function. 

h. Civil Case ñ an action founded on private rights arising either from a contract or a 

quasi-delict (Words and Phrases Vol. 7). It also include civil cases arising from legitimate 

police operation. 

i. Quasi-Judicial Bodies ñ administrative agencies which are required to investigate 

facts, or ascertain the existence of facts, conduct hearings, weigh evidence, and draw 

conclusions from them as basis for official action in the exercise of discretion of a judicial 

nature (Blackís Law Dictionary 1990 ed.). 

j. Head of Office/Immediate Superior - refers to the Directors of the Police Regional 

Offices, the Directors of the National Support Units and the Directors of the Provincial 

and City Police Offices. 

V. Policies and Procedures 

1. In cases filed against PNP personnel assigned with the National Headquarters 

and National Support Unit assigned at the National Headquarters, the following procedure 

shall be observed: 

a. PNP member charged with service connected offense shall submit a written request to 

his immediate superior officer attaching all the papers related to the case, i.e., spot 

report, investigation report, copy of the complaint or information, and other document 

deemed necessary. 

b. The immediate superior officer shall, within two (2) days from receipt, endorse the 

same to the National Legal Assistance Board, attn: Director, Legal Service -ñHead Secretariat 

for appropriate action. 

c. The NHQ LAB shall, upon determination of the merit of the request, immediately endorse 

the same to the National President, IBP appending to the request machine copy of 

the documents which are pertinent to the case. 

d. The NHQ LAB, thru the Secretariat, shall monitor all cases endorsed to the IBP and 

shall submit a monthly report to the C, PNP copy furnished the National President, Integrated 

Bar of the Philippines.

1016 


2. In cases filed against PNP personnel assigned with the Police Regional Offices, 

Police Provincial Offices and National Support Unit personnel assigned at the PRO or 

Police Provincial Offices, the following procedure shall be observed: 

a. PNP member charged with service connected offense shall submit his request to his 

immediate superior officer attaching all the documents related to the case, i.e. spot 

report, investigation report, copy of the complaint or information, and other document 

pertinent to the case. 

b. The immediate superior officer shall, within two (2) days from receipt, endorse the 

same to the Regional Legal Assistance Board (RLAB), attn: Chief, Regional Legal Service. 

c. The RLAB, through the Chief, Regional Legal Service shall, upon determination of the 

merit of the request, immediately endorse the same to the Chapter President, IBP that 

has jurisdiction over the tribunal or court where the case is pending appending to the 

request machine copy of the documents which are pertinent to the case copy furnished 

the NHQ LAB. 

d. The RLAB shall monitor all requests endorsed to the IBP and submit a monthly report 

to the NHQ LAB, copy furnished the Chapter President, IBP. 

3. On the lecture of laws and jurisprudence related to police function, request for 

availability of the IBP lecturers could be submitted by the immediate superior officer to 

the National or Chapter President, Integrated Bar of the Philippines, thru the NHQ LAB or 

RLAB, as the case may be. The Director, Legal Service or Chief, Regional Legal Service, 

as the case may be, shall closely coordinate with the appropriate office of the IBP 

and submit a Report for every activity and a monthly report on lectures conducted. 

4. The PNP must provide transportation to lawyers designated by the IBP to handle 

cases in behalf of PNP personnel and to those who will lecture on laws and jurisprudence 

related to police functions. If necessary, the PNP unit concern must also provide the 

detail of police escorts to the IBP lawyers. Thus, the Director, Legal Service or Chief, 

Regional Legal Service shall see to it that appropriate coordination is made at least five 

(5) days before the scheduled hearing with the City or Provincial Police Office for the 

detail of at least two (2) security personnel and the availability of vehicle. 

5. As may be necessary, the PNP Legal Service, Regional or Provincial Legal 

Offices shall be made available to the IBP lawyer tasked to render legal assistance, as 

well as access to legal references, use of computers. Personal assistance to research 

work or in the filing of pleadings or service of documents shall likewise be extended by the 

NHQ, Regional or Provincial Legal Office to the IBP lawyers. If warranted by circumstances, 

police security may also be detailed for the protection of the IBP lawyer rendering 

legal assistance and his family. 

6. Assistance shall also be rendered in connection with IBP membersí application 

for the issuance or renewal of firearm licenses and/or permit to carry firearms outside 

residence in accordance with existing rules and regulations.


7. All legal expenses in connection with the case, including the cost of transcript of 

stenographic notes (TSNs) except the cost of or payment for the legal services of the IBP 

lawyer shall be temporarily borne by the PNP personnel charged and subject to reimbursement 

after the termination of the case by filing of a request for reimbursement with 

the Regional Legal Assistance Board. The RLAB shall, thru a resolution, endorse said 

request for reimbursement to the NHQ LAB for granting of the request subject to availability 

of funds. 

VI. Penal Clause: 

Any personnel who delays the processing of application for legal assistance shall 

be subjected to administrative prosecution. The immediate superior officer of the personnel 

involved shall be included as a co-respondent under the doctrine of command 

responsibility. 

VII. Effectivity: 

This Circular shall take effect after thirty (30) days from the filing of a copy hereof 

at the University of the Philippines Law Center in consonance with Section 3 and 4 of 

Chapter 2, Book VII of Executive Order No. 292, otherwise known as ìThe Revised 

Administrative Code of 1987î as amended. 




(SGD.) ARTURO C. LOMIBAO 

Police Director General 

C, PNP 

I Concur: 

(SGD.) ATTY. JOSE ANSELMO I. CADIZ 

National President, IBP 

óo0oó 

LOI 03/06 ìTF LAWYERSî 

a. Memorandum of Agreement (MOA) between the Integrated Bar of the Philippines 

(IBP) and the Philippine National Police (PNP) dated January 30, 

2006; 

b. PNP Circular implementing the MOA between the IBP and PNP; 

II. Purposes and Scope:

1018 


To set goals and general direction to concerned police units in the conduct of 

special investigation geared towards the identification, prosecution and arrest of the 

suspects in the killing of lawyers (members of the Integrated Bar of the Philippines) 

III. Situation 

The incidence of killing of Lawyers in the Philippines for various reasons remain a 

huge task for law enforcement. Statistics have indicated that only a few of these killings 

were solved while others are unsolved and/or pending investigation. It is worth to mention 

also the considerable period of time that lapsed since the occurrence of the same without 

material progress up to this time. 

In the light of the insistent appeal of the members of the Integrated Bar of the 

Philippines (IBP) crying for justice on behalf of their slain colleagues and also the objective 

of solving these killings, there is a need to renew and sustain police actions to resolve 

these incidents. 

IV. Mission: 

To organize, integrate, concentrate and strengthen police efforts in undertaking 

case build-up and evidence gathering necessary for the filing of case against those 

involved in the killing, attempt or threat to the lives of the members of the Integrated Bar of 

the Philippines nationwide. 

V. Concept: 

The PNP concurrent with its mission and function shall, through its tasked units, 

create a task force who will concentrate in the special investigation of killings (to include 

previous unsolved cases) of the members of the Integrated Bar of the Philippines either in 

the government service or in private practice. To effectively carry out its mission towards 

the speedy solution of these cases, the PNP shall create TF LAWYERS, the significant 

role of which is conceptualized in the following: 

a. Identify those persons involved in the commission of these crimes; 

b. Gather sufficient evidence and to secure and protect material witnesses; 

c. File appropriate criminal and other charges and participate in the prosecution of arrested 

personalities; 

d. Initiate regular case conference with the prosecutors to identify the weaknesses in 

pursuing the investigation of these cases and to ensure one hundred percent (100%) 

conviction rate; 

VI. Tasks: 

a. D, CIDG: 

1. OPR in the implementation of this LOI;


2. Activate ìTF LAWYERSî with the Deputy Director, CIDG as Task Force 

Commander; 

3. To lead the conduct of investigation, supervise and monitor the progress 

and activities of the tasked units in the implementation of this LOI; 

4. Ensure the availability of the Deputy Director, CIDG for the performance 

of his duty as Commander of the Task Force; 

5. Provide other personnel augmentation and other resources to support 

the investigative requirements of the Task Force; 

6. Ensure the attendance of the DD, CIDG during the monthly meeting of 

the Board of Governors of the Integrated Bar of the Philippines at their 

national office or any place/venue designated for the purpose and to 

submit update report on the investigation conducted by the Task Force. 

7. Perform other tasks as directed. 

b. DPRM: 

1. Issue orders for the Deputy Director, CIDG as Task Force Commander, 

Task Force LAWYERS; 

2. Issue orders for other PNP personnel to compose the Task Force; and 


c. All RDs PRO 1-13, COR, ARMM, NCRPO and D, NSUs: 

1. Assist TF LAWYERS in the conduct of investigation of crimes committed 

against members of the IBP within their respective AOR; 

2. Provide the necessary security, financial and logistical support to TF 

LAWYERS and make available personnel for augmentation; 

3. Participate in the regular case conference to be called for by the TF 

LAWYERS; and 


d. D, CL: 

1. Provide appropriate technical and or forensic support to the TF LAW- 

YERS; 

2. Organize one (1) SOCO Team immediately available for dispatch in case 

a lawyer is reported killed; 

3. Ensure the availability of personnel and equipment for the conduct of 

investigation; and 


e. D, IG: 

1. Provide timely intelligence information to support the investigation activities 

of the TF LAWYERS; 

2. Provide intelligence personnel and action agents during the conduct of 

investigation of the TF; and 

3. Perform other tasks as directed.


f. DIDM: 

1. Provide a representative to the Task Force, preferably a PCO-Lawyer or 

well trained PCO investigator, to join in the actual investigation; 

2. Ensure the presence of said PCO-lawyer or well trained PCO Investigator 

whenever called by the Task Force; and 


g. D, LS: 

1. Provide appropriate legal service to the Task Force; 

2. Provide a representative to the Task Force, preferably a PCO-Lawyer, to 

join in the actual investigation; 

3. Ensure the appearance of said PCO-Lawyer whenever called by the 

Task Force; and 


h. DC: 

1. Provide financial support to the Task Force immediately upon request; 

2. Ensure the immediate release of the funding support to the Task Force; 


i. DL: 

1. Provide the necessary logistical support immediately upon request by 

the Task Force; 

2. Ensure the availability of the said logistical support whenever required; 

and 


VII. Coordinating Instructions: 

a. TF Lawyers shall be activated within one (1) week upon approval of this 

LOI and all tasked units shall submit to CIDG their respective IMPLANs 

one (1) week upon receipt hereof. Furthermore, D, CIDG shall submit 

the organizational structure and composition of the TF for approval of 

the C, PNP. 

b. The Commander, TF Lawyers, shall submit a monthly report to the C, 

PNP thru channel, indicating therein the result of their investigation and 

the progress of the cases of slain lawyers copy furnished the Integrated 

Bar of the Philippines and likewise attend the monthly meeting of the IBP 

Board of Governors. 

c. Task Force Lawyers shall constantly coordinate with the Integrated Bar 

of the Philippines and other concerned Government, Non-Government 

Organizations, and Civilian Sectors to secure other relevant information 

surrounding the killing of lawyers.


VII. Effectivity: 

d. Tasked units shall operate on existing logistical and financial allocations. 

e. Lateral coordination with other government agencies and all sectors of 

the society shall be encouraged. 

f. The Rules of Court, the Police Operational procedures and other governing 

laws, rules and regulations shall strictly be observed. 

g. Human rights of every person shall always be respected at all times. 

This LOI shall take effect thirty (30) days upon approval. 





Chief, PNP 

óo0oó 

Resolution Approving the Amendment of Specific Provisions and 

Providing for Additional Section of the 2003 IRR of RA 5487, As Amended 

Study Committee Resolution No. 01-05 

WHEREAS, a Committee for the Amendment of the above-cited provisions was 

created pursuant to Letter Orders No. 520 dated June 2, 2005 composed of the following 

Offices: 

Directorate for Operations (DO); 

Directorate for Human Research and Doctrine Development (DHRDD); 

Civil Security Group (CSG); 

Legal Service (LS); and 

PADPAO 

WHEREAS, Section 3.C.d Rule X of the 2003 IRR of RA 5487, as amended 

provides for the minimum contract rate as prescribed under the PADPAO Memorandum 

Agreement in conformity with existing laws and Section 7.g, Rule XVII of the same 

Implementing Rules and Regulations specifies the administrative sanctions for private 

security agencies found to have engaged in cut-throat security services; 

WHEREAS, above-cited provisions of the Implementing Rules and Regulations 

are not within the ambit of RA 5487, as amended and therefore, it needs to be amended; 

WHEREAS, on November 8, 2005, the Committee amended Sections 3.C.d, 

Rule X, 7.g, Rule XVII and 19, Rule IV to be read, respectively, as follows:


(Section 3.C.d, Rule X) 

ìThey shall not indulge in cut-throat competition, an offense committed by undercutting 

existing contract rate between the Private Security Agency (PSA) and the client 

regardless of the rate of the present contract and/or offering a price below the fixed rates 

prescribed by law for standard salaries and benefits for the guards and mandated taxes 

of the minimum cost distribution formula prescribed under the Implementing Rules and 

Regulations of RA 5487 in conformity with existing wage laws.î 

(Section 7.g, Rule XVII) 

ìWhen a PSA has been found to have engaged in cut-throat competition, an 

offense committed by offering a price below the fixed rates prescribed by law for standard 

salaries and benefits for the guards and mandated taxes of the minimum cost distribution 

formula prescribed under the Implementing Rules and Regulations of RA 5487, as 

amended, a penalty of administrative fines shall be imposed upon such erring Private 

Security Agency in the amount of fifty percent (50%) of the annual contract for the first 

offense and cancellation of license to operate for the second offense. PSA operators 

whose licenses have been cancelled under this rule shall be barred from obtaining another 

LTO. For purposes of this section, each contract entered into by a PSA, in violation 

of this provision shall be considered as a single count and treated as a separate offenseî. 

ìFor government contracts, any PSA bidder who shall offer an amount lower than 

the standard minimum wage and mandated taxes in its financial proposal shall be automatically 

disqualified and imposed an administrative penalty of suspension from participating 

in the public bidding process for having submitted bids containing false information, 

an act punishable under Section 69 of the Implementing Rules and Regulations Part 

A (IRR-A) of Republic Act No. 9184 (RA 9184). In such case, the PSA bidderís act is 

contrary to its previous declaration in its certificate of compliance with existing labor laws; 

a document submitted as part of the bidderís technical proposal. Provided, further that 

the said bidder shall also be blacklisted by the government agency concerned, pursuant 

to the Uniform Guidelines for Blacklisting, issued by the Government Procurement Policy 

Board (GPPB)î. 

ìIn the same manner, a complaint for cut-throat competition shall be filed against 

the erring PSA with the PADPAO Discipline Committee under Section 3.C.d, Rule X and 

Section 7.g, Rule XVII of this IRR. The decision of the PADPAO Discipline Committee 

shall be affirmed and indorsed by the PADPAO Board of Directors to the SAGSD for 

consideration and imposition of corresponding penalties. Any appeal shall be filed with 

the Chief, Philippine National Police within ten (10) working days from receipt of the 

notice of said decision and shall be resolved by the CSG Adhoc Adjudication Board, 

upon the order of the C, PNP, within forty-five (45) working days from filing thereof.î 

ìLikewise, Rule XVII ñ Protest Mechanism (covering sections 55, 56, 57 & 58) of 

the Implementing Rules and Regulations part A (IRR-A) of Republic Act No. 9184 (RA 

9184) provides for another avenue to protest the decision of the Bids and Awards Committee 

(BAC).î 

(Section 19, Rule IV)


ìCompensation, Social Benefits and Mandated Taxes. The employer Private 

Security/Training/Detective Agency, Company Guard Force, Government Guard Unit shall 

ensure the compensation of the following benefits and taxes due their respective security 

personnel as required by law: 

a. Guard salaries and benefits 

1) salary and wage prescribed in the minimum wage law; 

2) mandated health and medical but limited to annual physical examination 

3) mandated insurance benefits; 

4) mandated Pag-Ibig benefits; 

5) mandated separation and retirement pay benefits; and 

6) other as mandated by law. 

b. Mandated taxes 

1) value added tax; and 

2) other taxes as may be mandated thereafter. 

Relative thereto, no watchman, security guards or private detective shall be paid 

a salary compensation and social benefits less than that is prescribed by existing laws, 

rules and regulations including those that may be promulgated relative thereto. The 

amount prescribed therein shall be earmarked and set aside for the purpose aforestated; 

thus the same shall hereafter be segregated from the monies received by the agency 

from its clients an amount reserved for the remuneration of the guard or detective.î 

WHEREAS, a new provision for the imposition of administrative fine for Section 

19, Rule IV was formulated; Section 7.1., Rule XVII to read as follows: 

ìWhen a PSA has been found to have violated Section 19, Rule IV, a penalty of 

administrative fine shall be imposed upon such erring PSA in the amount of fifty percent 

(50%) of the annual contract value for the first offense and cancellation of LTO for the 

second offense.î 

NOW THEREFORE, RESOLVE, as it is hereby resolve that upon motion and duly 

seconded, the Study Committee approves the above-cited provisions. 

Adopted: 28 Nov. 2005 

Approved by: 

(SGD.) PCSUPT JAIME G. CARINGAL 

Chairman 

(SGD.) PSSUPT WILFREDO C. FUENTES 

Vice-Chairman 

(SGD.) PSSUPT RAMON V. GATAN (SGD.) PSUPT JOSE V. CARILLO 

CSG Rep (Member) CSG Rep (Member)


(SGD.) PSINSP LAILANI M. TUBON (SGD.) PSSUPT. ROBERTO L. ROSALES 

DO Rep (Member) DHRDD Rep (Member) 

(SGD.) PSINSP NELSON P. PAGADUAN (SGD.) PSUPT. FERDINAND E. SANTOS 

LS Rep. (Member) FED Rep. (Member) 


(SGD.) MR. RAMON D. BERGADO 

PADPAO Rep. (Member) 

Attested by: 

(SGD.) PCSUPT. ANTONIO D. NA—AS 

Board Secretariat 

óo0oó 

Resolution Approving the Amendment of the Penal Provision of 

Section 9.b.2, Rule XVII, 2003 IRR of RA 5487, as Amended 

Study Committee Resolution No. 02-05 

WHEREAS, a Committee for the Amendment of the above-cited provision was 

created pursuant to Letter Orders No. 520 dated June 2, 2005 composed of the following 

Offices: 

Directorate for Operations (DO); 

Directorate for Human Research and Doctrine Development (DHRDD); 

Civil Security Group (CSG); 

Legal Service (LS); and 

PADPAO 

WHEREAS, Section 9.b.2, Rule XVII of the 2003 IRR of RA 5487, as amended 

specifies that ìposting of unlicensed personnel for dutyî is classified as a less grave 

offense with a penalty specified in Section 10.b, Rule XVII: 

1) 1 st offense - P10,000.00; 

2) 2 nd offense - 20,000.00; and 

3) 3 rd offense - 30,000.00 or cancellation/revocation of license 

to operate or both 

WHEREAS, some unscrupulous security personnel have been performing security 

services with fake or no license to exercise security profession at all; 

WHEREAS, some Private Security Agencies and Company Guard Forces have 

been unknowingly posting private security personnel with fake or no license at all; 

WHEREAS, these Private security personnel with fake or without licenses might 

have criminal records or later on commit criminal acts, such as bank robberies, hold-ups, 

murders, etc;


WHEREAS, to deter private Security Agencies and Company Guard Forces 

from employing these security personnel with fake or no licenses at all, penalty for Section 

9.b.2, Rule XVII be amended to read as follows: 

1. 1 st offense ñ cost of license fee multiplied by ten (10) for both the security personnel 

and the PSA/CGF, if found guilty. The private security personnel shall be sent to training 

at the expense of the PSA/CGF; 

2. 2 nd offense ñ cost of license fee multiplied by twenty (20) for both the security personnel 

and the PSA/CGF, if found guilty. The private security personnel shall be suspended 

from performing private security profession for a minimum of six (6) months to one (1) 

year and shall be denied the license to exercise profession for the duration of the suspension; 

3. 3 rd offense ñ cost of license fee multiplied by thirty (30) for the PSA/CGF, if found 

guilty. The private security personnel shall be suspended from performing private security 

profession for life and shall be denied the license to exercise profession for life; 

4. 4 th offense ñ for the PSA, if found guilty, revocation and cancellation of License to 

Operate (LTO). 

NOW THEREFORE, RESOLVE, as it is hereby resolve that upon motion and duly 

seconded, the Study Committee approves the above-cited provisions. 

Adopted: 28 Nov. 2005 

Approved by: 

(SGD.) PSSUPT WILFREDO C. FUENTES 

Vice-Chairman 

(SGD.) PSSUPT RAMON V. GATAN (SGD.) PSUPT JOSE V. CARILLO 

CSG Rep (Member) CSG Rep (Member) 

(SGD.) PSINSP LAILANI M. TUBON (SGD.) PSSUPT. ROBERTO L. ROSALES 

DO Rep (Member) DHRDD Rep (Member) 

(SGD.) PSINSP NELSON P. PAGADUAN (SGD.) PSUPT. FERDINAND E. SANTOS 

LS Rep. (Member) FED Rep. (Member) 

(SGD.) MR. RAMON D. BERGADO 

PADPAO Rep. (Member) 

Attested by: 

(SGD.) PCSUPT. ANTONIO D. NA—AS 

Board Secretariat 

óo0oó




II. Scope: 

PNP Circular No. 02-2006 

Free Legal Assistance of the FLAGCOPS to PNP Personnel 

with Service Connected Offenses 

a. Section 49, RA No. 6975 as amended by Section 56, RA No. 8551; 

b. Joint Memorandum Circular of the DOJ, NAPOLCOM and PNP implementing 

Section 49, RA No. 6975; 

c. PNP Rules and Regulations Governing the functions of the Legal Assistance 

Board; 

d. LAB Resolution No. 2001-01 ñ creating the Legal Assistance Board at PROís 

and NSUís; 

e. DPRM Letter Orders Number 1270 dated December 19, 2005; 

f. Memorandum of Agreement (MOA) between the FLAGCOPS and PNP dated 

May 29, 2006. 

This Circular shall cover the procedures to be observed in the processing and 

granting of application for free legal assistance to be rendered by the FLAGCOPS to 

PNP personnel charges with service connected offense. 

III. Objectives: 

a. To boost/promote the morale of every PNP personnel, especially those assigned with 

the operations and investigation, by providing them legal counsel or legal aid from the 

Office of the Free Legal Assistance for Good Cops (FLAGCOPS) ready and willing to 

assist and tend to their cases and prepare for their personal defense in service related 

offenses; 

b. To contribute to the attainment of a high crime solution efficiency and conviction rate 

of criminals and for more effective and efficient crime prevention and suppression. 

IV. Definition of Terms: 

For purposes of this circular, the following terms are hereby defined: 

a. Legal Assistance ñ Court appearances and representations, preparation and submission 

of pleadings and other documents required to be produced and submitted by the 

court or tribunal, and such other legal services needed for the protection of the rights of a 

PNP member who has been charged of a service connected offense. Such legal assistance 

could be availed of in administrative, criminal and civil cases upon the filing of the 

complaint before the court, administrative body, the prosecutors office or before the 

Ombudsman or at any stage of the proceeding or even on appeal on a case to case 

basis, if still warranted by the circumstances.


b. NHQ Legal Assistance Board ñ the Board created at the NHQ headed by the TCDS 

who shall endorse for approval and appropriate action of the FLAGCOPS the recommendations 

of the RLAB. 

c. Regional/NSU Legal Assistance Board ñ Board created at the different PROs/NSUs 

who shall deliberate and/or approve requests for legal assistance. 

d. Personnel who may be entitled to Legal Assistance ñ all active uniformed and nonuniformed 

personnel of the Philippine National Police. 

e. Service ñ Connected Offense ñ any Administrative, Criminal and Civil case that may 

be charged against PNP personnel resulting from the lawful performance of official duties. 

f. Criminal Case ñ an action, suit or cause instituted to punish an infraction of criminal 

laws (Blackís Law Dictionary 1990 ed), arising from the lawful performance of official 

function. 

g. Administrative case ñ complaint filed with the Ombudsman, Sandiganbayan, Quasi- 

Judicial Bodies, PLEB, Mayorís Office, IAS and PNP Disciplinary Authorities arising 

from the lawful performance of official function. 

h. Civil Case ñ an action founded on private rights arising either from a contract or a 

quasi-delict (Words and Phrases vol. 7). It also include civil cases arising from legitimate 

police operation. 

i. Quasi-Judicial Bodies ñ administrative agencies which are required to investigate 

facts, or ascertain the existence of facts, conduct hearings, weight evidence, and draw 

conclusions from them as basis for official action in the exercise of discretion of a judicial 

nature (Blackís Law Dictionary 1990 ed.). 

j. Head of Office/Immediate Superior ñ refers to the Regional Directors of the Police 

Regional Offices, the Directors of the National Support Units and the Directors of the 

Provincial and City Police Offices. 

V. Who May Apply for FLAGCOPS Services/Requirements: 

Any uniformed and non-uniformed personnel of the PNP facing criminal, civil or 

administrative cases may file application for FLAGCOPS services through written application 

accompanied by the following documents: 

a. Spot Report; 

b. Investigation Report; 

c. Copy of the complaint or Information; 

d. Endorsement of the immediate superior officer; and 

e. Other document necessary/related to the case. 

VI. Policies and Procedures:


A. Filing of Application: 

1. In Cases Filed Against PNP Personnel Assigned with PROs and NSUs: 

a. The applicant must submit his written application with his immediate superior officer 

accompanied by the documents cited in paragraph V above; 

b. The immediate superior officer should verify and process the application and its supporting 

documents and make his recommendation to the PNP Regional Director or National 

Support Unit Director within three (3) days from receipt of the application; 

c. The RD, PRO or D, NSU shall review the recommendation of the immediate superior 

officer and decide whether the applicant is qualified for FLAGCOPS legal assistance. If 

qualified, the RD, PRO or D, NSU shall forward the application to the Executive Director, 

FLAGCOPS within three (3) days from receipt of the recommendation of the immediate 

superior officer, copy furnished NHQ LAB (NLAB); 

d. The RD, PRO or D, NSU, through the C, RLS, shall submit a monthly report (Update) 

of all cases acted and referred to the FLAGCOPS for legal assistance to the NHQ LAB 

(Attn: D, LS ñ Secretariat) for information of the C, PNP. 

2. In Cases Filed Against PNP Personnel Assigned with the National Headquarters 

(NHQ): 

a. The applicant must file his written application with the NHQ Legal Assistance Board 

(Attn: D, LS ñ Secretariat) accompanied by the necessary documents mentioned in 

paragraph V above; 

b. The D, LS shall evaluate said application and if found meritorious will submit his recommendation 

with the NHQ LAB within three (3) days from receipt of the application; 

c. The NHQ LAB shall in turn refer the said application to the Executive Director, 

FLAGCOPS within three (3) days from receipt of the recommendation of the D, LS; 

However, in both cases [para VI (A) (1) (2)] and in case of urgency, the applicant 

may directly file his application with the Executive Director, FLAGCOPS accompanied by 

written justification of urgency for such direct filing, copy furnished the RLAB or NHQ 

LAB as the case may be. 

B. Action of the FLAGCOPS: 

The Executive Director of FLAGCOPS shall, within three (3) days from receipt of 

the approved application, assign a lawyer to handle the case for the police officer concerned, 

unless he finds the applicant disqualified for lack of any of the qualification 

provided for in par. V above, in which case the Executive Director shall return the disapproved 

application citing the ground for the disapproval thereof within five (5) days from 

receipt. The disapprove applicant may file a motion for reconsideration within fifteen (15) 

days from notice of disapproval with the Board of Trustees which shall resolve the same 

within thirty (30) days from receipt of the motion; if the motion is not resolved by the


Board within 30 days, it is deemed granted. The Boardís resolution on the motion shall be 

final. 

C. The PNP Legal Service, thru its Regional Offices, shall closely coordinate with 

the designated FLAGCOPS lawyer who shall handle the case to ensure that all data and/ 

or documents could be expeditiously produced as well as the availability of the respondent/accused 

and his witnesses for a case conference. 

D. The Legal Service shall monitor the coordinative efforts between the FLAGCOPS 

Office/Lawyer tasked to render legal assistance and the Regional Legal Office concerned 

to ensure that the purpose of this Agreement shall not be hindered. For the 

purpose of accounting, the FLAGCOPS shall submit a monthly report to the PNP Legal 

Service lists of all cases being handled by their office. The Legal Service shall in turn, 

render a report to the Legal Assistance Board on the progress of cases handled by 

FLAGCOPS. 

VII. Legal Expenses: 

All legal expenses in connection with the case, including the cost of transcript of 

stenographic notes (TSNs), shall be borne and defrayed by the FLAGCOPS. 

VIII. Penal Clause: 

Any personnel who delays the processing of application for legal assistance shall 

be subjected to administrative prosecution. The immediate superior officer of the personnel 

involved shall be included as a co-respondent under the doctrine of Command 

Responsibility. 

IX. Effectivity - This Circular shall take effect after fifteen (15) days from the filing of a 

copy hereof at the University of the Philippines Law Center in consonance with Sections 

3 and 4 of Chapter 2, Book VII of Executive Order No. 292, otherwise known as ìthe 

Revised Administrative Code of 1987î, as amended. 




Chief, PNP 

I Concur: 

(SGD.) ATTY. EDDIE U. TAMONDONG 

Executive Director, FLAGCOPS


PHILIPPINE NUCLEAR RESEARCH INSTITUTE 


Administrative Order No. 02, Series of 2006 

Adoption of IAEA Code of Conduct on the Safety and 

Security of Radioactive Sources and IAEA Guidance on the 

Imports and Export of Radioactive Sources 

WHEREAS, pursuant to RA 2067 and RA 5207, both as amended, the PNRI is 

mandated to regulate and license the safe use of radioactive sources in medicine, research, 

and industry, for the protection of the health and safety of the workers and the 

general public from the potential hazards of radiation; 

WHEREAS, the PNRI is authorized to promulgate rules and regulations that 

govern the importation, exportation, and transportation of radioactive sources; 

WHEREAS, the PNRI recognizes the need for licensees to have a clear understanding 

on the specific safety and security requirements, and the regulations that apply 

to the import and export of radioactive sources; 

WHEREAS, there is a need for PNRI to ensure that licensees involved in importing 

radioactive sources have the appropriate technical and administrative capability and 

resources needed for the management of the sources; 

WHEREAS, the PNRI recognizes the need for licensees involved in export to 

determine that the importing country has the appropriate technical and administrative 

capability, resources and regulatory infrastructure needed for the management of the 

radioactive source in a manner consistent with the guidance in the Code; 

WHEREAS, there is a need for PNRI to ensure that licensees who export are 

able to confirm from the importing country that the consignee is authorized by the Competent 

Authority of the importing country to receive and possess the radioactive source in 

accordance with its laws and regulations; 

NOW THEREFORE, pursuant to the provisions of Section 4 of Republic Act No. 

5207, as amended, the PNRI hereby adopts the provisions of the IAEA Code of Conduct 

on the Safety and Security of Radioactive Sources and in order to be properly guided in 

its compliance with the IAEA Code of Conduct, the PNRI shall likewise conform to the 

provisions of the IAEA Guidance on the Import and Export of Radioactive Sources as far 

as practicable. 

This Order shall take effect fifteen (15) days after its publication in the Official 

Gazette. 

Adopted: 15 Feb. 2006



(SGD.) ALUMANDA M. DELA ROSA, Ph.D 


óo0oó 

Administrative Order No. 03, Series of 2006 

Amendment to CPR Part 22 ìFees and Charges for Radioactive 

Material Licenses and Other Related Regulatory Servicesî 




PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION 


Memorandum Circular No. 02, S. 2006 

Guidelines on the Name Hiring of Filipino 

Household Workers for Cyprus 

Pursuant to existing regulations which provide for the recruitment and documentation 

of Filipino household workers through an accreditation/registration system and the 

name hiring of Filipino household workers only in countries where foreign placement 

agencies do not operate, the name hiring of Filipino household workers bound for Cyprus 

shall be allowed only for the following employers duly endorsed by the Philippine Overseas 

Labor Office (POLO) which has jurisdiction over the worksite. 

1. Immediate members of the family of head of state/government; 

2. Ministers, Deputy Ministers and other senior government officials of the host 

country; 

3. Senior officials of the diplomatic corps and duly recognized international 

organizations; 

A copy of the certificate of competency (COC) of the worker issued by the 

Technical Education and Skills Development Authority (TESDA) shall be presented to 

POEA as a requirement for the documentation of household workers, whether name hire 

or agency hire. 

All previous issuances inconsistent with this circular are hereby deemed repealed 

and superseded.


For strict compliance effective 15 days from publication in a newspaper of general 

circulation. 



(SGD.) ROSALINDA DIMAPILIS-BALDOZ 

Administrator 

óo0oó 


Documentation for Overseas Employment of Workers Classified 

as Mission Critical Skills (MCS) Which Are in Shortage 

Pursuant to Governing Board Resolution No. 1, series of 2006, adopting a framework 

for determining the level of skill supply and demand and the occurrence of shortage 

of mission critical skills in particular industry, the POEA hereby identifies pilots and 

senior aircraft mechanics as MCS in shortage. 

Pilots refer to captains and co-pilots/first officers who handle the following aircrafts: 

B737, B747, B777, A319, A320, A330 and A340. Senior mechanics refer to mechanics 

A and B who work in the following fields: airframe and powerplant, avionics, powerplant, 

as well as senior cabin, structural and tool and equipment mechanics. 

In addition to existing POEA requirements, pilots and senior aircraft mechanics 

who are name hired and agencies deploying these types of skills shall present to POEA a 

proof of the workerís six months notice of resignation duly acknowledge by the present 

local employer/company, as a requirement for their documentation as OFWs. 

For strict compliance effective 15 days from publication in a newspaper of general 

circulation. 





óo0oó 


Guidelines on the Recruitment and Deployment 

of Filipino Workers to Australia 

In line with the Administrationís thrust to ensure the welfare of Filipino workers 

bound for Australia, the following guidelines shall govern the accreditation of Australian 

principals/employers and employment of Filipino workers in the country:


A. Accreditation of Australian Principals/Employers: 

The following documents, duly authenticated by the Philippine Embassy/Consulate 

in Australia, shall be submitted to POEA for evaluation/approval of accreditation: 

1. Special Power of Attorney 

2. Manpower request indicating the position and salary of the workers to be 

hired 

3. Master employment contract of the principal/employer 

4. Valid business license/commercial registration of the principal/employer. 

5. Sponsorship nomination approval from the Department of Immigration 

and Multicultural and Indigenous Affairs (DIMIA) of Australia. 

In case the principal/employer is a foreign placement agency, a list of the direct 

employers, their addresses and workers needed shall be submitted. 

For request for additional job orders, the sponsorship nomination approval from 

the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) of Australia 

for the new job orders shall be submitted together with the manpower request notarized 

in Australia. 

B. Within two (2) weeks upon arrival in Australia, all Filipino workers are required to 

submit to the Philippine Embassy in Canberra, a duly accomplished feedback/registration 

form that will be provided to the workers during their Pre-Departure Orientation 

Seminar. 





óo0oó 


Guidelines on the Recruitment and Deployment of 

Filipino Workers to Palau 

In line with the Administrationís thrust to ensure the welfare of Filipino workers 

bound for Palau the following documents shall be submitted to POEA for evaluation/ 

approval of accreditation: 

1. Special Power of Attorney duly authenticated by the Philippine Embassy in 

Palau. 

2. Authenticated manpower request indicating the position and salary of the 

workers to be hired. 

3. Authenticated master employment contract of the principal/employer


4. Valid business license/commercial registration of the principal/employer. 

5. Visa or equivalent documents. 

In case the principal/employer is a foreign placement agency, a list of the direct 

employers, their addresses and workers needed shall be submitted. 

For additional job orders, the Philippine recruitment agency shall submit the 

authenticated manpower request from the foreign principal/employer. 





óo0oó 


Mandatory Implementation of the Electronic Submission System 

for All Landbased Recruitment Agencies and Entities 

Further to Memorandum Circular No. 08, series of 2005, starting 01 July 2006 all 

landbased agencies/entities which have not yet availed of the electronic submission of 

contracts for processing program are required to register in the program in accordance 

with the following schedule: 

AGENCY NAME STARTING WITH DATE 

INDICATED LETTERS 

Numbers/A & B July 1-31, 2006 

C TO F Aug. 1-30, 2006 

G TO K Sep. 1-31, 2006 

L TO O Oct. 1-31, 2006 

P TO S Nov. 1-30, 2006 

T TO Z Dec. 1-31, 2006 

POEA Memorandum Circular No. 25, series of 2003 providing for the guidelines 

for participation in the e-Submit Program shall apply to all e-submit participants. 

All agencies registered under the program shall ensure that true, accurate and 

complete information on their workers are encoded for e-submission. Otherwise, agencies 

shall be liable for misrepresentation per Section 2.e, Rule 1, Part VI of the POEA 

Rules and Regulations which provides for the imposition of administrative sanctions to 

agencies ìengaging in act/s of misrepresentation in connection with recruitment and 

placement of workers, such as furnishing or publishing any false notice, information or 

document in relation to recruitment or employment.î


Likewise, all agencies are reminded to provide their hired workers with a copy of 

their individual employment contracts per Memorandum Circular No. 26 series of 2003. 

Copy of the employment contract is checked at the Labor Assistance Center upon departure 

of the worker. 

For compliance. 





óo0oó 


Requirements and Procedure on the Release of Escrow 

Deposits of Japanese Principals Hiring Overseas Performing Artist 

Consistent with the principles underlying Section 23 Part II of the POEA Rules 

and Regulations Governing the Recruitment and Employment of Landbased Workers on 

the release of Escrow Deposits of licensed agencies, the following guidelines shall be 

observed for the release of escrow deposits posted by Japanese principals pursuant to 

DOLE Administrative Guidelines implementing Department Circular No. 01-91 dated December 

13, 1991: 

I. Escrow Deposits of Japanese principals whose registration or accreditation was cancelled 

or had expired may apply for its release after the lapse of four (4) years from the 

date of cancellation or expiration by submitting the following documents: 

a. Letter request 

b. Clearances from the following Offices 

1. Office of the Labor Attache 

2. Supreme Court of the Philippines 

3. DOLE-Legal Services, office of the Secretary 

4. National Labor Relations Commission; and 

5. POEA Adjudication Office 

II. Prior to the lapse of the four (4) year period, the escrow deposit of Japanese principals 

may be released upon the submission of the following documents: 

a. Letter request 

b. Letter of No Objection from the Philippine Agent 

c. Surety bond issued by a surety company, duly accredited by the Insurance 

Commission, equivalent to the amount of the escrow deposit and valid for the 

remaining period. 

d. Clearances from the following offices




3. DOLE-Legal Services, Office of the Secretary 


5. POEA Adjudication Office. 

III. Japanese principals with valid registration or accreditation but has or intends to 

cease its operation may also apply for the release of the escrow upon submission of the 

following documents: 

a. Letter request for cancellation of registration and release of escrow deposit. 

b. Revocation of the Special Power of Attorney issued to its local agent 

c. Letter of No Objection from the Philippine Agent 

d. Surety bond issued by a surety company, duly accredited by the Insurance 

Commission, equivalent to the amount of the escrow deposit and valid for a 

period of four (4) years 

e. Clearances from the following offices 



3. DOLE-Legal Services, Office of the Secretary 


5. POEA Adjudication Office 





óo0oó 

Advisory No. 05, S. 2006 

Fake Islamic Certifications 

The Saudi Embassy in Manila has warned licensed recruitment agencies from 

deploying fake Moslem converts to work in Makkah and Medina to circumvent rules that 

bar non-moslems from entering Islamís holiest cities. 

The warning was issued by the Saudi Embassy after receiving confirmed reports 

that some recruitment agencies take advantage of Filipino visa applicants desiring to 

work in Saudi Arabia by deploying them as Moslems under fake Islamic certificates 

purportedly attested by the Office of Muslim Affairs. 

The malpractice was uncovered by the Saudi Embassy after going over certificates 

of conversion to Islam of visa applicants and found them to be fake. Visa applicants 

also revealed that some recruitment agencies required them to present Islamic


certificates, whether genuine or fake. The Saudi Embassy has identified the recruitment 

agencies involved in this illegal activity and cases will be filed and transmitted to concerned 

Philippine authorities. 

The practice of deploying non-moslems from entering, Makkah and Medina is 

against the teachings of Islam. Other places and regions in the Kingdom, like Riyadh and 

Jeddah, allow the entry of non-moslems as evidenced by the huge volume of Filipino 

workers working, and residing in Saudi Arabia. 





óo0oó 


Strict Compliance to POEA Memorandum Circular No. 3, Series of 2006, 

on Documentation for Overseas Employment of Workers Classified as 

Mission Critical Skills (MCS) Which Are in Shortage 

Pursuant to Governing Board Resolution No. 1 and POEA Memorandum Circular 

No. 03, both series of 2006 on ìDocumentation for Overseas Employment of Workers 

Classified as Mission Critical Skills (MCS) which are in Shortageî, all agencies participating 

in the ìin house contracts processingî program and the ìelectronic submission of 

contracts for processingî program are reminded to be responsible in ensuring the submission 

of the 6 months notice of resignation duly acknowledged by local employers prior 

to the processing of contracts of senior aircraft mechanics and pilots which were determined 

as mission critical skills in shortage. 

Agencies found not complying with the above issuances shall be liable to sanctions 

in accordance with the POEA Rules and Regulations. 

Adopted: 17 April 2006 




óo0oó 


Political and Labor Situation in Afghanistan


The Philippine Embassy in Islamabad, which has jurisdiction over Afghanistan 

has reported the following developments on the situation in this country: 

Peace and Order: Due to the resurgence of the Al Qaeda and Taliban operatives 

especially in the province of Kandahar, the said province is declared as high-risk 

area for OFWs. There are, however, Filipinos in Kandahar working for the UN and other 

international organizations. As such, security precautions are necessary, and deployment 

of non-skilled OFWs to these areas is not advisable. There is an added risk of 

becoming the target of kidnappings or extortions. 

Availability of Work: Afghanistan is still at its early stage of rehabilitation and 

rebuilding. There are large of unemployed Afghans and several millions still in refugee 

camps in Iran and Pakistan. 

Living Standards. The exchange rate of US dollar to Afghani is US$1.00 = 

Afghan 40.00. Given the said exchange rate, the cost of everything is high, especially 

food and accommodation. 

Upon the recommendation of the Philippine embassy, deployment of only skilled 

or semi-skilled workers should be allowed for Afghanistan. While Afghanistan cannot 

actually be classified as a war risk area, the security situation does not warrant the 

deployment of large numbers of OFWs outside coalition force bases or UN-sponsored 

programs due to the risk of becoming targets of insurgents. 

For the information of all concerned. 




PHILIPPINE PORTS AUTHORITY 


PPA Memorandum Circular No. 05-2006 

Mandatory Weighing of Export Loaded Containers at the South 

Harbor and Manila International Container Terminal 

Overloading of export containers is a common experience at the South Harbor (SH) 

and the Manila International Container Terminal (MICT). The handling of overloaded 

containers poses substantial risks to the terminal operators, port facilities and the carrying 

vessels. The Authority and the terminal operators of SH and MICT shall implement, at 

all times, appropriate safety measures to ensure that all export loaded containers handled 

at SH and MICT comply with the allowable container weight.


In order to ensure safety in the handling of export loaded containers in the two (2) 

terminals, their facilities and the carrying vessels due to discrepancies in the declaration 

of proper weights, the following guidelines are hereby prescribed. 

1. The terminal operators shall be responsible for ensuring the allowable weights and safe 

handling of all export loaded containers at the SH and MICT. 

2. All export loaded containers for loading shall be subject to mandatory weighing to 

ensure its compliance with the allowable weights and restrictions. 

3. Likewise, subject to mandatory weighing are transshipment containers from the outports 

intended for feeder vessels calling MICT and South Harbor. 

4. As a guide to establish the actual container weight, the declared weight per the Container 

Safety Convention (CSC) plate attached to the container shall be used. 

5. The terminal operators shall be responsible for informing shipping companies of the 

following: 

5.1 List of overloaded containers, which are not loaded, for appropriate information 

and advice to their clients/customers. 

5.2 Any additional charges resulting from the overloaded containers, e.g. shut-out 

cargo or storage charges (as applicable). 

6. Overloaded export containers shall not be loaded onto the carrying vessel. However, 

measures to correct overloaded containers like stripping, attendant special services and 

ultimate withdrawal of overloaded containers may be provided by the terminal operator 

and the expenses are for the account of the cargo owner. 

7. The terminal operators are authorized to collect ONE HUNDRED PESOS (P100.00) 

per container for the mandatory weighing of loaded export containers. 

8. The terminal operators shall, whenever necessary and expedient, coordinate with the 

Authority any concern resulting from the mandatory weighing of containers and for the 

efficient implementation of this Circular. 

This Memo Circular amends PPA Memo Circulars No. 47-97 dated 06 November 

1997 and No. 06-81 dated 22 April 1981. 

This same Circular shall take effect fifteen (15) days after its publication in a 

newspaper of general circulation and shall remain in force and effect unless otherwise 

cancelled or revoked. 

For the guidance and compliance of all concerned. 




(SGD) ATTY. OSCAR M. SEVILLA 

General Manager 

óo0oó 


Prescribed Passenger Terminal Fees (PTFs) in PPA Ports 

The deployment of twenty-four (24) units of port security equipment, specifically, 

Baggage X-ray Machines and Walk-Through Detectors in passenger terminals located in 

various PPA ports nationwide will entail additional expenses for concerned field offices. 

To partially cover the maintenance and operating costs of said port security 

equipment, the following passenger terminal fees are hereby prescribed: 

Name of Port Passenger Terminal Fee (PTF) 

(In Pesos, Inclusive of VAT) 

PDO Northern Mindanao 

Cagayan de Oro Baseport 15.00 

Iligan Baseport 15.00 

Nasipit Baseport 20.00 

Surigao Baseport 20.00 

Lipata Ferry Terminal 16.00 

Ozamiz Baseport 16.00 

Dapitan 11.00 

PDO Southern Mindanao 

Zamboanga Baseport (PTBs 1&2) 11.00 

Davao (Sasa) 11.00 

Cotabato Baseport 16.00 

PDO Southern Luzon 

Puerto Pincesa Baseport 20.00 

PDO Visayas 

Iloilo Fort San Pedro 20.00 

Jagna 11.00 

Liloan Ferry Terminal 16.00 

This Circular shall take effect upon full operation of the port security equipment 

in the passenger terminal buildings located in ports indicated above and after its publication 

in at least two (2) newspapers of general circulation. 




(SGD.) ATTY. OSCAR M. SEVILLA 


óo0oó 


Adoption of a Single Permit to Operate for Lighterage/Barging 

Services at the North Harbor, South Harbor and MICT 

The lighterage and barge operators requested for the adoption of a single PPA 

Permit to Operate (PTO) their services to be used at PMOs North Harbor and South 

Harbor and the Manila International Container Terminal (MICT). The objective of this 

request is to support the growth of ancillary services by simplifying and facilitating the 

application, processing and issuances of PTOs, as well as to lessen the regulatory fees 

being paid by said operators. This finds merit in the fact that North Harbor, South Harbor 

and MICT basically cater to the same Manila trade and clientele, are contiguous harbors 

and all under the supervision and control of PDO Manila/Northern Luzon. 

In the best interest of the service, therefore, the adoption of a single PPA PTO for 

lighterage and barging services is hereby directed within the jurisdiction of PMOs North 

Harbor and South Harbor and MICT. The lighterage and barge operators are required to 

secure their PTO at the port where most of their business transactions or services are 

rendered. The annual PTO shall serve as the PPA authority to transact business at the 

Port of Manila. 

This Circular shall supersede PDO Manila/Northern Luzon Memo Circular No. 

01-2006 dated 14 March 2006, take effect immediately and remain valid until otherwise 

revoked. 




(SGD) ATTY. OSCAR M. SEVILLA 


óo0oó 

PPA Administrative Order No. 02-2006 

U.S. Dollar-Denominated Vessel Charges Against Foreign 

Containers/Containerized Cargoes handled at South Harbor (SH) 

and Manila International Container Terminal (MICT)


Pursuant to Board-Com Resolution No. 2006-1013 and as confirmed by Board 

Resolution No. 2062 dated May 30, 2006, vessel charges against foreign containers/ 

containerized cargoes handled at SH and MICT shall be denominated in US dollars under 

the following conditions: 

1. The existing tariff rates shall be converted from peso to dollar at the rate of US$1.00 

to Php 53.50. 

2. The shipping line may choose to pay in US Dollars or in Philippine Pesos, even if the 

billing by the Operator is in dollars. Should the shipping line choose to pay in pesos, 

the payment shall be determined as follows: 

- The Operator shall base its billing on the day of completion of work on the vessel; 

- The conversion rate to be used shall be the weighted average rate in the Philippine 

Dealing System (PDS) as displayed on the page of Reuters or Bloomberg at 

4:00 p.m. of the day of completion of work on the vessel; 

- If the completion of work on vessel falls on a day during which there was no 

trading in the PDS, the conversion rate to be used shall be the last weighted 

average rate in the PDS as displayed on the PDS page of Reuters or Bloomberg 

at 4:00 p.m. on the previous banking day closest to the day of vessel completion; 

3. The US Dollars denominated tariff items shall be applicable only to international shipping 

lines calling at MICT and South Harbor. 

4. Obligations paid in foreign currency should not be sourced or bought from the Philippines 

banking system. 

This Order shall take effect fifteen (15) days after its publication in at least two (2) 

newspapers of general circulation. 



(SGD.) ATTY. OSCAR M. SEVILLA 


--o0o-- 

PPA Operations Memorandum Circular No. 01-2006 

U.S. Dollar-Denominated Vessel Charges on Foreign 

Containers/ Containerized Cargoes Handled at South Harbor (SH) 

and Manila International Container Terminal (MICT) 

Pursuant to PPA Board Resolution No. 2062 adopted on May 30, 2006 and PPA 

Administrative Order No. 02-2006, the existing vessel charges in Philippine Peso on 

foreign containers/containerized cargoes at SH and MICT shall be denominated in U.S. 

Dollars.


Attached* therefore is schedule for U.S. Dollar denominated vessel charges on 

foreign containers/containerized cargoes handled at SH and MICT which shall be effective 

June 16, 2006. 



Adopted:16 June 2006 

(SGD.) BENJAMIN B. CECILIO 

AGM for Operations 

--o0o-- 

PPA Administrative Order No. 03-2006 

Guidelines Implementing the Vessel Traffic Management 

System at the Port District of Manila 



PHILIPPINE RETIREMENT AUTHORITY 


Resolution No. 24, Series of 2006 

Approving the Policy on Special Reduced Deposit and the 

Rules and Regulations Implementing the Application for 

SRR Visa Through the Special Reduced Deposit 

ìRESOLVED, that the Board approves the Special Reduced Deposit thus retiree 

applicants 50 years old and above are required to deposit US$20,000 and retiree applicants 

aged 35 to 49 years old are required to deposit US$50,000; 

RESOLVED FURTHER that the Board approves the Rules and Regulations Implementing 

the Application for SRR Visa through the Special Reduced Deposit, (a 

copy of which is incorporated as Annex A); 

RESOLVED FURTHERMORE that the Special Reduced Deposit policy is approved 

for an experimental period of 6 months from date of initial implementation, subject to 

review on the 5 th month; 




RESOLVED FINALLY, that this Special Reduced Deposit Policy, and its Implementing 

Rules and Regulations shall become effective upon approval by the Board and 

compliance with the publication requirements. 

APPROVED.î 


CERTIFIED BY: 

(SGD.) EDGAR B. AGLIPAY 

Chairman 

(SGD.) ARMIN B. RAQUEL-SANTOS (SGD.) JUAN DE ZUNIGA, JR 

Vice Chairman/CEO Representative, BSP 

(SGD.) ESTANISLAO R. CANTA (SGD.) EVELYN R. CAJIGAL 

Representative, BI Representative, DOT 

Attachment: 

Rules and Regulations Implementing the Application for 

SRR Visa Through the Special Reduced Deposit 

Rule I. Definition and Basic Guidelines 

SECTION 1. Title - These rules shall be referred to as the Rules and Regulations 

to implement the application for SRR Visa through a Special Reduced Deposit 

SECTION 2. Definition of Terms ñ For purposes of these Rules and Regulations, 

the following definitions shall apply: 

a. BI shall refer to the Bureau of Immigration 

b. PRA shall refer to the Philippine Retirement Authority 

c. Marketer shall refer to individuals, partnerships, corporations and law firms 

who are accredited/authorized by PRA to promote the retirement program 

d. Program shall refer to the Special Reduced Deposit 

e. Reduced Deposit shall refer to the US Dollars Twenty Thousand (US$20,000) 

deposit per principal retiree who is at least 50 years old, or the US Dollars 

Fifty Thousand (US$50,000) deposit per principal retiree who is at least 35 

years old. 

Rule II. Qualifications and Deposit/Documentary Requirements/Fees 

SECTION 1. Persons qualified for SRR Visa through the Reduced Deposit ñ 

The retiree applicant must be at least thirty five (35) years old and shall have the qualifications 

and none of the disqualifications to enter the Philippines and shall be enrolled as the 

principal retiree in the PRA program under the current guidelines. 

SECTION 2. Deposit ñ The retiree applicant shall be required to put up a 

deposit of Twenty Thousand US Dollars (US$20,000) for those 50 years old and above,


and Fifty Thousand US Dollars (US$50,000) for those 35 to 49 years old, which shall be 

remitted to a PRA accredited depository bank, in the name of the retiree applicant, in 

accordance with existing PRA guidelines. 

SECTION 3. Documentary requirements/fees ñ To qualify for the Program, the 

retiree applicant must pay the required fees, and submit and/or comply with all the documentary 

requirements, such as: 

a. Duly Accomplished PRA Application Form 

b. Original of the valid passport with valid entry status 

c. Medical Certificate 

d. Police Clearance or NBI Clearance 

e. Bank Certification of the Inward Remittance to PRA for the account of 

retiree applicant 

f. 6 pieces 2x2 and 6 pieces 1x1 pictures 

g. Processing fee of US$1,500.00 for each principal retiree 

Note : c & d must be authenticated by the Philippine Embassy/Consular 

Office if secured abroad. 

Current guidelines on the inclusion of family members shall apply. 

Rule III. Terms and Conditions 

SECTION 1. Applicability of Program. The Program shall apply only to new 

applicants. Previous SRRV holders can not re-apply for SRRV under this Program. 

SECTION 2. Retirees enrolled under this Program may be allowed to withdraw 

their deposit for ìconversionî into an investment after a holding period of thirty (30) days 

from the date of the issuance of the SRRVisa, provided that the concerned retiree will pay 

the visitorial fee of US$500 for withdrawing a US$20,000 deposit, or US$750 for withdrawing 

a US$50,000 deposit. This fee shall be due and payable upon approval of their 

application for conversion, and every year thereafter. 

The areas of investments for holders of the special reduced deposit shall be strictly 

limited to the following: 

(a) purchase, acquisition and ownership of a condominium unit; 

(b) long-term lease of house and lot, condominium or townhouse, which should 

not be for a period shorter than twenty (20) years; 

(c) purchase, acquisition and ownership of golf or country club share/s; or 

(d) investment in shares of stocks of corporations duly registered in the Philippine 

Stock Exchange 

All applications for conversion of deposit shall be submitted to the Board of Trustees 

for its approval. 

In the event that the retireeís investment is depleted or its value reduced lower than 

the required deposit/investment, the retiree shall be required to either redeposit US$20,000


or US$50,000, as the case may be, or submit proof or evidence of another investment, to 

make up for the loss or reduction in value. 

Rule IV. Grounds for Termination And/Or Revocation of SRR Visa 

SECTION 1. Voluntary withdrawal from the Program. 

SECTION 2. Misrepresentation, fraud and use of falsified documents relative to the 

documents used in obtaining the SRRV. 

SECTION 3. Violation of existing PRA rules and regulations, and any of the 

existing laws of the Philippines. 

SECTION 4. Death of retiree. 

Rule V. Effects of Termination from the Program 

SECTION 1. If the applicant withdraws prior to the issuance of the SRRV, PRA 

shall issue to the depository bank a withdrawal clearance allowing the release of the funds 

in the name of applicant after PRA receives the applicantís formal letter-request. 

SECTION 2. If the retiree withdraws after the issuance of SRRV, the dollar deposit 

of the retiree shall be withdrawn only after the cancellation of the SRRV by the BI and 

upon issuance by the PRA of the clearance to the depository bank allowing the release of 

the funds. 

Rule VI. Other Provisions 

SECTION 1. Separability Clause. If any clause, sentence or provision or section 

of these Rules shall be held invalid or unconstitutional, the remaining part shall not be 

affected and shall remain valid and enforceable. 

SECTION 2. Effectivity. This Rule shall take effect upon its approval by the 

Philippine Retirement Authority Board of Trustees, and compliance with the publication 

requirements of Executive Order No. 292 (series of 1987). 

POWER SECTOR ASSETS AND LIABILITIES 

MANAGEMENT CORPORATION 


Guidelines and Procedures Governing Remittances and 

Disbursements of the Universal Charge 

(Revised as per ERC Order dated 5 January 2006) 

WHEREAS, Section 34 of Republic Act No. 9136 otherwise known as the ìElectric 

Power Industry Reform Act of 2001î (the ìActî or ìEPIRAî) provides that a Universal


Charge to be determined, fixed and approved by the Energy Regulatory Commission 

(ìERCî) shall be imposed on all End-Users for the following purposes: 

1. Stranded Debts and Stranded Contract Costs of National Power Corporation (ìNPCî) 

in excess of the amount to be assumed by the Government of the Philippines; 

2. Stranded Contract Costs of Distribution Utilities; 

3. Missionary Electrification; 

4. The equalization of the taxes and royalties applied to indigenous or renewable sources 

of energy vis-‡-vis imported energy fuels; 

5. An environmental charge equivalent to one-fourth of one centavo per kilowatt-hour 

(P0.0025/kWh), which shall accrue to an environmental fund to be used solely for watershed 

rehabilitation and management and shall be managed by NPC under existing arrangements; 

and 

6. A charge to account for all forms of cross-subsidies for a period not exceeding three 

(3) years. 

WHEREAS, Section 5 of Rule 18 of the Implementing Rules and Regulations of 

EPIRA (ìIRRî) mandates that the Universal Charge shall be a non-by passable charge 

which shall be (1) collected from all End-Users on a monthly basis by the Distribution 

Utilities or Suppliers in case of a Contestable Market; or (2) remitted directly to the 

National Transmission Corporation (ìTranscoî) or its Concessionaire by any End-Users 

or Self Generation Entities not connected to a Distribution Utility. 

WHEREAS, Section 7 of Rule 18 of the IRR provides that all Self-Generation 

Facilities whether new, existing or under construction shall not be covered by the imposition 

of Universal Charge for a period of four (4) years from its imposition: Provided, That, 

such Self-Generation Facilities shall register with the ERC and PSALM. 

WHEREAS, Section 34 of the Act mandates PSALM to be the administrator of the 

Universal Charge funds and requires PSALM to establish Special Trust Funds (ìSTFsî) 

for this purpose. 

WHEREAS, there is a need to establish procedures for the remittance and 

disbursement of the Universal Charge and for the timely provision of accurate information 

in relation thereto, to ensure that the objectives of the Universal Charge are achieved and 

to enable PSALM to fulfill its obligations under the Act. 

WHEREAS, Section 6 (b) of Rule 18 of the IRR requires PSALM, in consultation 

with the DOF and with the approval of the ERC, to promulgate procedures and guidelines 

to govern all remittances to and disbursements from the Special Trust Funds. 

NOW, THEREFORE, in consideration of the foregoing, PSALM promulgates these 

ìAmended Guidelines and Procedures Governing the Remittances and Disbursements of 

the Universal Chargeî as follows.


SECTION 1. Guiding Principles - 

In compliance with the EPIRA and its IRR, these Guidelines are being issued by 

PSALM for: 

(a) the remittance to the Special Trust Funds of the Universal Charge amounts collected 

or received by Distribution Utilities, Suppliers, and TRANSCO or its Concessionaire; 

(b) the administration by PSALM of the STFs; 

(c) the provision of information to PSALM so that it may comply with its obligations for the 

management of Universal Charge funds; and 

(d) the disbursement of the Universal Charge by PSALM to the Beneficiaries in accordance 

with their entitlements as determined and approved by the ERC. 

SECTION 2. Definition of Terms - 

2.01 Defined Terms: The following terms and expressions shall have the meanings set 

forth below: 

ìActî or ìEPIRAî refers to Republic Act No. 9136, otherwise known as the ìElectric 

Power Industry Reform Act of 2001î; 

ìBeneficiariesî means the entities eligible or authorized by the ERC to avail of the Universal 

Charge pursuant to EPIRA and its IRR as enumerated in Section 3.02 (STFs and 

their Beneficiaries); 

ìBTrî refers to the Bureau of Treasury; 

ìCollecting Entitiesî refers to (1) Distribution Utilities or Suppliers in case of Contestable 

Markets; and (2) TRANSCO or its Concessionaire in respect of End-Users and Self- 

Generation Entities not connected to a Distribution Utility; 

ìConcessionaireî has the meaning as defined in the EPIRA and its IRR and, for the 

avoidance of doubt, references herein to TRANSCO shall apply equally to the Concessionaire 

once the Concessionaire has been appointed to assume TRANSCOís responsibilities; 

ìContestable Marketî has the meaning as defined in the EPIRA and its IRR; 

ìDemand Draftî refers to a check issued by a bank with guaranteed funding. This is 

negotiable only within provincial branches. This instrument is usually coded for security 

purposes; 

ìDistribution Utilityî has the meaning as defined in the EPIRA and its IRR; 

ìDOEî refers to the Department of Energy, the government agency created pursuant to 

Republic Act No. 7638 whose expanded functions are provided in the Act;


ìDOFî refers to the Department of Finance, the government agency created pursuant to 

Executive Order No. 127; 

ìEnd-Userî has the meaning as defined in the EPIRA and its IRR; 

ìEnergy Regulatory Commissionî or ìERCî refers to the regulatory agency created by 

Section 38 of the Act; 

ìERC Rulesî refers to the ìERC Rules Governing the Collection of the Universal Chargeî; 

ìGovernment Financial Institutionî or ìGFIî refers to financial institutions or corporations 

wholly owned and controlled by the National Government. For purposes of these Guidelines, 

the GFI must be acceptable to the DOF; 

ìGuidelinesî refers to these ìGuidelines and Procedures Governing the Remittances and 

Disbursements of the Universal Chargeî; 

ìIRRî refers to the Implementing Rules and Regulations of the EPIRA; 

ìMain Trust Account ñ Universal Chargeî means the bank account established by PSALM 

either with the BTr or a GFI acceptable by the DOF, purposely and exclusively for receiving 

the remittance of the Universal Charge collections from the Collecting Entities; 

ìManagerís/Cashierís Checkî refers to a check issued by a bank with guaranteed funding. 

This instrument must be negotiable within Metro Manila only; 

ìMarket Operatorî shall have the same meaning as defined in the EPIRA and its IRR; 

ìMissionary Electrificationî has the meaning as defined in the EPIRA and its IRR; 

ìNational Power Corporationî or ìNPCî refers to the government corporation created 

pursuant to Republic Act No. 6395, as amended; 

ìNational Transmission Corporationî or ìTRANSCOî refers to the government corporation 

created pursuant to Section 8 of the EPIRA. References to TRANSCO in these 

Guidelines shall also be deemed as references to its Concessionaire; 

ìPersonî refers to a natural or juridical person, as the case may be; 

ìPetitionersî refers to the Persons entitled to petition the ERC for availment of the Universal 

Charge as provided in Section 3.01 (Petitioners for Availment); 

ìPower Sector Assets and Liabilities Management Corporationî or ìPSALMî refers to 

the government owned and controlled corporation created pursuant to Section 49 of the 

EPIRA; 

ìQualified Third Partiesî or ìQTPsî refers to persons who meet the qualifications set by 

the DOE and who obtain the necessary permits from the ERC and any other agency as 

may be required to be an indirect beneficiary of a portion of the Universal Charge for 

Missionary Electrification;


ìSelf-Generation Entityî or ìSelf-Generation Facilityî has the meaning as defined in the 

EPIRA and its IRR; 

ìSmall Power Utilities Groupî or ìSPUGî refers to the functional unit of NPC created to 

pursue missionary electrification function; 

ìSpecial Trust Fundî or ìSTFî refers to a trust fund established by PSALM for each 

intended purpose of the Universal Charge and its corresponding Beneficiary or Beneficiaries 

as enumerated in Section 3.02 (STFs and their Beneficiaries); 

ìSTF Accountî means an account opened by PSALM either with the BTr or a GFI acceptable 

to the DOF, purposely and exclusively for remittances to or disbursements of the 

Universal Charge; 

ìStranded Contract Costs of Distribution Utilitiesî has the same meaning as ìStranded 

Contract Costs of Eligible Contracts of Distribution Utilitiesî as defined in the IRR; 

ìStranded Contract Costs of NPCî has the meaning as defined in the EPIRA and its IRR; 

ìStranded Debts of NPCî or ìStranded Debtsî has the meaning as defined in the EPIRA 

and its IRR; 

ìSupplierî has the meaning as defined in the EPIRA and its IRR; 

ìUniversal Chargeî has the meaning as defined in the EPIRA and its IRR. 

ìWESM Rulesî shall refer to the rules governing the Wholesale Electricity Spot Market 

(ìWESMî), promulgated by the DOE in its Department Circular No. 2002-06-003, dated 

28 June 2002; 

ìWholesale Electricity Spot Marketî or ìWESMî refers to the Wholesale Electricity Spot 

Market to be created in accordance with RA 9136. 

2.02 Rules of Construction: Unless the context otherwise requires: 

(a) Words singular and plural in number shall be deemed to include the other; 

(b) Section headings are for convenience of reference only, do not form part of these 

Guidelines, and shall not be deemed to limit or otherwise affect any of the provisions 

hereof. References to Sections, unless otherwise indicated, are references to sections 

of these Guidelines; 

(c) In the event that any of the capitalized terms above are defined through reference to 

the EPIRA and its IRR, in the event of a conflict, the EPIRA definition shall govern; and 

(d) In the event that any of the capitalized terms above are defined through reference to 

the EPIRA and its IRR and such definition appears only in the EPIRA or the IRR, the term 

is deemed to have been defined by the document wherein the definition of such term 

appears.


The applicable laws, including the EPIRA, its IRR and other applicable government 

regulations, are incorporated herein by reference. 

SECTION 3. Coverage - 

3.01 Petitioners for Availment: The following are entitled to petition the ERC for availment 

of the Universal Charge for each of the intended purposes: 

(1) PSALM for Stranded Debt and Stranded Contract Costs of NPC; 

(2) Distribution Utilities with respect to their respective Stranded Contract Costs; 

(3) SPUG, for Missionary Electrification; 

(4) Generation companies with respect to the equalization of taxes and royalties 

between indigenous or renewable energy resources and imported fuels; 

(5) NPC with respect to the environmental charge of one-fourth of one centavo per 

kilowatt-hour (P 0.0025/kWh) of sales; and 

(6) NPC/PSALM and Distribution Utilities with respect to the mitigation of the removal 

of cross subsidies. 

3.02 STFs and their Beneficiaries: These Guidelines cover the following STFs to be 

established by PSALM, as provided in Section 4.02 (The STFs), for each intended purpose 

identified in Section 3.01 (Petitioners for Availment), and their respective beneficiaries: 

(1) Stranded Debts and Stranded Contract Costs of NPC for PSALM; 

(2) Stranded Contract Costs for Distribution Utilities as authorized by the ERC; 

(3) Missionary Electrification for SPUG; 

(4) Equalization of taxes and royalties between indigenous or renewable energy 

resources and imported fuels for generation companies so authorized by the 

ERC; 

(5) Environmental charge of one-fourth of one centavo per kilowatt-hour (P†0.0025/ 

kWh) of sales for NPC; and 

(6) Mitigation of the removal of cross-subsidies for NPC/PSALM and Distribution 

Utilities. 

The Petitioners shall be deemed the Beneficiaries with respect to their corresponding 

STFs only upon and to the extent of the approval by the ERC of their petition for availment 

of the Universal Charge. 

3.03 Collecting Entities: These Guidelines apply to the following entities mandated by the 

Act to collect or receive the Universal Charge, as set out in the ERC Rules Governing the 

Collection of the Universal Charge:


(1) Distribution Utilities collecting from End-Users in the captive market; 

(2) Suppliers collecting from End-Users in a contestable market; 

(3) TRANSCO or its Concessionaire collecting the amounts remitted by End-Users 

and Self-Generation Entities which are not connected to a Distribution System. 

SECTION 4. Creation and Maintenance of the Special Trust Funds - 

4.01 The Main Trust Account ñ Universal Charge 

(a) PSALM shall open one (1) Trust account, referred to as the ìMain Trust Account ñ 

Universal Chargeî, with the BTr or a GFI acceptable to the DOF. Collecting Entities shall 

deposit their collections of the Universal Charge in the Main Trust Account ñ Universal 

Charge. 

(b) Within ten (10) business days of the approval of these Guidelines by the ERC, 

PSALM shall provide the Collecting Entities with the bank details and account number of 

the Main Trust Account ñ Universal Charge. 

(c) If there are any amendments to the bank details and account number of the Main 

Trust Account-Universal Charge, PSALM shall notify all of the Collecting Entities as soon 

as possible but in any case within ten (10) business days from the effectivity of such 

amendments. 

4.02 The STFs 

(a) Pursuant to Section 6(a) of Rule 18 of the IRR, PSALM shall create one (1) separate 

STF for each of the six (6) intended purposes enumerated in Section 3.01 (Petitioners for 

Availment). These STFs shall be established with the BTr or a GFI acceptable to the DOF. 

(b) PSALM will make disbursements of the Universal Charge to the respective Beneficiaries 

from these six (6) STFs. 

(c) PSALM will enter into an appropriate agreement with the BTr or GFI detailing the 

terms for the maintenance of the STFs and the transfers of funds to and from the STFs. 

The terms of the agreement shall be consistent with the specific purposes for which the 

STFs were created in accordance with existing laws, government rules and regulations. 

(d) Amounts remitted to the Main Trust Account ñ Universal Charge will be allocated to the 

six (6) STFs pursuant to Section 7(c). 

(e) Any interest earned on monies in an STF Account shall form part of such STF and 

shall be used for the same specified purpose. 

(f) The charges, expenses, fees and other costs imposed by the GFI or BTr for the 

administration of the STFs shall be monitored and accounted for by PSALM. The charges, 

expenses, fees and other costs shall be debited to each of the STFs pro rata to the 

amount of money passing through each STF.


SECTION 5. Remittance of Universal Charge by Collecting Entities 

5.01 Remittance Procedures: To avoid the penalties and unnecessary costs brought 

about by a delay in the remittance of the Universal Charge, the Collecting Entities shall 

faithfully comply with the procedures set forth below: 

(a) Subject to Section 5.03 (ìAllowed Withholding of Universal Chargeî), each Collecting 

Entity shall remit its total actual collections of the Universal Charge to the Main Trust 

Account ñ Universal Charge without need of prior demand from PSALM. 

(b) The Universal Charge amounts collected during each calendar month shall be remitted 

to the Main Trust Account ñ Universal Charge on or before the last banking hour of the 

fifteenth (15th) day of the succeeding month. In the event that the fifteenth (15th) day of 

the succeeding month falls on a non-banking day or holiday, all Universal Charge collections 

shall be remitted to the Main Trust Account ñ Universal Charge on or before the last 

banking hour on the immediately succeeding banking day. 

(c) For proper control and timely recording, each Collecting Entity shall submit to 

PSALM all the necessary information pertaining to billing of the Universal Charge for 

the calendar month as required under Section 6 (ìProvision of Informationî) on the 

twentieth (20 th ) day of the succeeding calendar month. Similarly, information on collection 

and remittance of Universal Charge for the calendar month as required under 

Section 6 (ìProvision of Informationî) shall be submitted to PSALM on the fifteenth 

(15 th ) day of the succeeding calendar month, to coincide with the date of remittance. 

(d) All remittances of the Universal Charge shall be in Philippines Pesos and shall be 

made through any one of the following forms, in each case clearly identifying the Collecting 

Entity and the billing and collection month to which the remittance pertains: 

(1) Cash 

(2) Managerís/Cashierís Check 

(3) Demand Draft 

(4) Fund Transfer 

(5) Company Check 

(e) PSALM shall confirm with the BTr or GFI the amount of the Universal Charge remitted 

to the Main Trust Account ñ Universal Charge by each Collecting Entity in each month. 

PSALM shall issue a confirmation notice to each Collecting Entity within five (5) business 

days confirming the receipt of its funds in the Main Trust Account-Universal Charge. 

5.02 Late Remittances: Subject to Section 5.03 (ìAllowed Withholding of Universal 

Chargeî), failure of a Collecting Entity to remit without justifiable or valid reason its total 

actual collections of the Universal Charge in each calendar month in accordance with 

Section 5.01 (ìRemittance Proceduresî) shall subject such Collecting Entity to a late 

remittance interest charge and the fines and penalties provided in Section 8 of Rule 18 of 

the IRR. The procedures for late remittances are as follows: 

(a) In the event that any Collecting Entity collects amounts from End-Users in respect of 

the Universal Charge in any calendar month but fails to remit the same to the Main Trust


Account ñ Universal Charge on or before the last banking hour of the fifteenth (15th) day 

of the next calendar month, said Collecting Entity shall pay a late remittance interest 

charge on the amount collected and due but not remitted. The late remittance interest 

charge shall be applied to the difference between total actual collections of the Universal 

Charge for any calendar month and total actual remittances for said month, and will be 

calculated at the rate of five percent (5%) per month from the date upon which the 

remittance amount was due until the date when such amount is received in the Main Trust 

Account ñ Universal Charge. 

(b) The late remittance interest charge shall be in addition to whatever amount of fine or 

penalty may be imposed by the ERC under Section 8 of Rule 18 of the IRR. 

(c) Any late remittance interest charges shall be remitted to the Main Trust Account ñ 

Universal Charge for disbursement to the STFs pro rata to the allocation of other remittances 

between the STFs. 

(d) PSALM reserves the right to withhold any due disbursements of the Universal Charge 

to a Collecting Entity which has failed to remit its collections to the Main Trust Account ñ 

Universal Charge or require the Collecting Entity to pay the late remittance interest charges 

in accordance with the procedures described herein. 

(e) In the event that any Collecting Entity consistently delays in or fails to remit its Universal 

Charge collections for more than two (2) months, PSALM shall request the ERC to 

take appropriate action under Rule 18 of the IRR. 

5.03 Allowed Withholding of Universal Charge: A Collecting Entity which is a Distribution 

Utility authorized by the ERC to avail of the Universal Charge for Stranded Contract Costs 

of Distribution Utilities in any calendar month is entitled to withhold from its remittance to 

the Main Trust Account ñ Universal Charge an amount reflecting the Universal Charge 

approved by the ERC for such purpose for the relevant month, in accordance with the 

procedure provided in this Section: 

(a) In determining the amount which a Distribution Utility can net off from its remittance of 

the Universal Charge to PSALM, the Distribution Utility shall not discriminate in its own 

favor at the expense of other beneficiaries in the event that actual collections differ from 

expected collections based on the level of kilowatt-hour sales used by ERC in setting the 

Universal Charge per kilowatt-hour (kWh). In such case, the Distribution Utility shall only 

retain its proportionate share in the actual collection. 

(b) For the avoidance of doubt, a Distribution Utility must remit to the Main Trust Account 

ñ Universal Charge the amounts of Universal Charge collected from its End-Users pertaining 

to the other categories of Universal Charge. The balance of a Distribution Utilityís 

entitlement to Universal Charge for Stranded Contract Costs of Distribution Utilities for 

any month will be disbursed to said Distribution Utility by PSALM from the Universal 

Charge amounts collected for that purpose by other Collecting Entities, in accordance 

with Section 7 (ìDisbursements from the STFsî). 

(c) Under no circumstances may a Distribution Utility withhold from its remittances to the 

Main Trust Account ñ Universal Charge in respect of any month such amount in excess of


that which the ERC has authorized said Distribution Utility to recover from the Universal 

Charge for its Stranded Contract Costs for that month. 

SECTION 6. Provision of Information - 

6.01 Reporting Requirements and Procedures 

(a) In order for PSALM to monitor the proper remittance of Universal Charge collections 

by Collecting Entities for the protection of all End-Users, each Collecting Entity must 

furnish PSALM with relevant information on its billings and collections in each calendar 

month. The Market Operator is also required to submit information as set out in Section 

6.04 so that PSALM may verify the information provided by Collecting Entities. 

(b) The statements or information described in Sections 6.02 through 6.03 pertaining to 

billings in respect of each calendar month should be submitted to PSALM (by electronic 

mail or facsimile transmission) by each Collecting Entity to arrive on or before 

the twentieth (20 th ) day of the succeeding month. Likewise, information pertaining to 

monthly collections and remittances should be submitted to PSALM (by electronic mail 

or facsimile transmission) by each Collecting Entity to arrive on or before the fifteenth 

(15 th ) day of the succeeding month. For documents sent by electronic mail or facsimile 

transmission, the original of said statement or report must be provided to PSALM within 

ten (10) business days from the remittance of the Universal Charge. 

6.02 Reports by Distribution Utilities and Suppliers: In respect of each calendar month, 

each Collecting Entity that is a Distribution Utility or Supplier shall submit to PSALM: 

(a) A certified statement of its total actual billings of electricity separately identifying the 

total amount billed in respect of each Universal Charge component. Such statement shall 

include the total actual sales of electricity in kWh. The form for the Universal Charge 

Total Actual Billings Statement and sample calculations are attached hereto as Annex A1* 

and A2*, respectively. 

Billing adjustments due to erroneous meter reading, or arithmetical mistakes or 

omissions shall be reflected in the Universal Charge Billing Form, duly supported by a 

certified true copy of the debit or credit memo issued by the Collecting Entity to the 

concerned customer. 

Billing adjustments covering bad debts written off shall likewise be reflected in 

the Universal Charge Billing Form, duly supported by documents. 

(b) A certified statement of its total actual collections separately identifying the amount 

collected for each Universal Charge component. The form for the Universal Charge Total 

Actual Collections and sample calculations are attached hereto as Annex B1* and B2*, 

respectively. 

(c) The statements identified in Sections 6.02(a) and 6.02(b) must be signed by the Chief 

Financial Officer or his equivalent or any authorized representative of such Collecting 

Entity. 




(d) A Collecting Entity which is a Distribution Utility authorized by the ERC to collect an 

amount of Universal Charge in respect of its own Stranded Contract Cost must identify in 

its statement under Section 6.02(a) the amount which it is authorized by the ERC to avail 

from the Universal Charge for this purpose in the relevant calendar month and the amount 

which it has billed to its End-Users for this purpose in the relevant calendar month. In its 

statement under Section 6.02(b), said Distribution Utility shall identify separately the 

amount collected from its End-Users for this purpose and the amount withheld from its 

remittance to the Main Trust Account ñ Universal Charge under Section 5.03 (ìAllowed 

Withholding of Universal Chargeî). 

6.03 Reports by TRANSCO 

(a) TRANSCO shall submit the statements described in Section 6.02 (ìReports by Distribution 

Utilities and Suppliersî) in respect of its invoices to and collections from End- 

Users which are connected to the transmission system and not connected to a distribution 

system. In case TRANSCO does not meter and/or invoice any such End-Users on 

the basis of kilowatt hours of sales, TRANSCO will include in its statement under Section 

6.02(a) the basis on which it has estimated the kilowatt hours consumed by such End- 

Users in determining the Universal Charge amounts which it has invoiced. 

(b) In respect of amounts remitted to TRANSCO (or its Concessionaire, as the case may 

be) by Self-Generation Entities not connected to a Distribution Utility, TRANSCO shall 

submit to PSALM a copy of the information which has been provided to TRANSCO by the 

Self-Generation Entities in support of their remittances. TRANSCO may summarize such 

information in the event that it is voluminous. 

6.04 Reports by Market Operator: No later than the fifteenth (15 th ) day of each calendar 

month, the Market Operator shall submit to PSALM a summary of its actual meter readings 

in kilowatt hours for the immediately preceding calendar month separately identifying 

each metering point and the corresponding Distribution Utility, Supplier or End-User 

connected to the transmission system. 

6.05 Reports by NPC-SPUG: No later than the twentieth (20 th ) day of each calendar 

month, the National Power Corporation ñ Strategic Power Utilities Group (NPC-SPUG) 

shall submit to PSALM a summary of its actual meter readings in kilowatt hours for the 

immediately preceding calendar month separately identifying each metering point and 

the corresponding Distribution Utility, supplier or End-User in the SPUG area. 

SECTION 7. Disbursements from the STFs 

(a) The STFs shall be disbursed only for the specific purposes for which the same were 

created in accordance with existing laws, government rules and regulations. 

(b) The STFs shall be disbursed and accounted for in accordance with the fundamental 

requirements for disbursement of trust funds as provided for under applicable law, including 

the Government Auditing Code of the Philippines (Presidential Decree 1445) and the 

Government Accounting and Auditing Manual promulgated by the Commission on Audit. 

(c) The BTr or GFI shall distribute all the funds received in the Main Trust Account ñ 

Universal Charge to the STFs based on instructions issued by PSALM no later than the


19 th day of each calendar month (or, if this is a non-banking day or holiday, the next 

succeeding business day) reflecting the Beneficiariesí proportionate entitlements to avail 

of the Universal Charge. 

(d) To facilitate close monitoring of disbursements from the STFs and their use for the 

intended purpose: 

(1) Each Beneficiary shall promptly furnish PSALM with a certified true copy 

of the order (or other relevant ruling) issued by the ERC setting out the 

Beneficiaryís entitlement to the Universal Charge in respect of each year or 

each calendar month, as the case may be. 

(2) In respect of each calendar month and consistent with the information 

provided under Section 7(d)(1), each Beneficiary shall properly complete and 

certify the Universal Charge Disbursement Request Form as found in Annex 

C and submit the same to PSALM on or before the seventeenth (17 th ) day of 

the next calendar month. 

(3) PSALM will make no disbursement to any Beneficiary from any of the STF 

Accounts unless the Universal Charge Disbursement Request Form is accomplished 

in all respects and has been presented to the satisfaction of PSALM 

on or before the seventeenth (17 th ) day of the next calendar month. 

(4) Subject to Section 7(d)(4) and Section 7(f), PSALM shall instruct the BTr 

or GFI to disburse funds from the relevant STF Account to the Beneficiary on 

the twentieth (20 th ) day of each month (or, if this is a non-banking day or 

holiday, the next succeeding business day), either through funds transfer or 

Managerís Check. In case of payment by Managerís Check, the Beneficiaryís 

authorized representative shall have to appear at the PSALM offices with all 

relevant documents to demonstrate such authority to claim the Managerís 

Check. 

(5) Within five (5) calendar days from its receipt of the funds so disbursed, 

each Beneficiary must issue an official receipt in favor of PSALM. PSALM 

reserves the right to make no further disbursements to any Beneficiary until it 

has issued such official receipt for the disbursement. 

(e) In the event that the balance in any STF Account for any calendar month exceeds the 

amount of the availment request or requests submitted by the Beneficiary or Beneficiaries 

of such account for such month, PSALM shall retain the balance within the STF 

Accounts to pay for periods where a shortfall occurs. 

(f) In the event that the balance in any STF Account for any calendar month falls short of 

the Universal Charge availment request submitted by the Beneficiary of such account for 

such month, PSALM shall instruct the BTr or GFI to disburse only such amount not 

exceeding that which is in the STF Account. In the event that there are multiple Beneficiaries 

of any such STF Account, PSALM shall instruct the BTr or GFI to disburse the 

balance available in the account between the Beneficiaries pro rata to the Beneficiariesí 

availment requests for that month. The Beneficiary or Beneficiaries shall be entitled to


recover any such shortfall in a later month in accordance with the true-up mechanism 

approved by the ERC for the relevant Universal Charge purpose. 

(g) Nothing in these Guidelines shall restrict the right of NPC (SPUG) to disburse a 

portion of the Missionary Electrification component of the Universal Charge to QTPs 

provided such disbursement is in accordance with law and with the approval of the DOE 

and ERC. 

Section 8. Audit and Reporting 

(a) Acting in its capacity as administrator of the STF Accounts, PSALM shall: 

(1) Maintain monthly records of each component of Universal Charge billings, 

collections, remittances and disbursements. 

(2) Reconcile each component of Universal Charge billings, collections, and 

remittances with the books of accounts of Collecting Entities. 

(3) Maintain records of Universal Charge availments due and paid to each of 

the Beneficiaries in each month, including separate books of accounts for 

over-recovery of the Distribution Utility stranded cost component. 

(4) Reconcile Universal Charge availments due and paid to each of the 

Beneficiaries with the books of accounts of Beneficiaries on a monthly basis. 

(5) Whenever requested by the ERC, inform the ERC of the outstanding 

balance of each of the STF. 

(b) As required by Section 6 (d) of Rule 18 of the IRR, PSALM shall submit to the DOF 

and ERC on a quarterly basis a report on the remittances and disbursements of the 

STFs. 

(c) As required by Section 3 (f) of Rule 13 of the IRR, PSALM shall ensure that SPUG 

conducts proper monitoring, accounting and control of expenditures and efficient utilization 

of the Missionary Electrification funds from the Universal Charge. SPUG shall submit 

to PSALM a detailed yearly report containing: 

(1) Historical actual Operating Costs separately identifying expenditures on 

fuel, lubricants, purchased power, personal services, and other operating and 

maintenance expenses for the prior year and projected Operating Costs for 

the same categories for the current year and the next succeeding two years. 

(2) Historical actual Capital Expenditures for expansion, rehabilitation and 

installation of facilities for new areas of development based on the approved 

MEDP for the prior year and projected Capital Expenditures for the same 

categories for the current year and the next succeeding two years. 

(d) As required by Section 5 (b) of Rule 18 of the IRR, each Collecting Entity shall 

maintain separate books of accounts for the collections and remittances to PSALM of the 

Universal Charge. Such books of accounts must be made available to the ERC and 

PSALM during business hours upon two (2) days prior written notice. 

(e) As required by Section 6 (e) of Rule 18 of the IRR, PSALM shall maintain separate 

books of accounts for the disbursements to Distribution Utilities of the Universal Charge


for Stranded Contract Costs of Distribution Utilities and shall use the same to determine 

whether there has been any over-recovery by any Distribution Utility. PSALM will make 

such books of accounts available to the ERC for purposes of monitoring and accounting 

for sums collected from the Universal Charge. 

(f) Each Collecting Entity shall submit to PSALM a yearly audited report of total actual 

collections and total actual remittances of the Universal Charge. 

(g) In the event that PSALM discovers any discrepancy between expected and actual 

collections, or between actual collections and actual remittances, or any other indication 

that a Collecting Entity is failing to comply with these Guidelines, PSALM shall have the 

right to seek an explanation from such Collecting Entity or to refer the matter to the ERC 

for investigation. 

SECTION 9. Liability 

(a) PSALM shall not be held liable by any third party, including the beneficiaries of the 

STFs, for any non-remittance or partial remittance should the same be attributable to the 

fault or negligence of any of the Collecting Entities or any of its officers, employees, 

agents or assigns or any other party. Any Collecting Entity who is found by final judgement 

to be at fault shall immediately reimburse PSALM within five (5) days from demand 

of any amount expended by PSALM as payment for damages, expenses and other costs, 

incurred and paid pursuant to any settlement or legal proceedings, whether in the nature 

of administrative, civil or criminal, whenever PSALM is included as a party to any proceeding 

due to the fault or negligence of any Collecting Entity, its officers, employees, 

agents or assigns. 

(b) In accordance with the EPIRA, the IRR and the ERC Rules Governing the Collection 

of the Universal Charge, the ERC may impose sanctions on any Collecting Entity for its 

failure to comply with these Guidelines or any portion thereof. 

SECTION 10. Fines and Penalties 

The ERC may impose the appropriate fines and penalties for any violation or noncompliance 

with these Guidelines as provided in Section 5 of the Guidelines to Govern 

the Imposition of Administrative Sanctions in the form of Fines and Penalties Pursuant to 

Section 46 of RA 9136 dated May 17, 2002. 

SECTION 11. Amendments 

Any amendment to, or revision of these Guidelines may be proposed by PSALM, in 

consultation with the DOF and subject to the approval of the ERC. 

SECTION 12. Separability Clause 

Should any provision or section of these Guidelines be declared unconstitutional or 

contrary to law, the parts not so declared shall remain in full force and effect. 


(SGD.) NIEVES L. OSORIO 

President and CEO 

PSALM


PROFESSIONAL REGULATION COMMISSION 


Board of Accountancy 


Adoption of the Amendments to the Philippine Accounting Standards 

(PAS 39) ñ Financial Instruments: Recognition and Measurements 

ìCash Flow Hedge Accounting of Forecast Intragroup Transactions 

and the Fair Value Optionî As Part of the Generally Accepted Accounting 

Principles in the Philippines 





óo0oó 



Adoption of the Philippine Accounting Standard (PAS 101) ñ 

ìFinancial Reporting Standards for Non-Publicly Accountable Entitiesî 

as Part of the Generally Accepted Accounting Principles in the Philippines 





óo0oó 



Adoption of the Amendments to Philippine Accounting Standards (PAS) 39 - 

Amendments to Philippine Accounting Standards 39 ìFinancial Instruments: 

Recognition and Measurement Transition and Initial Recognition 

of Financial Assets and Financial Liabilitiesî as Part of the Generally 

Accepted Accounting Principles in the Philippines 


U.P. Law Center, Diliman, Q.C.


Adopted: 22 Sept. 2006 


--o0o-- 



Adoption of the Amendment to Interpretation SIC - 12: Consolidation - 

Special Purpose Entities of the International Accounting Standards 

Board (IASB) as Part of the Generally Accepted 

Accounting Principles in the Philippines 



Adopted: 22 Sept. 2006 


--o0o-- 



Adoption of the Amendment to Interpretation IFRIC-1 and IFRIC-2 of 

the International Financial Reporting Interpretations Committee of the 

International Accounting Standards Board (IASB) as Part of the Generally 

Accepted Accounting Principles in the Philippines 





óo0oó 



Adoption of the Amendments to the Philippine Accounting Standard 

(PAS 19) ñ Employee Benefits ìActuarial Gains and Losses, Group 

Plans and Disclosuresî as Part of the Generally Accepted Accounting 







óo0oó 



Adoption of the Philippine Financial Reporting Standard (PFRS 6) ñ 

ìExploration for and Evaluation of Mineral Resourcesî as Part of the 

Generally Accepted Accounting Principles in the Philippines 





óo0oó 




ìAccounting for Government Grants and Disclosure of Government 

Assistanceî as Part of the Generally Accepted Accounting Principles 

in the Philippines 



Adopted: 16 Aug. 2005 


óo0oó 




ìProvisions, Contingent Liabilities and Contingent Assetsî as Part 

of the Generally Accepted Accounting Principles in the Philippines 




óo0oó






ìInterim Financial Reportingî as Part of the Generally Accepted 






óo0oó 




ìAccounting and Reporting by Retirement Benefit Plansî as Part of 

the Generally Accepted Accounting Principles in the Philippines 





óo0oó 




ìBorrowing Costsî as Part of the Generally Accepted Accounting 






óo0oó





ìRevenueî as Part of the Generally Accepted Accounting Principles 

in the Philippines 





óo0oó 




ìSegment Reportingî as Part of the Generally Accepted Accounting 






óo0oó 




ìIncome Taxesî as Part of the Generally Accepted Accounting 






óo0oó





ìConstruction Contractsî as Part of the Generally Accepted 






óo0oó 




ìCash Flow Statementsî as Part of the Generally Accepted Accounting 






óo0oó 



Adoption of the Philippine Auditing Practice Statement (PAPS) 

1005 (Revised) - îThe Special Consideration in the Audit of 

Small Entitiesî as Part of the Generally Accepted Accounting 






óo0oó




Adoption of the Philippine Standards on Auditing (PSA) 300 ñ 

Planning an Audit of Financial Statements 





óo0oó 



Adoption of the Framework for the Preparation and Presentation 

of Financial Statements as Part of the Generally Accepted Accounting 






óo0oó 



Adoption of the International and Assurance Standards 

Board ñ Interim Terms of Reference 




Date Filed 27 April 2006 

óo0oó 

Resolution No. 2005-295, S. 2005 

Adopting a System to Expedite the Processing of STCW í95 

Certificates of Registered Marine Officers Hired for Immediate Deployment


WHEREAS, the Professional Regulation Commission (hereafter, the ìCommissionî) 

is empowered, under Section 7 (b) of Republic Act No. 8981 (PRC Modernization 

Act of 2000), ìto perform any and all acts, xxx, make such rules and regulations and issue 

such orders and other administrative issuances as may be necessary in the execution 

and implementation of its functions and the improvement of its servicesî; 

WHEREAS, it is the Commissionís thrust to expedite the issuance of STCW í95 

Certificates to qualified Marine Officers hired for immediate deployment without sacrificing 

the quality and integrity of its certification system, as a measure to improve its services 

to the public, particularly in this case the registered Marine Officers; 

WHEREAS, the arrangement will redound to the benefit of the concerned Marine 

Officers, as this will avoid unnecessary delays in the issuance of STCW í95 Certificates 

which would otherwise adversely affect them; 

WHEREFORE, the Commission RESOLVES, as it is hereby RESOLVED, to 

adopt and implement a system to expedite the processing and issuance of STCW í95 

certificates to Marine Officers hired for immediate deployment subject to the provisions 

provided hereunder and the guidelines as may be issued subsequently by the Commission 

for the proper implementation of this Resolution: 

I. Responsibility of the Shipping/Manning Company 

1. The President or Chief Executive Officer of the shipping/manning company 

or his duly authorized representative from its crewing/operation department 

shall guarantee the authenticity and genuineness of the documents submitted 

by the marine officer by executing a sworn Certification that all the 

documents and training certificates in support of the application for the issuance/revalidation 

of STCW í95 Certificates have been thoroughly reviewed 

and verified by him, and that they are genuine and authentic; 

2. If upon verification/validation of the Commission, the documents submitted 

by the marine officer are found to be spurious or tampered with, the shipping/ 

manning company (including its Liaison Officer (ìL.O.î) or any of its authorized 

representative), whose officer issued the certification mentioned above 

shall no longer be recognized and accepted in this expedite system. 

II. Undertaking of the Commission 

1. To determine if indeed the applicant is hired for immediate deployment, the 

Commission shall require submission of the following documents: 

a. Letter-request from the shipping/manning Company; 

b. Crew request from the Principal; 

c. Philippine Overseas Employment Authority (POEA) approved contract; 

d. Overseas Employment Certificate; 

e. Plane ticket (optional); 

2. The Commission shall endeavor to release the STCW í95 Certificate within 

three (3) to five (5) working days from the time all the required documents are 

submitted and the necessary payment has been made.


III. Miscellaneous: 

Filing of application must be done personally. Applicants who are exempted 

from taking the oral assessment may file the application personally, or if on 

board, through the companyís liaison officer (L.O.) or authorized representative 

recognized by the Commission. Application can be made with the Central 

Office or any of the PRC Regional Offices. 

Submission of any document or training certificate which is found to be spurious 

or fraudulent shall be a ground for the immediate withdrawal of the STCW 

í95 Certificate issued, filing of administrative case against the Marine Officer 

for the suspension or revocation of his Certificate of Registration and License, 

and disqualification of the concerned shipping/manning company, including 

its L.O., in this expedite system. This sanction shall be without prejudice 

to the filing of any administrative, civil and/or criminal actions by the 

Commission against the shipping/manning company and its officer/s or representative/s. 

FURTHER RESOLVED, that this Resolution shall take effect after fifteen (15) days 

from its publication in the Official Gazette or in a newspaper of general circulation in the 

Philippines, whichever is earlier. 

FINALLY RESOLVED, that this Resolution shall be furnished to all concerned for 

their information and guidance. 

Adopted: 23 Aug. 2005 

(SGD.) LEONOR TRIPON-ROSERO 

Chairperson 

(SGD.) AVELINA A. DELA REA (SGD.) RENATO B. VALDECANTOS 



óo0oó 

Resolution No. 2005-292, Series of 2005 

Accreditation of the Philippine Guidance and Counseling Association, Inc. 

(PGCA) as the Organization of Guidance Counselors 



Adopted: 08 August 2005 


óo0oó


Resolution No. 2005-288, Series of 2005 

ìAllowing Batch Renewal of Professionals Through Their Respective 

Accredited Professional Organizations (APOs)î 

WHEREAS, the Commission under Republic Act No. 8981, section 7(b), is 

empowered to make such rules and regulations and issue such orders and other administrative 

issuances as may be necessary in the execution and implementation of its functions 

and the improvement of its services; 

WHEREAS, batch renewal of professionals, is viewed as a scheme designed to 

improve the services of the Commission to its clientele, more particularly the professionals; 

WHEREAS, during the Commission meeting held on 09 March 2005, it was 

resolved that batch renewal through the APOs shall be allowed for reason of practicality; 

WHEREAS, batch renewal through the APOs is viewed also to be favorable to 

the Commission as this scheme will lessen the number of professionals personally appearing 

at the Central Office; 

WHEREAS, the arrangement will likewise redound to the benefit of the professionals, 

as this will allow them to save time, effort and expenses; 

WHEREFORE, the Commission RESOLVES, as it is hereby RESOLVED, to 

allow batch renewal of professionals through their respective APOs, subject to the compliance 

with the terms and conditions provided hereunder: 

1. Batch renewal shall be allowed only at the Central Office, to the exclusion of Regional 

Offices of the Commission; 

2. This Resolution shall not in any way preclude professionals in renewing their licenses 

personally or through the allowed representative/s other than the APOs; 

3. The APO shall provide the professionals with the appropriate application forms for 

PRC ID renewal, which forms the APO shall reproduce; 

4. By virtue of a Special Power of Attorney to be executed by the concerned professionals, 

the APOs liaison officer shall attend to the renewal of the IDís from their filing up to 

their release; 

5. The professional shall personally accomplish the application form to ensure accuracy 

of data; 

6. A photocopy of the expired ID must be attached to the application form; 

7. The specifications on photo requirement shall be observed strictly;

1070 


8. Renewal fees must be paid directly to the assigned Cashier of the Commission who 

shall record clearly the Original Receipt numbers on the claim slip (WARNING: payment 

made to any PRC employee other than the cashier shall become a basis for suspension 

of the batch filing privilege and the employee concerned shall be dealt with administratively); 

9. The professional ID may be claimed by the liaison officer on the designated date and 

upon presentation of the claim slip and the Special Power of Attorney as mentioned in 

item no. 4; 

10. To ensure order and avoid any loss or misplacement of documents, a succeeding 

transaction may be allowed only after the release of the preceding batch; 

11. By reason of limited PRC personnel, batch renewal shall not exceed twenty-five (25) 

applications per transaction; 

12. Application with incomplete data and those made in violation of the provisions of this 

Resolution shall not be accepted; 

FURTHER RESOLVED, that this Resolution shall take effect after fifteen (15) 

days from its publication in the Official Gazette or in a newspaper of general circulation in 

the Philippines, whichever is earlier. 

FINALLY RESOLVED, that the herein Resolution shall be furnished to all accredited 

professional organizations for their information and guidance. 

Adopted: 08 July 2005 

(SGD.) LEONOR TRIPON-ROSERO 

Chairperson 




óo0oó 

Board for Customs Brokers 


Allowing Repeaters-Graduates with Degrees or Courses Other 

Than Bachelorís Degree or Masterís Degree in Customs Administration to 

Sit in the October 2005 Licensure Examinations for Customs Brokers 

WHEREAS, Section 16 (b), Article III of R.A. No. 9280, the ìCustoms Brokers 

Act of 2004î provides, to wit: 

ìSec. 16. Qualifications of Applicants for Examinations. ñ In order to be 

admitted to the licensure examination for customs broker profession, a candi-


date shall, at the time of filing his/her application, establish to the satisfaction 

of the Board that: 

x x x x x x xî 

(b) he/she is a holder of a Bachelorís Degree in Customs Administration: 

Provided, That a holder of Masterís degree in Customs Administration shall be 

allowed to qualify within five (5) years from the effectivity of this Act; and 

x x x x x x x:; 

WHEREAS, the afore-quoted qualification is also set forth in Sec. 16, 

Rule III of Board Resolution No. 03, Series of 2005, ìThe IRR of the Customs 

Brokers Act of 2004î; 

WHEREAS, Section 3401, d., Part I of R.A. No. 1937, the ìTariff and 

Customs Code of the Philippinesî, as amended by P.D. No. 34, reads as follows: 

ìSection 3401. Qualifications of Applicants for Customs Brokerís Certificate. 

All applicants for customs brokerís certificate shall pass a written examination 

for the purpose. 

Applicants for admission to said examination shall have the following qualifications: 


d. He has completed at least a four-year collegiate course, where he has 

creditably taken at least eighteen (18) academic units in tariff and customs 

and/or taxation xxxxî 


x x x x x x xî; 

(Underscoring supplied) 

WHEREAS, examinees who have taken the licensure examination for Customs 

Brokers under the afore-stated collegiate course requirement but who have failed the 

same would like to retake it in the October 2005 Examination; and 

WHEREAS, in the absence of a specific provision in R.A. No. 9280 prohibiting 

any examinee-holder of the ìfour-year collegiate courseî from taking the Licensure Examination 

for Customs Brokers who has taken but failed the said examination the Board 

out of equity and propriety may still admit him or her thereto; 

NOW, THEREFORE, the Board resolves, as it hereby resolved, to allow repeatergraduates 

with degrees or courses other than Bachelorís or Masterís Degree in Customs 

Administration to retake only the October, 2005 licensure examinations for customs brokers. 

This Resolution shall take effect after fifteen (15) days following its full and complete 

publication in the Official Gazette or any newspaper of general circulation in the 

Philippines.

1072 



(SGD.) ANTHONY A. CRISTOBAL, Ph.D. 

Member (Acting Chairman) 

(SGD.) CONSTANTINO L. CALICA (SGD.) RODOLFO R. SALAZAR 

Member Member 

Attested to: 

(SGD.) CARLOS G. ALMELOR 

Secretary, Professional Regulatory Boards 

Approved: 

ON LEAVE 

LEONOR TRIPON-ROSERO 

Chairperson 




óo0oó 

Board for Customs Brokers 


Conducting the Licensure Examination for Customs Brokers in the Subject 

Tariff Law: Part I ñ Practical Problems on Classification ñ In Open Book/s 

WHEREAS, the Board gives a written examination in the scope thereof to applicants 

for registration as registered and licensed customs brokers under Sec. 15, Art. III 

of R.A. No. 9280, the ìCustoms Brokers Act of 2004î, and Sec. 15, Rule III of ìThe IRR of 

the Customs Brokers Act of 2004î; 

WHEREAS, all the subjects or areas in the said examination including the Subject 

Tariff Law: Part I ñ Practical Problems on Classification ñ are given in close book/s; 

WHEREAS, the Board, after request of and consultation with the schools offering 

the course Bachelor of Science in Customs Administration, decided to hold the said 

subject in open book/s; and 

WHEREAS, there is a need to allow the examinees to refer to the table for tariff 

headings and rate of duty found in their textbooks in solving the tariff classifications in 

afore-mentioned subject; 

NOW, THEREFORE, the Board resolves, as it is hereby resolved, to give in the 

October 2005 Licensure Examination for Customs Brokers the subject Tariff Law: Part I ñ 

Practical Problems on Classification ñ in open book/s; and accordingly, to include in the 

Program for the same Examination and in those for the subsequent schedules the follow-


ing note: ìPLEASE ANSWER FIRST PART I ñ TARIFF LAW: PRACTICAL PROBLEMS 

ON CLASSIFICATION, THEN SUBMIT YOUR QUESTIONNAIRE THEREOF TOGETHER 

WITH YOUR BOOK/S. ONCE YOU HAVE SUBMITTED YOUR QUESTIONNAIRE ON 

PART I, YOU CAN NO LONGER GET BACK AND GO OVER THE SAID PART. GET 

YOUR QUESTIONNAIRE FOR PART II-TARIFF LAW: COMPUTATION OF DUTIES, ETC. 

PROCEED ANSWERING IT. THEREAFTER, SUBMIT YOUR ANSWER SHEET WITH 

THE PART II QUESTIONNAIRE; and instruction: 7. ìNO OPEN BOOKS IN ALL SUB- 

JECTS except in Tariff Law: Practical Problems on Classification.î 

The herein resolution shall take effect after fifteen (15) days following the full and 

complete publication thereof in the Official Gazette or any newspaper of general circulation 

in the Philippines. 

Let copy hereof be furnished to the Examination Division, PRC and every PRC 

Regional Office and all other concerned bodies or organizations for their information and 

dissemination. 


(SGD.) ANTHONY A. CRISTOBAL, Ph.D. 

Member (Acting Chairman) 

(SGD.) CONSTANTINO L. CALICA (SGD.) RODOLFO R. SALAZAR 

Member Member 




Approved: 

ON LEAVE 


Chairperson 




óo0oó 

Board of Architecture 

Board Resolution No. 05, Series of 2005 

Prescription by the Board of the Design, Size, and Contents of the 

Dry Seal for Use by a Duly Licensed Architect

1074 


WHEREAS, Sec. 20, Art. III of R.A. No. 9266, known as ìThe Architecture Act 

of 2004î, and Sec. 20 Rule 20 of Board Res. No. 07, Series of 2004, cited as the ìIRR of 

the Architecture Act of 2004î, states, to wit: 

ìSec. 20. Seal, Issuance and Use of Seal. ñ A duly licensed architect 

shall affix the seal prescribed by the Board bearing the registrants name, 

registration number and title ìArchitectî on all architectural plans, drawings, 

specifications and all other contract documents prepared by or under his/her 

direct supervisionî; and (Underscoring supplied) 

WHEREAS, the last paragraph of Sec. 20, Rule III of supra IRR reads as follows: 

ìThe Board shall prescribe the design, size, and contents of the dry seal to be used in 

signing and sealing of architectural plans, drawings, specifications, contract documents 

and architectural permit prepared by or under his/her direct supervisionî; (Underscoring 

supplied) 

NOW, THEREFORE, the Board RESOLVES, as it is hereby RESOLVED, to 

prescribe the dry seal with the design, size, and contents as presented in Annex ìAî* for 

mandatory use by a duly licensed architect in signing and sealing of architectural plans, 

drawings, specifications, contract documents, and architectural permit prepared by or 

under his/her direct supervision. 

The Office of the Secretary, Professional Regulatory Boards, PRC shall have 

custody of the said dry seal. 

This Resolution shall take effect after fifteen (15) days following its complete and 

full publication in the Official Gazette or any newspaper of general circulation in the 

Philippines. 

Let copy of this Resolution be furnished to the President, United Architects of the 

Philippines (UAP), Inc. for distribution to affiliate architectural organizations and concerned 

governmental agencies for wide and extensive dissemination to all concerned. 

Adopted: 22 December 2005 

(SGD.) EUGENE G. GAN 

Chairman 

(SGD.) FERNANDO L. SANTOS (SGD.) MIGUEL R. CALUZA 

Member Member 







Approved: 


Chairperson 



SECURITIES AND EXCHANGE COMMISSION 


SEC Memorandum Circular 6, Series of 2006 

Submission of General Information Sheet and the General and 

Special Form for Financial Statements in Electronic Format 

SECTION 1. Rationale - Section 141 of the Corporation Code of the Philippines 

(Batas Pambansa 68) mandates that every corporation, domestic or foreign, lawfully 

doing business in the Philippines, shall submit to the Securities and Exchange Commission 

an annual report of its operations, together with a financial statement of its assets 

and liabilities, certified by any independent certified public accountant in appropriate 

cases, or by SEC-accredited independent certified public accountants in case of listed 

companies and secondary licensees, covering the preceding fiscal year and such other 

requirements as the Securities and Exchange Commission may require. 

Further, Section 26 of the Corporation Code requires that the Secretary or any 

other officer of the Corporation shall submit within thirty (30) days after the election of 

directors, trustees, and officers of the corporation, a report containing among others, the 

names, nationalities and addresses of such persons. Thus, for reporting such information, 

corporations use the General Information Sheet (GIS), the form devised by the 

Securities and Exchange Commission (SEC) for this and other purposes. 

Apart from being used for SEC monitoring and enforcement activities, the data in 

the aforementioned reports also serve as inputs for the different statistical frameworks 

compiled by other government institutions for purposes of analyzing the performance of 

the Philippine corporate sector and formulating the appropriate economic and regulatory 

policies. It is therefore essential that the data in the subject reports be complete, accurate, 

reliable, and submitted following the prescribed reporting template and timeframe, 

because of their profound impact on the economy in general and the capital market in 

particular. 

Considering the foregoing and in accordance with Section 27 or R.A. 8792 which is 

also known as the Electronic Commerce Act, and Section 37 of its Implementing Rules 

and Regulations, the submission of the GIS, the General Form for Financial Statements 

(GFFS), and the industry-specific Special Forms for Financial Statements (SFFS) in 

electronic format i.e., on diskette or Compact Disc (CD) is hereby mandated.

1076 


SECTION 2. Scope of application - This Memorandum Circular is applicable to 


1. SEC-registered domestic stock corporations with annual gross sales or gross revenue 

of at least Five Million Pesos (P 5,000,000.00); 

2. Investment Companies and Publicly-held Companies enumerated in Section 17.2 of 

the Securities Regulation Code; 

3. Investment Houses or Underwriters of Securities; 

4. Pre-Need Plan Companies; 

5. Brokers/Dealers in Securities; 

6. Financing Companies; 

7. Investment Company Advisers; 

8. Government Eligible Securities Dealers (GSED); 

9. Transfer Agents; 

10. All other market participants and self-regulatory organizations (e.g. Exchanges, 

Alternative Trading Systems, and Clearing Houses). 

Banks, Insurance companies, non-stock corporations, branch and representative 

offices of foreign corporations, and regional headquarters and regional operating headquarters 

of multinational corporations are not covered by this Memorandum Circular, and 

therefore, not required to submit the GIS, GFFS, and SFFS in diskette or CD. 

SECTION 3. Submission of Electronic Templates - 

1. The GIS in electronic format shall be submitted along with five (5) hard copies of the 

same within thirty (30) days from the holding of the annual stockholdersí meeting. 

2. The GFFS and SFFS in electronic format shall be submitted within thirty (30) days 

from the last day of submission of the Annual Audited Financial Statements (AAFS). 

3. The prescribed electronic templates for the GIS, GFFS, and SFFS are available for 

downloading from the SEC web page (http://www.sec.gov.ph), particularly the link entitled 

ìDownloadsî. The electronic templates and the covered corporations are as follows: 

a. Revised GIS - applicable to Stock Corporations; 

b. Revised GFFS - applicable to corporations not covered by any industryspecific 

SFFS. Blank spaces are provided in this form to allow companies to 

indicate accounts which are peculiar to their industry or business; and,


c. Revised SFFS: 

c. 1BDFS ñ applicable to Broker/Dealer in Securities 

c. 2FCFS (including schedules) ñ applicable to Financing Companies 

(Head Office with Branch Office/s Accounts) 

c. 3IHFS ñ applicable to Investment Houses and Underwriters of Securities 

c. 4PHFS ñ applicable to Investment Companies and Publicly-Held Companies 

enumerated in Section 17.2 of the Securities Regulation 

Code (SRC) 

c. 5PNFS ñ applicable to Pre-Need Plan Companies 

5. Pursuant to SRC Rule 68, corporations with subsidiaries are required to submit to the 

Commission both their parent and consolidated GFFS or SFFS, the figures of which shall 

be based on the audited financial statements. Each FS shall clearly indicate whether it is 

the ìParentî or ìConsolidatedî GFFS or SFFS. 

6. Corporations that qualify as Non-Publicly Accountable Entities under Philippine Accounting 

Standard 101, which will avail themselves of the temporary relief provided therein, 

are hereby allowed to use the old GFFS template during the first year of implementation 

of this Memorandum Circular. 

SECTION 4. Certification and/or Attachment Required - To promote the submission 

of complete, accurate, and reliable data in GIS, GFFS, and SFFS in electronic 

format, the same shall be accompanied by a certification under oath by the responsible 

officeró- 

1. For the GIS: 

The Corporate Secretary, President, or Chief Executive Officer shall certify that the 

diskette/electronic file is in the same form and format as the GIS hard copy; and 

2. For the GFFS and/or the Special Form for Financial Statements: 

The Treasurer, Chief Financial Officer, or a person occupying an equivalent rank in 

the company, shall certify under oath that, except for certain details/breakdowns required 

in the GFFS and SFFS, the Generally Accepted Accounting Principles in the Philippines 

(GAAP) prescribed accounts and figures provided in electronic documents are based on 

the contents of the AAFS submitted to SEC. 

SECTION 5. Penalty Clause - Failure to comply with the requirements of this Memorandum 

Circular shall be deemed non-compliance with SEC reportorial requirements. 

The following penalties, which shall be separate from the fines relative to late 

submission of the hard copies of the GIS and AAFS, shall be imposed for the non-

1078 


submission, late submission, or incomplete/inaccurate reporting of figures in the GIS, 

GFFS, and SFFS in electronic format: 

a. For the GIS: 

b. For the GFFS: 

a. 1First Offense: 

Reprimand 

a. 2Succeeding Offense: 

P 1,000.00 plus P 100.00 per day of delay 

b. 1First Offense: 

Reprimand 

b. 2Succeeding Offense: 


c. For the SFFS: 

c. 1First Offense: 

Reprimand 

c. 2Succeeding Offense: 


For clarification, a.1, b.1 and c.1 shall only apply during the first year of implementation 

of this Memorandum Circular. Infractions committed by first-time offenders in CY 

2007 shall be covered by the corresponding penalties under a.2, b.2, and c.2. 

SECTION 6. Amending Clause - All other existing memorandum circulars, orders, 

memoranda, or related issuances inconsistent with this Memorandum Circular are hereby 

revoked or modified. 

SECTION. 7. Effectivity - This Memorandum Circular shall take effect fifteen 

(15) days after publication in two (2) newspapers of general circulation. 



(SGD.) MA. JUANITA E. CUETO 

Officer-in-Charge 

--o0o-- 

SEC Memorandum Circular No. 7 

Rules on Securities Borrowing and Lending


WHEREAS, Section 2 of the Securities Regulation Code (SRC) declares that it is 

the policy of the State, among others, to promote the development of the Philippine capital 

market; 

WHEREAS, Section 28 of the SRC provides that no person shall engage in the 

buying and selling of securities in the Philippines unless such person is registered to 

engage in said activity, by the Commission; 

WHEREAS, securities borrowing and lending (SBL) is a form of securities business 

activity regulated by the Commission; 

WHEREAS, Section 39 of the SRC mandates that the Commission registers and 

grants licenses, supervises and regulates organizations engaged in activities related to or 

connected with the securities business; 

WHEREAS, Sections 33.2 (l) and 42.2 (e) of the SRC require the transparent, 

prompt and accurate clearance and settlement of all securities transactions; 

WHEREAS, the framework for SBL facility must be institutionalized principally because 

it facilitates the settlement of securities transactions, broadens trading strategies 

for market participants and enhances liquidity in the market; 

WHEREAS, the SRC likewise mandates the Commission to regulate the extension 

and maintenance of credit on securities; 

WHEREAS, the SRC authorizes the Commission to issue rules and regulations to 

make effective the provisions of the SRC; 

NOW, THEREFORE, pursuant to the foregoing provisions of the SRC, the Commission 

hereby adopts and issues the following rules to govern securities borrowing and 

lending activities. 

Section 1. Coverage - These rules prescribe the requirements for the conduct of 

SBL transactions by brokers, dealers, banks, insurance companies and other persons or 

entities which may be engaged or involved in SBL transactions. 

Section 2. Definition of Terms - The following terms shall have the meaning indicated, 

unless the context provides otherwise: 

(a) Beneficial Owner refers to any person who, by way of any contract, arrangement or 

other means, is entitled to the rights of ownership over a security including the power to 

vote or to direct the voting of said security and the power to dispose of or to direct the 

disposition of said security. In the context of securities, this term is generally used to 

distinguish this party from the legal owner (eg, a nominee) who holds the securities for 

the beneficial owner. 

(b) Borrower refers to a person who borrows securities from a lenderís portfolio in 

order to support his trading activities.


(c) Borrowing Period or Lending Period refers to a specified period agreed upon by 

the parties during which the SBL transaction remains outstanding. 

(d) BIR refers to the Bureau of Internal Revenue of the Republic of the Philippines. 

(e) Collateral refers to cash or property with ascertainable value permitted under these 

rules to be used as security for borrowed securities for the period until the borrowed 

securities are returned or paid. 

(f) Commission refers to the Securities and Exchange Commission of the Republic of 

the Philippines. 

(g) Direct Lender refers to an entity that lends, by way of formal loan agreement, its own 

securities directly to the borrower and not through an intermediary or lending agent. The 

direct lender is either the beneficial owner or legal owner of the securities subject of loan. 

(h) Equivalent Securities refer to securities of a similar type or class of issue bearing 

the same securities identification number and under the same tax regime as the borrowed 

securities that are transferred to the borrower. 

(i) Exchange refers to any entity registered with the Commission as an exchange pursuant 

to the SRC. 

(j) Intermediary refers to a third party institution that facilitates the SBL transaction. 

(k) Lender means a person who lends securities from his own portfolio or from the assets 

of his clients by way of formal loan agreement. A lender may be a direct lender or a 

lending agent. 

(l) Lending Agent means a juridical person which acts on behalf of a client with respect 

to the lending of securities. 

(m) Manufactured Dividend or Payment refers to the dividend or coupon payment or 

any payment in respect to any corporate action of the issuer which is created to compensate 

a lender of securities or a borrower with respect to the collateral used for security, 

for any dividend or payment that accrues while the securities are on loan to the borrower 

or the collateral is held by the lender. 

(n) Margin Call refers to the notice issued to the borrower to increase the amount of 

collateral to cover the amount of the outstanding borrowed securities. 

(o) Margin Release refers to the act of releasing to the borrower of the excess collateral. 

(p) Mark-to-Market (MTM) means the practice of periodically valuing borrowed securities 

and securities used as collateral based on their current market prices in order to 

reflect their current market value. 

(q) Master Securities Lending Agreement (MSLA) refers to the agreement between 

the lender and the borrower that embodies the terms and conditions by which securities 

are lent or borrowed.


(r) Securities Borrowing and Lending (SBL) means the lending of securities from a 

lenderís portfolio on a given date to a borrowerís portfolio to support the borrowerís 

trading activities with the commitment of the borrower to return or deliver said securities 

or equivalent to the lender on a determined future date. This is also referred to as a 

Securities Lending Transaction (SLT). Notwithstanding the use of expressions such as 

ìborrowî, ìlendî, ìloanî, ìreturnî, ìredeliverî, in SBL transactions, title to securities ìborrowedî 

or ìlentî shall pass from one party to another, and the party obtaining such title is 

obliged to redeliver or return equivalent securities. 

(s) Securities Custodian refers to a juridical entity that performs the functions of safekeeping 

securities for clients, holding title to the securities as nominee, valuing securities, 

administering dividend, reporting and other services. 

(t) Securities Lending Authorization Agreement (SLAA) refers to the contract between 

the beneficial owner of securities and his agent by which the former authorizes the 

latter to offer his securities for lending under the terms agreed between them. 

Section 3. Modes of Conducting SBL: Lending Agent; Direct Lending ñ Securities 

lending may be conducted by the beneficial owner directly or through a lending agent; 

Provided that, the parties to a SBL transaction shall comply with the documentation, 

valuation, collateral management, settlement, record keeping, reporting, accounting standard 

and other requirements as prescribed by the Commission. 

Securities lending may also be done using other methods such as through lending 

pool system, competitive auction, bid offer transaction or other schemes subject to the 

evaluation and approval of the Commission; Provided that, the parties to a SBL transaction 

shall comply with the required documentation, valuation, collateral management, settlement, 

record keeping, reporting, accounting standard and other requirements. 

Section 4. Registration Requirements for Lending Agent. No person shall act as 

lending agent unless he is registered as such by the Commission. 

An applicant for registration as lending agent must submit to the Commission the 

following: 

a. Duly accomplished Application Form. 

b. Board Resolution/ Authorization from applicant company/ firm allowing the securities 

lending agency service. 

c. Organizational and functional charts of the securities lending unit. 

d. Names and Curriculum Vitae of securities lending unit personnel. 

e. Detailed description of automated Securities Lending System. 

f. Manual containing risk management and internal control procedures. 

g. Copy of Bangko Sentral ng Pilipinas (BSP) license if the applicant is accredited 

securities custodian for banks and non bank financial institutions under BSP supervision. 

In addition to the above, the applicant, upon filing of the application, must pay a 

registration fee in the amount of Php 50,000.00 and must furnish the Commission a copy 

each of the pro-forma MSLA and SLAA he intends to use, for record purposes.


The Commission from time to time may prescribe other requirements it may deem 

necessary. Such requirements shall be applicable to all lending agents including those 

authorized before the adoption thereof. 

Section 5. Requirements for Securities Lending Unit Personnel ñ The securities 

lending unit personnel of the lending agent must demonstrate to the satisfaction of the 

Commission that its personnel possess functional knowledge and sufficient technical 

expertise in the operation of the securities lending system. 

Section 6. Requirements for Securities Lending System ñ The securities lending 

system of a lending agent shall have the following minimum basic functions and capabilities: 

a. Provide price quotation, trade matching and confirmation services. 

b. Run a lender selection process if necessary. 

c. Deliver the borrowed securities to the account of the borrower. 

d. Receive collateral securities from borrower. 

e. Perform daily valuation of borrowed and collateral securities. 

f. Determine the adequacy of total collateral value against the total market value of borrowed 

securities outstanding for each borrower. 

g. Issue margin calls or effect margin releases as appropriate. 

h. Track corporate actions on borrowed and collateral securities, collect the benefits due 

them and distribute said benefits to the lender or borrower as the case maybe. 

i. Execute loan and collateral return and recall processes. 

j. Receive borrowed securities from the borrower on maturity date. 

k. Return collateral to the borrower at the end of borrowing period or earlier. 

l. Collect lending fee on agreed due date and distribute the same to the lender. 

m. Inform borrower of the occurrence of default. 

n. Report failed settlements. 

o. Monitor foreign ownership of equity securities. 

The lending agent may appoint a third party to perform any or all the foregoing 

functions; Provided that, the lending agent shall disclose in its application for registration, 

its engagement of a third party service provider; Provided further that, the lending agent 

shall be accountable for the acts, errors and omissions of such third party service provider. 

Section 7. Requirements for Direct Lending ñ Only the following institutions may 

engage in direct lending: (1) domestic banks and branches of foreign banks; (2) investment 

houses; (3) investment companies; (4) insurance companies; (5) pension funds or 

retirement plans maintained by the Government of the Philippines or managed by a bank 

or other persons authorized by the BSP to engage in trust functions; (6) securities 

dealers, and; (7) other entities that may be declared by the Commission as qualified to 

engage in direct lending. 

The direct lender may lend its own securities directly to a borrower; Provided that, 

the parties shall comply with the following:


1. The direct lender and borrower must execute an MSLA; 

2. The direct lender must have a securities lending system which is capable of 

performing any or all of the functions enumerated under Section 6 hereof, 

and shall use the same to execute the SBL. 

The direct lender may appoint a third party to perform any or all the functions 

enumerated under Section 6; Provided that, such engagement of a third party service 

provider shall be disclosed to the borrower prior to the execution of MSLA; Provided 

further that, the direct lender shall be accountable for the acts, errors and omissions of 

such third party service provider. 

Section 8. Execution of MSLA - Prior to the execution of the first SBL transaction 

under a particular MSLA, the parties concerned shall execute an MSLA. 

The MSLA shall contain, among others, provisions on the following: 

a. The capacities in which the parties are acting. 

b. Term of loan and manner of confirmation. 

c. Mode of and requirements for delivery of borrowed securities. 

d. Eligible collateral and delivery of collateral. 

e. Statement that there is absolute transfer of title over the borrowed securities. 

f. Collateral management procedures. 

g. Valuation of securities. 

h. Arrangement for dealing with manufactured dividend, payment, voting right and corporate 

action. 

i. Return and recall of securities and consequences. 

j. Events of default and remedies of parties. 

k. Grounds for termination of loan and rights of parties upon termination. 

l. Lending fee and other charges. 

m. Representations and warranties of the parties. 

n. Liability of parties. 

o. Dispute resolution. 

The MSLA must be assigned a reference number. If BIR registration is necessary, 

the MSLA must be registered with the BIR. 

Section 9. Execution of SLAA ñ Prior to the delivery of securities by the beneficial 

owner to the agent, they shall execute an SLAA which must stipulate their respective 

rights and obligations on account of the lending of securities. 

The SLAA shall contain, among others, provisions on the following: 

a. Appointment of the agent by the beneficial owner and the acceptance by the agent of 

such appointment. 

b. Scope of agentís authority with regard to administration of the borrowed securities and 

collateral. 

c. Scope of agentís services and functions. 

d. Qualified borrowers, investment managers, investment outlets, if any.


e. Eligible collateral and collateral management terms, if any. 

f. Grounds and requirements for termination of agency. 

g. Lending fees and other charges. 

h. Representations and warranties. 

i. Liability of the parties. 

j. Dispute resolution. 

Section 10. Loanable Securities ñ Only securities listed in an Exchange and securities 

issued by the Bureau of Treasury or the Bangko Sentral ng Pilipinas are eligible for 

lending under SBL transaction; Provided that, such securities are in electronic form or if 

certificated, the same must be in its electronic form at the time of SBL transaction and 

free from all liens and encumbrances. 

The Commission may allow other securities for lending under SBL transaction. 

Section 11. Delivery of Borrowed Securities - The borrowed securities shall be 

delivered to or deposited with the borrower simultaneous with or after the delivery of the 

collateral. The borrowed securities shall be deemed delivered by the lender on delivery to 

the borrower or upon the lenderís direction in the instrument of transfer. 

If the borrowed securities are being held by an agent, custodian, depository or 

within the clearing and settlement system, such borrowed securities shall be deemed 

delivered by the lender on the effective instruction to such agent, custodian, depository 

or operator of such clearing and settlement system which delivery shall result in such 

borrowed securities being held for the account of the borrower or by such other means 

as may be agreed. 

In case of securities the title of which is registered in a computer-based system that 

provides for the recording and transfer of title by way of book entries, transfer of title shall 

take place in accordance with the rules of procedure of such system. 

The parties shall execute all necessary documents and give all necessary instructions 

to ensure that the title, rights and interests in the borrowed securities shall pass from 

one party to the other. 

Section 12. Eligible Collateral - For every borrowed security, the borrower shall 

provide the lender adequate collateral that may consist either of cash, equity or government 

securities, or a combination thereof, or other forms of collateral that may be allowed 

by the Commission. 

The eligible collateral securities are those securities listed in an Exchange, securities 

issued by the Bureau of Treasury or the Bangko Sentral ng Pilipinas; Provided that, 

such securities are in electronic form or if certificated, the same must be in its electronic 

form at the time of SBL transaction and free from all liens and encumbrances. 

Section 13. Delivery of Collateral - Cash collateral shall be delivered or deposited 

to the account of the lender prior to or simultaneous with the delivery of the borrowed 

securities.


The collateral securities shall likewise be delivered to or deposited with the lender 

prior to or simultaneous with the delivery of the borrowed securities. Collateral securities 

shall be deemed delivered by the borrower on delivery to the lender or upon the borrowerís 

direction in the instrument of transfer. 

If the collateral securities are being held by an agent, custodian, depository or 

within the clearing and settlement system, such collateral securities shall be deemed 

delivered by the borrower on the effective instruction to such agent, custodian, depository 

or operator of such clearing and settlement system which delivery shall result in such 

collateral securities being held for the account of the lender or by such other means as 

may be agreed. 

In case of securities the title of which is registered in a computer based system that 

provides for the recording and transfer of title by way of book entries, transfer of title shall 

take place in accordance with the rules of procedure of such system. 

If the parties intend that the title, rights and interests in the collateral securities shall 

pass from one party to the other, they shall execute all the necessary documents and give 

all necessary instructions to effect such transfer of title. 

Section 14. Marking to Market; Valuation; Margin Call; Margin Release - The 

borrowed and collateral securities must be marked-to-market at least once daily based on 

the valuation method as indicated by the parties in the MSLA. In the absence of such 

agreement, valuation shall be based on current market price. 

The value of the collateral must be maintained at levels agreed upon by parties; 

Provided however, that, in the absence of such agreement, the value of the collateral 

shall be maintained at an amount not less than the prescribed market value of the securities 

borrowed. 

If the collateral or the borrowed securities are in the form of cash or government 

securities, the value of collateral must be maintained at an amount not less than 102% of 

the current market value of the securities borrowed. 

If the collateral or the borrowed securities are in the form of equity securities, the 

value of collateral must be maintained at an amount not less than 105% of the current 

market value of the securities borrowed. 

When the value of collateral becomes less than the current market value of the 

borrowed securities, a margin call must be issued and the borrower shall promptly increase 

the amount of collateral to at least the current market value of the borrowed 

securities. 

However, when the value of collateral becomes greater than the current market 

value of the borrowed securities, the borrower may require the lender to release the 

collateral which is in excess of the current market value of the borrowed securities. The 

parties shall specify in the MSLA the threshold level above which the borrower may 

require the release of excess collateral.


The margining may be done on an aggregated or loan by loan basis; Provided that, 

the margining method to be adopted by the parties shall be specified in the MSLA. 

Section 15. Reinvestment of Collateral ñ The cash collateral shall be invested in 

the manner consistent with the terms disclosed at the time of the execution of the MSLA. 

The terms of reinvestment of cash collateral shall include: (a) list of qualified investment 

outlets; (b) list of qualified financial institutions; (c) criteria for considering an investment; 

(d) procedures for selecting an investment; (e) agreement on fees; and, (f) period or 

term of investment that must be not longer than the term of the particular SBL transaction. 

The reinvestment of cash collateral shall at all times comply with the applicable rules 

and regulations of the BSP. The Exchange, as regards their trading participants who are 

engaged in SBL transactions, may provide additional requirements on reinvestment of 

cash collateral or disallow the same. 

Section 16. Substitution of Collateral ñ Within the borrowing period, the borrower 

may withdraw the collateral upon prior notice to the lender; Provided that, the borrower 

shall substitute the withdrawn collateral with another eligible collateral acceptable to the 

lender. In such case, the lender shall return to the borrower the original collateral as 

demanded by the borrower. 

Section 17. Recall of Borrowed Securities ñ Within the borrowing period, the 

lender may recall the borrowed securities upon prior notice to the borrower in accordance 

with the standard settlement cycle for such securities. In such case, the borrower 

shall return the borrowed securities or their equivalent as demanded by the lender. On the 

other hand, the lender shall pay back the amount of cash collateral and return the collateral 

securities or their equivalent provided by the borrower. 

The borrowed or collateral securities shall be deemed returned by one party on the 

delivery to the other or upon the partyís direction in the instrument of transfer. 

The causes by which the lender may recall the borrowed securities as well as the 

consequent rights and obligations of the parties on account of such recall shall be provided 

in the MSLA. The MSLA must also contain provisions that would ensure that recall 

rights are not exercised indiscriminately. However, the lender and the borrower may 

agree that the borrowed securities shall not be recalled during the borrowing period. 

Section 18. Return of Borrowed Securities ñ Within the borrowing period, the 

borrower at any time may return the borrowed securities or their equivalent to the lender. 

When the borrowed securities or their equivalent have been returned, the lender shall 

pay back the amount of cash collateral and return the collateral securities or their equivalent 

provided by the borrower. 

The consequent rights and obligations of the parties on account of such early return 

of borrowed securities shall be provided in the MSLA. 

The borrowed or collateral securities shall be deemed returned by one party on 

delivery to the other or upon the partyís direction in the instrument of transfer.


Section 19. Termination of Loan ñ At the end of the borrowing period, the borrower 

shall return the borrowed securities or their equivalent to the lender. On the other hand, 

the lender shall pay back the amount of cash collateral and return the collateral securities 

or their equivalent provided by the borrower. 

The borrowed or collateral securities shall be deemed returned by one party on 

delivery to the other or upon the partyís direction in the instrument of transfer. 

Section 20. Default of Parties - The lender and borrower shall provide in the MSLA 

the circumstances constituting events of default on either party, their remedies and their 

consequent rights and obligations in case of default. 

Section 21. Restriction on Foreigners ñ Foreigners shall not borrow from Filipinos 

equity securities of Philippine companies which are engaged in nationalized activities 

and whose foreign ownership is limited by the Constitution and existing laws unless there 

is in effect an established mechanism or process by which foreign ownership in said 

companies can be properly monitored so as to ensure that foreign equity remains within 

the constitutional and statutory limitations. 

Lending agents and direct lenders shall ensure that SBL transactions entered into 

by foreigners are properly accounted for and that such foreigners agree to comply with 

this rules and applicable regulations. 

Section 22. Documentation of SBL Transaction ñ Each SBL transaction shall be 

covered by a confirmation notice that specifies the details of the SBL transaction. The 

confirmation notice shall, among others, contain the following information: reference 

number, contract date, names of lender and borrower, type and quantity of borrowed 

securities, term, delivery date, face amount and market value of borrowed securities, 

collateral, MSLA reference number and settlement date. 

Each party to the SBL transaction shall be entitled to receive a copy of such 

confirmation notice. 

The Commission may allow other forms of confirmation notice and the information 

to be included therein. 

Section 23. Record Keeping and Reporting ó Lending agents and direct lenders 

shall maintain SBL ledgers, whether in manual or electronic form, that must be kept up-todate 

and must contain the full and complete details of all SBL transactions. 

The ledgers shall contain data such as the names of lender and borrower, tax 

information numbers of parties, contract date, type and quantity of borrowed securities, 

term, delivery date, face amount and market value of borrowed securities, collateral, 

MSLA reference number, settlement date, returned and unreturned borrowed securities 

and such other data the Commission may deem necessary. 

Lending agents and direct lenders may also maintain other books and records 

containing details of their SBL transactions.


The ledgers, books and records pertaining to SBL transactions shall be subject to 

periodic or special examinations by examiners and other authorized representatives of 

the Commission. These ledgers, books and records shall be maintained in accordance 

with Section 52 of the SRC. 

Lending agents and direct lenders shall submit to the Commission a bi-annual Summary 

Report of their SBL transactions within thirty (30) days after the end of the covered 

period. 

The Commission may allow a different manner of compliance with the record keeping 

and reporting requirements prescribed in these rules taking into account the different 

modes of conducting SBL. 

Section 24. Authority of the Exchange ñ The Exchanges licensed by the Commission 

to operate may design and adopt their own SBL programs and prescribe their own 

rules to govern the securities borrowing and lending activities of their trading participants; 

Provided that, said SBL programs and rules shall be consistent with the regulations 

herein set forth and approved by the Commission. 

Trading participants of an Exchange shall conduct their SBL transactions in accordance 

with the rules of the Exchange concerned. 

Section 25. Compliance With BIR Regulations ñ For an SBL transaction to qualify 

for tax exemption, the parties thereto must comply with the requirements imposed by the 

BIR under the applicable revenue regulations. 

Section 26. Prohibition and Penalties - The Commission may disallow any securities 

from being lent or borrowed, limit the ability of borrowers to borrow eligible securities 

or impose additional restrictions on borrowers it may deem necessary for the protection 

of investors. 

Any person who violates any provision of these rules shall be penalized as follows: 

VIOLATION AMOUNT OF FINE 

1 st Violation Php 20,000.00 for every order/transaction or 

twice the amount of order/transaction, whichever 

is higher. 

2 nd Violation Php 30,000.00 for every order/transaction or 


is higher. 

3 rd & Subsequent Violations Php 50,000.00 for every order/transaction or 


is higher. 

The imposition of the monetary penalty shall not prejudice the filing of administrative 

and criminal charges as may be warranted by circumstances against persons 

responsible for the violation.


Section 27. Effectivity - These rules shall take effect fifteen (15) days after publication 

in two (2) newspapers of general circulation. 



For the Commission: 

(SGD.) FE B. BARIN 

Chairperson 

--o0o-- 

SEC Memorandum Circular No. 8, Series of 2006* 

Revised Guidelines on Foundations 

WHEREAS, Section 5 of Republic Act No. 8799, otherwise known as the Securities 

Regulation Code, in relation to Presidential Decree No. 902-A, declares the need to 

empower the Securities and Exchange Commission (the ìCommissionî) to protect not 

only the investors but the public as well, pursuant to the governmentís policy of promoting 

the equitable distribution of wealth; 

WHEREAS, many of the foundations registered with the Commission have been 

observed to focus mainly on the fund-raising aspect of their projects; 

WHEREAS, it is essential that the funds generated by the foundations are utilized in 

accordance with the purposes stated in their Articles of Incorporation; 

IN VIEW OF THE FOREGOING, SEC Memorandum Circular No. 01-04 dated 

January 20, 2004 is hereby revised and the following guidelines in the registration and 

monitoring of foundations are hereby adopted: 

SECTION 1. A ìFoundationî is a non-stock, non-profit corporation established for 

the purpose of extending grants or endowments to support its goals or raising funds to 

accomplish charitable, religious, educational, athletic, cultural, literary, scientific, social 

welfare or other similar objectives. 

SECTION 2. A Foundation applying for registration with the Commission shall, in 

addition to the requirements for non-stock, non-profit corporations, submit the following 

documents: 

a. Notarized Certification of Bank Deposit of the amount of not less than One 

Million Pesos (P1,000,000.00); and 

b. Statement of willingness to allow the Commission to conduct an audit. 

*Filed earlier on 20 June 2006 but was modified per SEC Res. No. 305, s. 2006


SECTION 3. The applicantís corporate name shall contain the word ìFoundationî. 

SECTION 4. Upon the effectivity of this Circular, all registered Foundations shall 

submit, in addition to the General Information Sheet, its Audited Financial Statement 

which shall include a sworn Statement of its President and Treasurer on the following 

information that relates to the preceding fiscal year: 

a. Source and Amount of Funds; 

b. Program/Activity planned, ongoing and accomplished; 

i. Complete name, address and contact number of project officerin-charge; 

ii. Complete address and contact number of project office; and 

c. Application of Funds 

SECTION 5. A registered Foundation shall attach to the sworn statement mentioned 

in the immediately preceding paragraph a Certification from the Office of the Mayor, or 

the Office of the Barangay Captain, or the Head of either the Department of Social 

Welfare and Development or Department of Health, on the existence of the subject Program/ 

Activity in the locality on which it exercises jurisdiction. 

SECTION 6. In Case a registered Foundation has not yet submitted to the 

Commission a statement of willingness to allow the conduct of an audit, it shall attach 

such statement when it submits the documents required in Sections 4 and 5. 

SECTION 7. For purposes of the audit to be conducted, a registered Foundation 

shall allow the Commissionís representatives access to its corporate and accounting 

books, records, names of beneficiaries, agreements entered into, correspondences and 

all pertinent documents for the preceding five (5) years. 

SECTION 8. All funds of the Foundation shall be deposited in a banking institution 

regulated by the Bangko Sentral ng Pilipinas. 

SECTION 9. Failure to comply with any of these rules or any violation of the provisions 

hereof shall render the Foundation liable to pay a fine in an amount that shall be determined 

by the Commission which shall not be less than Ten Thousand Pesos (P10,000.00). In 

case the Foundation fails to submit the required documents for two (2) consecutive 

years, the Commission may, after due notice and hearing, revoke the registration of the 

Foundation. The penalties enumerated herein shall be without prejudice to whatever other 

legal action may be available under existing laws. 

SECTION 10. All other circulars, rules, orders and issuances, or parts thereof that 

are inconsistent with this Memorandum Circular are hereby repealed or modified 

accordingly. 

SECTION 11. These Revised Guidelines shall take effect fifteen (15) days after its 

publication in a newspaper of general circulation.



(SGD.) FE B. BARIN 

Chairperson 

SUGAR REGULATORY ADMINISTRATION 


Sugar Order No. 9, Series 2005-2006 

Imposition of Additional Import Lien on Sugar Importation 

Under the Countertrade Sugar Swap Program 

WHEREAS, pursuant to the provision of Section 10.2 of Circular Letter No. 24, 

dated March 17, 2006, Series of 2005-2006 re: Implementing Rules and Regulations 

(IRR) for the Countertrade Sugar Swap Program (CSSP), an additional import lien has to 

be imposed on all refined sugar imported under the said countertrade program. 

WHEREAS, the SRA has already established the ranges of world refined sugar 

prices (London #5) and the domestic wholesale prices of refined over this period since 

March 17, 2006 as basis to determine the reasonable amount of the additional import lien; 

WHEREAS, there is a need to define the amount, collection and distribution of 

the said additional lien to be imposed on sugar importation under the CSSP; 

NOW, THEREFORE, under and by virtue of the authority vested in the Sugar 

Regulatory Administration, it is hereby ordered that: 

SECTION 1. The amount of PhP20.00 per LKg-bag as additional import lien 

shall be imposed on all refined sugar imported under the CSSP. 

SECTION 2. The said amount of PhP20.00 per LKg-Bag shall be paid by the 

concerned importer under the CSSP to the SRA as one of the requirements prior to the 

issuance of the SRA clearance on withdrawal of the imported sugar from the Bureau of 

Customs (BOC) 

SECTION 3. The total amount of additional import lien collected from sugar 

importation under the CSSP shall be held in trust by the SRA for distribution among the 

sugar producers. 

SECTION 4. The subject lien shall be distributed pro rata by the SRA among the 

producers (planters and millers) through their major federations, namely CONFED, NFSP, 

UNIFED, PANAYFED and LUZONFED (for Planters), PSMA, PIMA, AIM (for millers) plus 

the unaffiliated producers pursuant also, to Section 10.2 of said Circular Letter No. 24.


SECTION 5. The basis of the distribution of the total amount of additional lien 

collected under the CSSP shall be the production of the previous crop year 2004-2005 as 

provided for also, by Section 10.1 of the said Circular Letter No. 24. 

SECTION 6. All other liens pertaining to refined sugar importation as provided 

for in Sugar Order No. 4, Series of 2001-2002 shall also be imposed on this importation 

under the CSSP. 


SECTION 8. Provisions of Sugar Orders, Circular Letters, and/or other rules 

and regulations contrary to or inconsistent with this Sugar Order, are hereby amended, 

modified or revoked accordingly. 



By Authority of the Sugar Board 

(SGD.) JAMES C. LEDESMA 


óo0oó 

Circular Letter No. 30, Series of 2005-2006 

Implementing Rules and Regulations in the Monitoring and 

Reclassification of Imported ìCî Sugar Under the Countertrade 

Sugar Swap Program (CSSP) 

Pursuant to Circular Letter No. 24, dated 17 March 2006, Series of 2005-2006, 

the following Implementing Rules and Regulations are hereby promulgated for the effective 

monitoring of the imported sugar under the CSSP classified as ìCî or Reserve sugar 

to ensure its proper disposition into its designated market, to wit: 

1. GENERAL RULE. Pursuant to the aforesaid Circular Letter No. 24, all imports under 

the CSSP upon arrival shall be classified as ìCî or Reserve sugar as indicated in the SRA 

clearance to be issued for withdrawal from the Bureau of Customs (BOC), henceforth, 

shall be subject to close monitoring until finally disposed of to its intended market. 

2. Application for Clearance to Cover the Imported Sugar Under the CSSP 

2.1 Importers under the program shall apply with the SRA for Clearance for 

withdrawal of their imported sugar from the BOC subject to the following requirements: 

2.1.1 Letter Application for clearance, stating therein among others the volume 

of importation, date of arrival and address of warehouse/s where 

the sugar shall be stored.


2.1.2 Shipping documents 

- Bill of Lading 

- Proforma Invoice 

- Packing List 

2.1.3 Surety Bond issued by a reputable surety/insurance company, or Bank 

Guarantee/Standby Letter of Credit (LC) or any other guarantee (acceptable 

to SRA) in favor of the SRA. 

2.1.4 Payment of SRA liens imposed on imported refined sugar per SRA Sugar 

Order No. 4, Series of 2001-2002 and additional import lien for producers 

of the sugar industry pursuant to SRA Sugar Order No. 9, Series of 

2005-2006. 

3. Issuance of SRA Clearance to Cover the Imported Sugar Under the CSSP 

3.1 The SRA shall issue to the importers under the program who had complied 

with all the requirements of Article 2 hereof a Clearance stating among 

others the ìCî or Reserve sugar classification of the volume of imported sugar 

indicated therein for withdrawal from the BOC. 

3.2 The BOC upon receipt of the SRA clearance shall release the imported 

ìCî sugar under the program tariff free only pursuant to Presidential Memorandum 

Order 206, dated February 23, 2006, in the presence of the SRA 

representative. 

4. Monitoring of the Imported ìCî Sugar under the CSSP 

4.1 The importers under the program shall notify the SRA through a Notice of 

Withdrawal from the Bureau of Customs (ANNEX ìAî) stating among others 

the date of withdrawal of the imported sugar from the BOC per issued clearance 

and the warehouse destination (as approved by the SRA) to where the 

imported ìCî sugar shall be temporarily stored. 

4.2 The SRA representative shall monitor the imported ìCî sugar from the 

BOC up to the designated warehouse where the sugar shall be stored. 

4.3 The importer and the SRA representative upon storage of the imported 

sugar in the warehouse, shall certify as to the quantity/volume of the sugar 

stored thereat (ANNEX ìBî) which quantity/volume must be the same as stated 

in the covering SRA Clearance. 

4.4 A double padlock system shall be installed in the subject warehouse, one 

from the SRA and the other from the importer. 

4.5 The SRA representative may conduct from time to time spot checking of 

the warehouse to monitor the stocks thereat. 

4.6 The imported ìCî sugar stored at the importerís warehouse/s cannot be 

withdrawn unless reclassified into ìBî sugar (or ìDí world Market sugar as the 

case maybe) by the SRA.


5. Re-classification of the imported ìCî Sugar Under the CSSP into ìBî or Domestic 

Sugar. 

5.1 The importers under the program shall apply with the SRA for re-classification 

of their imported ìCî sugar into ìBî or Domestic sugar subject to the 

following requirements: 

5.1.1 Letter Application for re-classification of their ìCî sugar into ìBî or Domestic 

sugar stating among others the volume of sugar for reclassification 

and the location of the warehouse/s storing the sugar. 

5.1.2 Proof of export documents mentioned in Sections 3.2.1 to 3.2.3 of the 

said Circular Letter No. 24, which volume of sugar exported under the 

CSSP shall only be the extent of re-classification from ìCî to ìBî sugar. 

5.1.3 There shall be NO re-classification of the imported ìCî sugar into ìBî 

sugar prior to 01 June 2006, pursuant also, to Section 5.5 of the said 

Circular Letter No. 24. 

5.2 A Letter Authority to withdraw shall be issued to the importers by the SRA 

upon approval of the application for re-classification stating among others the 

approved volume of ìCî sugar re-classified as ìBî sugar stored in a particular 

warehouse. 

5.3 The withdrawal from the warehouse of the imported sugar reclassified as 

ìBî sugar shall only take effect after the SRA authorized representative and 

the importer had jointly conducted an inventory of the sugar stored thereat to 

determine if there was unauthorized ìCî sugar withdrawal prior to its re-classification 

into ìBî sugar. 

6. Penalty of authorized withdrawal of imported sugar. 

6.1 The penalty of P200/lkg of sugar shall be imposed for unauthorized withdrawal 

of imported sugar or withdrawal in violation of Section 4.6 hereof. 

6.2 The SRA shall not allow the withdrawal of the remaining imported sugar 

nor the release of the bond (as required in Section 5.4 of Circular Letter No. 

24, Series of 2005-2006 dated 17 March 2006) unless the imposed penalty 

shall have been fully complied by the concerned importer. For this purpose, 

the said bond shall have a validity period until not earlier than August 31, 2006. 

6.3 The SRA may cancel the license of erring exporters/importers notwithstanding 

the imposition of the above-stated penalties. 

This Circular Letter shall take effect immediately. 




óo0oó



Memorandum Circular No. 1, Series of 2006 

Correction on Section 6 of Circular Letter No. 30, Series of 2005-2006 

Re: Implementing Rules and Regulations in the Monitoring and 

Reclassification of Imported ìCî Sugar Under the Countertrade 

Sugar Swap Program (CSSP) 

This is to inform all concerned of the correction in Section 6 of Circular Letter 

No. 30, Series 2005-2006. The correction is on a typographical error due to oversight. 

rected. 

Accordingly, the corrected provision of said Circular Letter is to read as follows: 

ì6. Penalty of unauthorized withdrawal of imported sugar. 

Attached is a copy of Circular Letter No. 30, Series of 2005-2006*, as cor- 

For your information and guidance. 





óo0oó 

Circular Letter No. 25-A, Series of 2005-2006 

Amendment to Circular Letter No. 25, Series of 2005-2006 Re: Implementing 

Guidelines in the Liquidation of ìB-2î or NFA Sugar 

Article 5 of Circular Letter No. 25, dated 17 March 2006, is hereby amended, per 

further request of the National Food Authority (NFA), dated 18 April 2006, to ensure full 

compliance of the sugar producers to make available their ìB-2î sugar to the NFA for 

liquidation, and shall read as follows: 

ì5. Unliquidated ìB-2î Sugar 

*See page 1092. 

5.1 The producers of unliquidated ìB-2î sugar Sixty (60) days from 

its week-ending date of production or from week-ending March 

5, 2006 (in the case of unliquidated ìB-2î sugar produced during 

week-ending March 5, 2006 and prior week-endings) shall


apply for reclassification into ìBî sugar with the SRA, Quezon 

City attached thereto the photocopy of the covering ìB-2î 

quedans. 

5.2 The SRA shall advise the concerned holders (producers) of 

the ìB-2î quedans through the SPROs assigned at the mills 

whether or not their applications for re-classification into ìBî 

sugar had been approved. 

5.3 The holders (producers) of unliquidated ìB-2î quedans with 

approval for re-classification into ìBî sugar shall present the 

original ìB-2î quedans to the SPROs assigned at the mills for 

surcharging into ìBî sugar (stamped at the back thereof with 

ìRECLASSIFIED INTO ìBî SUGAR PER C.L. 25-A, SERIES OF 

2005-2006î).î 






óo0oó 

Sugar Order No. 10, Series of 2005-2006 

Swapping And/Or Physical Exchange of Raw ìB-2î or NFA 

Sugar with Available Refined Sugar 

WHEREAS, the NFA in its letter to the SRA dated 27 April 2006 requested for 

approval of the ìswappingî of ìB-2î sugar quedans with the available refined sugar in 

order to provide the domestic market especially in Metro Manila with affordable refined 

sugar to stabilize prices; 

WHEREAS, the SRA sees that there is a need to approve said request to enable 

the NFA to save on cost of tolling and transporting the ìB-2î sugar in refined form from the 

different sugar refineries in the Visayas/Mindanao to Metro Manila to facilitate and expedite 

the distribution/disposition in the domestic retail markets; 

NOW, THEREFORE, under and by virtue of the authority vested in the Sugar 

Regulatory Administration (SRA), it is hereby ordered that: 

SECTION 1. The ìB-2î sugar quedans liquidated by the NFA from the sugar 

producers of Crop Year 2005-2006 can be applied for swapping. 

SECTION 2. The application for ìswappingî shall be done by the NFA through a 

letter of application filed with the SRA, Quezon City attached thereto the following:


1. Physical ìB-2î quedans and RSQ 

2. Listings of the said quedans 

3. Affidavit as to the ownership of the subject sugar 

4. Memorandum of Agreement (MOA) between the NFA and the sugar traders 

as to the winning bidder duly notarized, manifesting the exchange of the ìB- 

2î sugar with the available refined sugar. 

SECTION 3. The approved ìswappingî shall authorize the withdrawal of the 

sugar through the surcharging of the ìB-2î NFA sugar quedans with available refined 

sugar per Sugar Order No. 10, series 2005-2006 and the issuance of the corresponding 

Letter of Authority to the concerned mills. 

SECTION 4. This type of ìswappingî is only applicable to the ìB-2î sugar 

quedans of the NFA issued this CY 2005-2006 and not to other classes of sugar quedans 

issued by the mills. 







By Authority of the Sugar Board: 



óo0oó 

Sugar Order No. 11, Series of 2005-2006 

Allowing the Advance Swapping of ëAí Quedans of Specific 

Week Endings of Crop Year 2005-2006 

WHEREAS, as of April 30, 2006 there had been produced approximately 192,900 

Metric Tons of ìAî or U.S. export sugar, and together with the balance of last crop year 

and the actual replenishment from ìBî to ìAî there is now enough volume of available ìAî 

or U.S. Export sugar for our regular and additional U.S. Quota Allocation for Quota Year 

(QY) 2005-2006; 

WHEREAS, also, as of April 30, 2006, the ìAî sugar quedans representing 

about 97% of the total volume of our export commitment to the U.S. for QY 2005-2006 had 

been verified by the SRA for shipment, thus, indicating that the U.S. Quota (regular and 

additional) for the said QY will be filled up;


WHEREAS, it is incumbent upon the SRA as mandated by EO 18, Series of 

1986 to protect the interest of the sugar industry in general and sugar producers in 

particular, without compromising our export commitment to the U.S. in terms of quality of 

the ìAî sugar and its shipment schedule; 

NOW, THEREFORE, under and by virtue of the powers vested in the Sugar 

Regulatory Administration (SRA), it is hereby ordered that: 

SECTION 1. The ìAî sugar allocation of 10% per Sugar Order No. 3-A, Series 

of 2005-2006, shall continue until the end of Crop Year 2005-2006. However, the ìAî 

sugar quedans issued for week-ending May 7, 2006 and onwards shall no longer have a 

deadline for submission to the SRA for verification within the previously prescribed schedule 

per Section 1 of Sugar Order No. 8-A, Series of 2005-2006. 

SECTION 2. Likewise, the aforesaid ëAí quedans issued on week-ending May 7, 

2006 and onwards will now be allowed for Advance Swapping into ëBí sugar. 

SECTION 3. A Circular Letter shall be issued as implementing guidelines for 

advance swapping. 

SECTION 4. This Order shall take effect week ending 07 May 2006. 









óo0oó 

Circular Letter No. 33, Series of 2005-2006 

Implementing Rules and Regulations in the Advance Swapping of 

ìAî or U.S. Quota Sugar of Specific Week-Endings of Crop Year (CY) 

2005-2006 Into ìBî or Domestic Sugar 

Pursuant to Sugar Order No. 11, dated 05 May 2006, Series of 2005-2006, the 

following Implementing Rules and Regulations (IRR) are hereby promulgated for the Advance 

Swapping of the ìAî or U.S. Quota sugar produced in specific week-endings of CY 

2005-2006 into ìBî or Domestic sugar, to wit: 

I. Eligible for Advance Swapping. Pursuant to the aforesaid Sugar Order No. 11, all 

ìAî quedans issued on week-ending May 7, 2006 and onwards shall be allowed Advance 

Swapping into ìBî or Domestic sugar.


II. Advance Swapping Fee. The ìAî quedan-permits subject of Advance Swapping shall 

be charged with an Advance Swapping Fee of Php2.50/LKg-Bag pursuant to General 

Administrative Order No. 1, Series of 2002-2003. 

III. Bond Guarantee of Replenishment. All applications for the said Advance swapping 

shall be covered by a Bond as a guarantee of replenishment of the ìAî sugar 

advance swapped into ìBî sugar. However, pursuant to SRA Board Resolution No. 2006- 

054, dated 02 May 2006, applications of sugar producers (planters, millers, cooperatives) 

are exempt from this Bond requirement. 

A bond of Ten Pesos (P10.00) per LKg-Bag either in cash or companyís check 

with accompanying bank guarantee (please see attached form*) referring to the check 

number thereof, shall be paid to/issued in the name of the Sugar Regulatory Administration 

(SRA), dated 01 April 2007, upon submission of the ìAî quedan-permits for processing, 

and wherein said bond shall be forfeited in favor of the SRA in the event the applicant 

fails to replenish the total volume of ìAî sugar approved for advance swapping with the 

corresponding ìBî sugar not later than 31 March 2007 of Crop Year 2006-2007. 

However, upon replenishment of the total volume of ìAî sugar with the corresponding 

ìBî sugar, the SRA shall return to the applicant the said bond in the amount of Ten 

Pesos (P10.00) per LKg-Bag. In the case of ìAî refined sugar, the volume of ìBî raw 

sugar to replenish the same shall be the equivalent volume of ìAî raw sugar subject of 

advance refining. 

IV.Eligible for Replenishment. The ìBî quedan-permits issued during the Crop year 

2006-2007 shall be allowed (eligible) for replenishment. 

V. Application. Application for Advance Swapping shall be filed in any of the following 

SRA Offices: 

a. PCRO, SRA Quezon City 

b. SRED, SRA Bacolod City 

VI. Deadline of Application for Advance Swapping. The deadline for the filing of the 

application for Advance Swapping under this Circular Letter shall be not later than 31 

August 2006 of the current Crop year 2005-2006. Application for Advance Swapping 

shall not be accepted thereafter. 

VII. Requirements of Advance Swapping. The requirements of regular swapping 

application per Circular Letter No. 31, Series of 1997-1998 shall apply to herein advance 

swapping. 

VIII. Documentation 

1. The ìAî quedans subject of Advance Swapping shall be stamped ìSUR- 

CHARGED FOR WITHDRAWAL AS ìBî OR DOMESTIC SUGAR PER 

SUGAR ORDER NO. 11, SERIES OF 2005-2006, DATED 05 MAY 2006î

1100 


2. A Letter Authority addressed to the concerned mills/refineries allowing/ 

authorizing the withdrawal of the ìAî sugar as ìBî sugar shall be issued by the 

SRA. 






óo0oó 

Circular Letter No. 25-B 

Amendment to Circular Letter No. 25, Series of 2005-2006 

Re: Implementing Guidelines in the Liquidation of ìB-2î or NFA Sugar 

Section 3.2 (a) of Circular Letter No. 25, Series of 2005-2006 is hereby amended 

as requested by NFA in order to facilitate the re-classification of the voluminous ìB-2î or 

NFA quedans into ìBî sugar for withdrawal, where subject quedans are involved in the 

swapping and/or physical exchange with available refined sugar of accredited SRA sugar 

traders as authorized by Sugar Order No. 10, Series of 2005-2006, and reads as follows: 

ì3.2 Distribution of the ìB-2î Sugar 

a) The NFA shall submit the liquidated quedans to SRA, Quezon City (ìB-2î quedans 

issued by mills in Luzon, Eastern Visayas and Mindanao) and SRA, Bacolod City (ìB-2î 

quedans issued by mills in Negros and Panay) for surcharging/conversion from ìB-2î 

sugar to ìBî sugar and for the corresponding authority to be issued by the SRA for 

withdrawal for refining. 

However, for ìB-2î quedans swapped by NFA with the refined sugar of SRA 

accredited sugar trader/s as the winning bidder/s in the said swapping, shall 

be automatically re-classified as ìBî sugar upon presentation/submission of 

the following documents by the said trader to the mill concerned, to wit: 

1) Notice of Award of NFA to the winning bidder/trader. 

2) Certification of NFA on the volume of ìB-2î quedans to be reclassified as 

ìBî sugar for withdrawal in a particular mill attached thereto the list of ìB-2î 

quedans. 

The SRA SPRO assigned at the mill concerned shall stamp at the back of the ìB-2î 

quedans with ìRECLASSIFIED AS ìBî SUGAR PER CIRCULAR LETTER NO. 25-B S. 

2005-2006î, while the mill shall prepare the Sugar Release Order (SRO) with the NFA as 

Assignee For the Account of (FAO) the winning bidder/trader. 

This Circular Letter shall take effect immediately.






óo0oó 

Circular Letter No. 38, s. of 2005-2006 

Application for Milling/Refining License for Crop Year 2006-2007 

With reference to the abovementioned subject, all Sugar Mill/Refinery Companies 

are hereby directed to submit the following requirements to Production Contol and Regulation 

Office, SRA, Diliman, Quezon City, to wit: 

a. Application (in triplicate) for the issuance of a license to manufacture or refine centrifugal 

sugar subject to the conditions set under SRA Sugar Order No. 8, dated 23 July 

1992, and SRA Sugar Order No. 4, dated 17 September 1992, respectively. 

b. Milling or Refining License Questionnaire. 

c. Crop Estimate for Crop Year 2006-2007, only for Sugar Mill Companies. 

The aforementioned requirements (copies hereto attached*) shall be submitted Thirty 

(30) Days prior to the start of the Crop Year 2006-2007. 

Additionally, consistent with SRAís desire to rationalize the mill schedules of the 

industry, and in the light of high current sugar stock inventory, please take special importance 

to your scheduled start of milling operation which we hope also considers cane 

maturity and good mill efficiency. 






--o0o-- 

Sugar Order No. 12, s. 2005-2006 

Reinstatement of ìAî ëHomelessí Sugar of 

Crop Year 2005-2006 Into ìAî or U.S. Quota Sugar 

WHEREAS, the allocation for the whole U.S. Quota (regular and additional) of 

216,438 MTCW for Quota Year 2005-2006 had already been filled up;

1102 


WHEREAS, various sugar producers/traders had made an appeal with the SRA for 

reconsideration for verification of their ìAî export sugar classified as ìhomelessî sugar 

pursuant to Sugar Order (S.O.) Nos. 8, 8-A, Series of 2005-2006, wherein said verification 

is to reinstate the subject ìAî ìhomelessî sugar (for failure of their owners to have 

the covering ìAî quedans verified for export during the specified schedule per said S.O.) 

into ìAî or U.S. Quota sugar; 

WHEREAS, the SRA is mandated by EO 18, Series of 1986, to protect the interest 

of the sugar industry in general and sugar producers in particular, without compromising 

our export commitment to the U.S. in terms of quality of the ìAî sugar and its shipment 

schedule; 

NOW, THEREFORE, under and by virtue of the powers vested in the Sugar Regulatory 

Administration (SRA), it is hereby ordered that: 

SECTION 1. The ìAî sugar quedans which were declared as ìAî ëhomelessí sugar 

pursuant to Sugar Order Nos 8, 8-A, series of 2005-2006 are hereby reinstated as ìAî or 

U.S. Quota Sugar. 

SECTION 2. The ìAî quedans covering the ìAî ëhomelessí sugar shall be subject 

for verification prior to its reinstatement as ìAî or U.S. Quota Sugar. 

SECTION 3. The application for verification of the subject ìAî quedans shall be 

filed with the SRA, Quezon City attached thereto the ìAî quedans and its list by mill/by 

quedan number. 

SECTION 4. A reinstatement fee of PHP10.00 per LKg-bag shall be paid upon 

filling of the application for verification with the SRA. 

SECTION 5. All ì Aî quedans subject of verification shall be stamped at the back 

thereof as ìReinstated ìAî ëhomelessí sugar into ìAî or U.S. Quota Sugar per S.O. 

No. 12, series of 2005-2006î. 

Other ìAî ëhomelessí sugar which covering quedans (issued week-ending April 30, 

2006 and prior week-endings of CY 2005-2006) were not verified for the purpose provided 

for in this Order shall remain ìhomelessî (non-status/non-marketable). 


SECTION 7. Provisions of Sugar Orders, Circular Letters, and/or other rules and 

regulations contrary to or inconsistent with this Sugar Order, are hereby amended, modified 

or revoked accordingly. 




Administrator


TECHNICAL EDUCATION AND SKILLS DEVELOPMENT 

AUTHORITY 


Training Regulations 

Agricultural Crops Production NC III 

Agri-Fishery Sector 




--o0o-- 


Automotive Servicing NC I 

Automotive Sector 




--o0o-- 


Automotive Servicing NC III 





--o0o-- 


Automotive Servicing NC IV 




--o0o--

1104 




Biomedical Equipment Servicing NC II 

Health, Social, and Other Community Development Services Sector 




--o0o-- 


Carpentry NC III 

Construction Sector (Civil Works) 




--o0o-- 


Deck Seafaring NC I 

Maritime Sector 




--o0o-- 


Emergency Medical Services NC II 





--o0o--



Engine Seafaring NC I 





--o0o-- 


Engine Seafaring NC III 





--o0o-- 


Fish Capture NC II 

Agriculture and Fishery Sector 




--o0o-- 


Horticulture NC III 

Agri-Fishery Sector 




--o0o--

1106 



Machining NC I 

Metals and Engineering Sector 




--o0o-- 


Machining NC III 

Metals and Engineering Sector 




--o0o-- 


Masonry NC I 





--o0o-- 


Masonry NC III 





--o0o--



Massage Therapy NC II

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